[ET Net News Agency, 23 November 2018] The office of the US Trade Representative on 19
November proposed new export restrictions on additional sectors to crackdown on
intellectual property theft by foreign nations including China, and biotech is one
industry identified to be subject to limits on foreign investment.
Nomura said Chinese venture capitals (VCs) that focus investment in US biotech companies
are the front line to be affected by this potential restriction. In the longer term, with
a potential worsening of Sino-US relationship, it thinks restrictions and/or difficulties
will extend to affect more general biotech business, such as US biotech companies using
China CRO services, and China drug makers licensing in advanced US innovation drugs.
Nomura suggested that investors be more cautious on Chinese biotech companies that
have close business relationships with the US.
In addition to the factors mentioned above, a worsening Sino-US relationship may also
hurt China biotech companies on rising R&D expenses. Chinese biotech makers face 10% price
increases for imported equipment every year, and the Sino-US friction may worsen the
situation, the research house said. (KL)