Court injunction leads to removal from 1260H list five months after designation
Regulatory risk eases ahead of December 'biotechnology concern' determination
Pentagon warns relisting remains possible based on additional grounds
The US Department of Defense has removed Chinese biotech contract development and manufacturing organization WuXi AppTec from its list of "Chinese military companies" under USFKI 5200.08, about five months after the firm was added to the roster in June.
The move is expected to ease the regulatory burden on WuXi AppTec as the US government prepares to finalize its list of designated biotechnology concerns in December.
The Pentagon announced the removal through a Federal Register notice Monday (local time), saying the deletion of WuXi AppTec from the 1260H list of Chinese military companies operating in the United States took effect Thursday.
The decision follows a preliminary injunction granted by the US District Court for the District of Columbia.
The Defense Department had added WuXi AppTec to the 1260H list in June — alongside Alibaba, Baidu and BYD, among a total of 188 companies — citing the firm's indirect ownership by China's State-owned Assets Supervision and Administration Commission and alleged ties to the People's Liberation Army.
WuXi AppTec responded by filing a lawsuit against the Defense Department on June 11, arguing the designation did not meet the applicable legal standards and seeking its removal from the list.
A court granted the company's motion for a preliminary injunction on Aug. 7, paving the way for the formal removal announced this week.
However, the Pentagon said the decision was made without prejudice, meaning it does not prevent the department from relisting WuXi AppTec based on additional or supplementary grounds — leaving open the possibility of a future redesignation.
Industry observers say the removal spares WuXi AppTec an immediate threat to its business operations. Companies on the 1260H list are barred from entering into direct contracts with the Defense Department, and starting in 2027, indirect purchases through third parties will also be prohibited.
Particularly significant is the link between the 1260H list and the Biosecure Act, passed in December last year, which restricts US government procurement and contracting with designated "biotechnology concerns." Companies on the 1260H list are included in that category. The White House Office of Management and Budget is expected to publish its final list of biotechnology concerns before Dec. 18 — the first anniversary of the law's enactment — making the court's decision a closely watched development in the industry.
silverpaper@heraldcorp.com
