Chinas biotech cash injection suddenly drops as U.S. scrutiny intensifies

China is a big area of opportunity for biotech: It has a population of about 1.4 billion, with a sizable and growing chunk of that demographic succumbing to chronic, middle-class diseases like diabetes, cancer and heart disease. Regulation is complex, to say the least, but U.S. and European biotech companies know China is an increasingly important area not just to sell medicines, but to discover and develop them as well. China, too, has been making a big push in the direction of innovation, and is looking to spend considerable sums on Western biopharmas to do so: In the first six months of last year, Chinese investors took part in venture capital funding rounds for U.S. biotech companies worth $1.65 billion. Much of this cash has been used to fill in the “valley of death”: a gap between getting a promising idea into something more tangible, with cash pots of $20 million and $30 million injected into seed rounds for very young startups hoping to start the journey into the clinic. Many saw this as the beginning of a trend, with Chinese companies and VCs increasingly looking to help bolster U.S. biotechs. But fast-forward one year, and funding is down by more than half to just $725 million, according to new figures out by Seattle-based data provider PitchBook. This comes amid increasing trade wars between the U.S. and China, with the White House doubling down on its tough stance against alleged intellectual property theft from the country as well as higher scrutiny over how and where overseas cash injections are coming into the U.S.

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