On Feb. 9, Chinese pharmaceutical firm Wuxi Biologics, whose Shanghai subsidiary made its name to the Unverified Entity List (UVL), saw 25% of its stock evaporate, losing $9.9 billion off its market value.
The sudden decrease came after its Shanghai subsidiary appeared on the U.S.’s UVL, announced on Feb. 8. Trading its shares was later postponed.
Wuxi Biologics is also the producer of ingredients for making Britain’s AstraZeneca COVID-19 vaccines.
The U.S. Department of Commerce said the action came because it could not verify how xi Biologics would use U.S. products.
Having a name on the list means that there will be more procedures for U.S. companies to go through before shipping U.S. goods to the entity. In addition, 33 Chinese firms were added to the list, including public companies, universities, and aviation and electronics suppliers, such as China Aviation Development Southern Industries and Beijing Shiweitong Technology Co. Ltd.
The U.S. had previously required WuxXi Bio to stop reselling or re-exporting items purchased from it. But as the healthcare company’s CEO said, per Reuters, the pandemic had prevented the U.S. Commerce Department from inspecting if they had complied with the requirements.
He said, “Because of Covid-19, they have not been able to travel here in the last two years to verify us, so they have put us on this ‘unverified list.’”
He added that WuXi Bio would discuss the matter with the U.S. Department through its attorneys.
Other Chinese companies also saw their stocks nosedive after the UVL announcement.
Laser and automation equipment maker Haimuxing Laser Intelligent Equipment Co. saw their shares fall more than 7%.