What Is the COINS Act? A Guide for Biotech Dealmakers
The COINS Act is the clearest signal yet that the United States plans to regulate not just who American life-sciences companies buy from in China, but who they invest in. It is still a proposal, but it has moved quickly, and for any dealmaker with exposure to Chinese biotech, it is worth understanding now rather than after it passes. For a read on what it actually does, we turned to a recent Open Door Salon conversation with Theresa Campobasso, a former US Marine Corps intelligence officer and Senior Vice President at Aardwolf Global who advises on supply-chain security across the life sciences.
What the COINS Act actually proposes
The COINS Act would require US government screening of American investment in Chinese biotechnology. Where the BIOSECURE Act governs federal procurement, this reaches the deal itself, and the scope is broad.
"Any licensing deals, any joint ventures, any equity investments in China could be subject to both Treasury and Department of War reviews."
The name is not incidental. COINS stands for Countering our Innovative National Security rivals in Biotechnology, and Campobasso notes the bill emerged in the wake of two recent pharmaceutical deals each potentially worth more than ten billion dollars. The intent, as she reads it, is to take a tool that has so far touched only government buyers and point it at the private capital flowing into Chinese biotech.
The investigation running underneath it
The COINS Act did not appear in a vacuum. Campobasso points to a parallel federal inquiry that is quietly shaping the ground.
"The United States International Trade Commission formally instituted this investigation, documenting the degree of subsidization of Chinese biotechnology firms, market overcapacity, and the extent to which Chinese state support and pricing practices are affecting US market competitiveness."
That investigation reports back to Congress within a year, and its framing matters: it treats Chinese biotech pricing as a market-distortion problem, the same lens applied to other industries before tariffs and restrictions followed. It is the evidentiary base a wider rule would stand on.
Why it goes further than BIOSECURE
The BIOSECURE Act names five Chinese companies and binds only federal contractors. Campobasso's read is that the COINS Act is designed to widen that perimeter substantially.
"It was originally intended to extend the BIOSECURE-style restrictions from just those five named entities to whole categories of Chinese biotech companies more broadly."
That is the shift dealmakers should sit with. BIOSECURE was about who you can buy from. The COINS Act is about who you can invest in, and it would apply to categories of companies rather than a short, named list, which makes it far harder to plan around by simply avoiding a handful of names.
Will existing deals be grandfathered in?
This is the question many investors are quietly asking, and Campobasso's answer is direct. Because the regulation is threat-based rather than a matter of trade or compliance, she does not expect existing arrangements to be protected.
"I would be very surprised if there was a grandfathering, because we're looking at real, legitimate risks: a substantiated and evidence-driven pattern of behavior for Chinese biotechnology companies to adversely leverage American patient data and to steal intellectual property."
Regulation written against a documented pattern of behavior, she argues, is exactly the kind that tends not to grandfather what came before it. The companies treating a signed deal as permanently safe may be the ones most exposed when a rule lands.
The red flags that are knowable in advance
Much of the risk, Campobasso stresses, is identifiable before a deal closes, if the right questions get asked.
"If it's a Chinese company that receives funding from the Chinese state, or if it has a Chinese Communist Party structure within the company itself, which many do, those are two big red flags."
Those structures are common and frequently undisclosed, but they are not invisible. The problem, in her view, is not that the information is unavailable; it is that standard diligence stops before it gets there.
What dealmakers can do before it passes
Campobasso's practical point is that the gap between a signal and a statute is the window to act. The companies that fare best are the ones mapping their exposure now.
"There are ways for investors, for executives, for anybody listening to this to buy down their risk right now, today, before these things are enacted into regulation."
In practice that means investigating domestic and alternative partners before a rule forces the question, and stress-testing each deal against a single scenario: if this partner becomes a restricted entity tomorrow, what happens to the business? Whether the COINS Act passes in its current form is still open. What looks settled, in Campobasso's telling, is the direction. The regulatory line around US-China biotech is moving from the loading dock to the cap table, and the companies reading the signals early will have the most room to move. For sponsors and partners navigating that shift, that is the conversation Open Door Salon exists to host. You can work with us here.
What a Treasury and Department of War review would mean in practice
The mechanics matter as much as the principle. A deal that must clear Treasury and a national-security review is a deal with a new source of delay, cost, and uncertainty baked in before the commercial terms are even settled. For a licensing arrangement that hinges on speed to market, or an equity round on a fixed timeline, the prospect of a government screen can change the math entirely, and it can do so retroactively if the rule arrives mid-deal. That is why Campobasso frames the current moment as a planning problem rather than a compliance one: the companies that wait for the statute inherit not just a longer remediation timeline but a portfolio of deals whose assumptions no longer hold.
The diligence question most teams are not asking
The gap she keeps returning to is not effort, but scope. Business-development teams run thorough diligence on IP ownership, clinical data, regulatory pathway, and financial terms, and then stop, because that set of checks has always been enough. What it does not surface is who else has a claim on a molecule, or what happens to the deal if the partner is designated a restricted entity tomorrow. Those are the questions a screening regime will effectively ask on a company's behalf, after the fact and at far higher cost. Asking them now, before signing, is the cheapest version of the same exercise.
This piece is drawn from the recorded, on-the-record conversation with Theresa Campobasso on Open Door Salon. The bills referenced are proposed US legislation; consult current congressional coverage for their status.