The SBIR/STTR programs, a vital source of non-dilutive funding for early-stage biotechs, remain on pause with no clear path to reauthorization. The logjam is due to a niche debate between a few members of Congress over foreign-funded company eligibility, stalling the entire program.

The National Defense Authorization Act (NDAA) has elevated biotech to a national security asset, alongside AI and quantum computing. This shift creates new funding opportunities through a dedicated Department of Defense (DOD) biotech office, distinct from traditional NIH grants.

Unlike the NIH's science-driven approach, the Department of Defense's new biotech funding priorities will be reactive to geopolitical threats. The DOD will invest in areas where China is perceived to be advancing, such as synthetic biology and biologic data security, rather than funding basic research.

Reports of Eli Lilly meeting with French Treasury officials sparked concern about regulatory hurdles. However, analysts believe France's foreign investment screening is routine and unlikely to block a deal for Abivax, pointing to government support for prior biomedical acquisitions like AstraZeneca's purchase of Amolyt.

The updated Biosecure Act replaces a fixed list of sanctioned Chinese firms with a dynamic designation process controlled by the administration. This shifts risk for U.S. biotechs from a known quantity to an unpredictable political process, where any Chinese partner could be deemed a "company of concern" at any time.

Building hardware compliant with US defense standards (NDAA) presents a major cost hurdle. Marine robotics company CSATS notes that switching from a mass-produced Chinese component to a US-made alternative can increase the price by 8x to 15x, a significant economic challenge for re-shoring manufacturing.

The NDAA introduces a "reverse CFIUS" policy requiring US investors to notify or seek permission before investing in foreign companies in sensitive sectors. While biotech is not yet included, this framework could be extended, significantly impacting global venture capital strategy.

Supply chain vulnerability isn't just about individual parts. The real test is whether a complex defense system, like a directed energy weapon, can be manufactured *entirely* from components sourced within the U.S. or from unshakeable allies. Currently, this is not possible, representing a critical security gap.

Unlike its predecessor, the likely-to-pass Biosecure Act 2.0 doesn't name specific companies like WuXi AppTec. Instead, it grants the administration discretionary power to define "companies of concern" and the resulting market consequences. This ambiguity leaves biopharma companies uncertain about future supply chain partners and market access, creating a prolonged period of strategic risk.