WuXi AppTec has secured an early legal victory in its fight against the US Department of Defense over its controversial designation as a “Chinese military company.”
Chief Judge James E. Boasberg of the US District Court for the District of Columbia granted WuXi AppTec’s request for a preliminary injunction against the DoD designation.
The ruling bars the DoD from “enforcing, implementing, or otherwise giving effect” to its classification of WuXi AppTec under Section 1260H of the National Defense Authorization Act for Fiscal Year 2021.
Boasberg found that WuXi AppTec “established a likelihood that the designation was arbitrary and capricious,” according to a court filing reviewed following the ruling.
The judge also found that defense officials had repeatedly misread the evidence used to justify the decision to place the Shanghai-headquartered firm on the list.
“A scarlet letter sends a clear message: keep away,” Boasberg wrote in a 35-page opinion, highlighting the real-world damage the designation had already caused the company.
The ruling noted that WuXi AppTec’s customers and suppliers had “canceled contracts, terminated longstanding relationships, and moved their business to competitors” following the designation.
Boasberg added that the company’s placement on the DoD’s 1260H list was “inflicting harm on WuXi that later relief cannot repair,” strengthening the case for immediate injunctive relief.
The DoD formally added WuXi AppTec to its Section 1260H list on June 8, 2026, citing the firm’s indirect ownership by an institution under China’s State Council and its affiliations with the Chinese Ministry of Industry and Information Technology and the People’s Liberation Army.
Inclusion on the Pentagon’s 1260H list automatically triggers “biotechnology company of concern” status under the Biosecure Act, which restricts US federal procurement and grants involving those firms’ equipment or services.
WuXi AppTec filed a legal complaint on June 11 in the US District Court for the District of Columbia, arguing the DoD’s designation as a “national security threat” had “inflicted substantial reputational, commercial, and operational harm” to the company.
The company followed that complaint with a motion for preliminary injunction on June 29, seeking to prevent the DoD from taking any further actions based on the designation, with a court hearing held on July 22.
A WuXi AppTec spokesperson welcomed the court’s decision, stating: “This ruling relieves us from the immediate adverse consequences of the erroneous 1260H designation during the litigation process.”
Shares of WuXi AppTec surged on the back of the ruling, rising as much as 7.7% to reach their highest level in approximately five years, before closing up 4.2% at CNY161.34, equivalent to roughly USD23.92.
The legal battle is far from over, with the injunction representing only a temporary reprieve while the broader case against the DoD designation continues to work through the courts.