Biosecure Act passed by U.S. House may benefit Korean biotech industry

[Photo by Reuters / Yonhap]

The U.S. House of Representatives passed the Biosecure Act on Monday, a bill aimed at curbing the influence of Chinese biotechnology companies. The legislation is now one step closer to becoming law, which could create new opportunities for South Korean biotech companies.

The Biosecure Act passed with a 306-81 vote, according to Bloomberg and other sources. The bill, designated as a “suspension of the rules” measure, which allows for expedited voting on non-controversial legislation, moved quickly through the House floor.

With Senate approval and President Joe Biden’s signature remaining, analysts believe the act could become law by the end of the year. Bloomberg estimates a 70 percent chance of the bill’s final passage.

The Biosecure Act includes provisions that prevent companies receiving U.S. government funds from purchasing equipment and services from hostile foreign biotech firms.

The law aims to prevent potential leaks of sensitive information, such as the genetic data of U.S. citizens, to foreign entities. Although the law doesn’t explicitly name any countries, its primary target is China.

Companies such as Wuxi Biologics, Wuxi AppTec, Chinese genomics company BGI Group, and its subsidiary MGI are included in the list of entities.

The bill also prohibits U.S. federal agencies from conducting business with companies that use equipment or services from these restricted firms. A grace period until January 2032 has been included.

The potential passage of the Biosecure Act could deal a significant blow to Chinese biotech firms.

Wuxi Biologics, for instance, holds a 10.2 percent share of the global contract development and manufacturing organization (CDMO) market, making it the third-largest player globally. Nearly half of the company’s revenue comes from the U.S., leaving it particularly vulnerable to the new restrictions.

In contrast, the situation presents an opportunity for Korean CDMO companies such as Samsung Biologics. As U.S.-based clients seek alternatives to Wuxi Biologics for pharmaceutical production, the demand for Korean biotech services is already on the rise.

Samsung Biologics has reported a twofold increase in inquiries since the U.S. began advancing the Biosecure Act.

Korean pharmaceutical firm ST Pharm was also recently selected as a material supplier for a blockbuster drug previously sourced from China.

“The law’s impact will be felt more in the mid- to long-term, considering the grace period,” said a Korean biotech industry insider. “Now is the time for aggressive investment to strengthen competitiveness and maximize opportunities.”