Treasury Draft Rules Ban U.S. Equity in Chinese Biotech but Spare Licensing Deals
The U.S. Treasury Department has released proposed regulations under the Comprehensive Outbound Investment National Security (COINS) Act, adding biotechnology to the list of restricted sectors for investment in 'countries of concern,' primarily China. The draft rules prohibit U.S. equity investments, joint ventures, and convertible debt in Chinese biotech firms, including those involving advanced modalities like cell and gene therapies. However, the proposal explicitly excludes traditional cash-based licensing agreements, allowing Western pharma 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.