Reuters reported Nov. 9 that a government posting showed the U.S. Department of Defense (DoD) had removed WuXi AppTec from its Section 1260H list of Chinese military companies. The posting said the deputy secretary of defense acted in light of a federal court injunction.
Chief Judge James E. Boasberg of the U.S. District Court for the District of Columbia issued the preliminary injunction Aug. 7. He found WuXi likely to succeed in arguing that the designation was arbitrary and capricious. The order barred DoD from enforcing the designation while the case proceeded; it did not decide whether WuXi ultimately qualified for the list.
DoD’s June notice said WuXi was indirectly owned by China’s State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) and indirectly affiliated with the State Administration of Science, Technology and Industry for National Defense (SASTIND) and the People’s Liberation Army (PLA). In a June 9 announcement, WuXi said it did not meet the statutory criteria for designation.
On the ownership rationale, Boasberg said DoD appeared to conflate a finding that 5.32% of the AVIC fund’s portfolio was invested in WuXi shares with a claim that the fund owned 5.32% of WuXi. He also said the cited laboratory work did not establish the defense-linked partnerships DoD had described. The court cited evidence that customers and suppliers canceled contracts, ended relationships or moved work to competitors after the designation.
The court left open the possibility of a new designation if the department accurately described the evidence and explained how it met the law’s requirements. The opinion also said a Section 1260H designation is necessary, but not sufficient, for inclusion on the separate BIOSECURE Act list of biotechnology companies of concern. The Office of Management and Budget (OMB) is due to publish an initial list by Dec. 18, 2026.
