Briefing: Chinese investors shy away from US biopharma startups in 2019

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Chinese investment in US biopharma startups down over 80% in 2019 – Bay Bridge Bio

What happened: In the span of a year, Chinese investment in US biotech has gone from providing more than 40% of the industry’s venture funding to almost zero. According to Bay Bridge Bio, new US regulations on foreign investments implemented last August are to blame for the decrease. The regulations give the Committee of Foreign Investment in the United States (CFIUS) expanded power to more closely scrutinize foreign minority investments in startups.

Why it’s important: CFIUS’s new authority makes it difficult for early-stage companies to accept foreign investments, as evidenced by the fact that Chinese VC has participated in just one US biopharma company’s Series B round so far in 2019. American VCs have filled in the gaps, though, making up 47% of Series B funding participants through June 18 compared with just 5% in 2018. In China, this could be a blessing for a domestic biotech industry that has suffered from its own recent drop in investments: now that Chinese investors are shying away from US assets, they may return their attention to local firms.