Oncolytics Biotech Inc T.ONC

RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:USA Inflation Reduction Act (IRA) 2022 Re: Biotech and China

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Further to PeteZerria's post citing the NYT article -

"A New York Times review of hundreds of pages of records worldwide shows that WuXi is heavily embedded in the U.S. medicine chest, making some or all of the main ingredients for multibillion-dollar therapies that are highly sought to treat cancers like some types of leukemia and lymphoma as well as obesity and H.I.V."

"WuXi AppTec and WuXi Biologics have also received millions of dollars in tax incentives to build sprawling research and manufacturing sites in Massachusetts and Delaware that local government officials have welcomed as job and revenue generators. One WuXi site in Philadelphia was working alongside a U.S. biotech firm to give patients a cutting-edge therapy that would turbocharge their immune cells to treat advanced skin cancers."  

The tension has grown since February, when four lawmakers asked the Commerce, Defense and Treasury Departments to investigate WuXi AppTec and affiliated companies, calling WuXi a “giant that threatens U.S. intellectual property and national security.” 

A House bill called the Biosecure Act linked the company to the People’s Liberation Army, the military arm of the Chinese Communist Party. The bill claims WuXi AppTec sponsored military-civil events and received military-civil fusion funding. 

Smaller biotech companies, which tend to rely on government grants and have fewer reserves, are among the most alarmed. Dr. Jonathan Kil, the chief executive of Seattle-based Sound Pharmaceuticals, said WuXi has worked alongside the company for 16 years to develop a treatment for hearing loss and tinnitus, or ringing in the ear. Finding another contractor to make the drug could set the company back two years, he said. 

The Senate version has been amended to protect existing contracts and limit supply disruptions. Still, the scrutiny has prompted some drug and biotechnology companies to begin making backup plans. 

Peter Kolchinsky, managing partner of RA Capital Management, estimated that half of the 200 biotech companies in his firm’s investment portfolio work with WuXi. 

“Everyone is likely considering moving away from Wuxi and China more broadly,” he said in an email. “Even though the current versions of the bill don’t create that imperative clearly, no one wants to be caught flat-footed in China if the pullback from China accelerates.” 

The chill toward China extends beyond drugmakers. U.S. companies are receiving billions of dollars in funding under the CHIPS Act, a federal law aimed at bringing semiconductor manufacturing stateside. 

For the last several years, U.S. intelligence agencies have been warning about Chinese biotech companies in general and WuXi in particular. The National Counterintelligence and Security Center, the arm of the intelligence community charged with warning companies about national security issues, raised alarms about WuXi’s acquisition of NextCODE, an American genomic data company. 

Aides from the Senate homeland security committee said their core concerns are about the misuse of Americans’ genomic data, an issue that’s been more closely tied to other companies named in the bill. 

WuXi is known for helping biotech firms from the idea stage to mass production, Dr. Kolchinsky said. For example, a start-up could hypothesize that a molecule that sticks to a certain protein might cure a disease. The company would then hire WuXi chemists to create or find the molecule and test it in petri dishes and animals to see whether the idea works — and whether it’s safe enough for humans. 

WuXi operates large bioreactors and manufactures complex peptide, immunotherapy and antibody drugs at sprawling plants in China."  

As for BIO, the trade group, in March came out n support of the BIOSECURE Act, with the organization’s CEO, John Crowley, arguing that the U.S. and its allies should not allow “adversaries abroad” to further their goal to become the “biotechnology center of excellence in the world.” BIO made the public endorsement of the bill simultaneously with an announcement that WuXi AppTec had voluntarily ended its membership with the trade group. 

"Our adversaries abroad have stated that they intend to become the biotechnology center of excellence in the world," BIO CEO John Crowley said in a statement. "America and our allies cannot let this happen. Securing and advancing our preeminence in biomanufacturing will be one key component of a multi-prong approach to secure and advance this strategic imperative in biotechnology.”