U.S. District Judge James Boasberg's preliminary injunction keeps the Defense Department from enforcing WuXi AppTec's Section 1260H designation while the company challenges the listing in court, and the judge said key ownership and military-link allegations were likely insufficiently substantiated. The ruling gives WuXi temporary relief rather than a final merits victory, but it strengthens the company's case after the court accepted evidence that clients had suspended new projects, frozen collaborations or shifted work to rivals, creating potential long-term damage in a business where contracts often run for years. Boasberg also denied the Pentagon's request to stay the injunction pending appeal and required WuXi to post just $1 in security, meaning the order should remain in force unless a higher court intervenes. The judge said the Defense Department could still redesignate WuXi on new grounds if it accurately describes the evidence and reasonably explains how the listing criteria are met. Court documents said the Pentagon's claim that a fund linked to a Chinese state-owned aerospace and defense group held a 5.32% stake in WuXi was erroneous because the 5.32% figure referred to the fund's own net asset allocation, while the actual investment was about $200,000, or roughly 0.001% of WuXi's equity. The judge also said alleged links to China's defense regulators and the People's Liberation Army through hospital research were unsubstantiated. WuXi filed suit on June 11 and sought a preliminary injunction on June 29, before winning the order on August 7 after a July 22 hearing. Morgan Stanley said the decision removes a major uncertainty and maintained an Overweight rating with a HK$193 target price. WuXi has about 450 employees in the United States, serves more than 1,000 U.S. clients, and said U.S. customers contributed about 70% of revenue last year.