WuXi Bio: COVID-delayed inspections blamed for addition to US Unverified List

The addition of two WuXi Biologics sites to the US Government’s Unverified List will have no impact on its business, the CDMO says.

On Monday, the US Commerce Department added 33 Chinese companies to its Unverified List (UVL) including two subsidiaries of contract development and manufacturing organization (CDMO) WuXi Biologics based in Shanghai and Wuxi.

As supply chain consultants BDP put it: “The UVL lists names of companies that the Bureau of Industry Security (BIS) could not verify as bona fide because an end-user check could not be completed to a satisfactory level.”

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Companies on the list are ineligible to receive items subject to the Export Administration Regulations (EAR) by means of a license exception, essentially being placed under certain import, export, and resale restrictions.

According to WuXi Bio, its addition to the list is to US Government agencies being unable to undertake required end-use verifications so that certain equipment can be exported from US suppliers.

“WuXi Biologics has been importing certain hardware controllers for bioreactors and certain hollow fiber filters that are subject to US export controls but have received Commerce Department approval for the last 10 years,” the CDMO said in a statement.

“We are in compliance with all US export control regulations. We do not re-export or resell these items to any other entity. The Commerce Department has a routine process to verify the proper use (ie self-use, no resale) of these on site. This process has not be [sic] completed in the last two years due to the COVID-19 pandemic.”

COVID-19 has disrupted many parts of the biopharma supply chain, regulatory audits included. A slowdown and temporary halt on inspections by the US Food and Drug Administration on both domestic and foreign production facilities, for example, has been well-documented.

The addition to the list “has no impact on our business or ongoing services to global partners,” WuXi Bio said, as there is “very minimal impact to our imports as no such equipment is required after facility construction in Shanghai and Wuxi.”

The sentiment was shared by Jefferies analyst Christopher Lui, who wrote in a note that the firm could be taken off the list within two months, but if not it is fully furnished with bioproduction equipment and consumables for the foreseeable future:

“For bioreactors, all bioreactors in those two sites that were imported from the US have been approved and installed already. The next batch of bioreactor changes will be in 2024/25,” he said.

“For consumables such as filters, there are 6-month inventories in stock, not to mention the company is able to use other filter suppliers. Filter changes will not be an issue in terms of ongoing clinical trials as long as the information is filed with the FDA. Management also stated no US filters are used in commercial CMO services. Wuxibio uses four bioreactor suppliers and five filter suppliers globally (including vendors from Germany, UK and Japan), where cost is not an issue given the market is competitive in pricing.”

WuXi Bio has two biologics development and manufacturing sites in Shanghai with the second opening last year. In Wuxi, meanwhile, two facilities offer a total of 70,000 L of clinical and commercial mammalian bioreactor capacity.