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MajorMarket eventFri, Oct 231 min read
Restrictions could narrow major drugmakers’ access to promising Chinese treatments.
The U.S. Treasury is seeking restrictions on deals involving Chinese biotechnology and artificial intelligence, according to the report; the measures are at the proposal stage.[1]
The proposed prohibitions could cut major pharmaceutical companies off from Chinese biotech developers, a source of many promising cancer treatments.[1] The available report does not specify which transactions would be covered or when restrictions would take effect.[1]
Drugmakers can obtain drug candidates developed by other companies through deals, then take them through further development and commercialization. If the restrictions cover such transactions, drugmakers that rely on Chinese research could have fewer candidates to choose from and need to seek alternatives. Chinese developers could lose deal proceeds that help fund further research. The size of the effect depends on the final scope.[1]
For AI, the potential channel is also reduced access to deals. Chinese AI companies could have fewer opportunities to transact with U.S. counterparties if their deals fall within the restrictions, but the available information does not identify the specific businesses exposed.[1]
If the proposed restrictions cover drug-development deals, pharmaceutical companies sourcing candidates from China may need alternatives, while Chinese biotech developers could lose partners and deal income. The report specifically identifies Chinese companies as a source of many promising cancer treatments.[1]
Deals involving Chinese AI companies face potential restrictions that could narrow their access to U.S. counterparties. Exposure depends on which transactions are covered, details the available report does not provide.[1]