The US Department of Defence (DoD) has removed WuXi AppTec from its list of designated Chinese military companies, easing geopolitical headwinds for the contract research, development, and manufacturing organisation (CRDMO).
The decision marks a turnaround from WuXi’s initial inclusion on the list, dubbed 1260H, in June. At the time, the DoD stated that WuXi had links to the State Administration for Science, Technology and Industry for National Defense (SASTIND) and the People’s Liberation Army (PLA). The SASTIND is an administrative bureau within the Chinese government, while the PLA is the official military force of the People’s Republic of China (PRC).
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WuXi has always maintained that the allegations were incorrect, calling the designation “mistaken and baseless”. The company subsequently launched legal proceedings to block the designation and any resultant action from being on the 1260H list.
In August, a federal judge agreed with WuXi’s view and issued a preliminary injunction blocking the Pentagon from enforcing the designation.
In a statement to Pharmaceutical Technology following removal from the list, a WuXi AppTec spokesperson said: “According to DoD, this decision was made in compliance with the motion for preliminary injunction granted on 7 August by the US District Court for the District of Columbia. This decision relieves our company from further adverse consequences of the 1260H designation.”
Being on the 1260H list does not automatically result in sanctions but could mean being subject to BIOSECURE, an act that came into law this year that limits Chinese biotechs and manufacturers from accessing US funding and collaborating with domestic pharma companies using federal funds.
Citi analysts said: “We think the removal of WuXi AppTec from the 1260H list is significantly positive to the stock and also sentiment of the whole Chinese [contract outsourced organisations] sub-sector. This also means that, for now, the company can work on US federal-funded projects, despite their insignificant revenue contribution.”
WuXi AppTec operates in more than 30 countries, primarily serving as a CRDMO that supports global drugmakers in drug development. In its most recent earnings report, WuXi reported total revenue of 45.5bn yuan ($6.8bn) for the first nine months of 2026, up 39% from the same period in 2025.
The financial results marked a strong performance despite geopolitical tensions between the US and China. Along with BIOSECURE, the US government is also seeking to curb other types of investment in Chinese firms. In October, the US Department of the Treasury’s proposed that biotech joins the list of sensitive technologies as part of the Comprehensive Outbound Investment Security (COINS) Act.
The framework expands the government’s ability to restrict or monitor US investment in sensitive technologies developed by companies listed as “ones of concern”. The Act has widely been described as primarily targeting American investment in China.
If included, biotech would join semiconductors and microelectrics, quantum computing, and hypersonic systems, among other technologies encompassed by COINS.
