On June 21, the Hong Kong-based South China Morning Post quoted industry analysts as stating that as the United States intensifies restrictions on investment and technology transfer, cross-border biotechnology transactions between China and the US are becoming more complex and may face a certain degree of slowdown.
"Future geopolitical scrutiny may lead to a slight reduction in transaction volume compared to scenarios without such scrutiny," said Diederik Stadig, Senior Medical Economist at ING Research.
He pointed out that despite the increasing regulatory obstacles, the general trend of Western pharmaceutical companies forming partnerships with Chinese biotech companies is unlikely to reverse. 'Given the growing importance of innovation in China, Western pharmaceutical companies will continue to conclude deals with Chinese counterparts. We expect this trend to accelerate in the coming years.'
The Dutch International Group estimates that the total value of out-licensing agreements between Chinese biotechnology companies and Western pharmaceutical companies this year will reach approximately $240 billion, compared to $136 billion in 2025. “There is room for these transactions to expand further. Only the largest and most resource-rich pharmaceutical companies are capable of dealing with complex political environments. Such transactions will increasingly become the exclusive domain of large pharmaceutical corporations,” said Stadig.
Stephen Farrelly, Global Head of Pharmaceuticals and Healthcare at the Dutch International Group, stated that proposals from the US regarding biosecurity legislation (Biosecure Act), which targets US and certain Chinese biotech companies, are unlikely to stop Western interest in drug research within China. However, it will make collaborations "more complex, selective, and more politically sensitive".
On August 11, 2025, the world’s first plant-based recombinant human serum albumin product was officially launched at Guanggu. Wuhan Heyuan Biology has developed a unique technology called “rice hemodialysis” – by inserting the human serum albumin gene into rice, it is possible to extract 20 to 30 grams of high-purity albumin from each kilogram of rice. This creates the world’s first plant-based “biopharmaceutical factory”. This “Chinese original” technology, derived from rice, has the potential to change the situation where China relies on imports for 60% of its life-saving drugs. IC Photo
According to reports, under the current situation, the United States is expanding restrictions on China’s biotechnology industry. On June 2nd, a US congressman proposed the Biotech Investment National Security Act (BINSA), which will revise existing rules for foreign investment review, including the evaluation of pharmaceutical and biotech products.
If this bill is passed, all licensing agreements, joint ventures, and equity investments between American companies and Chinese biotech companies will be subject to review by the U.S. Treasury Department.
Cyrus Ng, Head of Healthcare Investment Research at Deutsche Bank Asia, stated: "These regulations will likely lead to a slight negative impact on China's outward-bound market by limiting cooperative models and potentially reducing transaction scales."
He pointed out that China’s drug asset valuations are about 50% lower than those of similar assets globally, which helps to maintain its attractiveness to overseas pharmaceutical companies. 'Given the significant valuation gap and the continuous emergence of promising candidate drugs, out-licensing activities are unlikely to stop.'
In fact, as of now, the pace of transactions remains strong. According to reports, as of the end of May this year, Chinese biotech companies have signed more than 20 foreign licensing agreements.
In the largest transaction of the year, Jiangsu Hengrui Medicine and Bristol Myers Squibb reached an agreement worth up to $15.2 billion, covering 13 early-stage oncology, hematology, and immunology projects. At the same time, Innovent Biologics and Pfizer reached a cooperation agreement worth up to $10.5 billion, involving 12 early-stage cancer drug candidates.
Cyrus Ng pointed out that certain transaction structures face higher regulatory risks than others, especially the 'NewCo' model – where Chinese biotechnology companies split their assets into new joint ventures with foreign partners, while retaining some equity. This may fall directly under the investment review framework proposed by BINSA.
He added that China is also increasing its efforts to protect proprietary biomedical databases, which adds another layer of complexity to cross-border cooperation.
Jefferies's Asia Healthcare Research Director, Cui Cui, stated that multinational pharmaceutical companies still have strong motivation to acquire assets from China. The reasons include lower development costs, shorter research and development cycles, as well as the increasing pressure due to the expiration of patents.
Cui Cui said: 'Global pharmaceutical companies still have a strong demand for assets originating from China. We believe that multinational corporations have the incentive to actively lobby in order to avoid further friction.'
The South China Morning Post pointed out that this tense relationship is not only reflected at the transaction level. Earlier this month, the US Department of Defense listed WuXi AppTec on a list of companies it claims to be ‘associated with Chinese military forces’. Several other Chinese technology companies were also included in the list.
Subsequently, Yáo Míng Kǎngdé filed a lawsuit in the U.S. District Court for the Southern District of Columbia against the United States, claiming that this determination was "clearly erroneous" and stating that he would take immediate action to challenge this decision.
On June 9, Lin Jian, a spokesperson for the Chinese Ministry of Foreign Affairs, emphasized during a regular press conference that China has always firmly opposed the US tendency to generalize concepts of national security and to create discriminatory lists under various pretexts, as well as the unreasonable suppression of Chinese enterprises. We urge the US to correct its wrongful practices and stop its unreasonable suppression of Chinese enterprises. China will take necessary measures to firmly protect the legitimate rights and interests of Chinese enterprises.
