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Foreign Investment Rules and Biotech

New rules governing foreign investment in certain US technologies may affect biotech investors, Stat News reports.

The new regulations issued by the Treasury Department require foreign investors in certain critical technological areas to undergo national security reviews, or face with fines as high as the amount invested, according to the Wall Street Journal. Bloomberg adds that the review would examine what sort of sensitive information would be made available to the foreign investors and whether that could compromise US interests.

These new rules encompass 27 different industries, bringing them under the auspices of the Committee on Foreign Investment in the US, the Journal says. Previously, CFIUS dealt largely with when foreign investors assumed controlling stakes in US companies, it adds, noting that the new regulations were spurred in part by increased Chinese investment in Silicon Valley.

But as Stat News reports, the rules also encompass biotech, which has also experienced a wave of Asian investment. It adds that more than 40 percent of biotech deals so far in 2018 have included at least on Asian investors, as compared to 11 percent in 2016. These regulations could slow investment in biotech, it adds.

The rules take effect in November and are part of a pilot program, Stat News adds.