Structuring Cross-Border Biotech Deals in the Shadow of US and China Regulatory Tightening

The COINS Act, BINSA, BIOSECURE, and China's Decree No. 837: What Deal Teams Need to Know Now

INTENDED AUDIENCE

Business development, legal, corporate development, licensing, and investment professionals at pharmaceutical and biotechnology companies, as well as venture investors actively engaged in—or evaluating—cross-border transactions involving China-originated assets.

The regulatory landscape for US-China biotech transactions is evolving rapidly—and simultaneously—on both sides of the Pacific. In the United States, multiple legislative and regulatory developments may expand outbound investment controls to pharmaceutical licensing and biotechnology intellectual property. In China, new outbound investment regulations taking effect on July 1, 2026 are expected to increase scrutiny of offshore restructuring and equity-linked cross-border transactions.

Several important regulatory milestones are anticipated between July 2026 and March 2027 that could materially affect transaction planning. While the scope and timing of these developments remain uncertain, deal teams are increasingly evaluating how to build structural flexibility into transactions rather than waiting for final rules that may not emerge for many months.

DISCUSSION TOPICS

The US Trajectory | How the COINS Act, BIOSECURE (including the June 2026 1260H expansion), FY2027 NDAA proposals, and BINSA interact—and what the range of possible outcomes may mean for transaction planning.

The China Trajectory | The implications of State Council Decree No. 837 (effective July 1, 2026), the tightening of red-chip restructuring approvals, and the emerging distinction between licensing-for-cash and licensing-for-equity structures.

The Structural Spectrum | How different transaction structures—including pure licensing arrangements, NewCo structures, joint ventures, and direct investments—map onto regulatory exposure on both sides of the Pacific, and where lower-risk structural alternatives may remain available.

Building Flexibility into Term Sheets | How different transaction structures—including pure licensing arrangements, NewCo structures, joint ventures, and direct investments—map onto regulatory exposure on both sides of the Pacific, and where lower-risk structural alternatives may remain available.

What We Don't Know Yet | Key open questions, including Treasury's potential biotechnology sector designation, BINSA's legislative path, and China's implementation of Decree No. 837—and how transaction parties can plan around uncertainty rather than wait for certainty that may not arrive.

BACKGROUND

The Comprehensive Outbound Investment National Security Act (COINS Act), enacted in December 2025 as part of the FY2026 National Defense Authorization Act, established the first US outbound investment screening regime. The statute currently applies to artificial intelligence, semiconductors, and quantum computing, while granting the US Department of the Treasury authority to designate additional sectors—including biotechnology—without further legislation. The Treasury Department is required to issue final implementing regulations by March 13, 2027.

The Biotech Investment National Security Act (BINSA), announced on June 12, 2026, is a bipartisan legislative proposal that would amend the COINS Act to expressly bring certain pharmaceutical licensing structures within the outbound investment regulatory framework, rather than limiting coverage to equity investments. If enacted, it would represent the first legislation specifically extending outbound investment controls to licensing transactions.

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