一笔42亿美元的交易：泰它西普“出海”，荣昌生物陷风波

Chuan Sun, Managing Partner of MoFo's Shanghai office, was recently interviewed by 21st Century Business Herald. The article explores the trend of Chinese innovative drug companies adopting NewCo models and equity-based licensing strategies to navigate financial pressures and globalize in a challenging capital market through out-licensing and NewCo.

For some innovative pharmaceutical companies, expanding internationally is not merely an option but a necessary path. Chuan explained that despite some companies having stable finances and sufficient cash flow, the market's valuation of their assets remains significantly below the actual value. Companies that have recently completed their first or second round of financing often resort to out-licensing strategies.

Chuan introduced the concept of NewCo, which combines out-licensing with capital injection. This approach allows companies to secure initial funding while holding shares in NewCo, enabling them to benefit from future growth. Domestic pharmaceutical companies collaborate with foreign private equity or venture capital firms to establish NewCo. They transfer assets to obtain shares and leverage their resources to recruit management and R&D teams for NewCo. If the company develops successfully, it can exit through an initial public offering or sale.

Chuan highlighted several challenges and considerations regarding the NewCo strategy: founders and companies may lose valuable assets when choosing NewCo; existing shareholdings may be diluted after NewCo is established; the experience and capability of partners or collaborators are crucial, as not all venture capital or private equity firms possess strong capabilities. Innovative pharmaceutical companies must assess whether their partners can successfully advance projects.

Read the full article.