Treasury Draft Rules Target Chinese Biotech Equity While Sparing Licensing Deals
The U.S. Treasury has released draft regulations under the Comprehensive Outbound Investment National Security (COINS) Act, adding biotechnology to the list of restricted sectors for investment in 'countries of concern' like China. The rules prohibit U.S. equity investments, joint ventures, and convertible debt in Chinese biotech firms, including those involving advanced modalities such as cell and gene therapies. However, the proposal explicitly excludes traditional cash-based licensing agreements, allowing Western pharmaceutical companies to continue in-licensing Chinese drug candidates. The Treasury is seeking public comment until December 7, 2026, with industry groups urging a narrower scope to avoid harming U.S. competitiveness.