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CSPC PHARMA (01093.HK) Falls 4%, HENGRUI PHARMA (01276.HK) Slumps 7%; Citi Says Low Chance of US Bill to Curb Investment in China Biotech Passing, Sees Buying Opportunity in Pharma Sector
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Citi published a research report noting that bipartisan US lawmakers proposed a bill on June 2 to include US outbound investment in Chinas biotechnology sector under the review requirements of the Comprehensive Outbound Investment National Security Act (COINS Act). The proposed legislation, titled the National Security Biotechnology Investment Act of 2026, aims to amend the 2025 COINS Act by adding biotechnology to the list of industries subject to outbound investment screening by the US Treasury. Citi pointed out that if the bill is passed, it could restrict business development (BD) transactions, joint ventures and equity investments between Chinese and US pharmaceutical companies. Citi believes the probability of the legislation being passed is low. Drawing a parallel with the Biosecure Act, which ultimately passed in a much milder form after causing market volatility, the bank expects a similar outcome. Reasons cited for the low likelihood of passage include: first, the bill would limit US companies access to high-quality innovation from China, affecting pipeline development; second, it could weaken the competitiveness of US companies relative to European and Japanese multinationals; and third, the bill faces strong opposition from US pharmaceutical companies and some investors. Citi said geopolitical tensions have negatively impacted Chinas biotechnology sector, but it still expects multiple positive catalysts in 26, including strong earnings from leading pharmaceutical and biotech companies, more BD transactions and progressive clinical trial data readouts. The bank sees this as a good buying opportunity for investors and keeps its preferred Hong Kong-listed names in the pharmaceutical and biotechnology sector unchanged, including HENGRUI PHARMA (01276.HK), CSPC PHARMA (01093.HK), ASCLETIS-B (01672.HK) and INNOVENT BIO (01801.HK). CSPC PHARMA closed at HKD7.25, down 4.23%, with turnover of 124 million shares, involving HKD896 million. INNOVENT BIO closed at HKD76.85, down 2.54%, with turnover of 13.9082 million shares, involving HKD1.068 billion. ASCLETIS-B closed at HKD9.94, down 3.78%, with turnover of 4.9072 million shares, involving HKD49.2188 million. HENGRUI PHARMA closed at HKD54.7, down 7.05%, with turnover of 12.538 million shares, involving HKD697 million. (ad/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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