[Edaily Reporter KIM SUNG-JIN ] As the Chinese government moves forward with measures to control the overseas transfer of cutting-edge core biotechnology—such as cell and gene therapy (CGT) and small interfering RNA (siRNA)—attention is focused on the potential impact on the domestic pharmaceutical and biotech industries. While there are concerns within the industry that the future operations of domestic companies that have introduced new Chinese drugs may be disrupted, the focus is on preventing the outflow of core technologies rather than restricting the export of specific pharmaceuticals; therefore, the immediate direct impact is not expected to be significant.

These regulations are likely to pose an obstacle for companies seeking to manufacture and produce new Chinese drugs domestically or to import core technologies from Chinese firms. However, some analysts suggest that South Korea could instead emerge as an alternative partner in the global CGT market.

China Bans Transfer of Core Technology Ownership… New Drug Licenses Permitted

According to the pharmaceutical and biotech industries on the 21st

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China’s Ministry of Commerce and Ministry of Science and Technology released an amendment on the 16th adding 40 technologies in the fields of artificial intelligence (AI), biotechnology, and solar energy to the list of export bans and restrictions. Fourteen technologies were classified as export bans, while 26 were classified as subject to export restrictions. In the biotech sector, the list includes five technologies related to CGT, siRNA, and pathogenic microorganisms. The Chinese government plans to finalize the detailed list after gathering public comments through November 15.

The core of the Chinese government’s export controls on advanced biotechnology is focused on preventing the outflow of core technologies. Specifically, in the fields of CGT and siRNA, the government plans to prohibit the transfer of overseas ownership of universal core technology platforms that can be used in the development of various pharmaceuticals. Technologies that enhance the functionality of pathogenic microorganisms are also included in this category.

However, this does not mean that technology exports themselves will be blocked. It is expected that the export of technology alone—without transferring ownership—under the Chinese government’s authorization, as well as technology transfers necessary for the manufacture and testing of specific pharmaceuticals, will remain permissible.

A bioindustry official stated, “It appears the intent is to allow Chinese companies to enter overseas markets by exporting new drug technologies while preventing the ownership of core source technologies—which can be used to develop various new drugs—from passing into the hands of foreign companies.”

This regulation is seen as a response to the rapid growth of China’s biotech industry and the increasing number of cases where technology is exported overseas. According to the Korea Bio Association, the value of licensing agreements signed by Chinese biotech companies with multinational pharmaceutical firms, including those in the U.S., reached approximately $136 billion (about 180 trillion won) last year. Of the major pharmaceutical and biotech licensing agreements worth over $50 million worldwide last year, 48%—nearly half—were signed by Chinese companies.

GC Cell: “Import of Pucaso Will Not Be Affected”… Separate Review if Domestic Production Is Pursued

As China moves to restrict exports of core biotech technologies, attention is also focusing on the potential impact on the domestic pharmaceutical and biotech industry. This is because, as China’s biotech industry grows rapidly, there are increasing instances of domestic companies importing Chinese pharmaceuticals or technologies. This year alone, JWPHARMACEUTICAL signed a domestic exclusive licensing agreement with Chinese pharmaceutical company Jian’anli Pharmaceuticals for the GLP-1 receptor agonist drug candidate “Bofangglutide,” and HK inno.N Corporation also secured the rights to develop and commercialize “Eknoglutide,” a GLP-1-targeted obesity treatment candidate, from China’s Saiwind Bioscience in 2024 and is currently conducting Phase 3 clinical trials in Korea.

However, GLP-1 therapies fall under a different category from the cell and gene therapies and siRNA core technologies specified in this regulatory proposal and are therefore not included in the scope of these regulations.

GC CELL, on the other hand, is proceeding with the domestic introduction of T-cell therapies (CAR-T), which are directly related to these Chinese regulations. Last October, GC CELL introduced “Fukaso,” a multiple myeloma treatment, from Nanjing IasoBio in China. Fukaso is a chimeric antigen receptor T-cell (CAR-T) therapy that genetically engineers the patient’s own T-cells to attack cancer cells. It received marketing authorization in China in 2023, and GC CELL applied for an import license from the Ministry of Food and Drug Safety in February of this year.

In a regulatory filing at the time, GC CELL announced that it had secured not only the exclusive rights to develop and market Fucaso in South Korea but also the rights to manufacture and produce the drug. This has drawn attention to whether the inclusion of CGT technology in the Chinese government’s export control list could affect GC CELL’s future business operations.

GC CELL maintains that the current efforts to secure domestic approval and supply of Pucaso will not be affected. This is because the import license currently being applied for involves collecting blood from domestic patients, sending it to China, manufacturing the CAR-T therapy there, and then importing the finished product back to Korea for administration to patients. The company explains that, since the process involves manufacturing in China and supplying the finished therapy to Korea, it is unrelated to the recent technology export restrictions.

However, this does not mean the regulations will have no impact at all. This is because GC CELL has signed a contract securing not only the rights to sell Pucaso domestically but also the rights to manufacture and produce it. A GC CELL official stated, “Discussions regarding the manufacturing license have not yet begun,” adding, “If we proceed with domestic production, we will need to separately review whether it violates Chinese regulations.”

New Opportunities for Domestic CGT and siRNA Companies?

Conversely, some observers suggest that the Chinese government’s restrictions on the transfer of ownership of core technologies could present opportunities for domestic biotech companies. This is because if global pharmaceutical companies find it difficult to directly acquire core platforms from Chinese firms, they may seek to secure technology from other countries. In Korea, companies such as Olix Pharmaceuticals, Inc. and BIONEER CORPORATION, which possess siRNA platforms, are cited as relevant players. Olix Pharmaceuticals, Inc. also has experience signing a technology export agreement with the global pharmaceutical company Eli Lilly in 2025 based on its proprietary siRNA technology.

However, since the Chinese government permits licensing agreements that do not involve ownership transfer, it remains to be seen whether demand for technology exports from domestic companies will actually increase. Furthermore, as the regulatory measures—including the scope and specific items covered by technology exports—have not yet been finalized, there is a high likelihood of unforeseen variables.

A bioindustry official stated, “While transactions between domestic companies and China—primarily involving licensing and supply agreements for individual substances—currently fall under the exemption from controls, the scope could change following the public comment period ending on November 15.” The official added, “In the fields of CGT and nucleic acids, since China is blocking the overseas transfer of these platforms, South Korea could emerge as an alternative supplier for global partners.”