NewCo may be a more suitable model for some domestic pharmaceutical companies than BD, which has been increasing from last year to this year. The fields of cancer and self immunotherapy are the main layout directions. Since September, there have been multiple incidents of NewCo going global.
On September 17th, Maiwei Biotechnology announced the signing of an Exclusive License Agreement and a Preferred Stock Purchase Agreement with Kalexo regarding the 2MW7141 project. According to the license agreement and equity purchase agreement, Maiwei Biotechnology will receive up to $1 billion in advance payments and milestone payments (approximately RMB 7.1 billion) from Kalexo, as well as low single digit royalties, including a one-time, non refundable down payment and a near end payment of $12 million in cash. As part of the consideration, Maiwei Biotechnology will also receive a total of double digit Series A preferred shares from Kalexo under the agreed conditions.
It is worth mentioning that our partner Kalexo is an innovative pharmaceutical company established by Aditum Bio. Aditum Bio focuses on the translational medicine stage of drug development, co founded by former Novartis executives Joe Jimenez and Mark Fishman in 2019, with the aim of accelerating the advancement of new drugs from early development to clinical stages through capital and professional resources. Obviously, Kalexo is a typical startup NewCo company. This is also the first cooperation involving NewCo mode by Maiwei Biotechnology, which promotes the development of specific pipelines by establishing a new company through cooperation with external capital.
In addition to Maiwei Biotechnology, on September 5th, Hengrui Pharmaceutical announced that the company has reached an exclusive license agreement with Braveheart Bio, a US company, for its independently developed small molecule inhibitor of cardiac myosin, HRS-1893 project. Hengrui Pharmaceutical officials stated that this is Hengrui once again partnering with international capital to promote global pharmaceutical innovation through the NewCo model. The successful introduction of life science investment institutions such as Forbion Capital and OrbiMed not only demonstrates the international competitiveness of Hengrui's diversified and high-value R&D pipeline, but also accelerates the company's global development process of innovative therapies in the field of heart disease, providing more clinically valuable treatment options for patients worldwide.
According to the terms of the agreement, Hengrui Pharmaceutical will receive a down payment of $65 million, which includes $32.5 million in cash and an equivalent $32.5 million in Braveheart Bio equity, as well as a $10 million recent milestone payment upon completion of the technology transfer, totaling $75 million. In addition, Hengrui Pharmaceutical will also receive milestone payments related to clinical development and sales up to 1.013 billion US dollars, as well as corresponding sales commissions. The total transaction amount of this project is nearly 1.1 billion US dollars.
It is worth mentioning that this is not the first time Hengrui Pharmaceutical has gone global through the NewCo model. Last May, it licensed its GLP-1 class innovative drug portfolio (HRS-7535, HRS9531, HRS-4729) under the NewCo model to a new company formed by Bain Capital Life Sciences Fund, Atlas Ventures, RTW Capital, etc., with a total down payment and potential milestone payments of up to $6 billion. As part of the transaction consideration, Hengrui Pharmaceutical also acquired 19.9% equity in the new company
From the two NewCo products launched overseas, it can be seen that the 2MW7141 pipeline in this cooperation with Maiwei Biotechnology is a dual target small nucleic acid drug independently developed by the company in the preclinical stage, mainly used for blood lipid regulation in people with dyslipidemia and prevention of high-risk cardiovascular events. The synergistic regulatory effect of 2MW7141 is clear, and it has shown strong and persistent inhibitory effects on target genes in preclinical studies, with low off target risk. At present, the 2MW7141 project is progressing smoothly, and preliminary experiments have verified the effectiveness of the dual/multi-target small nucleic acid drug development technology platform independently developed by Maiwei Biotechnology.
The product HRS-1893 developed by Hengrui Pharmaceutical in this collaboration is a highly selective Myosin small molecule inhibitor independently developed by the company. It can specifically inhibit the activity of cardiac myosin ATPase, normalize myocardial contractility, reduce left ventricular hypertrophy, and improve diastolic compliance. HRS-1893 has conducted multiple clinical trials, and its Phase I clinical trial data was recently announced at the 2025 European Society of Cardiology (ESC) conference. According to Hengrui Pharmaceutical, the product is currently undergoing phase III clinical trials in China for obstructive hypertrophic cardiomyopathy.
Industry insiders say that the NewCo model is a new path for Chinese innovative pharmaceutical companies to go global, which can achieve light asset going global through "technology investment+capital cooperation". It not only guarantees short-term returns, but also helps Chinese innovative pharmaceutical companies better participate in decision-making in international cooperation and lay out long-term international competition. It is reported that since last year, innovative drugs in China have sparked a wave of NewCo transactions.