The "NewCo" model, where a new company is formed around assets licensed from an existing firm, is a key strategy for Western investors to access a deep well of innovation from Chinese companies like Heisco, which are largely unknown in the West but possess broad, innovative pipelines.

Instead of a traditional IPO, Candid Therapeutics secured a NASDAQ listing and a massive capital infusion by merging with RallyBio. This reverse merger, coupled with a concurrent private investment, provides nearly $700 million in cash to fund operations through 2030, demonstrating a powerful alternative financing path to public markets.

Forbion identified an arbitrage: promising biotech assets in China whose originators lacked global development expertise. Their strategy is to create new Western companies, in-license these assets, and install an experienced team to unlock their "rest of world" value, a model proven by a billion-dollar exit.

Biotech firms are increasingly using reverse mergers paired with substantial PIPE financings ($200M+) as an alternative path to the public markets. This "IPO-esque" strategy offers speed and efficiency but may trade off the broader investor exposure gained through a traditional, lengthy roadshow process.

To tap into public market investors, Adaptin Bio merged with a 'Form 10' public shell company. This distinct route is not a SPAC as it doesn't raise money in an IPO. Instead, it provides a faster path to becoming a public reporting entity to attract a wider investor base.

When traditional venture funding dried up for Madrigal Pharmaceuticals, they found an unconventional path to capital and a public listing. They pursued a reverse merger with Cinta, a public company that had recently failed a Phase 3 trial and was seeking an exit. This "bake off" victory secured Madrigal $41 million.

To capitalize on promising Chinese biotech assets while mitigating risks in IP and manufacturing (CMC), investors are creating new US-based companies ("NewCos"). This structure allows an experienced US leadership team and board to guide the asset's development to meet global regulatory standards.

Biotech companies are increasingly favoring reverse mergers over traditional IPOs. The process allows for confidential diligence with select funds, is faster, and sidesteps market volatility like election uncertainty. The previous stigma is fading as the quality of investor syndicates remains high.

The formation of Sarafa showcases a complex strategy for capitalizing and publicizing assets from China. The process involved concurrently in-licensing an asset, raising a $230M private round, and executing a reverse merger into a public company, demonstrating a rapid path to the U.S. market.