Biotech firm WuXi AppTec has been removed from a blacklist of companies allegedly linked to China's military following a court challenge, a move expected to ease uncertainty among overseas clients and offer a degree of encouragement for other Chinese entities on the list.
In a filing to the Hong Kong stock exchange on Tuesday, Shanghai-based WuXi AppTec said the US Department of Defense had removed it from the Section 1260H of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 list of "Chinese military companies" after a federal court barred the Pentagon from enforcing the designation in August.
The decision relieves the company of further adverse consequences arising from the listing, WuXi AppTec said.
"We remain committed to serving our customers and enabling the lifesaving and life-improving medicines they make for patients," the company said.
The Pentagon added WuXi AppTec to the list on June 8, citing alleged links to Chinese State-owned and military entities. The company rejected the designation and sued three days later. On Aug 7, US District Judge James Boasberg granted a preliminary injunction, questioning the evidence supporting the Pentagon's decision and recognizing the damage to the company's business, including lost contracts and longstanding partnerships.
Zhan Kai, a partner at Dacheng Law Offices, said the removal had been widely anticipated following the injunction, and the formal notice represented the implementation of the earlier court order.
The decision could ease compliance concerns among pharmaceutical companies that use WuXi AppTec's research, development and manufacturing services. Although inclusion on the 1260H list does not amount to a blanket ban on commercial activity in the US, it restricts Pentagon procurement and can make customers reluctant to maintain business ties.
Citi analysts said the removal was positive for WuXi AppTec and sentiment across China's pharmaceutical outsourcing sector, Bloomberg reported. The decision also allows the company to participate in US federally funded projects for now, although such business represents a relatively small share of its revenue.
Beyond the immediate commercial benefits, the case highlights the importance of legal remedies for Chinese companies facing disputed US sanctions, said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.
Zhou said the Pentagon's decision, made in compliance with a court order rather than as a voluntary reversal, demonstrated the role of judicial review in scrutinizing government decisions. He said the case could provide a benchmark or reference for other Chinese firms seeking to protect their legitimate rights and interests through legal and procedural avenues, helping safeguard normal business operations and a fair market environment.
However, some regulatory uncertainty remains, particularly over the US BIOSECURE Act, enacted in December 2025 as part of the fiscal 2026 National Defense Authorization Act. The law restricts certain federal procurements and funding involving biotech companies "of concern", which can be identified through the Pentagon's 1260H list or a separate review led by the US Office of Management and Budget.
Zhao Heng, founder of medical strategy consulting firm Latitude Health, said that the delisting reflected the court's injunction, but did not mean the company was free of broader US policy risks.
lijing2009@chinadaily.com.cn
