A federal court has issued a preliminary injunction against the U.S. Department of Defense (DoD), blocking its designation of WuXi AppTec Co., Ltd. as a "Chinese military company." This ruling, made by Chief Judge James E. Boasberg of the District Court for the District of Columbia, is significant for the global provider of services to pharmaceutical and life science companies, which claims the designation has harmed its business relationships and operations.
The court's decision comes in response to a lawsuit filed by WuXi AppTec on June 11, 2026, after the DoD included the company on its Section 1260H list under the National Defense Authorization Act for Fiscal Year 2021. This designation has serious implications, including restrictions on federal contracts and funding, which WuXi argues could irreparably damage its business.
Background
WuXi AppTec, founded in 2000, is a global Contract Research, Development, and Manufacturing Organization (CRDMO) that supports pharmaceutical companies in drug development. The company operates six facilities in the United States and employs around 450 people, with U.S. customers accounting for approximately 70% of its revenue in 2025.
The designation as a Chinese military company stems from the DoD's interpretation of WuXi's ownership and affiliations. The DoD's decision was based on claims that WuXi is indirectly owned by the State-owned Assets Supervision and Administration Commission (SASAC) and affiliated with the People’s Liberation Army (PLA) and the Ministry of State Security (MSS). WuXi has consistently denied these claims, asserting that it does not have ties to the Chinese military.
After a series of communications with the DoD, WuXi was designated on June 10, 2026, with the justification that it is indirectly owned by SASAC and affiliated with the PLA. This designation prompted WuXi to file a lawsuit, seeking a preliminary injunction to prevent the enforcement of the designation while the case is ongoing.
The Ruling
The court ruled in favor of WuXi AppTec, granting the preliminary injunction. Chief Judge Boasberg stated that the DoD's designation appeared to be arbitrary and capricious under the Administrative Procedure Act. He noted, "The designation is inflicting harm on WuXi that later relief cannot repair." The court emphasized that WuXi had established a likelihood of success on the merits of its case, particularly regarding the arbitrary nature of the designation.
In his opinion, Judge Boasberg detailed the flaws in the DoD's rationale for the designation. He pointed out that the agency's claims of WuXi's indirect ownership and affiliation with military entities were based on misinterpretations of the evidence. The court found that the DoD's justifications did not adequately support the designation, leading to the conclusion that WuXi was likely to succeed in its challenge.
Impact
The court's decision to block the DoD's designation has significant implications for WuXi AppTec and potentially other companies facing similar scrutiny. By granting the preliminary injunction, the court has temporarily alleviated the immediate business risks associated with the designation, allowing WuXi to continue its operations without the constraints imposed by the DoD.
This ruling may also set a precedent for how the government assesses and justifies designations under Section 1260H. If the court's analysis is upheld in future proceedings, it could lead to greater scrutiny of the DoD's designation process and its implications for companies with ties to China.
What's Next
WuXi AppTec's case is ongoing, and the DoD may choose to appeal the ruling. The company will continue to seek a permanent resolution to its designation status as the legal proceedings unfold. Details regarding any related cases or further developments were not available in the court filing.