I have filed a public comment on Treasury's proposed rules under the COINS Act. I advise biotech and pharma companies on cross-border licensing. In my comment, I support the law's aim of keeping U.S. money and expertise from strengthening the military, intelligence and surveillance capabilities of China and other countries of concern.
But the current draft makes biotech a prohibited sector, with no lighter tier for deals that only need to be reported.
Its broadest biotechnology paragraph, § 851.226(r)(4), covers any company that uses a biological system to make or modify a pharmaceutical compound. U.S. investment in such a company would be banned if it is, broadly, based in a country of concern or owned or controlled from one. The list, from small molecules and vaccines to cell and gene therapies and antibodies, covers nearly all biologic drug development. Treasury recognizes that restrictions in this sector could work against national security if they lead to significant public health risks or harm American businesses.
Notification would serve Treasury better than a ban on medicines
In my comment, I propose that we keep the ban where Treasury's stated risks lie. That means biological agents and toxins, energetic materials, biomanufacturing equipment under export control, platforms that design or engineer organisms, pathogens or agents from scratch, and blacklisted companies. Developing and making specific medicines, and building bioinformatics tools, would become notifiable, so investors would report them to Treasury. Because Treasury's current program never covered biotechnology, and a banned sector files almost no notices, a notifiable tier would give it evidence it has never had on individual transactions. It would also provide Treasury a basis to extend the ban by rule wherever that evidence shows acute risk.
Most large deals with Chinese developers are cash licenses
After some digging, I found 56 deals from January 2025 to October 2026 in which a developer in mainland China or Hong Kong licensed a medicine or platform to a company outside Greater China. Each carried at least $50 million in cash and equity agreed at signing. Forty-three were cash licenses, while the other 13 also involved shares, a new company in which the Chinese licensor holds or will hold equity, or shared development costs or profits. Nine of the 13 had American licensees, and in seven of the nine the Chinese licensor took, or will take, shares, warrants or notes in the licensee.
I recognize the concern that American companies increasingly depend on assets from China. A ban would leave that dependence in place and move the deals to partners abroad. Treasury itself noted in 2024 that foreign investors may replace American ones in prohibited transactions.
The definitions should leave ordinary deals and American startups alone
The draft leaves "joint venture" undefined and relies on its plain meaning, two parties contributing capital or assets and sharing profits and losses, which an ordinary co-development deal can fit. The comment asks Treasury to state that a license or product collaboration forming no jointly owned entity is not one. Read literally, the "direction or control" test could bar American investment in a Delaware antibody startup whose chief executive is a Chinese scientist working here on a visa. Treasury should keep people who live here lawfully out of that one test, though the ownership tests would still apply to them. It should also confirm that a licensor with under half the equity and at most one board seat lacks control, and judge larger stakes on their facts.
I have offered to test any definition that Treasury or other commenters propose against our deal dataset, and to file the results on the docket. Comments are due by December 7, and anyone with deal evidence of their own can still file. You should definitely contribute if you want your voice to be heard and your on-the-ground experience appreciated.
A copy of my comment is here, and I am open to a healthy debate on how we keep American biotech thriving and prosperous, and protect our national health. Reach out to discuss.
Julien
Common questions about the COINS Act and biotech
These answers are my reading of a proposed rule, not legal advice, and any real deal should be checked with counsel.
What is the COINS Act? The Comprehensive Outbound Investment National Security Act became law on December 18, 2025, as part of the National Defense Authorization Act for Fiscal Year 2026. It gives Treasury's outbound investment program a statutory basis, so Treasury can bar some American investments tied to countries of concern and require notice of others. Treasury's proposed rule to carry it out, which would create a new Part 851 of its regulations, appeared in the Federal Register on October 26, 2026.
Does the COINS Act rule cover biotech? Congress did not list biotechnology in the Act, but Treasury's proposed rule adds it as a prohibited technology under its power to add sectors. The ban applies to American investment in companies or individuals tied to a country of concern that do the listed work. The paragraph that matters most for drug development, § 851.226(r)(4), covers using a biological system to make, modify, enhance or control a pharmaceutical compound. That takes in nearly all biologic drug development, from antibodies and vaccines to cell and gene therapies. Because the sector has no notifiable tier, the $50,000 de minimis exception, which applies only to notifiable deals, never applies to it.
Does the COINS Act rule cover licensing deals? The draft covers equity, some loans, joint ventures, new operations in a country of concern and some fund stakes. A cash license, with no shares changing hands, no licensor stake in a new company and no shared costs or profits, is none of these. But the draft gives "joint venture" its plain meaning, with no new entity needed, so a deal that shares development costs or profits could count as one. Investors in a new American company can also be caught if Chinese holders together own half or more of it, or if the licensor controls it. That matters only where the company's own work falls within the ban, and my comment asks Treasury to settle these points in the rule itself.
What is a covered foreign person under the COINS Act? It is an individual, company or government body defined by its ties to a country of concern, whatever its technology. The rule then bans, or requires notice of, American investment in those that engage in a listed technology. Among other tests, a company counts if it is organized under the laws of a country of concern or has its principal place of business there. It also counts if such persons together own half or more of it, or if one of them has "direction or control" of it. Read literally, that last test could catch a Delaware antibody startup whose chief executive is a Chinese scientist working here on a visa. My comment asks Treasury to keep people who live here lawfully out of that one test, while the ownership tests would still apply to them.
What is the difference between a prohibited and a notifiable transaction under the COINS Act? A prohibited transaction cannot legally be made, while a notifiable one is allowed if the American investor files specified information with Treasury. My comment asks Treasury to keep the biotech ban for agents and toxins, energetic materials, biomanufacturing equipment under export control, design platforms and companies on government lists. Developing and making specific medicines, and building bioinformatics tools, would become notifiable instead. Because Treasury's current program never covered biotechnology, those notices would give it new evidence, and a basis to widen the ban where risk is shown.
When are comments on the COINS Act rule due? Comments are due by December 7, 2026, through regulations.gov under docket TREAS-DO-2026-0595. Treasury publishes every comment and attachment, including any confidential business information in them, so share only deal details you are willing to make public. It asked commenters to discuss the impacts of the biotech provisions and to support their views with empirical data where possible.