U.S
.-China Bio-Hegemony Competition Heats UpThe U.S. House of Representatives Special Committee on the Chinese Communist Party recently introduced the “Biotechnology Investment National Security Act (BINSA).” The core of this bill is to expand the scope of the “China Investment Restriction Act (CONIS Act),” which was passed last year, to include the biotech sector.
If the bill is enacted, all licensing agreements, joint ventures (JVs), and equity investments entered into by U.S. companies with Chinese firms across the entire biotech industry—including pharmaceuticals, biopharmaceuticals, and clinical R&D—will be subject to review by the U.S. Department of the Treasury. This effectively means that biotech investments and cooperation with China will be managed at the national level.
However, the bill remains in the proposal stage. Whether the biotech sector will be subject to these regulations is expected to be clarified when the U.S. Treasury Department finalizes the implementing regulations for the CONIS Act by March 17 of next year.
Consequently, the market is paying closer attention to the U.S. Department of Defense’s recent inclusion of Chinese genomics analysis firm BGI Group, equipment manufacturer MGI Tech, and contract development and manufacturing organization (CDMO) WuXi AppTec on its list of “Chinese military-linked companies.” This is because the market views this move as significantly increasing the likelihood that WuXi AppTec will be designated a “biotech company of concern” under the Biosecurity Act, a designation expected to be announced in the second half of this year.
A bioindustry official stated, “Now that WuXi AppTec has been added to the list of Chinese military companies, the possibility of it being excluded from future regulations is virtually nil,” adding, “We are keeping in mind the possibility that even its core affiliates could fall under the scope of these regulations.” In fact, the draft Biosecurity Law contains provisions allowing the regulatory scope to extend to subsidiaries, parent companies, affiliates, and successor companies.
In response to the U.S., China is also taking steps to protect its biotechnology. It is reported that China’s Ministry of Commerce recently reviewed measures to ban or restrict exports of certain advanced biotechnologies, such as antibodies, cell therapies, and gene therapies. This suggests that the business strategies of Chinese biotech companies—which have previously sought to enter the global market through aggressive technology transfers and licensing deals—may undergo changes.
South Korean CDMOs and ADCs See ‘Opportunity’… Cooperation with China Is a ‘Wild Card’
An official from a CDMO company said, “There are already reports that global pharmaceutical companies are considering production and development partners outside of China in light of the possibility that U.S.-China tensions could escalate,” adding, “Korean companies are being evaluated as viable alternatives that possess both technological expertise and production capabilities.”
CDMO companies such as SAMSUNG BIOLOGICS(207940), #Lotte Biologics, and Celltrion(068270) are being cited as potential beneficiaries. Among these, SAMSUNG BIOLOGICS is the first company mentioned alongside Lonza and Fujifilm as a potential alternative to Wuxi Biologics in the global CDMO industry. This is because Wuxi Biologics has maintained a dominant position in the market by leveraging its “end-to-end” services, which cover the entire biopharmaceutical development cycle; consequently, SAMSUNG BIOLOGICS—which possesses similar business models and capabilities—is drawing attention as a viable alternative.
In fact, SAMSUNG BIOLOGICS completed the acquisition of a production facility in Rockville, U.S., in March and has begun operations there, enabling it to expand its engagement with clients in the U.S. and potentially secure orders directly. Additionally, the company is proceeding with the construction of Plant 6 at its Songdo Bio Campus II in Incheon, targeting completion next year, thereby establishing a foundation to meet the increased demand expected during the global supply chain restructuring process.
Korean companies possessing next-generation bispecific antibody and antibody-drug conjugate (ADC) platforms are also being cited as potential beneficiaries. As global pharmaceutical companies are currently engaged in a fierce competition to acquire large-scale technology centered on bispecific antibodies and ADCs, and given that Chinese companies have emerged as global leaders in the export of related technologies, Korean firms could benefit indirectly by filling this gap. In fact, 56% of China’s 2024 anti-cancer drug licensing deals involved ADCs, with the total transaction value reaching approximately $19 billion (about 29.0681 trillion won).
Among Korean companies, ABL Bio Inc.(298380)and Y-Biologics, Inc(338840)are being mentioned. ABL Bio Inc., through its U.S. subsidiary Neoak Bio, has commenced U.S. Phase 1 clinical trials for its bispecific antibody ADC candidates ABL206 and ABL209, and began dosing the first patient last month. ABL206 is a first-in-class compound that simultaneously targets B7-H3 and ROR1. ABL209 simultaneously targets EGFR and MUC1. The company is focusing on enhancing tumor selectivity and therapeutic efficacy compared to existing ROR1 or B7-H3 monoclonal antibody-drug conjugates (ADCs), thereby securing a competitive edge in the dual-antibody ADC market—a dual blue ocean.
Y-Biologics, Inc. possesses a core pipeline, including AR166 and AR170, through its next-generation immuno-oncology platform, “Multi-Abkaine.” Both candidate compounds have demonstrated excellent tumor-suppressing effects in preclinical studies, and development is reportedly proceeding smoothly with the goal of submitting an Investigational New Drug (IND) application next year.
The company recently partnered with Wuxi Biologics to develop a next-generation triple-target immuno-oncology drug, raising concerns about regulatory risks associated with its collaboration with China. However, many analysts believe that the impact of U.S.-China tensions on current projects will be limited, and there is no reason not to classify the company as a potential beneficiary.
A Y-Biologics, Inc. official also stated, “Even if Wuxi Biologics is subject to regulation under the future Biosecurity Act, a grace period will apply to existing contracts,” adding, “We believe this will not affect the 2027 global IND submission schedule.”
Of course, there are also many voices expressing concern about the risks associated with the deepening U.S.-China tensions. While the immediate visible impact is limited, if U.S. biosecurity regulations targeting China are fully implemented, changes to the business models of companies that have collaborated with China may become inevitable.
In fact, AriBio and LigaChem Biosciences have established cooperative relationships by transferring technology to Chinese companies, and there are many cases—such as those of JWPHARMACEUTICAL and HK inno.N Corporation—where companies are introducing new drug candidates from Chinese biotech firms or engaging in joint development. There is also a steady increase in the number of companies utilizing Chinese contract research organizations (CROs) and contract development and manufacturing organizations (CDMOs), which offer competitive advantages in terms of cost and development speed.
An official from a pharmaceutical company stated, “Since there have been many instances where moves toward stricter regulations in the U.S. and China amounted to little more than warnings, I believe it is still too early to assess their impact,” but added, “If these regulations are actually institutionalized and enforced, the impact could be significant, so companies that have proactively reviewed response strategies may have an advantage.”
