By Scott Murdoch and Himanshi Akhand (Reuters) – China’s WuXi AppTec will raise $500 million in a convertible bond sale, according to a regulatory filing on Tuesday, a month after the U.S. House passed rules to restrict business with the firm on national security grounds. WuXi Apptec said the proceeds raised in the deal would […]
Health
WuXi AppTec to raise $500 million in convertible bond sale as US restrictions loom
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By Scott Murdoch and Himanshi Akhand
(Reuters) – China’s WuXi AppTec will raise $500 million in a convertible bond sale, according to a regulatory filing on Tuesday, a month after the U.S. House passed rules to restrict business with the firm on national security grounds.
WuXi Apptec said the proceeds raised in the deal would be used to fund the Shanghai-headquartered biotech company’s global expansion and debt refinancing, according to its stock exchange announcement.
The zero-coupon bonds are due to mature in October 2025 and have an initial conversion price of HK$80.02 per Hong Kong share. The conversion rate is a near 16% premium to the stock’s closing price on Monday.
The company said on Tuesday it was also considering options for its cell and gene therapy manufacturing unit WuXi Advanced Therapies, which operates four laboratories and manufacturing facilities in Philadelphia.
WuXi Apptec had put the business up for sale, the Financial Times reported last week. The firm said on Tuesday it had not entered any binding agreements for the unit.
WuXi Apptec works on the discovery, development and production of small molecule drugs, cell therapies and gene therapies, as well as providing testing services for medical devices.
The company, along with other Chinese firms, have been at the centre of new U.S. laws aimed at restricting their businesses in the United States due to national security concerns.
The U.S. House of Representatives passed the Biosecure Act in September that would prohibit federal contracts with targeted firms and those that do business with them.
The bills are designed to keep Americans’ personal health and genetic information from foreign adversaries and aim to push U.S. pharmaceutical and biotech companies to lessen their reliance on China for everything from drug ingredient manufacturing to early research.
The legislation must pass the U.S. Senate before it can be sent to President Joe Biden to be signed into law. China’s foreign ministry has described the U.S bill as “discriminatory”.
WuXi Apptec’s Hong Kong listed shares are down nearly 14% year to date while its Shanghai-listed stock is off 28%.
(This story has been corrected to say that the U.S. House passed rules to restrict business with WuXi AppTec, not that the rules were fully passed, in paragraph 1)
(Reporting by Himanshi Akhand in Bengaluru; Editing by Devika Syamnath and Lincoln Feast)