On October 16, the Ministry of Commerce and the Ministry of Science and Technology issued an announcement soliciting public comments on a revision to the Catalogue of Technologies Prohibited and Restricted from Export, while simultaneously implementing pre-export registration management for related technologies. This revision involves 40 technologies across three fields: artificial intelligence, biomedicine, and photovoltaics.

Specifically, among the five biomedical technologies proposed for addition this time, the prohibited-for-export category includes original technology and process platforms for cell and gene therapy, original technology and process platforms for small nucleic acid drugs, and artificial genetic modification and directed passaging gain-of-function technologies for pathogenic microorganisms; the restricted-for-export category includes discovery and validation technologies for entirely new targets in cell and gene therapy, and discovery and validation technologies for entirely new targets in small nucleic acid drugs.

At a time when the transaction value of domestic innovative drug BD outbound deals keeps hitting new highs, this policy development has drawn widespread industry attention: Will it choke off outbound expansion? Is the sky about to change for innovative drug globalization? How should CGT and small nucleic acids proceed with outbound expansion going forward?

Chapter 1: The Premises and Boundaries of the Five Technology Controls

In fact, this revision is not an isolated event.

Since 2001, the Ministry of Commerce, together with the Ministry of Science and Technology, has adjusted and revised the Catalogue multiple times, forming a working convention of "some in, some out; some controlled, some liberalized." A spokesperson for the Ministry of Commerce explicitly stated that this revision is "routine work in technology trade management, conducted in accordance with laws and regulations, and not targeted at any specific country, region, or entity."

Focusing on the biomedical field, over the past three years, the scale of China's innovative drug out-licensing transactions has continued to climb.

According to data released by the National Medical Products Administration, as of September 2026, the transaction value of China's innovative drug BD outbound deals this year exceeded $120 billion, up 36% year-over-year, nearly matching the full year of last year. Upfront payments exceeded $10 billion. The market simultaneously shows characteristics of steadily growing average transaction value per deal, both increasing upfront payment amounts and proportions, and frequent large deals landing — demonstrating the continuously rising value of domestic innovative drugs.

When a country's technological accumulation reaches a level sufficient to influence the global industrial landscape, the accompanying institutional arrangements typically follow. The inclusion of biomedical technologies in the export control system is institutional follow-through after industrial maturation.

Specifically, among the five biomedical technologies proposed for addition this time, the prohibited-for-export category includes original technology and process platforms for cell and gene therapy, original technology and process platforms for small nucleic acid drugs, and artificial genetic modification and directed passaging gain-of-function technologies for pathogenic microorganisms; the restricted-for-export category includes discovery and validation technologies for entirely new targets in cell and gene therapy, and discovery and validation technologies for entirely new targets in small nucleic acid drugs.

Understanding the control boundaries of these technologies requires grasping three core points:

First, "platforms" rather than "pipelines" are the focus of control. The draft for comments explicitly states that the "technology and process platforms" prohibited from export refer to "complete sets of reusable underlying common technologies formed through long-term R&D accumulation that can support the development of multiple drugs." Technologies and processes used for the development of a single drug variety are not within this scope.

Second, out-licensing is not included. The draft for comments explicitly states that for out-licensing models that do not involve transfer of ownership, facilitation measures such as automatic licensing apply. This means the current industry-mainstream License-out model — granting overseas companies the right to use intellectual property, collecting upfront and milestone payments, while technology ownership remains domestically retained — is not directly constrained by this control.

Third, pathogenic microorganism technologies focus on biosafety. Artificial genetic modification and directed passaging gain-of-function technologies for pathogenic microorganisms are listed as prohibited from export, covering gain-of-function technologies for known or potential pathogenic microorganisms, passaging culture systems used for large-scale proliferation and directed accelerated evolution, and artificially controlled passaging induction technologies that simulate natural evolutionary processes. The Ministry of Commerce stated that including them in the Catalogue for prohibited export "is an important measure to safeguard national security," directly related to human health and national biosafety.

Chapter 2: How Will It Affect the Industry's BD Landscape?

At a time when Chinese innovative drugs are expanding globally on a large scale, how will this policy shift affect the industry's BD landscape?

A securities analyst noted that "the relevant policies mainly impose constraints on technology platform-type transactions, and the impact on industry outbound collaboration may be relatively limited. The core purpose is to safeguard domestic core technology sovereignty and solidify the foundation for long-term innovation."

Over the past two years, as the scale of China's innovative drug out-licensing transactions has continued to climb, the platform value of Chinese biopharmaceutical companies is being recognized by multinational pharmaceutical companies, and transaction targets are also changing — early deals were mostly focused on single pipelines or indication rights, while in recent years more and more transactions involve underlying technology platforms and R&D capabilities themselves.

The new rules draw clearer compliance boundaries for cross-border flows of platform technology — companies can commercialize platform value through licensing, joint development, and other models without transferring platform ownership.

For companies, this is not only a compliance requirement, but also a strategic choice in transaction structure: retaining platform ownership means retaining the ability to continuously produce new pipelines, and therefore retaining chips for more future BD transactions.

Overall, the core logic of the policy adjustment is to "control ownership, liberalize use rights" — protecting the autonomy and controllability of underlying platform technologies while leaving ample space for pipeline licensing and collaborative development.

Facing policy adjustments, biopharmaceutical companies can prepare responses at three levels.

At the strategic level, establish a dynamic management mechanism for technology export compliance. Systematically sort out one's own technology assets, accurately grasp technology boundaries (for example, the relationship between multi-pipeline technologies and platform technologies), the specific models and specific behavioral methods of technology import and export, and properly handle cross-border transactions already undertaken.

At the transaction level, make good use of facilitation measures and optimize transaction structures. The new rules clarify the space for applying facilitation measures to various export scenarios. Companies can fully consider policy boundaries in transaction structure design: for example, when packaging platform licensing with pipeline licensing, clearly distinguish which involve transfer of ownership and which are merely grants of use rights.

At the operational level, complete pre-export registration in a timely manner. Technology export operators must register on the Ministry of Commerce's unified platform technology trade management information application before exporting related technologies. Exports already begun but not yet completed are also within the registration scope. Registration scenarios cover transferring technology ownership abroad, domestic technology licensed for overseas use, and changes in domestic technology ownership or actual controllers to overseas entities.

Finally, returning to the question at the beginning: Will it choke off outbound expansion? In the short term, mainstream License-out is not directly affected, and BD that should be done continues to be done. In the long term, the policy has drawn a line — platform ownership stays domestic, use rights can be negotiated.

Ultimately, this policy development is not about preventing innovative drugs from going global, but about preventing the sale of "the hen that lays the eggs." For companies, rather than being anxious, it is better to take stock of one's assets early, design transaction structures well, and register what needs to be registered.