From July 22 to 24, the Great Nation New Drug CPIC 2026 Global Conference was held at the National Exhibition and Convention Center in Shanghai. As one of the important special forums of the conference, the Merits & Tree Law Offices Session From IP to BD—China Innovative Drug Trading Power Forum successfully concluded on July 24.

1. Opening Remarks

This forum was hosted by Tang Huadong, partner at Merits & Tree Law Offices . In his opening remarks, Lawyer Tang pointed out that over the past decade, the landscape of China’s innovative drug industry has fundamentally changed, with going overseas shifting from an “option” to a “mandatory.” As going global becomes a common choice, new questions arise: how to make deals happen, do well, and speed them up? This is precisely the core question that this forum aims to address.

2. Keynote Speech

Topic 1: From IP to BD, the Six-Dimensional Model of the Transaction Power of China’s Innovative Drug BD — Lawyer Tang Huadong from Merits & Tree Law Offices Session

Attorney Tang presents a core point: in BD transactions, buyers are not purchasing the IP or the asset itself, but rather a set of “verifiable certainties.”

For the same target and similar assets, the core difference between successful transactions and failures is not the degree of technological advancement, but whether the seller can allow the buyer to identify and explain each layer and price the risk throughout the entire project process. Good assets are not the same as good tradable assets; the key is to improve the project’s closing rate.

Based on this, he proposed a “six-dimensional transaction power model” for innovative drug transactions, covering the following six dimensions:

(1) Scientific variability. As FIC projects, some are highly sought after, while others are considered “too new to touch,” with the difference being whether the mechanisms have been thoroughly researched. Differentiation must be based on benchmarking against clinical gold standards, with objective data proving that stable output in industrialized scenarios is the prerequisite for buyer recognition.

(2) Clinical fulfillment capability. Asset valuation essentially reflects the buyer’s expectations for the project’s future clinical success rate. IIT data can validate efficacy and safety in advance, and high-quality clinical protocol design provides buyers with a clear development path.

(3) IP exclusivity. Buyers care not about “whether there are patents,” but “whether patents can block competitors.” It only focuses on core molecular patents without covering dosage forms, indications, or other extended fields, making it easy to circumvent. Patent ownership is unclear, and the absence of FTO can both lead to valuation reductions.

(4) Asset tradability. Requirements include clear ownership, controllable risk, cut-off, and independent delivery. Models such as commissioned development and collaborative R&D often lead to ambiguity in rights, especially in cross-border licensing and Newco transactions, where tradability is the primary prerequisite for buyer decisions.

(5) Degree of cooperation matching. The same asset can be adapted to different partners, resulting in completely different commercial value. Precise integration can effectively reduce the cost of trial and error and shorten transaction cycles.

(6) Execution credibility. A large number of transaction cards are stuck in the TS phase, stemming from delayed seller decision-making and inefficient due diligence coordination. Efficient execution is reflected in rapid response, complete output, and decisive contract signing.

Lawyer Tang summarized: “Translate technological value into transactional value, use IP to define pricing boundaries, and use transactions to test whether value is delivered.” “The six-dimensional model uses its weaknesses as the speed limiting step; every dimension must be in place.

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Topic 2: Accelerating IP to BD with “Super Servers” — ATLATL’s Engineering Practice — Zhu Pengcheng, Founder and CEO of ATLATL Dart Innovation Center

In his speech, Dr. Zhu pointed out that the biopharmaceutical industry is transitioning toward lightweight design, engineering-oriented R&D, and institutionalized innovation. The traditional asset-heavy, large-team R&D model no longer fits industry trends. In the future, the core competitiveness of innovative pharmaceutical companies will focus on two major areas: drug design and BD commercialization, with R&D execution relying on standardized engineering platforms. His proposed “Super Server” ecosystem platform breaks through the limitations of traditional CROs with single service and builds a nationwide, integrated R&D network. By integrating full-chain R&D modules through standardized laboratories, we achieve on-site collaboration among service providers and end-to-end IP protection.

Building on this platform, Dr. Zhu further summarized the engineering implementation path into four steps:

Labeling—tag elements such as indications and targets to establish a correlation network; Modular layered breakdown—breaking down R&D business layer by layer down to the smallest execution unit; Mining technology — transforming unique laboratory technologies into tradable modules; Select technology — match the most suitable solution for the project.All IPs belong to the client; the platform does not hold any customer IPs; When the platform co-develops with multinational pharmaceutical companies or publishes papers with clients, IP ownership is clearly stipulated in cooperation agreements; Although different companies operate in the same space, strict physical separation, process management, and information security protocols ensure that technology is not cross-transferred. The core capabilities of this engineering platform are the key support that drives early-stage projects from ideas to verifiable and tradable states.

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Topic 3: Compliance Red Lines in Innovative Drug BD Transactions —  Xiaoxing Guo from Merits & Tree Law Offices

In his speech, Lawyer Guo Xiaoxing began by citing the Manus case—in April 2026, the Foreign Investment Security Review Office of the National Development and Reform Commission issued a decision to prohibit Meta’s acquisition of the Manus project. Although Manus has relocated its headquarters to Singapore, it is still recognized as foreign investment and subject to review because its core technology and R&D team originate from China. This is the first publicly disclosed prohibition case since the implementation of the “Foreign Investment Security Review Measures,” with the core logic being “substance over form”: even if the transaction entity has completed the overseas identity change, as long as the technical roots are in China, regulation can still be traced. This case sends a warning signal: overseas registration does not necessarily sever a transaction’s connection to Chinese regulators. Innovative drug BD transactions involve sensitive elements such as technology, data, and human genetic resources. When conducting cross-border cooperation, pharmaceutical companies need to preemptively assess whether the transaction has connections with domestic assets, technology, teams, and data that are sufficient to trigger regulatory compliance.

On this basis, Lawyer Guo focused on breaking down five major compliance red lines:

(1) Regarding foreign investment security review, according to the “Measures for Foreign Investment Security Review,” foreign investors obtaining control of Chinese enterprises may trigger security review. However, there is a common misconception in the industry—many people believe that only obtaining 50% equity or a majority of board seats counts as “control.” In fact, both the legal systems of China and the United States have a catch-all clause called “significant impact”—meaning that foreign investors, even if they do not reach the control line, can also influence business decisions through means such as holding more than 10% of the shares, board seats, or veto power, which may also fall under scrutiny. Lawyer Guo especially reminded that in sensitive fields like gene therapy, biotech companies that grant foreign investors more than 10% equity plus board seats during financing must be pre-evaluated to see if safety review has been triggered.

(2) Regarding technology export controls, the core targets of innovative drug BD transactions are technology and IP, and China has a fully equivalent technology export control system. Currently, biopharmaceutical technologies explicitly banned or restricted from export include: human germ cell gene editing technology (prohibited from export), vaccine virus strains, core TCM formulas and breeding technologies, human tissue cell separation technology, and more. As biosafety regulation tightens, more biopharmaceutical technologies will be included in the control catalog in the future, and companies need to regularly check technical attributes against the catalog in advance.

(3) Antitrust compliance: Many people think antitrust only applies to large-scale mergers and acquisitions, but in fact, it comprehensively covers mainstream BD models such as equity transactions, asset transfers, and Newco cooperation. Lawyer Guo used the Newco transaction as an example: even if the transaction is completed overseas, the company is located in Singapore, and the funds come from overseas, as long as the turnover of all parties meets the threshold set by China’s Anti-Monopoly Law (global turnover over 12 billion or Chinese turnover over 4 billion), they still need to report to the China Antimonopoly Bureau. He specifically pointed out that antitrust filings are not only applicable to equity transactions, but also to asset transfers within complete business segments (including patents, listing licenses, supply chains, and overall assets within the R&D system). Additionally, the transaction agreement must avoid clauses such as “restricting partners’ subsequent R&D,” as such clauses may be deemed monopoly agreements and face high penalties.

(4) Regarding human genetic resource regulation, clinical data and genomic data are often the core content of due diligence in innovative drug BD transactions. China’s regulation of human genetic resources centers on incorporating activities involving Chinese population samples and genomic data into the framework of licensing, filing, prior reporting, and security review. Foreign entities shall not collect or preserve Chinese human genetic resources within China, nor shall they provide them abroad. “Foreign entities” include not only overseas organizations and individuals but also domestic institutions established or actually controlled by them. If the domestic entity becomes a foreign entity after the equity acquisition, subsequent activities involving human genetic resources in China usually need to be carried out by qualified Chinese entities and must follow corresponding licensing or filing procedures according to the specific project. In addition, genome sequencing information resources involving more than 500 cases must also pass security review when providing overseas resources.

(5) Regarding data export, buyers usually require open data rooms, which include clinical protocols, subject data, SAE, laboratory test results, pharmacokinetic efficacy data, statistical analysis reports, CMC data, etc. If it involves providing personal information or important data overseas, it may fall under the jurisdiction of data export rules. Pharmaceutical companies especially need to note that medical and health information is sensitive personal information, requiring individual consent and conducting prior assessments of personal information protection impacts. The “Regulations on Promoting and Regulating Cross-Border Data Flows” provides tiered arrangements for exit routes: if a total of more than 1 million personal information or sensitive personal information of 10,000 or more is provided abroad, a security assessment must be declared; If the cumulative provision of personal information of more than 100,000 but less than 1 million people, or sensitive personal information of less than 10,000 people, a standard contract or certification must be obtained. If the quantity threshold is not met, basic obligations such as notification and consent must also be fulfilled. In BD projects, it is recommended to categorize and process documents early on, rather than waiting until signing to ask “Can the data be submitted?”

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Topic 4: Opportunities and Challenges in Innovating Mainstream IP Work in a Highly Competitive Landscape—Lao Fang, IP Director of METiS Pharmaceutical

Dr. Lao pointed out that under the current development landscape of innovative drugs, corporate IP work is gradually shifting from a single patent application support department to a core department supporting competition, financing, and transactions. IP is the embodiment of all innovative achievements and the most important tool for final monetization. To illustrate the importance of IP layout, Dr. Lao shared two real-life cases.

Case 1: The patent battle between Arbutus/Genevant and Moderna’s LNP delivery system.

In this case, Dr. Lau focused on analyzing Acuitas’s “069 Patent Group.” This patent group is one of the early and most important applications in the LNP field, with extensive claims and a presence in major global markets. The most damaging among them is the ‘378 patent, which locks the proportion of cationic lipids above 43%. Dr. Lao, drawing on his own R&D experience, pointed out that the industry has tried to circumvent this by using ‘detour design,’ such as reducing the proportion of cationic lipids to 41% or even 40%. During the pilot phase, these formulations may be feasible, but once they enter CMC scale-up production, various instability issues arise. It can be said that outside the scope of this patent, it is almost impossible to produce an LNP formula that meets market standards. Facing this patent barrier, Moderna launched a series of invalidity challenges, with some patent claims invalidated, but the two core patents, ‘069 and ‘378,’ remain valid in the U.S. market to this day. This means that in the largest commercial mRNA market, Arbutus/Genevant has choked all competitors with these two patents. In March 2026, the two parties reached a global settlement agreement, with Moderna agreeing to pay up to $2.25 billion—of which $950 million is a fixed payment and another $1.3 billion linked to an appeal outcome—in exchange for global access rights for its infectious disease mRNA vaccine product line. Dr. Lau also analyzed Moderna’s attempt to bypass patents—the SORT technology. This technology introduces a fifth lipid component on top of the traditional four-component LNP, bypassing formulation limitations and enabling targeted extrahepatic delivery. However, she pointed out that SORT technology has not seen large-scale R&D progress in the future and may still have technical limitations. This case clearly shows that in innovative drug BD transactions, the “cleanliness” of the IP and underlying technical barriers are the core variables determining project value.

Case 2: The patent dispute over N1-methylpseudoucil (m1Ψ) in the mRNA field.

Dr. Lao pointed out that unmodified mRNA triggers immune system attacks and is rapidly degraded after entering the body. Replacing natural uridine with m1Ψ can fundamentally reduce immune inflammation and improve transcriptional and translation efficiency, making it one of the fundamental technologies for mRNA drug development. Moderna’s European patent EP3590949. The core claims of this patent are highly precise—”an mRNA in which 100% of the uraridine-containing nucleotides are replaced by nucleotides containing N1-methylpseudouracil.” This combination of “100% replacement + m1Ψ” forms one of the most valuable patent barriers in the mRNA technology field. In August 2022, Moderna filed lawsuits against Pfizer and BioNTech in the UK, Germany, the Netherlands, and other countries, accusing its COVID-19 vaccine Comirnaty of infringing the patent. The defendants argued that the technology lacked novelty or obviousness compared to the patent application published by Professor Karikó and Weissman’s team at the University of Pennsylvania in 2007, but both the UK High Court and the Court of Appeal rejected this claim. The court held that although the comparative document mentions m1Ψ and 100% replacement in the long list, it does not explicitly combine the two in teaching, so the “selected invention” from the list is novel; The defendant’s expert witness clearly used the known successful results to deduce the technique of reversing the facts, which is a case of “hindsight with Liang Liang.”

On August 1, 2025, the UK Court of Appeal finally ruled that the EP949 patent was valid and infringing was established. This case reveals the core logic of protecting innovative drug IP: concrete, non-obvious improvements made based on pioneering work by predecessors can still obtain strong patent protection. She also pointed out that different jurisdictions have varying degrees of validity in determining the patent’s validity—Dutch courts have preliminarily ruled it invalid, while courts in the UK and Germany have upheld its validity, reminding innovative drug companies to adapt their global patent layouts and litigation strategies to local conditions and fully assess differences in judicial practices across countries.

Next, Dr. Lao shared Jitai Technology’s AI technology platform. The company has built an AI-driven LNP high-throughput screening platform, forming a complete iterative closed loop of wet and dry formulas, covering everything from lipid molecule design and high-throughput formulation screening to wet experiment verification. After four to five years of iteration, the platform has achieved an efficiency leap from “screening out a dozen or so from thousands of formulas” to “screening out 20%~30% of the formulas from hundreds of formulas,” with delivery activity more than 30 times higher than existing technology and demonstrating significant delivery performance and good safety in animal experiments. Behind these technological breakthroughs is a systematic patent layout — from lipid molecular structures and formulation combinations to various targeted indications, Jitai Technology has built a multi-layered protection network through patents. The company has achieved the world’s first highly efficient delivery in the field of targeted cardiac delivery, and recently presented related results at the International Cardiology Congress.

Dr. Lao concluded that IP is not only a tool to protect innovation but also a core bargaining chip in BD negotiations. Companies should embed IP work throughout the entire chain of R&D and commercialization, paving the way for future monetization from the very beginning of innovation.

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Topic 5: Sharing Business Development and Global Cooperation Paths for Chinese Biotech Enterprises — Liu Chen, Managing Director and Head of China at Locust Walk

Dr. Liu systematically shared the core methods of BD trading from a hands-on perspective.

(1) From passive response to proactive planning

Dr. Liu pointed out that the biggest shortcoming for domestic pharmaceutical companies in external cooperation is “passive response”—only after the due diligence list is temporarily coordinated with departments to piece together materials, lacking forward-looking strategic planning. He proposed that a good BD must consider a core question: What role does your product play in the other party’s product pipeline? Based on this strategic positioning, prepare materials, proactively review the strategic value of their products, and proactively plan their reach paths. Not passive responses.

(2) Only multi-party competition can raise valuations

Optimal transactions are inevitably based on multi-party competition, and overreliance on a single channel is the core weakness. Academic conferences, visits by executives from multinational pharmaceutical companies to China, and industry summits are all key nodes for building trust; the trust accumulated through face-to-face communication is far superior to email. But he should not rely too much on “relationships”—while knowing the other party’s CEO is beneficial, multi-billion-dollar transaction decisions ultimately depend on data quality and business logic.

For partner selection, Dr. Liu proposed three core criteria: financial strength, synergy in therapeutic areas, and development and commercialization capabilities. He divides potential buyers into three tiers: those who meet all three criteria are in the first tier; Those meeting both criteria are in the second tier; The third tier consists of opportunistic buyers. He specifically pointed out that about 50% of transactions ultimately do not come from the initial locked targets, but rather from “strategic encounters” involving third parties.

(3) Long-term stable delivery data

Although senior executives at multinational pharmaceutical companies have publicly expressed support for innovation in China, scientists responsible for due diligence still have doubts about the credibility of China’s clinical and CMC data. According to industry statistics, from initial contact to final signing, MNC evaluates the average BD cycle of a project as long as 14 months. During these 14 months, MNC scientists and external consultants reviewed data item by item on target validation, animal models, pharmacokinetics, CMC batch consistency, clinical protocol design, and more. Any data flaw at any point could overturn previous conclusions. Trust was gradually built through these 14 months of repeated questioning and data delivery—every R&D milestone was delivered on time, and every due diligence report was fully submitted—these were concrete pillars for building trust.

(4) Build a standardized BD project management system

Dr. Liu suggests that companies establish standardized communication record ledgers, fully documenting the personnel, content, and follow-up actions involved in each exchange; Data databases should be managed by functional categories; Due Diligence Q&A tracking forms should be followed up item by item. MNC evaluation projects follow a unified framework, covering areas such as target mechanisms, pharmacology and toxicology, clinical data, CMC, intellectual property, and commercialization forecasting, with thorough preparation required for each dimension.

In his summary, Dr. Liu mentioned that BD is a job that requires long-term management. Domestic biotech companies need to change their passive and short-sighted mindsets, prioritize legal compliance, diversify buyer resources, standardize data systems, and differentiate pipeline narratives, maximizing pipeline value amid multi-party competition.

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3. Roundtable Forum

After the keynote speeches, the forum moved into a roundtable discussion. The roundtable session was moderated by Huang Xiaolin, partner at Merits & Tree Law Offices. Four guests—Du Shanshan, Head of Pharmaceutical Affairs at Servier China; Guo Lianyu, Director of External R&D Innovation at Servier China; Guo Songxi, Head of Intellectual Property at Astellas China; and Miao Zhenwei, Chief Scientific Advisor at Adcoris, participated in the roundtable discussion. They engaged in discussions on ‘From BP to Term Sheet: Key Bottlenecks and Breakthrough Paths in China’s Innovative Drug BD Transactions.’

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Roundtable Topic (1): Institutional Benefits Brought by the New Regulations — Du Shanshan, Head of Pharmaceutical Affairs at Servier China

Du Shanshan interpreted the “Regulations for the Implementation of the Drug Administration Law,” with four aspects directly changing the logic of BD transactions:

First, the change of sponsors now has a clear path. Previously, after a license-in/out transaction was completed, the sponsor had no formal approval channel and had to file the matter themselves. Article 9 of the new regulations clearly states that changing the sponsor must apply to the National Medical Products Administration, with review completed within 20 working days, and the change can be made directly after the transaction is completed.

Second, MAH responsibility cannot be transferred. MAH’s primary responsibility for quality and safety in entrusted production, storage, transportation, and other stages must not be transferred, and no contract provisions can be exempted. If MAH status is transferred along with the transaction, the buyer will directly bear quality and safety responsibilities. MAH attribution should not be based solely on market equity divisions, but should first assess the maturity of both parties’ quality supervision systems.

Third, data protection and institutional protection during market exclusivity periods. For the first time, the new regulations clearly define the protection of clinical trial data and the exclusivity system, constituting parallel exclusivity with patent protection. Even if a core patent is invalidated, generic drugs within the data protection period cannot rely on the original drug data for submission. Children’s medications are granted a market exclusivity period of no more than two years, while rare disease medications are limited to seven years.

Fourth, there is a clear path for overseas clinical data to be submitted in China. Article 10 of the new regulations stipulates that if overseas research data meets the requirements, they may be used for domestic registration, but must be handled differentially according to the product stage:

Preclinical/dose escalation phase: If the dosage has not been determined abroad, simultaneous clinical trials in China may be considered, requiring evaluation of East Asian patient data and ethnic sensitivity analysis.

RP2D has been identified overseas: cytotoxic drugs usually use the maximum tolerated dose method, and simplified dose exploration is generally required in China; Molecular targeted drugs and immunotherapies use the optimal biological effector dosage method; if the safety window is sufficient and ethnic differences are not significant, repeats may be avoided; otherwise, safety introduction is required.

Key overseas clinical trials have started but are not yet completed: If ethnic sensitivity analysis confirms no significant differences and sufficient data, the trial can be directly included in international multicenter clinical trials.

Key overseas research completed or approved overseas: if clinical benefits are significant and the study design meets Chinese requirements, bridging studies may be used; Otherwise, a complete confirmatory study must be conducted according to new drug standards.

Clinically urgently needed rare disease drugs: Under the premise of preliminary assessment without racial differences, approval for marketing can be directly accepted from overseas clinical data.

Overall, the earlier the R&D stage, the more synchronized domestic and international advancement is needed; The further you go, the more opportunities you have to directly use overseas data for declaration. The core premise has always been to fully demonstrate that there are no significant differences in drug response between Chinese and overseas patients, and that the overseas study design meets Chinese clinical practice standards.

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Roundtable Topic (2): Three Major Bottlenecks from the MNC Perspective — Guo Lianyu, Director of External Innovation at Servier’s R&D

In his speech, Dr. Guo pointed out that while scientific excellence is important, what truly determines whether a project can reach the Term Sheet is whether both parties are willing to share the risks. She broke down the core bottlenecks in the process of advancing innovative projects from three aspects.

(1) Strategic Alignment.

No matter how good the scientific data of a project is, if it is not in the disease area of concern for MNC or cannot synergize with the company’s existing product portfolio, it is difficult to advance. When evaluating projects, pharmaceutical companies should not only look at differentiated advantages but also consider whether they align with the company’s R&D strategy and positively complement their existing product portfolio. Dr. Guo gave an example: Servilla previously focused on small molecules, antibodies, and ASO, but only recently expanded into the siRNA field. The direction a company focuses on at different points in time is dynamic, so finding the right partner at the right time is just as important as the quality of the project itself. The value of external innovation teams lies in early involvement, communicating the compatibility of both parties before the Business Plan is formed, to avoid deal termination later due to strategic disagreements.

(2) Project maturity and data integrity.

What MNC needs is not a research highlight, but a complete data chain that supports internal decision-making. Besides whether the target mechanism is reasonable, security and effectiveness data are also needed, as well as clear conversion paths, CMC feasibility, IP protection strength, and registration strategies. Only when all data forms a complete chain of evidence can MNC make decisions to advance.

Dr. Guo specifically mentioned that external innovation teams can help innovative companies understand what data MNC truly needs and which questions need to be answered at this stage, thereby enabling targeted efforts to address weaknesses and improve data packages, rather than waiting until the due diligence stage to passively expose problems.

(3) Alignment of expectations between both parties.

Biotech companies often evaluate their projects based on technological value and financing needs—”How much is my technology worth?” “How much money do I need to raise?”, “How much future potential do I have?” MNC, on the other hand, focuses more on risk-adjusted value—does this drug have a clear development path? Is the clinical protocol design feasible? Will future commercial returns be sufficient? If these two perspectives are not clearly communicated early on, they can be magnified infinitely by the Term Sheet stage, making it difficult for both parties to reach agreement on core terms.

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Roundtable Topic (3): Breadth of IP Layout and Clarity of Ownership — Guo Songxi, Head of Intellectual Property at Astellas 

In his speech, Dr. Guo mentioned that the term ‘intellectual property’ in Taiwan is referred to as ‘intellectual property rights,’ and this term better reflects the essence—it is essentially a process of ‘transforming intellectual activity into property.’ Therefore, intellectual property has a dual nature: it is both an asset carrying technology and a legal exclusive right. It is precisely because of these two attributes that patents can be transferred or licensed, forming the basis of BD transactions.

From the perspective of asset attributes, the integrity of patent layout directly affects the commercial valuation of the project. She suggests that companies dynamically build patent portfolios based on R&D progress: apply for compound patents after confirming them; Apply for dosage form patents after determining the dosage form before clinical practice; Applied for dosage patents after discovering optimal dosage in phase II and III clinical trials; Later, if combination therapy is found to be more effective, a combination drug patent can be applied for. The more complete the layout, the longer the product’s exclusivity period (LOE), and the higher the estimated peak sales—this is an important commercial metric for MNC when evaluating transactions.

From the perspective of legal attributes, ownership issues and FTO analysis are core matters that need to be handled in advance. Regarding ownership, if the contract does not clearly specify IP ownership when cooperating with a CRO in commissioned development scenarios, according to Chinese law, intellectual property may belong to the entrusted party rather than the investor; When cooperating with hospitals, according to the “Regulations on the Administration of Human Genetic Resources,” data must be filed with hospitals, and in some cases, the IP of research results may be required to be shared mandatorily. If these two types of issues are not properly addressed early on, they may become obstacles to transactions during the due diligence stage.

Regarding the FTO, Dr. Guo emphasized that having a patent does not mean free enforcement—the essence of a patent is to exclude others from implementing it, not to guarantee that one’s own implementation will not infringe. The FTO must be completed before the deal initiates and must be evaluated separately by region—China, the US, Europe, and Japan—and must be conducted in all markets; a single report cannot cover the entire world. If Biotech has already completed FTO analysis and generated reports during internal R&D, and proactively shares due diligence with buyers, transparency and efficiency can be greatly improved.

Roundtable Topic (4): Newco Model and Division Strategy—Miao Zhenwei, Chairman, CEO, and Chief Scientific Advisor of Inberry and Hangzhou Adcoris

Dr. Miao Zhenwei pointed out that a core issue currently facing the ADC field is the clinical resistance caused by the widespread use of Topo inhibitors. Currently, most mainstream ADCs approved worldwide use Topo payloads, making the market highly homogeneous. Data show that once a patient has used Topo inhibitor ADCs, even if the target is switched, the objective response rate for subsequent treatment may drop to 0% or only 3.7%—resistance targets the payload itself, and changing targets is ineffective.

Adcoris’s response strategy includes three directions:

First, developing a new non-Topo payload, the company has already deployed seven major categories, bypassing existing patents and resistance mechanisms at the source;

Second, advancing dual-drug ADCs, conjugating two different payloads on the same antibody to enhance efficacy through combined effects, which accounts for about 80% of the company’s R&D investment;

Third, precise differentiation based on Topo—using the DS-8201’s payload as a reference, Adcoris

The AC246 molecule was developed, which introduces hydroxylamine groups while retaining key properties such as water solubility, bystander killing effects, and rapid elimination in vivo. Animal experiments show that its efficacy in vivo is significantly superior to DXd, and it holds fully independent intellectual property rights.

 

At the target level, Adcoris chose 5T4. This target is a protein expressed by trophoblast cells during embryonic development, highly expressed in the vast majority of solid tumors but almost nonexistent in normal tissues, demonstrating excellent specificity.

Dr. Miao provided a comprehensive review of the transaction history of the 5T4 ADC project. In 2024, the project entered the in-depth due diligence phase for a global leading MNC, but was halted at the final stage for two reasons: first, some CMC documents were incomplete due to company relocation; Second, MNC wanted to wait until Phase I clinical data were available before advancing, but at that time, Adcoris lacked sufficient funds to support nearly 100 million yuan in clinical investment. Facing this dilemma, Adcoris shifted to the NewCo model, partnering with the K2 Fund (the Asian branch of the long-established US fund MPM) to establish NewCo in Singapore to advance project development. The transaction also includes an upfront payment, milestone payment, sales share, and equity. K2 revealed that after inspecting 1,000 companies in China, Adcoris was the first to close a deal.

Dr. Miao mentioned that the fundamental reason for the successful transaction lies in the “cleanliness” of the IP—Adcoris’s payload molecules have achieved substantial innovation beyond the scope of existing patents, with antibody selection, target selection, and linker lysis characteristics all independently developed. MNC did not question the patents during due diligence. The transaction also involves a core legal issue—patent division. Adcoris’s original patent application is a platform technology patent, which includes both platform methods and specific compound embodiments. The buyer wishes to acquire ownership of specific compounds; if the entire transfer occurs, Adcoris will lose control of the platform technology. Ultimately, the issue was resolved through a patent division strategy—splitting the platform technology and specific compound into two separate patent applications, transferring the compound patent to NewCo, while keeping the platform technology for subsequent pipeline development. Dr. Miao believes that at present, the threshold for pipeline introduction for multinational pharmaceutical companies continues to rise, complete clinical data has become a mandatory requirement, and the single license-out model poses a significant challenge for cash-tight startup ADC companies. The NewCo cooperation model can quickly secure overseas funding and advance global clinical development of the pipeline, while retaining ownership of core technologies while continuously retaining the possibility of secondary external licensing. It is a practical and feasible solution for domestic innovative ADC assets going global.

4. Conclusion