Expect ‘high tide’ of Chinese biotech deals as threat of US curbs fades: analysts

Analysts predict a surge in biotech deals between China and the US as Washington appears to be distancing itself from stringent restrictions, according to industry experts. This favorable environment would boost Chinese healthcare firms, following the country's ambitious five-year plan for the sector. Nomura's Jialin Zhang noted that out-licensing agreements between China and the US would "ride on a high tide" in the favorable circumstances.

The US Treasury Department is reportedly drafting investment rules for American pharmaceutical firms, which would allow them to license most Chinese drugs while avoiding links to pathogens or weaponizable biotechnology. This stance represents a "substantially softer stance" compared to the restrictions outlined in recent US bills.

The Comprehensive Outbound Investment National Security (Coins) Act, which took effect in March 2027, did not specifically target biotechnology, allowing a Biotech Investment National Security Act (Binsa) bill to be introduced in June by two lawmakers to include it. However, the bill has not been passed yet. Chinese biotech firms have shown strong momentum, with out-licensing deals involving China-made innovative drugs increasing by 36% to US$120 billion this year.

China aims to become a global biomedicine powerhouse, with a five-year plan targeting that at least 25% of global first-in-class innovative drugs come from the country by 2030. This growth in the Chinese biotech sector is expected to support a re-rating of the market, despite potential geopolitical uncertainties ahead of the US midterm elections in November.