Our Take
China has stopped waiting for one approval system to fit all cell therapies and built two instead; the real story is which companies will actually use the second path before licensing out.
Why it matters
Chinese biotech out-licensing deals hit $137.7 billion in 2025, but that exodus was partly forced by regulatory ambiguity. If Order 818 works, Chinese developers get domestic revenue and real-world data before deciding to sell abroad, which shifts when and how multinationals negotiate.
Do this week
CGT companies and foreign partners: audit your existing licensing milestones and manufacturing commitments against both the NMPA and NHC pathways before renegotiating; the faster hospital route may invalidate your assumptions about timeline and control.
China opens a second track for cell and gene therapies
State Council Order No. 818 took effect on May 1, 2026, creating China's first national framework for clinical research and translational application of cell therapies, gene therapies, gene editing, stem cell technologies, and tissue engineering. It establishes a dual-track system: products can still move through the traditional National Medical Products Administration (NMPA) drug approval pathway, or qualified hospitals can conduct clinical research and translation under the National Health Commission (NHC) without requiring full pharmaceutical approval.
The distinction matters because it addresses a structural mismatch. Personalized cell therapies often resist mass production, have short viability windows, and depend on hospital-embedded manufacturing. The conventional NMPA route takes five to eight years and was designed for standardizable products. Order 818 lets therapies with tight timelines and individualized characteristics bypass that path entirely, moving directly from hospital-based research into clinical use, with hospitals charging patients once approval is granted.
Order 818 tightens oversight simultaneously. It limits eligible institutions largely to top-tier hospitals, introduces sponsor domicile requirements (sponsors must be Chinese legal entities), and increases penalties for illegal activity. The regulation also addresses a long-standing gray zone: China had accumulated substantial clinical research volume in advanced therapies but lacked a legitimate domestic commercialization route, creating what Boyang Wang, founder of Singapore-based longevity fund Immortal Dragons, calls an "innovation without translation" bottleneck.
The regulation changes where Chinese biotech money and data stay
Before Order 818, Chinese developers faced structural pressure to license assets abroad or relocate. Global out-licensing deals from Greater China reached $137.7 billion in 2025, nearly tenfold the 2021 level, with Pfizer, Novartis, Merck, GSK, AstraZeneca, AbbVie, and others acquiring Chinese-developed programs. That licensing boom reflected real pipeline quality, but also reflected the fact that China offered no clear path to build commercial value domestically for personalized therapies.
Order 818 changes the calculus. If Chinese companies can move therapies into the clinic through hospital pathways, generate real-world evidence, and establish commercial traction before licensing internationally, they retain more negotiating leverage and keep revenue domestic longer. Wang argues the effect is both structural and immediate: "If the framework enables efficient hospital-biotech collaboration with predictable timelines, innovation has a reason to stay."
For foreign companies, the picture is more complex. China becomes a more regulated and commercially attractive CGT market, but not necessarily an easier one to enter directly. Multinationals relying on regulatory arbitrage, cross-border data flows, or wholly-owned operations now face materially higher friction. Foreign-invested enterprises face specific constraints: Article 10 requires clinical research sponsors to be Chinese legal entities, and China's Negative List continues to restrict foreign investment in stem cell and gene diagnosis and treatment technologies outside designated pilot zones. The FDA also announced in June 2025 that it would halt new clinical trials involving transfer of American patients' living cells to China and other "hostile countries" for genetic engineering and reinfusion.
For companies willing to establish local manufacturing, Chinese clinical data generation, and genuine partnership structures, the market has become more attractive because regulatory uncertainty has dropped substantially.
Audit your product strategy and partnership terms now
For Chinese CGT developers, the strategic question shifts from "how fast can we file for NMPA approval?" to "which track maximizes our specific product's biology and commercial potential?" Standardizable products remain on the NMPA route. Therapies resistant to mass production, with short viability windows, or tied to specialized manufacturing now have a hospital-centered alternative that may accelerate clinical deployment and revenue generation.
For foreign companies and their Chinese partners, existing licensing agreements and manufacturing commitments may be built around the wrong regulatory milestones. If a product is better suited to the NHC hospital pathway rather than the traditional NMPA track, the development timeline, sponsor domicile, manufacturing location, and partnership structure all change. Renegotiate before announcing timelines based on old assumptions.
The longer-term question is whether China intends to build competitive advantage in areas where scale, enrollment speed, real-world data generation, manufacturing cost structure, and phenotypic data matter most. Order 818 is the regulatory infrastructure to test that bet. Companies that understand both tracks and move early will have more room to set the terms of any subsequent international partnership.