This article is translated and modified based on "岸迈生物NewCo模式成功要素深度解析" [https://mp.weixin.qq.com/s/f5R9FHCkhjuN6ozHdlasUg].
Executive Summary
EpimAb Biotherapeutics has successfully implemented the NewCo model through two significant deals in 2024-2025: licensing EMB-06 to Vignette Bio and a T-cell engaging molecule to Juri Biosciences. The company's success can be attributed to four key factors:
Strong Technology Platform: EpimAb's proprietary FIT-Ig® and MAT-Fab platforms, along with its CD3 binding domain library, provide unique advantages in bispecific antibody development.
Strategic Clinical Stage Selection: The company chose to out-license EMB-06 during Phase I/II trials, maximizing value while minimizing risk. The strategic pivot from oncology to autoimmune diseases opened new market opportunities.
Partner Selection: Collaboration with Foresite Capital and subsequent merger with Candid Therapeutics secured substantial funding ($370M Series A) and expert guidance in autoimmune disease development.
Deal Structure: The company maintains 20-30% equity stake in NewCos while securing significant upfront payments ($60M from Vignette, potential $210M from Juri) and milestone payments.
Key Implications
The success of EpimAb's NewCo model demonstrates a viable path for Chinese biotech companies to expand globally, highlighting the importance of:
Technological innovation as a foundation for international recognition
Strategic timing of out-licensing decisions
Partnership with experienced global investors
Balanced deal structures that combine immediate returns with long-term value participation
This case study provides valuable insights for Chinese innovative pharmaceutical companies seeking international expansion through the NewCo model.
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On May 27, 2025, EpimAb Biotherapeutics, a clinical-stage biopharmaceutical company specializing in the discovery and development of multispecific antibodies for diseases with highly unmet clinical needs, and TCG Labs Soleil, a venture capital firm that integrates dedicated capital with its own biotechnology R&D center, announced that Juri Biosciences, Inc., a portfolio company of TCG Labs Soleil, has entered into a global licensing agreement with EpimAb. The agreement grants Juri Biosciences global exclusive rights to develop a T-cell engaging molecule targeting kallikrein-related peptidase 2 (KLK2) and CD3 for the treatment of metastatic prostate cancer.
Under the terms of the agreement, EpimAb is entitled to receive up to $210 million in funding, including upfront payments and milestone payments associated with development, registration, and commercialization, as well as royalties. Further financial details were not disclosed.
Juri Biosciences is one of several portfolio companies established by TCG Labs Soleil. Dr. Charles Sawyers, the founding chair of the Human Oncology and Pathogenesis Program at Memorial Sloan Kettering Cancer Center, will serve as a strategic scientific advisor, working closely with the TCG Labs Soleil team to support the project and help guide the development of KLK2-targeted therapies. Dr. Sawyers is a leading expert in the field of metastatic prostate cancer and translational oncology, and he co-discovered enzalutamide, one of the most widely used therapies for advanced prostate cancer today.
On September 4, 2024, Vignette Bio, a company incubated by Foresite Labs and invested in by Foresite Capital, entered into a licensing agreement with EpimAb for a BCMA-targeted TCE EMB-06. This agreement marked the beginning of EpimAb' highly anticipated overseas expansion.
In the deal, Vignette has obtained exclusive rights to develop and commercialize EMB-06 outside of Greater China. In return, EpimAb will receive a total upfront payment of $60 million, up to $575 million in development, regulatory, and commercialization milestone payments, a revenue share based on net sales, and a portion of Vignette's equity. This case represents a new path for Chinese innovative drug companies to go global. The success of EpimAb's NewCo model lies in its technological platform advantages, clinical-stage selection strategy, indication conversion for commercial considerations, and deep collaboration with professional investors. Compared to the traditional License-out model, the NewCo model not only provides immediate financial support for EpimAb but also allows for participation in future value growth through equity holdings.
Core Technology Platforms: Differentiated Competitive Advantages
The success of EpimAblogics' NewCo stems from its robust technology platforms. The company possesses two proprietary bispecific antibody technology platforms—FIT-Ig® and MAT-Fab—which serve as the core competitive strengths for product development. As a globally unique bispecific antibody technology, the FIT-Ig® platform adopts a ‘2+2’ tetravalent bispecific antibody design without the need for amino acid mutations or linker peptide chains, avoiding steric hindrance and structural heterogeneity. This design is significantly superior to platforms such as Roche's CrossMab and Genmab's DuoBody. This structural design enables EpimAb to fuse any two monoclonal antibodies into a single bispecific antibody molecule without altering the original monoclonal antibody sequences, greatly reducing the complexity and cost of research and development. As of January 2022, EpimAblogics has obtained patent authorizations in countries including the United States, China, Australia, Japan, South Korea, New Zealand, and Mexico, establishing a global patent protection network and effectively mitigating the risk of technology infringement.
EpimAb's CD3 binding domain library also provides unique advantages for the development of its T-cell engager (TCE) molecules. The CD3 binding domain library offers diversified CD3 binding arms, optimizing affinity to balance efficacy and safety, particularly in reducing the risk of cytokine release syndrome (CRS). The low incidence of CRS (only grade 1) and high safety characteristics demonstrated by EMB-06 in clinical trials are direct reflections of this technological advantage. In tumor patients, EMB-06 exhibited pharmacodynamic activity (T-cell redistribution and activation, as well as transient release of low-level cytokines) at doses ≥0.6 mg. In the high-dose group (≥120 mg), the ORR reached 100% (1 CR, 2 VGPR, 2 PR) while maintaining a low toxicity level, providing a solid foundation for subsequent transition to the autoimmune field.
Although EpimAb's MAT-Fab platform was not directly applied to the development of EMB-06, it played a crucial role in the company's early discovery stage, complementing the FIT-Ig® platform. The MAT-Fab platform enables EpimAb to rapidly generate and screen a series of T-cell engaging molecules, advancing the most promising candidates with optimal efficacy and safety profiles into the pre-IND and clinical stages. The synergy between EpimAb's three major technology platforms has established a strong technological barrier in the field of bispecific antibodies, enhancing the international competitiveness of its products. This synergy is the core foundation of EpimAb's successful overseas expansion through the NewCo model.
Clinical Stage Selection and Indication Conversion Strategy
EpimAb's decision to grant NewCo authorization for EMB-06 at a specific clinical stage reflects their precise grasp of the value of each clinical phase. EMB-06 has already entered Phase I/II clinical trials in the oncology field (multiple myeloma), showing promising data (such as an ORR of 92% in the high-dose group). However, it has not yet completed Phase II. Conducting NewCo authorization at this stage aligns with the industry consensus that ‘Pre-IND to Phase I/IIa clinical trials are most suitable for NewCo’, maximizing the leverage effect of capital. At this stage, EpimAb has already validated the product's safety, tolerability, and preliminary efficacy, laying the foundation for subsequent development. However, the value of the pipeline has not been fully realized. By introducing external funds through the NewCo model at this point, overseas development can be accelerated, and risks can be diversified.
EpimAb's decision to shift the focus of EMB-06 from oncology to autoimmune diseases reflects the company's clear business strategy. The oncology field is highly competitive, with products like Johnson & Johnson's Tecvayli already on the market. In contrast, the autoimmune disease space remains relatively untapped, presenting a blue ocean opportunity. By changing the indication, EpimAb can extend the life cycle of its pipeline and enhance its valuation. The market for autoimmune drugs is vast and rapidly growing. Industry forecasts predict that the global bispecific antibody drug market will grow at a compound annual growth rate (CAGR) of 44.4% between 2024 and 2032, potentially reaching $224.6 billion by 2032. Dr. Chen-Bing Wu, CEO of EpimAb, stated, 'We have seen compelling results from recent clinical data on the use of B-cell depletion mechanisms in autoimmune diseases.' This strategic shift allows EpimAb to leverage the same technology platform to develop multiple indications, maximizing the value of its pipeline. By focusing on autoimmune diseases, the company can capitalize on the growing market demand and establish itself as a key player in this promising therapeutic area.
EpimAb's strategy to switch indications is based on robust preclinical and early clinical data. Preclinical studies of EMB-06 have shown minimal induction of cytokine release while maintaining strong anti-tumor activity. This characteristic gives EMB-06 a unique advantage when transitioning to the autoimmune field. Autoimmune diseases, such as rheumatoid arthritis, have extremely high safety requirements, and EMB-06's low-risk design for cytokine release syndrome (CRS) meets this need precisely. Data from EpimAb demonstrates that in multiple myeloma patients treated with EMB-06, all CRS cases were grade 1 or 2 according to the ASTCT (American Society for Transplantation and Cellular Therapy) criteria, and no ICANS (immune effector cell-associated neurotoxicity syndrome) was observed. These findings provide crucial support for the development of EMB-06 in autoimmune indications.
Partner Selection and Transaction Structure Design
EpimAb's success in the NewCo model can be largely attributed to its precise selection of partners and the ingenious design of the deal structure. EpimAb chose Vignette Bio as its collaboration partner, which was incubated by Foresite Labs and focuses on innovative therapies for immune and inflammation-related diseases. This choice aligns perfectly with EpimAb's strategy to shift EMB-06 towards the autoimmune field. As the lead investor, Foresite Capital values the potential of BCMA targeting in the autoimmune field and the differentiated advantages of EpimAb's technology platform. The strategic alignment between EpimAb and its partners has been a key factor in the successful implementation of the NewCo model.
Structurally, the deal designed by EpimAblogics follows a typical NewCo model: the exclusive rights to develop and commercialize EMB-06 outside of China are out-licensed to Vignette Bio, while EpimAb retains the rights in Greater China. In return, EpimAb receives a total of $60 million in upfront payments, consisting of cash and Vignette equity, as well as up to $575 million in milestone payments tied to development, regulatory, and commercial achievements, plus royalties based on net sales. This 'BD+Financing' model not only provides EpimAb with immediate financial support but also allows them to participate in future value appreciation through their equity stake in Vignette.
Another key aspect of the deal is the acquisition of Vignette Bio by Candid Therapeutics. Candid was founded by Dr. Ken Song, who played a crucial role in the establishment and IPO of the radiopharmaceutical company RayzeBio, which was later sold to BMS for $4.1 billion. This three-party merger and multi-step financing model allows EpimAb to indirectly hold equity in Candid through its Vignette shares, further amplifying the potential for returns. After acquiring Vignette Bio and TRC004, Candid completed a Series A financing round of $370 million, setting a record for the highest fundraising amount in the biopharmaceutical industry since 2024, demonstrating the market's strong recognition of EpimAb's assets.
The equity structure in the deal is one of the key factors contributing to EpimAb's success. EpimAb's shareholding in Vignette Bio is in line with the industry norm of 20%-30% for licensors in the NewCo model. This allows EpimAb to participate in value creation in the international market while maintaining control over the Chinese market. Through this equity design, EpimAb not only receives milestone payments and royalties but also stands to gain additional returns when Candid is acquired by an MNC or goes public in the future, maximizing long-term value.
Exit Paths and Revenue Realization in the NewCo Model
EpimAb has achieved multi-stage revenue through the NewCo model, including upfront payments, milestone payments, sales royalties, and participation in future value growth by holding equity in Vignette and Candid. This multi-layered revenue structure is one of the core advantages of the NewCo model. Compared to the traditional License-out model, the NewCo model allows EpimAb to avoid the risk of intermediaries profiting from price differences. For example, Hengrui Pharma previously licensed a pipeline to Ariosa Diagnostics, which was eventually acquired by Roche at a high price, while Hengrui only received limited returns. However, in the subsequent Hercules transaction, Hengrui was able to participate in subsequent value growth by holding a 19.9% equity stake.
Candid Therapeutics has successfully integrated EpimAb and Jiahe's pipelines through a three-party merger and multi-step financing, completing a $370 million Series A financing, setting a record for the highest fundraising amount in the biopharmaceutical industry since 2024. This scale and speed of financing far exceed the industry average, demonstrating the market's high recognition of EpimAb' assets. Candid plans to obtain clinical data on drug safety before 2025 and expects to make breakthrough progress in the field of autoimmunity.
The two main exit paths for the NewCo model are acquisition and IPO. Acquisition is currently the most common exit method for NewCos. For example, Pfizer acquired Cerevel (holding 15% equity) for $8.7 billion, and Roche acquired Telavant (holding 25% equity) for $7.1 billion. These cases demonstrate the huge potential for NewCos to amplify value through acquisitions. IPO exit is another important path. For example, ArriVent (which introduced Furmonertinib from Allist) raised $175 million in its IPO, and GPCR NewCo Septerna raised $331 million in its IPO. Candid, which EpimAb indirectly holds equity in through Vignette, may achieve an exit through one of these two paths in the future.
Using Hengrui Medicine as an example, it licensed its GLP-1 product portfolio to Hercules through the NewCo model, with a total transaction value exceeding $6 billion. In contrast, Hengrui only received limited returns in previous BD transactions. EpimAb' EMB-06 deal also reflects this advantage. The structure of a $60 million upfront payment and $575 million in milestone payments enables it to obtain continuous revenue at different development stages of the pipeline.
Implications for the Internationalization of Chinese Biotechs
The success of EpimAb's NewCo model provides important insights for innovative Chinese pharmaceutical companies. Firstly, technological innovation is fundamental; only by possessing proprietary patent platforms (such as EpimAb's FIT-Ig) and differentiated products can companies gain recognition in the international market. Data shows that the global bispecific antibody drug market is expected to reach approximately US$13 billion by 2024, and Chinese pharmaceutical companies have already established a significant position in this field, with nearly 90% of bispecific/multispecific antibody projects being developed by domestic companies.
Secondly, strategic choices determine value maximization. EpimAb chose to out-license their products between the Pre-IND and Phase I/II stages, ensuring initial product validation while retaining sufficient room for value appreciation. At the same time, by shifting EMB-06 from the oncology field to the autoimmune field, they successfully avoided the red ocean competition and created a blue ocean market. This strategy was validated in the first quarter of 2025 in Chinese pharmaceutical transactions, where the proportion of out-licensing deals in the metabolic endocrinology and autoimmune fields increased from 12% in 2023 to 25% in 2024, demonstrating market recognition of this strategy.
Thirdly, the professional capabilities of partners are crucial. EpimAb chose to collaborate with Foresite Capital, valuing their expertise in the autoimmune field. Foresite Capital provides resources through its incubator, Foresite Labs, to accelerate the development of EMB-06 in the autoimmune direction. Similarly, Hengrui selected Bain Capital as a partner, recognizing their successful experience in the biopharmaceutical field. Data shows that in 2024, more than 30% of the innovative drug candidates introduced by large multinational pharmaceutical companies came from China, and in the first quarter of 2025, the number and total amount of Chinese pharmaceutical transactions increased by 34% and 222% year-on-year, respectively, demonstrating the increasing recognition of Chinese innovative drugs in the international market.
Fourthly, policy support provides a strong guarantee for internationalization. The National Medical Products Administration (NMPA) actively participates in the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH) and transforms guidelines, enhancing international recognition. As of March 2025, China has 13 vaccines, 12 in vitro diagnostic reagents, 58 drugs, and 61 active pharmaceutical ingredients that have passed the World Health Organization's prequalification, making positive contributions to promoting global drug accessibility and affordability. At the same time, the National Healthcare Security Administration's pricing autonomy policy for First-in-Class (FIC) drugs also provides better revenue protection for innovative pharmaceutical companies.
Challenges and Risk Management in the NewCo Model
Despite the significant benefits of the NewCo model, EpimAb has faced numerous challenges. The primary challenge is the ability to secure continuous funding. When a NewCo is established, it often coincides with a period of industry excitement. However, as clinical trial timelines extend, the company's survival heavily depends on its ability to obtain ongoing funding. EpimAb has effectively addressed this issue by collaborating with renowned institutions such as Foresite Capital and securing $370 million in funding for Candid.
The second challenge lies in the clinical advancement and commercialization capabilities. As a newly established company, a NewCo needs to rapidly progress clinical trials overseas, which places extremely high demands on the team's professional capabilities and ability to acquire resources. EpimAb chose to collaborate with Foresite Capital, valuing their expertise and resource network in the field of autoimmunity. Foresite Capital has previously participated in the incubation of Chimagen (focused on First-in-Class antibody drugs) and promoted the development of Haisco's TYK2 inhibitor ESK-001, demonstrating their successful track record in this field.
The third challenge is related to business capabilities. An outstanding NewCo needs to leverage initial overseas clinical data to quickly establish partnerships or even mergers and acquisitions with large pharmaceutical companies. EpimAb successfully circumvented this challenge by collaborating with Vignette Bio and being acquired by Candid. Dr. Ken Song, the Chairman of Candid, has extensive experience in the pharmaceutical industry and has successfully founded and led several life science companies, including RayzeBio, which was acquired by BMS for $4.1 billion. This provides strong support for his business negotiations.
EpimAb's risk control strategy in the NewCo model is worth learning from. By holding equity in Vignette, EpimAb not only obtained immediate benefits but also retained the right to participate in decision-making and share future value. This structural design enables EpimAb to participate in value creation in the international market while maintaining control over the Chinese market. Furthermore, by collaborating with professional investors, EpimAb effectively diversified its R&D and commercialization risks, reducing its dependence on a single market.
Future Development Trends of the NewCo Model
With the rising trend of Chinese innovative drug companies going global, the NewCo model is becoming an essential pathway for the internationalization of Chinese innovative drugs. In 2024, China's innovative drug BD transactions are showing a trend of 'low upfront payments, a high number of transactions, high transaction amounts, and increasingly diverse partners,' and the NewCo model is a significant driver of this trend. Compared to traditional BD models, the NewCo model not only provides a higher proportion of upfront payments (for example, Curon reached a deal with Merck with an upfront payment of $700 million, accounting for more than half of the total transaction amount) but also achieves long-term value sharing through equity design.
In the future, the NewCo model will exhibit the following development trends:
Tmergence of localized NewCos: After the success of the NewCo model led by overseas funds, domestic investment institutions and pharmaceutical companies have also begun to take action, preparing for NewCos led by Chinese institutions. These localized NewCos will not only be better adapted to the characteristics of the domestic pharmaceutical industry but also realize the maximum commercial value of their pipelines through overseas market expansion.
Diversified financing models: In addition to the NewCo model, biotechs are also exploring other diversified financing models, such as 'patent rights' financing. For example, the U.S. biotech company Syndax obtained $350 million in cash by licensing the patent rights of its anti-CSF-1R antibody Niktimvo to a royalty company, while retaining future sales revenue sharing rights. This model provides innovative pharmaceutical companies with more financing options and serves as a beneficial supplement to the NewCo model.
Diversified exit pathways: As the NewCo model matures, exit pathways will become more diversified. In addition to traditional mergers and acquisitions (M&A) and initial public offerings (IPOs), NewCo companies may also achieve exits through mergers with other companies, spin-offs, or special purpose acquisition companies (SPACs). For example, after Aiolos Bio was acquired by GSK with a $1 billion upfront payment, its core founding members established Verdiva Bio and obtained $410 million in Series A financing, demonstrating the ongoing vitality of the NewCo model.
EpimAb's successful NewCo case provides a clear internationalization path for Chinese innovative pharmaceutical companies. Through technological innovation, strategic choice, partner selection, and policy utilization, Chinese innovative pharmaceutical companies can maximize their value in the global market. In the future, with the acceleration of the internationalization process of China's pharmaceutical regulation and the improvement of innovative drug R&D capabilities, the NewCo model is expected to become one of the mainstream models for Chinese innovative pharmaceutical companies to go overseas, promoting China's pharmaceutical industry to occupy a more important position in global competition.
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Reference
https://mp.weixin.qq.com/s/f5R9FHCkhjuN6ozHdlasUg
