The U.S. Treasury Department proposed rules Oct. 22 to curb American investment in parts of China’s biotechnology sector, POLITICO reports. The proposed package would also affect investments in advanced chips and artificial intelligence, according to the Financial Times.
The biotech provisions cover certain bio-derived compounds and materials, biomanufacturing equipment and facilities, biological-design and sequencing technology, and tools for automated scientific discovery, POLITICO reports. The Financial Times says Treasury also identified certain treatments that modify patients’ cells or genes, as well as immunotherapies, as prohibited under the proposed rules.
What about drug deals?
American drugmakers have increasingly turned to Chinese developers for new medicines, with some striking multibillion-dollar licensing deals, POLITICO reports. A Treasury official told reporters the proposal does not address licensing deals, POLITICO says. The official declined to clarify whether or how it would apply to co-development and co-marketing agreements. Will Humphrey, a vice president at consultancy Capstone, told the Financial Times that cash-paid licensing deals without an equity investment avoid the proposed regulations.
The Biotechnology Innovation Organization warned that an overly broad approach could create uncertainty for innovators and investors and unintentionally weaken U.S. biotech competitiveness.
China has separately proposed barring sales of some biopharma innovations, including domestic cell-and-gene therapy technologies, to foreign buyers while retaining licensing as a route for foreign access, POLITICO reports. On the U.S. proposal, POLITICO says Treasury will take public comments until Dec. 7 and that the initiative must be finalized by March under the law.
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