US-China trade war begins to impact biotechs; Fosun to ease up on US investments

By PharmaCompass

2019-06-06

Impressions: 119 Article

The trade war between the US and China is beginning to impact investments in the pharmaceutical sector. The most acquisitive Chinese biotech company — Fosun International Ltd — is easing up on investments in the US.

According to Kevin Xie, Fosun’s chief representative in the US, Fosun is looking to limit its investments in US biotech companies to mostly small stake holdings, in an effort to avoid American regulatory scrutiny, which has been on the rise.

“Trade friction has impacted our investments in the US, but not to the extent of stopping all deals," Xie said.

Fosun is shifting its focus to emerging markets, Xie said. In 2017, Fosun had bought Indian drugmaker Gland Pharma for US$ 1.1 billion.

Under President Donald Trump, the Committee on Foreign Investment in the United States (CFIUS), which screens takeovers of domestic assets for national security risks, has become more stringent. Trump’s decision this month to blacklist Huawei Technologies has added to uncertainty over whether any cross-border mergers would be approved by China and the US.

Healthcare deals involving Chinese investors in the US stood at US$ 2.8 billion last year, compared with US$ 702.9 million in 2017. Fosun has been a big player for US biotechs to partner with. Kite, for example, joined hands with Fosun to create Fosun Pharma Kite Biotechnology to develop, manufacture and commercialize its CAR-T therapy in China. But all that will change, with CFIUS screening even the purchase in biotechnology due to worries that investment by Chinese firms could give Beijing access to patient data that could be used to blackmail Americans.

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