(Yicai) Sept. 10 -- Shares of WuXi AppTec, MGI Tech, and other Chinese biotech companies fell after the US House of Representatives voted to pass a bill prohibiting federal agencies from doing business with them over concerns about potential security risks.

WuXi AppTec [SHA: 603259] closed 5.4 percent lower at CNY37.29 (USD5.24) a share in Shanghai today, while its Hong Kong-listed stock [HKG: 2359] sank 10.4 percent to HKD32.20 (USD4.13). WuXi Biologics [HKG: 2269], spun off from WuXi AppTec in 2017, fell 3.9 percent to HKD10.90.

BGI Group spin-off MGI Tech [SHA: 688114] lost 1.5 percent to CNY38.15, while BGI Genomics [SHE: 300676], the listed arm of BGI, ended 2 percent down in Shenzhen at CNY34.79.

The House voted 306 to 81 for the Biosecure Act yesterday. The legislation will impact WuXi AppTec, WuXi Biologics, BGI, MGI, and MGI's US unit Complete Genomics, but it also includes an eight-year grace period, allowing them to go on doing business with federal agencies until 2032. The bill must also pass the US Senate before going to President Joe Biden for signing into law.

“We firmly believe that WuXi AppTec has not posed, does not pose, and will not pose a security risk to the United States or any other country and it has not been subject to any sanction by the US government agencies,” WuXi AppTec, a Shanghai-based provider of research, development, and production services for global drug firms, said in a statement today.

“We also reiterate that WuXi AppTec does not have a human genomics business or collect human genomic data in the US, China, or elsewhere,” it said.

The progress of the Biosecure Act has been closely followed by the market since the start of this year, having weighed heavily on WuXi AppTec's share price. The stock has dived around 49 percent in Shanghai and about 59 percent in Hong Kong since the end of last year.

“The company will work closely with its advisors to continue our engagement and dialogue with the relevant stakeholders involved in the legislative process,” WuXi AppTec added.

Net profit at WuXi AppTec dropped 20 percent to CNY4.2 billion (USD589.9 million) in the six months ended June 30 from a year earlier, according to its most recent financial report. Revenue fell 9 percent to CNY17.2 billion (USD2.4 billion), with CNY10.7 billion of that coming from US clients. 

Editors: Dou Shicong, Martin Kadiev