China-headquartered contract research, development and manufacturing organization (CRDMO) WuXi AppTec has secured a major victory in its legal battle against the Department of Defense (DoD), which in June 2026 designated it as a “Chinese military company” under Section 1260H of the BIOSECURE Act.

DoD’s Office of the Under Secretary of Defense (Acquisition and Sustainment) announced in the Federal Register that WuXi AppTec has been removed from the U.S. military’s 1260H List. According to the announcement, the CRDMO’s removal from the list is “in compliance with the order issued by the U.S. District Court of Columbia on August 7, 2026, granting WuXi AppTec’s Motion for Preliminary Injunction, which enjoins the Department from enforcing, implementing, or otherwise giving effect to the Department’s designation of WuXi AppTec as a Chinese military company under Section 1260H.”  

WuXi AppTec filed a June 11 lawsuit in the U.S. District Court for the District of Columbia, claiming DoD’s “unlawful” designation as a “national security threat” has “inflicted substantial reputational, commercial, and operational harm” to the CRDMO. In August, a U.S. judge granted WuXi AppTec’s motion for preliminary injunction to enjoin DoD from enforcing or implementing its 1260H List designation.

While DoD said it was delisting WuXi AppTec from its list of Chinese military companies operating in the U.S., the announcement added that the department was doing so “without prejudice to relisting the company on additional or supplementary grounds.”

Questions also remain as to whether WuXi AppTec could still face another designation by the Trump administration. General Counsel Howard Wu acknowledged during WuXi AppTec’s earnings call last month that it could still be named a “biotechnology company of concern” (BCC) under the BIOSECURE Act by the Office of Management and Budget (OMB).

OMB is expected to publish the BCC list, meeting statutory criteria related to foreign adversary control and national security risk, by the end of 2026. “So far, we are not aware of any proposed BCC designation or any notice made by the OMB,” Wu said.

Despite geopolitical tensions between Washington and Beijing, biopharmaceutical companies are increasingly choosing to manufacture their newer FDA-approved innovator and biosimilar products at facilities in China, found a recent analysis by data and analytics firm GlobalData.

GlobalData made the case that the recent trend demonstrates growing confidence by the biopharma industry in using China for manufacturing, with U.S.-based companies accounting for more than half of the companies choosing Chinese facilities in 2026 as a production location for innovator and biosimilar drugs approved by the FDA between 2020 and 2025.

The firm noted that WuXi AppTec in June was added to DoD’s 1260H List and designated as a “Chinese military company” but won a major legal victory in August when the U.S. District Court for the District of Columbia granted WuXi AppTec’s motion for preliminary injunction.

While the designation was blocked by the court, GlobalData warned that “the episode highlights a potential pathway for U.S. policymakers to target and limit reliance on Chinese CDMOs and their supply chains.”