China Healthcare: US Treasury Department could be making rules allowing most China out-licensing deals

Reuters reported on 18 September that the US Treasury Department is drafting rules that could preserve most licensing deals between US pharma and Chinese biotech/pharma companies, confining restrictions to narrow areas "like pathogens and potentially weaponizable technologies". We understand the Treasury Department is expected to release a proposed rule for COINS implementation this fall, and a final rule would be due in March next year. We believe this report from Reuters, if confirmed, could reduce the tail-risk investors had feared on China-originated drug out-licensing deals, but it doesn't resolve the potential hit to sentiment if biotechnology is added to the rules for the COINS Act and appears on the outbound investment blacklist. According to the report, the rules would let US pharma companies continue to license most Chinese drug candidates, concentrating restrictions on a small slice of technologies tied to pathogens or weaponizable biotech, rather than a blanket clampdown. T