Qiming Venture Partners' Kan Chen: NewCo Model Profoundly Impacts Global Value of Chinese Innovative Drugs
This isn't just a successful investment case — it more profoundly reveals the path by which China's pharmaceutical innovation is being revalued.
Editor's Note: In May 2025, Candid Therapeutics was acquired by global biopharmaceutical company UCB for $2.2 billion, including a $2 billion upfront payment and up to $200 million in potential future milestone payments. In what stands as a landmark acquisition for China's biopharmaceutical industry, Qiming Venture Partners played an indispensable role alongside Candid's core management team. Recently, Kan Chen, Partner at Qiming Venture Partners and Co-Head of Healthcare Innovation, shared the story behind this NewCo transaction, offering an in-depth analysis of its underlying logic and profound industry transformation. He believes the core consideration of the NewCo model is to fully leverage China's clinical data and execution efficiency, as well as to take advantage of the NewCo's closer proximity to the U.S. venture capital market. The NewCo model can also deliver better upside compared to traditional license-outs. This article was originally commissioned by VBData and is republished here with authorization from Qiming Venture Partners' WeChat account.
On May 4, 2025, news shook the global biopharmaceutical community: Candid Therapeutics, founded less than two years prior, was acquired by Belgian pharmaceutical giant UCB for up to $2.2 billion, with a staggering $2 billion upfront payment. This "lightning-fast" exit was not only a shot in the arm for the biopharmaceutical sector but also marked the full commercial closure of the "NewCo" globalization model—co-created by Chinese and American venture capital, Chinese innovative molecules, and top-tier American entrepreneurial teams—from incubation to high-value acquisition.
At the heart of this transaction, an innovative molecule from China—EpimAb's BCMA T-cell engager (TCE)—played a pivotal role. Its unique FIT-Ig platform design, demonstrating best-in-class potential and safety, became the "knock on the door" that attracted UCB. And the origin of it all stemmed from a bold hypothesis by U.S.-based Foresite Capital: Could convenient, off-the-shelf TCE therapies overcome the limitations of CAR-T in autoimmune diseases?
The "remarkable" turning point in the story occurred at Qiming Venture Partners. Kan Chen, its Partner and Co-Head of Healthcare Innovation, precisely connected EpimAb's asset to Ken Song, a "serial entrepreneurial star" who had just successfully sold his company. After joining Foresite Capital, Ken Song facilitated the merger of another CD20 TCE asset, ultimately building Candid with a complete TCE portfolio. This "chemical reaction" rapidly assembled from "Chinese assets + American team + Chinese-American venture capital" proved its immense value in autoimmune diseases in less than two years, delivering unprecedentedly rich returns for all participants.
This is not merely a successful investment case; it more profoundly reveals the path for revaluing Chinese pharmaceutical innovation. While the market remains anxious about geopolitical "noise" and the ceiling of the license-out model, the NewCo model—with its flexibility, efficiency, and full value release—is becoming the dominant narrative for China's premium biotech assets to connect with global capital markets. Through this exclusive interview with Dr. Kan Chen, this article deconstructs the deal-making logic behind UCB's lightning acquisition of Candid and explores this model's far-reaching impact on China's innovative drug industry landscape.
Kan Chen, Partner at Qiming Venture Partners and Co-Head of Healthcare Innovation
01/ A Precision-Calculated "Asset Speed-Dating"
Candid's story is fundamentally a competition about speed. From its official launch in 2024 to its acquisition in May 2025, this company completed asset sourcing, licensing, merger and financing, clinical advancement, and a multi-billion-dollar acquisition exit in less than two years. This iteration speed, comparable to internet companies, completely upended the traditional ten-year-long cycle of new drug R&D.
Dr. Kan Chen attributed its success to two factors in the interview: "Ken Song's track record of success, and the team's very fast execution." This precisely pinpoints the core of the NewCo model—using a mature team and mature assets to capture the maximum time-difference dividend.
The starting point of this model, as mentioned, was a "bold hypothesis" proposed by Foresite Capital at the end of 2022: Since autologous CAR-T can achieve immune reset in autoimmune diseases, could TCE bispecific antibodies—with simpler manufacturing processes, no need for chemotherapy preconditioning, and lower costs—achieve the same effect? Based on this judgment, Foresite Capital's team launched an exhaustive asset search covering nearly 50 projects. This was not blind casting of a wide net but a precision hunt with clear clinical hypotheses and biological logic, targeting molecules that had already demonstrated differentiated potential in early data.
Ultimately, EpimAb's BCMA TCE molecule stood out. Its key advantage: in Phase I clinical trials for multiple myeloma, it not only showed excellent efficacy but also demonstrated far superior safety compared to peers, particularly with extremely low rates of cytokine release syndrome (CRS).
Dr. Kan Chen emphasized in the interview: "Safety is better than other molecules." This characteristic is crucial for future expansion into non-fatal autoimmune disease indications, as autoimmune patients have far lower tolerance for treatment safety risks than oncology patients. It can be said that the "best-in-class" potential in safety was the cornerstone that ultimately won over UCB.
With the asset secured, the next step was assembling a top-tier execution team. Here, a typical cross-border China-U.S. collaboration model emerged: Vignette Bio, incubated by Foresite Capital, obtained the asset license, while Dr. Kan Chen leveraged his deep industry network to find Ken Song, who had just sold RayzeBio for $4 billion. Ken Song himself was also independently researching TCE applications in autoimmune diseases—the two hit it off immediately.
Dr. Kan Chen recalled that Ken Song "quickly decided to come on as CEO." A serial entrepreneur with multi-billion-dollar exit experience is itself the strongest endorsement of a project's value, making subsequent financing and acquisition negotiations flow naturally.
The sophistication of the NewCo model also lies in the malleability of its asset portfolio. After Ken Song joined, the team did not rest on the single BCMA asset but quickly integrated another CD20 TCE project from Two River and Third Rock Ventures.
Through this merger, Candid built a TCE "combination punch" covering different B-cell subsets—BCMA targeting plasma cells, CD20 targeting B cells. This combination dramatically broadened its therapeutic potential across multiple autoimmune indications including systemic lupus erythematosus and scleroderma, while also upgrading the company in UCB's eyes from a single-pipeline project to a strategic acquisition with platform value.
This efficient asset integration and team assembly would not have been possible without deep synergy between Chinese and American venture capital. From Foresite Capital and Qiming Venture Partners to Samsara BioCapital and Mirae Asset, this investor consortium was not merely a provider of capital but a connector of resources and critical networks.
Dr. Kan Chen described Qiming Venture Partners' role in detail during the interview: "Mainly at the company's inception, we found the ASSET, and brought in the management team, especially founder Ken Song, to the company." This depth of empowerment far exceeds the scope of traditional financial investors, representing a typical manifestation of "strategic positioning" plus "post-investment service" capabilities.
For Chinese biotech companies, the Candid case reveals the enormous value uplift of the NewCo model compared to traditional license-outs. Dr. Kan Chen pointed out to VBData that many people think license-outs are better because you get money directly, but "the upfront payment won't be particularly high, and secondly, your sales royalty is only about 8% to 10%." In the NewCo model, Chinese biotech companies as original asset licensors not only receive upfront and milestone payments but also hold a substantial equity stake in the NewCo. Once the NewCo is acquired at a premium, what the Chinese company receives is not a fixed annual sales royalty but a massive, one-time investment return—achieving a "Davis Double Play" of value.
This model's success has greatly stimulated the revaluation of Chinese innovative drug assets. In the past, the market often viewed Chinese molecules as "cheap generics" or "me-too" products, but Candid's $2.2 billion in real money proved that with truly differentiated molecular design and solid early data, China-originated innovation can equally command "global-level" prices. Among the five criteria Dr. Kan Chen listed for evaluating NewCo projects, "the product must have sufficient market potential," "clinical data must be solid," and "the molecular design must have advantages" became core—undoubtedly pointing the way for Chinese biotech companies with strong R&D capabilities.
Of course, this model demands extremely high standards from participants. For American teams, strong clinical advancement capabilities and capital operation experience are required; for Chinese asset owners, robust molecules and the foresight to "share profits" are needed; for investors, cross-cultural communication skills and a top-tier "circle of friends" are essential.
Dr. Kan Chen candidly stated that the greater demands of doing NewCo on investor capabilities are reflected in "communication with some overseas funds, and understanding of market industry conventions for these NewCos in the U.S." This is not simple financial investment but a "symphony" requiring precision coordination—where a misstep in any single link could lead to total failure.
02/ The Dual Crush of China Speed and Cost
The secret weapon that allowed Candid to assemble a clinical data package sufficient to impress UCB in less than two years was not American domestic R&D efficiency but a deeply embedded Chinese clinical "engine." Dr. Kan Chen stated bluntly in the interview: "China contributed the vast majority of clinical data." This cuts to the heart of what enables the NewCo model to operate at high speed—leveraging China's vast patient resources, relatively low operational costs, and efficient clinical trial approval processes to provide rocket-like acceleration for NewCo companies' value explosion.
After Ken Song's team took over Candid, their first key decision was to establish a China clinical team. Dr. Kan Chen revealed that Qiming Venture Partners helped build the China clinical team, while Ken Song found Derek Yuan as China Clinical General Manager. This organizational design enabled Candid to operate like a local company, penetrating China's top-tier clinical centers to rapidly initiate and enroll patients. For new therapies like TCE that require proof-of-concept, being able to see efficacy signals and safety data in patients first is the core battle that determines a project's life or death and subsequent valuation.
The advantages of this "China-U.S. dual-track" clinical strategy are obvious. In the United States, constrained by high labor costs, stringent regulatory processes, and relatively dispersed patient populations, completing an early-phase clinical trial may take years and tens of millions of dollars. In China, benefiting from the dividends of recent regulatory reforms and a massive population base, enrollment speed is often several times that of the U.S., while costs are only a fraction. Candid precisely leveraged such advantages to build a "massive clinical data package" for its BCMA project in extremely short time, directly laying the foundation for this acquisition.
More importantly, Chinese clinical data is not just "fast" but "good." The efficacy and extremely low CRS rate demonstrated by Candid's BCMA TCE in autoimmune patients was its core selling point. These critical data came overwhelmingly from Chinese clinical centers. This means China has become the first site for validating the clinical value of globally first-in-class or best-in-class drugs. When this high-quality clinical evidence from China is placed on the desks of MNC executives like UCB, its persuasiveness far exceeds any experimental data on PowerPoint slides.
Behind this phenomenon lies the profound qualitative transformation of China's innovative drug industry ecosystem. In the past, Chinese pharmaceutical companies mostly did follow-on fast-follow programs, with clinical data serving domestic registration and market approval. Now, represented by Candid, China's clinical capabilities have become an indispensable link in the global new drug R&D value creation chain. Whether international big pharma or American NewCos, increasingly recognize that if you want to rapidly validate a promising molecule, going to China for clinical trials is becoming an extremely attractive option.
For American NewCos, the value of China clinical teams extends far beyond "saving time and money." Through deep collaboration with Chinese CROs and clinical centers, they can access large numbers of refractory patients who have failed standard treatments and have urgent need for novel therapies. These patients' real-world data often carries more clinical significance than data from healthy volunteers or mild patients, and better demonstrates the product's "hardcore" strength to investors and potential acquirers. The "systemic advantage" Dr. Kan Chen referred to is precisely manifested in this efficient resource integration and execution capability.
The "siphon effect" of Chinese clinical resources has already formed and is irreversible in the short term. As long as China can continue providing high-quality, low-cost, high-efficiency clinical research services, global capital and innovative drug projects will continuously flow in. This not only brings enormous opportunities to the CRO industry but has also cultivated a cohort of China clinical management talent with international vision and operational capabilities. Figures like Derek Yuan are precisely the product of China-U.S. biopharmaceutical ecosystem integration—they understand global new drug development standards while being thoroughly familiar with local operational rules.
The Candid case also brings profound revelations to China's clinical CRO and SMO industries. The traditional "take orders and execute" model is becoming obsolete; clinical service platforms that can proactively integrate resources, deeply participate in project design, and even provide one-stop solutions for NewCos will occupy more advantageous positions in future value distribution. Going forward, we may see more deep collaborations like "helping build the China clinical team," where the boundaries between investors, incubators, and clinical service providers become increasingly blurred.
From "Single Breakthrough" to "Paradigm Export"
Candid's success was no isolated incident; a major transformation may be unfolding. Dr. Kan Chen revealed in the interview that Candid was one of three NewCos they had previously done, and they are currently evaluating another 3 to 4 NewCo opportunities. This means this model of "importing Chinese assets, American team execution, rapid clinical validation, and premium acquisition exit" has evolved from an accidental "point breakthrough" to a replicable, batch-producible "industrial paradigm." When this paradigm begins to scale, it will fundamentally reshape the global innovative drug transaction landscape.
This model's powerful vitality lies in its precise resolution of core pain points on both sides of the Pacific. For American capital and entrepreneurs, it solves the sourcing problem of "where to find differentiated, promising molecules." China's vast innovative drug asset pool, having weathered the capital bubble of recent years, has沉淀下来一批真正有实力的项目和人才，而它们的估值正处于历史低点。对于中国Biotech而言，它解决了"如何让资产价值最大化"的退出难题。正如陈侃博士所言，NewCo模式能享受到比License-out好得多的"upside"，让中国创新不再被低价"买断"。
UCB's acquisition logic also reveals MNC strategic needs in the new cycle. Large pharmaceutical companies face the dual pressure of major patent cliffs and declining internal R&D efficiency; they urgently need to externally introduce differentiated, late-stage pipelines with solid clinical data. But directly acquiring a Chinese company involves multiple challenges including geopolitics, cultural integration, and management reach. Acquiring a NewCo operated by an American team, with core assets sourced from China and clinical data already validated, is a lower-risk, smoother-to-integrate strategic choice. The Candid case proves that NewCo has become a "safe adapter" for MNCs to access Chinese innovation dividends.
Notably, NewCo model applications are rapidly extending beyond tumor immunology. While Candid rode the hottest autoimmune disease wave, Dr. Kan Chen clearly pointed out that "neurology, including infectious disease areas, including some other rare disease areas, all actually have some opportunities." This greatly expands the NewCo model's imaginative space. As long as an area has massive unmet clinical needs and China possesses differentiated molecules or technology platforms, global value development through the NewCo model is theoretically possible.
So, will NewCo ultimately replace traditional license-outs as the mainstream path for Chinese innovation to go global?
Dr. Kan Chen pointed out that the current mainstream globalization paths are mainly three: direct license-out, going global through NewCo, and being acquired. Currently, direct acquisition of Chinese companies by European and American enterprises is relatively rare; the main models in the future will likely be either license-out or NewCo globalization.
The license-out model is more direct with simpler transaction structures, and remains the most feasible choice for Chinese small and medium-sized biotech companies lacking international operational experience and resources. The NewCo model has higher barriers; it requires founders to have stronger conviction, willing to relinquish direct control of pipelines to bet on higher future returns. The two models will coexist long-term, serving companies at different stages with different intentions.
Despite the model itself maturing, market competition has already intensified. Those top-tier assets with global rights or clear best-in-class potential will more easily win favor from top American funds and entrepreneurial teams, creating a Matthew effect where the strong get stronger. Meanwhile, large volumes of homogenized, me-too assets will struggle to attract capital attention even under NewCo packaging. This means the NewCo model is not a "safe harbor for the weak" but rather an "amplifier for the strong"—further intensifying the survival of the fittest among innovative drug assets.
But regardless of how models innovate, all the noise ultimately comes down to one point: when that needle goes in, does it actually work? In Candid's story, all the capital operations, team assembly, and clinical advancement ultimately served to answer this most fundamental scientific question. This may be the most朴素 yet profound revelation the entire Candid legend leaves for the industry: in biopharmaceuticals, excellent science and solid clinical data will always be the sole source of value creation.
Author | Zhu Ping
Source | VBData
Founded in 2006, Qiming Venture Partners currently manages 11 USD funds and 7 RMB funds, with total committed capital reaching $9.5 billion. Since its inception, the firm has focused on investing in early and growth-stage outstanding enterprises in Technology and Healthcare Innovation.
To date, Qiming Venture Partners has invested in over 580 high-growth innovative companies, of which more than 210 have listed on the New York Stock Exchange, NASDAQ, Hong Kong Exchanges and Clearing Limited, Shanghai Stock Exchange, and Shenzhen Stock Exchange, or exited through mergers and acquisitions, with over 80 recognized as industry-leading unicorns or super-unicorns.
Many Qiming Venture Partners portfolio companies have grown into the most influential companies in their respective fields, including Xiaomi (01810.HK), Meituan (03690.HK), Bilibili (NASDAQ:BILI, 09626.HK), Zhihu (NYSE:ZH, 02390.HK), Roborock (688169.SH), Hesai Technology (NASDAQ:HSAI, 02525.HK), UBTECH (09880.HK), WeRide (NASDAQ:WRD, 0800.HK), HyperStrong (688411.SH), Insta360 (688775.SH), Unisound (09678.HK), Biren Technology (06082.HK), Zhipu (02513.HK), Gan & Lee Pharmaceuticals (603087.SH), Tigermed (300347.SZ, 03347.HK), Zai Lab (NASDAQ:ZLAB, 09688.HK), CanSino Biologics (688185.SH, 06185.HK), Schrödinger (NASDAQ:SDGR), MicroPort EP MedTech (688617.SH), Sanyou Medical (688085.SH), Amoy Diagnostics (300685.SZ), SinoCellTech (688520.SH), Insilico Medicine (03696.HK), AusperBio, Yuanxin Technology, MediLink Therapeutics, LaNova Medicines, StepFun, and others.