The Biosecure Act, introduced by the United States to keep Chinese bio corporations in check, has been included in the House-Senate compromise of the National Defense Authorization Act (NDAA), putting it on a de facto path to passage.
The Biosecure Act bars the U.S. administration, related agencies, and corporations that receive government funding from purchasing products or services from Chinese bio corporations designated as "of concern." The National Defense Authorization Act is a bill that sets the United States' defense budget framework and policy direction.
Chinese corporations such as WuXi AppTec, WuXi Biologics, and BGI have been cited as major targets of the Biosecure Act. If the bill passes within the year, Chinese corporations face the prospect of being effectively forced out of the global market. Meanwhile, countries including Korea have an opportunity to enjoy spillover benefits. Observers also say competition to seize this is likely to intensify.
◇ Biosecure Act gathers speed again… China's WuXi Biologics at risk
The final House-Senate conference version of next year's U.S. National Defense Authorization Act (NDAA), which reflects the Biosecure Act, passed the U.S. House on the 10th (local time). According to the Associated Press, the conference bill passed the House floor with 312 votes in favor and 112 against. The bill will take effect after Senate passage and the signature of U.S. President Donald Trump.
Notably, in this compromise the Biosecure Act strengthens the transparency of the process for designating "bio corporations of concern." Last year, some lawmakers blocked the bill, citing opaque procedures for designating corporations of concern and the lack of provisions to remove entities from the list. At the time, analysis in the United States also said Chinese corporations mounted an active response by spending large sums on lobbying domestically.
If the bill clears the Senate and is finally passed, WuXi Biologics, one of the world's top five contract development and manufacturing organizations (CDMOs) for biopharmaceuticals, could be hit directly, according to a series of projections. The company's revenue last year totaled 18.6754 billion yuan (about 3.088 trillion won).
In the global CDMO market by revenue, Switzerland's Lonza ranks No. 1, and Samsung Biologics, WuXi Biologics, and Catalent have competed for the No. 2 spot.
The Biosecure Act could reshape the CDMO industry landscape. An industry official said, "Due to the Biosecure Act, WuXi Biologics' CDMO business could contract not only in the United States but also in Europe and Asia."
WuXi Biologics moved to secure cash this year by selling plants in Ireland and Germany. On the 2nd, it signed a strategic memorandum of understanding with the Qatar Free Zones Authority (QFZ), kicking off a push into the Middle East market. The main point of the agreement is for WuXi Biologics to build its first integrated contract R&D and manufacturing center in the Middle East.
◇ Opportunity for K-bio… Japan and India could also benefit
In the market, Samsung Biologics, Celltrion, Lotte Biologics, SK pharmteco, CHA Biotech, Samsung Bioepis, and ST PHARM are cited as beneficiaries of the U.S. Biosecure Act.
Some say business opportunities could open faster than initially expected. Lee Seung-gyu, vice chairman of the Korea Biotechnology Industry Organization, said, "When the U.S. Biosecure Act was first introduced, it included a grace period of about eight years, but the House-Senate compromise now disclosed shows no mention of a grace period," adding, "We presume Congress reviewed the matter and left it out." If the bill passes as is, measures such as restricting transactions with Chinese corporations or terminating contracts could be implemented immediately.
Korean pharmaceutical and bio corporations are also accelerating expansion. A prime example is Celltrion. Celltrion invested 10 billion won in initial capital to establish Celltrion BioSolutions as a CDMO specialist.
It is also building a new finished drug product (DP) facility in Songdo, Incheon, slated for completion in the first half of next year. Separately, it secured a production base in the United States. It acquired Eli Lilly and Company's Branchburg, New Jersey, plant for about 460 billion won. After the acquisition, the company plans to invest up to an additional 700 billion won to boost capacity. It secured U.S. production facilities to eliminate tariff risks, and with the Biosecure Act taking effect and under the Trump administration's policy direction, the advantages of producing in the United States are coming to the fore, potentially creating opportunities for business growth, observers say.
A Celltrion official said, "Under discussions between the two companies, the U.S. production facility will supply Eli Lilly and Company with active pharmaceutical ingredients produced at the plant upon acquisition," adding, "We expect to enjoy benefits such as immediate revenue generation, stronger local supply chains, and lower logistics costs."
Samsung Biologics split off its biosimilar business and created a holding company, Samsung Bioepis Holdings, reorganizing itself into a pure-play CDMO. The main reason the company pursued a biosimilar spin-off was concerns among some global clients about conflicts of interest, which this resolves.
Samsung Biologics currently ranks No. 1 in CDMO capacity and is expanding its facilities. It is building a second bio campus in Songdo, Incheon, and constructing Plant 6 there with a target to complete and start operations in 2027.
Some in the market also expect a stronger preference for U.S.-based facilities under the administration's and big pharma's reshoring policies. Samsung Biologics currently has production facilities only in Korea. As such, the market has discussed the possibility that Samsung Biologics could secure U.S. production facilities through mergers and acquisitions (M&A).
By contrast, Lotte Biologics acquired and is operating a plant in Syracuse, New York. Its Songdo, Incheon, plant is slated for completion in 2027. Leveraging the competitive edge of having U.S.-based production facilities, the company is aiming to win contract manufacturing for not only antibody drugs but also antibody-drug conjugates (ADC).
ST PHARM, a subsidiary of Dong-A Socio Holdings, is regarded as a global top-tier corporation in active pharmaceutical ingredients (API) for oligonucleotides. Oligonucleotides are the main raw materials for RNA therapeutics. RNA therapeutics work by binding to genetic material to block the production of disease-causing proteins. ST PHARM already supplies new drug ingredients to 10 global pharmaceutical companies developing RNA therapeutics.
ST PHARM has also recently expanded its production facilities. To secure manufacturing capacity for oligonucleotide therapeutics across a range of scales from small and mid-sized to large lines, it invested 150 billion won and in September completed the second oligo building at its Banwol plant in Gyeonggi Province. Sung Moo-je, CEO of ST PHARM, said, "With the completion of the second oligo building, ST PHARM can respond more closely to the needs of various markets."
SK is also taking aggressive steps in the API CDMO market. SK Group's CDMO subsidiary SK pharmteco has been expanding its advanced small-molecule and peptide production plant (Plant 5) in Sejong since March this year. In particular, the API for Eli Lilly and Company's obesity treatment Mounjaro is slated to be produced there. Last year, news of a partnership agreement between SK pharmteco and Eli Lilly and Company reached the market, but the company has remained tight-lipped, saying to date, "We cannot confirm."
Some predict global competition among corporations will grow fiercer. Lee Seung-gyu, vice chairman of the Korea Biotechnology Industry Organization, said, "New uncertainty may arise as a result of the Biosecure Act's passage," adding, "Only corporations with sufficient competitiveness will be able to seize opportunities." He said, "Japan, Thailand, and India are investing aggressively," adding, "In particular, Fujifilm has been increasing its production facilities in the United States and is using this as a weapon to expand its market, so we are watching closely."
Lee also said, "Separate from political conflicts or the Biosecure Act, relationships and cooperation between Korean and Chinese bio corporations are important," adding, "Acknowledging that China has made great strides in research and development and industrial terms, Korean corporations should seek opportunities."