NatSec & Biotech #1: Congress targets Chinese biotechs
Deducting R&D spending, DoD industrial strategy, Schmidt’s startups, Chinese COVID research, EU biotech initiative, EU CSRD, crop biotech in Nigeria and LatAm...
Welcome to this first edition of the NatSec & Biotech Update! This newsletter will provide a record of developments at the intersection of biotechnology and international relations. Publication frequency will be dictated by the newsworthiness of developments and my own capacity but I expect to publish 2-4 times a month.
In this edition:
USA
Congressional committees target Chinese biotech companies
House votes to make R&D expenses 100% tax deductible
Pentagon releases industrial capacity, including to reach out to biomanufacturers
Eric Schmidt’s Innovation Endeavors launches $630 million venture capital fund
China
Chinese scientists experiment on humanized mice with COVID variant
European Union
EU Commission to present Biotech and Biomanufacturing Initiative
USA
Congress targets Chinese biotechs (Reuters)
Chinese biotech firms are being targeted by bills in the U.S. Congress. These seek to reduce collaboration with Chinese companies to safeguard U.S. intellectual property and Americans’ genetic and health data.
Senator Gary Peters (D-MI), Chairman of the Homeland Security Government Affairs Committee, has proposed a bill that would prohibit federal agencies from contracting with many leading Chinese biotech companies. It would also stop the government from entering into contracts with companies that use their equipment or services.
A companion bill proposed by Representative Mike Gallagher (R-WI), Chairman of the House Select Committee on the Chinese Communist Party, accuses the companies of aiding Beijing’s military.
Some U.S. biotech companies are concerned the overly broad measure may cut them off from needed services and harm research and innovation.
CCP newspaper Global Times said the move would make the U.S. “drop stone on its own feet.”
Reuters has reported that the Beijing Genomics Institute was collecting genetic data from millions of women for research on the traits of populations and collaborates with China’s military.
Sen. Peters, Rep. Gallagher, and other congressmen have also signed a letter calling for a sanctions review of WuXi AppTec and its affiliate WuXi Biologists
The developments have pummeled Chinese biotech stocks.
The House Select Committee on the CCP held several events in Massachusetts, a major biotech hub, this week. These focused on biotech, U.S.-China relations, competitiveness, and national security.
Speaking at the Boston Biotech and Harvard Forum, Rep. Gallagher said: “I always go back to this moment which was in the early months of the pandemic. China threatened to cut off the export of advanced pharmaceutical ingredients to plunge us into a sea of coronavirus. I think we have to assume they would do something like that if there was a crisis. That should motivate us to onshore or near shore the production of biotechnology more broadly, so that we can reduce that dependency.”
Writing in the Boston Globe, Representative Jake Auchincloss (D-MA) argued for public investment in “curiosity-driven, peer-reviewed research [as] a public good.”
Rep. Auchincloss argues investing more in biotech to keep up with China. Necessary measures include training physician-scientists, developing infrastructure, standardization, and more funding for the National Institutes of Health.
Massachusetts’ U.S. Representatives Seth Moulton (D-MA) and Jake Auchincloss joined Radio Boston to discuss their visit to Boston biotech labs.
Chosun Daily boasted the moves against Chinese biotechs would benefit competitors, notably in South Korea.
“Our industrial strength is our deterrent”: Pentagon releases industrial strategy (Defense One)
The U.S. Department of Defense has released its first National Defense Industrial Strategy (NDIS) to create a more resilient defense industrial ecosystem.
Assistant Defense Secretary for Industrial Base Policy Laura Taylor-Kale wrote: “A strong military supported by our industrial ecosystem deters potential adversaries. And should deterrence fail, our adversaries had best understand that the United States, supported by her industrial might, will fight—and win.”
The Strategy notably aims to diversify suppliers to sectors and companies not traditionally considered part of the defense industrial base, including biomanufacturing companies.
House votes to make R&D expenses 100% tax deductible (BIO)
The House passed the Tax Relief for American Families and Workers Act, which would make R&D expenses 100% tax deductible through 2025.
Until 2022, R&D expenses had been 100% deductible.
The bipartisan bill still needs to be approved by the Senate.
Eric Schmidt’s Innovation Endeavors launches $630 million venture capital fund (Fierce Biotech)
Former Google CEO Eric Schmidt’s early-stage venture capital firm Innovation Endeavors has closed a new $630 million fund, with a focus on biotech.
Innovation Endeavors co-founder Dror Berman said: “Investing in healthcare and biotech solutions is a core focus at Innovation Endeavors. As a firm, we have been investing in the life sciences since our inception.”
Other U.S. biotech news:
100th USDA Agricultural Outlook Forum focuses on biotech for sustainable farming (BIO)
China
Chinese scientists experiment on humanized mice with COVID variant (New York Post)
Chinese scientists have experimented on humanized mice with GX_P2V, a mutated coronavirus strain found in pangolins.
GX_P2V had a 100% kill rate among the mice.
The study authors write: “This underscores a spillover risk of GX_P2V into humans and provides a unique model for understanding the pathogenic mechanisms of SARS-CoV-2-related viruses.”
European Union
EU Commission to present Biotech and Biomanufacturing Initiative (Euronews)
The European Commission is preparing to launch an EU Biotech and Biomanufacturing Initiative, according to a leaked document seen by Euronews.
The plan, to be presented on 20 March, would designate biotech as “one of the critical technologies for the EU’s economic security.”
The main objectives are to strengthen R&D, facilitate marketing of biotech products and solutions, and reinforce the bloc’s economic security.
The draft plan focuses on biopharma, industrial biotech, mobilization of funding, reducing administrative burden for companies, and aligning research priorities.
Biopharma innovation is central to the Commission’s draft plan, with a focus on treatments using CAR-T cells (genetically engineered to target a specific antigen on cancer cells), CRISPR-Cas9 genome editing, and technologies based on messenger RNA (mRNA, which played an essential role in COVID-19 vaccines).
The draft document stresses the need to regain “European leadership for health biotech,” focusing on “public health benefits, new treatments, more tailored treatments” and “fostering an enabling environment for clinical trials.”
The plan will also promote industrial biotech, biomanufacturing, and circular bio-based products.
The draft plan mentions the need to support “consolidation of investment funds, including venture capital, stock exchanges and post-trading infrastructure.” Fund would notably be mobilized from the European Investment Bank (EIB).
It also touts introducing an “R&I tax credit,” which would be novel and controversial given tax matters remain firmly in the hands of member states.
Claire Skentelbery, director general of the EU biotech association EuropaBio, said the initiative “has to deliver substantial and fast industrial progress for the EU and be bold on key bottlenecks that prevent Europe from being a leading global player.”
More on the EU and biotech:
CSRD: A guide for biotechs to comply with the EU’s new Corporate Sustainability Reporting Directive (LaBiotech)
French life scientists push for gene-edited crops to reduce pesticide use and fight climate change (Genetic Literacy Project/Le Point)
White paper on Biointelligent Manufacturing: Definitions, International Status, Potentials for Europe and Recommendations (ManuFUTURE)
Other biotech news
Conspiracy theorist targets Nigerian biotechnologists (Daily Trust)
An overview of the past and present of Latin America’s agricultural biotech prowess (Genetic Literacy Project)