April 19, a Sunday, should have been a quiet day.

But the emotions of pharmaceutical executives, scientists, and clinical experts were stirred by the "Approval Work Specifications for the Clinical Translational Application of New Biomedical Technologies (Draft for Comments)" (referred to as the "Work Specifications").

With only two weeks remaining until the official implementation of the "Regulations on the Clinical Research and Clinical Translational Application of New Biomedical Technologies" (referred to as "Decree No. 818") on May 1, the National Health Commission (NHC) released five chapters and twenty-six articles of operational details at this critical juncture, with a public comment deadline of April 25.

In other words, the entire industry has less than one week to digest, respond, and engage.

Who will be left out? This question encapsulates the core anxiety of the industry.

TONACEA 01: Exits and Ebbing Tides

To understand the intensity of the discussion surrounding Decree No. 818, it is helpful to consider a broader context of "ebb."

Guangdong Medical Valley · Nansha Life Science Park, which has housed over 40 cell and gene therapy companies since its establishment in 2014, was once a major cluster for China's cell therapy industry. However, after the 2026 Lunar New Year, asset transfer announcements began to appear frequently in the park.

Laboratory equipment, clinical trial approvals, company equity—almost every asset that could be liquidated was put on the shelf, with sellers eager to exit as quickly as possible. The industry has dubbed this the "runaway transfer" phenomenon in the context of Decree No. 818.

This "mass exodus" is not an isolated case. Qichacha data shows that as of December 8, 2025, China had registered 30,600 newly established cell therapy-related companies within the year. This large base means that, faced with the "compliance line" drawn by Decree No. 818, more cell therapy companies will seek to close or transfer in the future.

Industry insiders believe that the core reason for the collective exit of cell therapy companies lies in Decree No. 818's precise crackdown on the gray-area model of "conducting research as a substitute for commerce."

The cell therapy industry has long operated under a "dual-track" regulatory system: companies can either pursue the lengthy new drug approval pathway, which takes an average of 10 to 20 years, or follow the medical technology application pathway, conducting investigator-initiated clinical studies.

The problem is that the technology pathway only allows medical institutions to conduct free clinical research, never establishing a compliant pathway for clinical translational application with fee collection. Consequently, a large number of companies disguised free clinical research as paid commercial projects, partnering with hospitals to "substitute research for commerce" and illegally conduct stem cell therapy businesses.

Before the issuance of Decree No. 818, due to the lack of enforcement details and penalty standards, the risk of non-compliance always existed. Starting this May, this situation will be completely rewritten.

The new regulations explicitly require that stem cell therapies must be conducted in Grade 3A hospitals and undergo strict national approval. Faced with the three red lines—"only in Grade 3A hospitals, must be approved, no arbitrary fees"—companies that previously survived by exploiting loopholes have lost their room to operate. A large number of small and micro-enterprises with tight funding chains and lacking cooperative relationships with Grade 3A hospitals are being rapidly eliminated by the market.

The forces reshaping the industrial landscape are already visible. However, this reshuffle is far from over, and a series of deeper uncertainties continue to trouble the entire industry.

TONACEA 02: Three "Red Lines"

Article 3 of the Work Specifications is the most discussed and most contentious provision in the entire document.

It stipulates that only two categories of technology can apply for the translational application pathway: first, technologies with a very high degree of personalization for which no drug with a similar mechanism of principle has received marketing approval or initiated confirmatory clinical trials in China; second, technologies for treating rare diseases for which no similar drug has been marketed or entered confirmatory clinical trials.

The drafting note emphasizes that "drugs and medical devices that already have a clear product form and can be standardized and mass-produced" are explicitly excluded.

This means that a large number of CGT technologies will face three "red lines."

First, standardized products must go through the NMPA pathway.

For products that can already be mass-produced, such as CAR-T and stem cell preparations, if a company wishes to pursue the translational application pathway, it must first prove that its technology has a "very high degree of personalization." But what constitutes a "very high degree of personalization"? The Work Specifications do not provide a clear definition.

A university professor analyzed that this "can roughly refer to the comparison between autologous CAR-T and universal CAR-T." That is, autologous CAR-T—which involves collecting a patient's own T cells for modification—may meet the "personalized" standard. Universal, off-the-shelf products will most likely be classified under the drug registration pathway.

Second, once a similar mechanism enters confirmatory clinical trials or receives marketing approval, latecomers are blocked.

This is the real "killer move." In earlier leaked versions, the policy threshold was set at IND application. The Work Specifications have adjusted this. However, even with "confirmatory clinical trials" as the red line, the advantages of first movers remain significant.

Third, popular indications are largely out of reach.

If a drug has already been marketed for a certain indication, or if a confirmatory clinical study is underway for that indication, then new technologies with the same mechanism and same indication will not be able to pursue the Decree No. 818 translational pathway. For targets such as CD19 and BCMA, which have already been addressed by approved CAR-T products, later entrants have virtually no chance to break through via this regulation.

Some commentators believe that for the cell therapy industry, the drug attribute is fundamental, and the new drug pathway is the only viable commercialization route. Pharmaceutical companies should return to the essence of drug development and abandon any illusions of "cutting corners." Rather than crowding into the narrow doorway of the Decree No. 818 pathway, companies might be better off committing to the drug registration path.

The challenge is that the investment required for the drug registration pathway is several times or even tens of times greater than that for the translational application pathway. For small biotechs with tight funding, this choice itself may not be easy.

TONACEA 03: What Constitutes a Similar Mechanism?

The three "red lines" of the approval scope have already suffocated many companies, and the concept of "similar mechanism of principle" has become a Rashomon-like debate over the right to define.

One industry practitioner expressed confusion to TONACEA: should stem cells and CAR-T cell therapies be classified together based on their attribute as "cell drugs," or should they be distinguished based on the different cell types they use?

Behind this question is an attempt to grasp the classification criteria—is it cell type? Mechanism of action? Target? Or molecular structure?

Given the complex iteration of technologies, the standard for "similar mechanism" may be very difficult to define going forward.

Professor Song Xiangrong of West China Hospital of Sichuan University and founder of WestGene Biopharma raised a very specific technical scenario: "KRAS G12C already has a small-molecule drug approved. If I develop a multi-target in vivo CAR-T targeting KRAS G12C/G12D, can it pass 818 clinical application?"

This touches on two dimensions of intersection: first, different drug forms—small molecule chemical drugs vs. cell therapy; second, different mechanisms of action—single-target inhibitor vs. multi-target in vivo CAR-T. According to technical consensus, this is clearly not a "similar mechanism." But how regulators will judge remains unknown.

The drafting note of the Work Specifications states: "The criteria for defining 'similar mechanism of principle' within the approval scope will vary depending on the characteristics of different technologies, and separate guidelines will be developed for each category in the future."

TONACEA 04: The Truth About the "Dual-Track" System

A recurring topic in industry discussions is the relationship between Decree No. 818 and Decree No. 828.

Decree No. 828, the revised "Implementation Regulations for the Drug Administration Law" effective January 2026, further clarifies the pharmaceutical pathway for cell therapies.

Decree No. 818 follows the medical technology translational pathway, while Decree No. 828 follows the drug registration pathway. They are legally parallel, but in industry practice, many view them as an "either-or" choice.

The question raised by Zhou Guoying, founder of Yinomi Bio, is both specific and important: From the perspective of new drug standards, does pursuing the Decree No. 818 pathway imply that the CMC process is insufficient or that clinical outcomes are poor? If the final evaluation criteria for new drugs are the same, why not take the Decree No. 828 pathway? Why have Decree No. 818 at all? Or does this aim to lighten the NMPA's workload by allowing the NHC to conduct parallel reviews through the Decree No. 818 pathway?

To some extent, this captures the industry's deepest doubts about the dual-track system.

According to the university professor cited earlier, "818 and 828 do not constitute a dual-track system. At most, the dual-track exists only for clinical research. For application, only one path can be taken, and taking the 818 path comes with limitations."

Thus, a single technology cannot pursue both paths simultaneously. Companies can choose between filing (NHC pathway) or IND (NMPA pathway) during the clinical research stage. But at the translational application stage, they must either apply for technology translation via the Decree No. 818 pathway or apply for drug marketing via the Decree No. 828 pathway. There is no option to "walk on two legs."

So how should companies choose?

Zhang Changfeng, Director of Biotherapy at SPH Biotech, gave an example. The University of Pennsylvania once had a therapy combining autologous stem cell transplantation, high-dose melphalan, and CAR-T for treating multiple myeloma. "Does this technology have clinical value? Yes, but it cannot be translated as a drug."

Zhang further explained: "Many emerging therapies—and therapies that may emerge in the future—cannot be easily defined as drugs, yet they still have clinical value. The definition of a drug is clear—'prevention, treatment, diagnosis of human diseases'—but it is also narrow, leaving many things outside its scope."

Therefore, the real value of the Decree No. 818 pathway is not to provide a backdoor for companies that "cannot afford IND," but rather to leave a lifeline for technologies that "cannot be defined as drugs."

TONACEA 05: Eliminating Gray Markets vs. Opening New Paths

The legislative intent behind Decree No. 818 has become another focal point.

Some industry practitioners suggest that policy introduction generally falls into two categories: forward-looking guidance and reactive remediation. Within this framework, Decree No. 818 is closer to the latter, aimed at regulating clinical research.

This inevitably brings up the "He Jiankui incident." In 2018, He Jiankui announced the birth of the world's first gene-edited babies, drawing international attention. This incident exposed a huge legal vacuum in China's regulation of new biomedical technologies. The legislative work for Decree No. 818 accelerated against this backdrop.

However, Decree No. 818 was delayed for several years before being issued, due to various reasons. By the time it was released, it coincided with new development challenges in China's CGT industry, inevitably leading the industry to place excessive expectations on it.

An insider close to regulators said that the original intent of Decree No. 818 is to eliminate gray markets, not to facilitate translation and innovation as industry professionals imagine.

Another biotech founder shared their observation with TONACEA: The state wants to push a large number of gray-market cell therapy operations toward compliance, thereby protecting the tax base. However, the NMPA's review pathway cannot be expanded indefinitely, necessitating an outlet such as the NHC's medical technology pathway.

"Gray market" is not an alarmist term. In recent years, a large number of unregistered cell therapy institutions in China have charged patients exorbitant fees under the guise of "health management," "anti-aging," and "immune enhancement," providing unproven cell infusion services. Operating outside regulatory oversight, lacking GMP production conditions and standardized quality control systems, they pose significant public health risks.

From this perspective, the primary goal of Decree No. 818 is to bring these gray-zone clinical research activities into a regulatory framework. The existence of the translational application pathway is more about providing an outlet for technologies that genuinely cannot follow the drug pathway.

May 1 is approaching. The comment deadline for the draft Work Specifications is April 25, leaving the industry little time.

Some call this a "great reshuffle," while others prefer to call it "separating the truth from the falsehood." But regardless of the label, one thing is certain: on the new track jointly delineated by Decree No. 818 and the Work Specifications, the rules have been rewritten.