(Yicai) Feb. 2 -- Shares of WuXi AppTec continued tanking even though the Chinese biomedicine firm revealed a new CNY1 billion (USD139.3 million) buyback scheme to control a plunge caused by concerns of a new obstacle to work with American partners.
WuXi AppTec's Shanghai-listed equity [SHA: 603259] dived 10 percent to close at CNY50.22 (USD7), falling more than 30 percent in the past six trading days. Its Hong Kong-listed shares dropped 22 percent to HKD43.25 (USD5.50) as of 3.26 p.m.
The contract development and manufacturing organization will buy its Shanghai-listed shares for up to CNY100.9 (USD14) apiece, or one and a half times the average trading price of the past 30 days leading to the decision, the Shanghai-headquartered company announced this morning. After that, it will cancel the equity, a move often done to increase earnings per share.
The company's equity started slumping last week when Yicai reported on Jan. 26 that a new bill called the Biosecure Act, introduced by a committee of the United States House of Representatives, has gained bipartisan support from lawmakers. The bill puts WuXi AppTec and Shenzhen-based BGI Genomics on a list of “biotechnology companies of concern,” and if it is passed, it would block their access to federal funding in the United States.
Chen Zhisheng, chief executive of WuXi Biologics, told Yicai earlier that the bill "is highly unlikely to become law," and even if it was passed, it would take years. WuXi Biologics was spun off WuXi AppTec years ago.
The bill contains inaccurate information about WuXi AppTec, the firm said on Jan. 26, adding that it abides by laws and regulations in countries where it does business, including China and the US. WuXi AppTec's business development does not threaten the security of any country, it added.
Editor: Emmi Laine