US Senate committee takes up bill targeting China's BGI, WuXi Apptec

By Karen Freifeld

(Reuters) - A bill in the U.S. Senate that would restrict business with China's BGI, WuXi Apptec and other biotech companies on national security grounds faces its first big test in Congress on Wednesday.

The draft legislation, which is designed to keep Americans' personal health and genetic information from foreign adversaries, will be discussed in a committee meeting and could be changed and either moved forward for a vote or held back for more discussion.

The bill has spurred deep concern among investors, driving a sell-off in the shares of WuXi AppTec when news of its introduction first reached Chinese markets last month.

As currently written, it would prohibit federal agencies from contracting with China's BGI, MGI, Complete Genomics, WuXi AppTec, their affiliates and other biotechnology companies deemed of concern. It would also stop the government from entering into contracts with companies that use their equipment or services.

But when members of the Homeland Security and Governmental Affairs Committee meet on Wednesday to markup the bill, it is possible one or more company names could be stripped from the text.

The companies have denied they pose any security threats.

The committee expects the bill to move forward on a bipartisan basis, an aide for Senator Gary Peters, chair of the Homeland Security and Governmental Affairs Committee said.

A companion bill introduced in the House in January accuses BGI, a genomics company, of posing a threat to U.S. national security through its collection of genetic data. It describes MGI and Complete Genomics as subsidiaries and affiliates.

WuXi Apptec, which provides R&D and manufacturing services to the pharmaceutical and healthcare industry, allegedly has ties to the Chinese military, according to the House version of the bill.

The companies have said the proposed legislation contains false, misleading and unfounded allegations.

Rick Connell, WuXi Apptec's chief operating officer for the U.S. and Europe, said the company was closely monitoring the markup.

"We are confident that upon considering the facts, lawmakers will understand that WuXi AppTec does not pose a national security risk," Connell said, and is "a trusted partner to customers in the U.S. and around the world."

BGI Group said it supports the bill's premise of protecting Americans' personal data, but that it does not have access to that data. It said the legislation will "drive BGI out of the U.S." and limit competition.

Once it moves out of committee, the bill must pass in both the full Senate and the House, and then needs be signed by the president.

(Reporting by Karen Freifeld; Editing by Stephen Coates)