Impact of proposed China biotech investment rules expected to be minimal, RBC says

** US Treasury's proposed draft rule on biotech investment in China will have minimal sector impact, as larger cos can likely keep pursuing M&A while smaller ones retain access to more affordable ex-US assets, RBC Capital Markets analysts say

** Department announced proposed rules for screening investment in China and added biotechnology sector to legislation

** "The current wording...is broad enough to allow most deal making", RBC said, but flagged uncertainty as rules could become more restrictive or looser

** For companies with acquisitive history, e.g. Jazz Pharma JAZZ.O, they could focus resources on US M&A to avoid even potential Treasury scrutiny, brokerage says

** "While there may be persistent headline risk for companies like Legend Biotech LEGN.O and BeOne Medicines that are still sometimes painted as Chinese biotechs, we think the practical impacts are immaterial as ONC is domiciled in Switzerland and LEGN is Cayman domiciled"- RBC

** Brokerage added its data suggests China deal flow continues to grow, with H1 deals rising to 45 and the share of all licensed assets climbing from 5% in 2024 to 12% in 2026