The U.S. Department of Defense removed Chinese biopharmaceutical contract development and manufacturing organization WuXi AppTec from its Chinese Military Companies list under Section 1260H of the National Defense Authorization Act. The exclusion took effect on the 5th and was published in the Federal Register on the 10th, about five months after WuXi AppTec was added in June. The action followed a Washington, D.C., federal district court decision on Aug. 7 granting the company’s request for a preliminary injunction after it sued the Defense Department on June 11. WuXi AppTec had disputed the designation, which alleged indirect ownership by China’s State-owned Assets Supervision and Administration Commission and indirect ties to the State Administration for Science, Technology and Industry for National Defense and the People’s Liberation Army. The company disclosed the Defense Department’s decision in a Nov. 10 filing with the Hong Kong Stock Exchange, after which its shares rose as much as 6.06% in early Monday trading to HK$210, with turnover of about HK$29.465 million. The Defense Department said WuXi AppTec could be relisted if additional or supplementary grounds arise. The removal does not change the broader U.S. regulatory stance toward Chinese biotechnology companies, and inclusion on the Section 1260H list alone does not automatically make a company a bio company of concern under the Bio Security Act. The Office of Management and Budget must determine whether a listed company is involved in the manufacture, distribution, provision or procurement of biological equipment or services, with the industry watching Dec. 18 as the deadline for publication of the BCC list. The outcome could affect expectations that U.S. clients will shift production from Chinese CDMOs to domestic providers such as Samsung Biologics and Lotte Biologics, although WuXi AppTec’s broad services range from drug-candidate discovery and clinical support to active pharmaceutical ingredient and finished-drug production, meaning its activities do not fully overlap with large domestic CDMOs.