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Chinese firm that shares roots with a Mayo Clinic venture faces heightened security measures

Wuxi Biologics, which started in 2010 as a business unit of Wuxi AppTec and later spun off as a separate company in 2015, was placed on a “unverified list” with 32 other Chinese organizations by the U.S. government this week.

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ROCHESTER — A Chinese biotech firm that shares its roots with a company that runs a joint venture with Mayo Clinic was placed on an “unverified list” by the U.S. government this week.

Wuxi Biologics, which started in 2010 as a business unit of Wuxi AppTec and later spun off as a separate company in 2015, was placed on the list with 32 other Chinese organizations.

The Commerce Department explained that being on the list means the U.S. government could not verify the legitimacy of the company. Organizations on the list are required to file more paperwork and follow additional regulations when dealing with U.S. companies.

Wuxi AppTec and Mayo Clinic own a joint venture called WuXi Diagnostics . WuXi Diagnostics opened a 3,008-square-foot "research and diagnostic testing development facility" in 2019 on the third floor of the One Discovery Square complex in downtown Rochester.

In 2019, WuXi Diagnostics announced that it hoped to grow its Rochester staff from 12 employees. WuXi Diagnostics then described the goal of the Rochester facility as "to accelerate esoteric diagnostic product development, and bring more personalized and accurate clinical diagnosis services for global patients.”

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While the stocks of both WuXi Diagnostics and Wuxi AppTec tumbled following the announcement, Wuxi AppTec told U.S. media outlets that it is not on the unverified list and it doesn’t hold any shares of Wuxi Biologics.

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It is unclear what effect, if any, having a sister company placed on the list will have on the Rochester operation.

WuXi AppTec Group and Mayo Clinic formed WuXi Diagnostics in early 2018, three years after WuXi Diagnostics was spun out as a separate company.

"It focuses on the development of advanced diagnostic technologies to create a world-leading clinical special diagnostic platform and integrated research and development of clinical diagnostic reagents and products platform, establish a comprehensive large-scale clinical testing data center, and empower Chinese medical institutions," according to a description by WuXi.

Jeff Kiger tracks business action in Rochester and southeastern Minnesota every day in "Heard on the Street." Send tips to jkiger@postbulletin.com or via Twitter to @whereskiger . You can call him at 507-285-7798.

Jeff Kiger writes a daily column, "Heard Around Rochester," in addition to writing articles about local businesses, Mayo Clinic, IBM, Hormel Foods, Crenlo and others. The opinions of my employer do not necessarily reflect my opinions. He has worked in Rochester for the Post Bulletin since 1999. Send tips to jkiger@postbulletin.com or via Twitter to @whereskiger . You can call him at 507-285-7798.
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