US government to closely scrutinize the overseas venture into American biotech companies in the future as an initiative by the White House for the protection of US technology and intellectual possessions.
The Treasury Department passed a new regulation to governor the foreign investments that obtain non-controlling equity stake of UD biotech companies. “Committee on Foreign Investment into the United States (CFIUS)” has the authority for the inspection of investments from international sources. The extended guidelines as well cover 26 further critical arenas, which includes nuclear electric power generation and guided missile technology. Previously, the committee only assessed mergers and acquisitions that shifted the control of US company into international firms.
In 2018, till August, the Chinese and other Asian investors accounted for about 50% of total investment and from just two years, these investors have made more than one tenth of US biotech flow.
Treasury Secretary Steven Mnuchin stated that “These temporary regulations address specific risks to US critical technology while informing the development of final regulations that will fully implement FIRRMA,” This statement was made with reference to the new act “Foreign Investment Risk Review Modernization Act of 2018”, which led to the expansion of CFIUS jurisdiction.
The department also mentioned that the risk of loss of technical dominance and excellence due to few foreign direct investments, necessitates instantaneous plans.
China is recently pertinent country in biotechnology sector, as their governing policies aided to reveal a native sector that’s extensively straggled its American and European correspondent companies in developing innovative therapies and medications. As Biotechnology is a part of the Chinese government “Made in China 2025” plan, many policies are relaxed requirements that had halted the clinical trials and new drug approvals.
– Rikitha K Murthy,