Summary of Conference Call Notes Company/Industry Involved - **Industry**: Contract Development and Manufacturing Organization (CDMO) sector, particularly focusing on biotechnology companies in China Key Points and Arguments 1. **Biosecure Act Inclusion**: Provisions from the US Biosecure Act were included in the FY26 NDAA, aligning with market expectations and refining definitions related to 'biotech companies of concern' [1][4] 2. **Definition Refinement**: The final text specifies that a 'biotech company of concern' must be listed under section 1260H and the OMB's published list, limiting coverage to subsidiaries, parents, or successors, thus removing 'affiliates' [1][4] 3. **Legislative Timeline**: The NDAA is expected to be voted on in the House soon, followed by the Senate and presidential approval. The Section 1260H entity list is anticipated to be released in January 2026, which may cause short-term share price fluctuations [1][4] 4. **Impact on Share Prices**: Despite potential short-term fluctuations due to the Section 1260H list, the fundamental impact on the CDMO sector is expected to be limited due to grandfather clauses and the lack of comparable alternatives outside China [1][5] 5. **Investor Focus Shift**: Investors are increasingly focused on tangible deliverables and operational performance, supported by a gradual recovery in global demand following rate cuts and evolving customer outsourcing behavior [1][5] 6. **Sector Performance**: The CDMO sector remains sensitive to US-China relations, reflected in share price volatility, but the fundamental impact is limited. Key drivers include the recovery of the global supply chain and changes in customer outsourcing behavior [5][1] 7. **2026 Guidance**: Chinese CDMOs are expected to provide guidance for 2026 in Q1 2026, which could act as a catalyst for the sector [5][1] Other Important but Possibly Overlooked Content 1. **Contracting Trigger Changes**: The NDAA narrows the contracting trigger to cases where the contractor knows that covered equipment/services will be used, rather than having reason to believe [4][6] 2. **Removal Process for Entities**: A formal process for designated entities to request removal from the list of biotechnology companies of concern has been introduced, which may provide a pathway for companies to mitigate risks associated with the Biosecure Act [7][6] 3. **Overseas Health Care Exceptions**: The NDAA broadens exceptions for the acquisition or provision of health care services overseas, which may impact operational strategies for companies involved in international healthcare [7][6] This summary encapsulates the critical insights from the conference call, focusing on the implications of the Biosecure Act and the evolving landscape of the CDMO sector in China.