China CXOs Biosecure Act update: No major surprises; remain constructive on China CXO growth and globalisation

Research evidence excerpt

14 October 2025

Equity Research Report

China CXOs

Biosecure Act update: No major surprises; remain

constructive on China CXO growth and globalisation

◆ Biosecure Act update in line with our and market expectations

◆ May cause some short-term market volatility; remain

constructive on long-term growth visibility

◆ Maintain Buy on CXO names − Wuxi XDC and Pharmaron

What’s New? Biosecure Act update in line with our and market expectations.

On 10 October, the U.S. Senate passed the 2026 National Defense Authorization Act

(NDAA) (S.2296), which includes S.Amdt.3841 as a secondary amendment, including

revised Biosecure provision, the prohibition will take effect 60 days and 180 days

after the amendment. Under this proposal, U.S. federal agencies would be barred

from procuring, renewing, or extending contracts with “biotechnology companies of

concern,” or with entities that use biotech services or equipment from such

companies. Crucially, contracts signed prior to the effective date are exempt for up

to 5 years, meaning entities can continue some legacy relationships during the

transition period. The “entities of concern” scope is process-based rather than

name-based: companies may be designated based on ties to foreign adversary

control, biotech operations, or national security risk (e.g. data handling).

Equities

Health Care Providers &

Srvcs

China

Linda Shu*, PhD (Reg. No. S1700522120001)

Head of China Healthcare Research

HSBC Qianhai Securities Limited

Oliver Wang* (Reg. No. S1700523100003)

Analyst, China Healthcare Research

HSBC Qianhai Securities Limited

Evie Liu* (Reg. No. S1700119110001)

Associate

Shenzhen

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

not registered/ qualified pursuant to FINRA regulations.

Impact? May cause some short-term market volatility but we remain

constructive on China CDMOs growth on international diversification and

business restriction de-risking. China’s CXO index has corrected 4.92% since

early October due to concerns over geopolitical risks and the impact of the Biosecure

Act. We think this update could trigger short-term volatility in U.S.-listed or U.S.-tied

…