A Nomura expert interview suggests that transitional arrangements can cushion the near-term impact, but the actual effects will depend on the specific company list, contract implementation and scope of investment restrictions.
A US Treasury draft would restrict equity investments, convertible debt and certain joint venture arrangements involving Chinese biotechnology companies. Goldman Sachs believes conventional licensing transactions can still proceed, but structures involving joint funding and shared profits and losses, or attached equity, may fall under the prohibition.
J.P. Morgan believes the U.S. Treasury’s proposed rules are stricter than it expected, posing greater risks to private financing and equity-linked partnerships in China’s biopharmaceutical industry. The scope of application to standalone drug licensing remains unclear, and the final coverage could still change.
