CRL: BIOSECURE Act Inclusion of WuXi AppTec Net Positive for CRL

研报英文原文证据摘录

CRL: BIOSECURE Act Inclusion of WuXi AppTec Net Positive for CRL

EQUITY RESEARCH QUICK TAKE

RBC Capital Markets, LLC

Ryan Halsted (Analyst)

June 9, 2026

Charles River Laboratories International, Inc.

BIOSECURE Act Inclusion of WuXi AppTec Net Positive for CRL

NYSE: CRL | USD 186.44 | Outperform | Price Target USD 215.00

Sentiment: Positive

We view the expansion of the BIOSECURE Act list to include WuXi AppTec as a net positive for Charles River Laboratories through

reducing competition for US-based preclinical work from lower priced Chinese-based CROs. However, we are incrementally

more concerned that this could result in reciprocal barriers to entry for CRL to the fast-growing Chinese CRO market.

On June 8, 2026, the Pentagon added WuXi AppTec to its list of Chinese companies with alleged military connections, opening

the door for classification as a "company of concern" under the BIOSECURE Act and prohibiting federal contracts starting later

this month.

BIOSECURE Act is net positive for preclinical IND-enabling work to domestic CROs like CRL. WuXi competes for preclinical

alongside CRL and LabCorp, offering in vitro/in vivo capabilities at a discount price. WuXi AppTec generates three-quarters of

its revenues from its US business and offers the full continuum of preclinical CRO services. We believe WuXi is strong in Clinical

Discover but uncertain how much it directly competes with CRL's DSA segment. Another question is whether sponsors redirect

to other low-cost Asian CROs not covered by BIOSECURE who are already competing in the US through local subsidiaries, but it is

unclear if this provides an insulation from future BIOSECURE changes.

Pricing dynamics could inflect favorably for domestic CROs as BIOSECURE removes the low-cost benchmark. Preclinical landscape