In major news on Hong Kong stocks, shares of WuXi Biologics (Cayman), Inc. (HK:2269) tumbled due to the mounting threats over the advancement of a U.S. bill that could prevent Chinese biotech firms from securing federal contracts. Yesterday, the U.S. Senate’s Homeland Security committee endorsed the bill, causing a breakdown for the WuXi family of biotech and research companies.
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Shares of WuXi Biologics plummeted by around 21%, while WuXi AppTec Co., Ltd. (HK:2359) stock fell by 20% on Thursday. Year-to-date, both stocks have lost over 40% of their value, ranking them among the worst performers on the Hang Seng Index benchmark.
WuXi Biologics is an open-access technology platform that provides comprehensive solutions to enable organizations in the process of discovering, developing, and manufacturing biologics.
Biotech Firms Feel the Squeeze
The bill, which was introduced in December, bars U.S. federal agencies from engaging in contracts or providing funds to Chinese biotech firms, citing worries over the potential misuse of personal data of U.S. citizens.
Since its start, the bill has sparked significant distress among investors, leading to a sell-off in the shares of WuXi companies. While the bill still awaits approval from the full Senate and the House, as well as the President, it poses a significant challenge to WuXi, which heavily depends on the U.S. for a large portion of its revenue.
What is the Price Target for WuXi Biologics Stock?
As per the consensus rating on TipRanks, 2269 stock has received a Strong Buy rating supported by five Buys and one Hold recommendation. The WuXi Biologics share price forecast stands at HK$47.50, signifying a potential upside of 118.4% from the current level.
