WuXi AppTec added to Pentagon 1260H list: implications for Western CDMOs and CROs

Research evidence excerpt

WuXi AppTec added to Pentagon 1260H list: implications for Western CDMOs and CROs

Biologics is a separate listed entity and is not designated under the current 1260H update. However,

changes to the 1260H list can be made at any time and would flow through to BIOSECURE prohibitions

within two years. We think there is a reasonable risk that pharma customers become more concerned

that WuXi Biologics will be included in the future, however.

Peptide API (Bachem, Polypeptide): the TIDES business is the clearest competitive overlap. WuXi

AppTec's peptide and oligonucleotide manufacturing has been growing rapidly, doubling in 2025 to c.

$1.6bn in revenue, and making it around twice the size of the next largest peptide CDMO, Bachem. This

news (even if WuXi AppTec's appeal is successful) may drive additional demand for Western players, with

Bachem's US expansion and potential Sisslerfeld site, as well as Polypeptide's expansionary investments

and its Lifecore US partnership all potential beneficiaries.

Preclinical research (Charles River, Evotec) has suffered from aggressive competition. WuXi AppTec is a

significant player in preclinical research services, and both Charles River and Evotec have cited increased

competition from China companies as particularly challenging. Some CROs with Chinese ownership

are already competing in the US through local subsidiaries, and it is unclear to us how their corporate

structures may insulate them from BIOSECURE. Additionally, most contracts in preclinical CRO work are

fairly short-term in nature (months to a year or two), so there isn't an immediate pressure on Western

companies to stop using WuXi research services.

Small molecule CDMO (Lonza, Siegfried): modest incremental positive on top of existing onshoring

tailwinds.