$1B deal follows hot IPO: Leads Biolabs and Dianthus partner on bispecific LBL-047

On October 16, Nanjing Leads Biolabs Co., Ltd. (“Leads”) (9887.HK), a clinical-stage biotechnology company focused on developing innovative therapies in oncology and autoimmune diseases, and Dianthus Therapeutics, Inc. (NASDAQ: DNTH), a clinical-stage biotechnology company developing next-generation therapeutics to address severe autoimmune diseases, today announced that they have entered into an exclusive global partnership to jointly advance LBL-047 (to be developed as DNTH212 by Dianthus Therapeutics outside Greater China), a novel anti-BDCA2-TACI bispecific fusion protein that has obtained IND approval in the U.S. and IND acceptance in China.

Under the agreement, Dianthus will pay Leads Biolabs $38 million in upfront and near-term payments—including $30 million initially and a further $8 million upon initiation of the Dianthus-led Phase 1 trial—in exchange for exclusive global rights to develop and commercialize DNTH212 outside Greater China.

Leads Biolabs is also eligible to receive up to $962 million in additional development and regulatory approval milestones, as well as commercial milestones across multiple indications. Additionally, Leads Biolabs will be entitled to tiered royalties ranging from mid-single digit to low double digits on net sales outside Greater China. The total potential value of the transaction is approximately $1 billion.

On September 19, LBL-047 received Investigational New Drug (IND) clearance from the U.S. FDA. The asset is a bispecific fusion protein composed of a humanized anti-BDCA2 antibody and a modified extracellular domain of the Transmembrane Activator and CAML Interactor (TACI). Globally, no fusion proteins simultaneously targeting both BDCA2 and TACI have been approved or are in clinical stages, indicating that LBL-047 has first-in-class potential.

The out-licensing of ex-Greater China rights for this early-stage clinical asset not only generates immediate positive cash flow for Leads Biolabs but also accelerates the global clinical validation of its pipeline through this collaboration.

LBL-047 is a bispecific fusion protein targeting both BAFF/APRIL and BDCA2. It is composed of a humanized anti-BDCA2 antibody and a modified extracellular domain of TACI, designed to simultaneously inhibit plasmacytoid dendritic cell (pDC) activity as well as the differentiation and activation of B cells and plasma cells. With an engineered Fc region that extends its half-life, LBL-047 has the potential to reduce dosing frequency and improve patient compliance.

B cells and plasmacytoid dendritic cells (pDCs) play critical synergistic roles in the pathogenesis of various autoimmune diseases. BAFF (B-cell activating factor) and APRIL (a proliferation-inducing ligand) are key cytokines that promote the survival, maturation, and function of B cells and plasma cells. The TACI domain can bind to both BAFF and APRIL, thereby inhibiting their downstream signaling. pDCs secrete large amounts of type I interferons (IFN-I, including IFNα and IFNβ) and activate both T cells and B cells, which are closely associated with inflammatory responses. Compared to povetacicept, a clinically validated BAFF/APRIL inhibitor in late-stage development, DNTH212 demonstrated stronger suppression of immunoglobulins (i.e., IgM, IgA, and IgG) in non-human primate studies.

BDCA2 is specifically expressed on the surface of pDCs. Its activation effectively suppresses the production and subsequent effects of Type I interferons (IFN-I). Clinical data from previous BDCA2-targeting monoclonal antibodies (e.g., litifilimab) have validated the therapeutic potential of this target in two autoimmune diseases: systemic lupus erythematosus (SLE) and cutaneous lupus erythematosus (CLE). Compared to litifilimab, a BDCA2 inhibitor validated in late-stage clinical trials, DNTH212 demonstrates comparable IFNα inhibition and superior pDC depletion in vitro.

Furthermore, through glycosylation engineering, LBL-047 achieves more potent and broad suppression of aberrant immune responses. It exhibits strong therapeutic potential for a range of autoimmune diseases where B cells and/or pDCs play a critical role, including systemic lupus erythematosus (SLE), dermatomyositis, IgA nephropathy (IgAN), and Sjögren's syndrome.

This deal marks a successful start for Leads Biolabs' global expansion strategy following its listing on the Hong Kong Stock Exchange on July 25. Previously, the Nanjing-based biopharma had partnered with BeiGene on LBL-007, receiving RMB 200 million in upfront payment (the collaboration was terminated in May 2025, with global rights returned to Leads). For another asset, the autoimmune TCE drug LBL-051, Leads structured a NewCo partnership with U.S.-based Aditum Bio, securing eligibility for $35 million in upfront and near-term payments.

Not only has Leads Biolabs capitalized on the industry trends of business development and NewCo models, but it has also ridden the wave of a thriving secondary market for Chinese biotech. During its subscription period, Leads was oversubscribed by 3,029 times—far exceeding the 148-times average for Hong Kong listings this year—with total frozen capital approaching HK$340 billion, making it one of the most sought-after IPO projects in the Hong Kong biotech sector over the past three years.

Founded in 2012, this Chinese innovative biopharmaceutical company was established by Xiaoqiang Kang and Shoupeng Lai, who bring nearly two decades of experience in drug discovery and biopharmaceutical industry. Prior to its IPO, the company completed eight financing rounds, raising a total of approximately US$150 million.

Its core asset, LBL-024, is a PD-L1/4-1BB bispecific antibody. It represents the first and only 4-1BB-targeting immunotherapy worldwide to enter registrational clinical trials for extra-pulmonary neuroendocrine carcinoma. The program has already received Breakthrough Therapy Designation (BTD) from China's NMPA and Orphan Drug Designation (ODD) from the U.S. FDA, positioning it as a potential first-in-class therapy for advanced extra-pulmonary neuroendocrine carcinoma.

Currently, Leads Biolabs maintains a pipeline of 14 assets, six of which have entered clinical stages. This includes one core product, LBL-024, and three key products—LBL-034, LBL-033, and LBL-007—all focused on immuno-oncology. The portfolio spans multiple modalities such as bispecific antibodies, TCEs, and ADCs. Notably, LBL-047, the subject of this transaction, represents Leads Biolabs' first autoimmune program to receive IND clearances from both U.S. and Chinese regulatory authorities.

According to a Dianthus press release, the Phase 1 clinical trial of LBL-047 in China is expected to initiate by the end of 2025. The study will enroll both healthy volunteers and patients with systemic lupus erythematosus (SLE), with topline results from the healthy volunteer portion anticipated in the second half of 2026.

On the day the deal was announced, Dr. Xiaoqiang Kang, Founder, Chairman, and CEO of Leads Biolabs, stated in an exclusive interview that the company aims to file INDs for five new drugs in 2026. He also outlined plans for LBL-024 to expand into 8–10 additional oncology indications over the next two years, including non-small cell lung cancer and melanoma.

The LAG-3 monoclonal antibody LBL-007, previously out-licensed to BeiGene, has now entered a combination therapy clinical study with LBL-024 to evaluate its efficacy in treating advanced melanoma. Meanwhile, the company continues to actively seek partnership opportunities with global pharmaceutical companies for the program's development in overseas markets, with the goal of accelerating its international advancement.

Additionally, LBL-034, a TCE targeting GPRC5D and reported as the second globally in clinical development stage, is actively pursuing business development collaborations with leading pharmaceutical companies to enhance its clinical and commercial potential. In the most recently disclosed clinical data, the high-dose cohort demonstrated an objective response rate (ORR) of 90% in patients with relapsed/refractory multiple myeloma.

"The current market favors establishing NewCos around preclinical assets. Partners then collaboratively advance these assets through Phase I or II trials to achieve proof-of-concept, after which the program rights are divested," shared Dr. Xiaoqiang Kang. He elaborated, "Licensing out clinical-stage assets isn't merely about selling a product; it's fundamentally a collaboration. For Chinese biotechs, conducting clinical trials or sales operations in the U.S. independently is exceptionally challenging. Therefore, global partnerships represent a more efficient pathway.”

Regarding the selection of partners, Dr. Kang highlighted two core criteria: "First, they must have substantial financial capacity. Second, they must demonstrate genuine commitment—truly recognizing the value of your pipeline and being willing to prioritize the development of your product. This ensures that the program isn't hindered by incidental factors like personnel changes, which could delay the R&D progress."

Dianthus was incorporated in 2019 in Delaware, USA, with a strategic focus on autoimmune diseases. Leveraging its differentiated technology platform, the company is dedicated to developing next-generation complement-targeted therapies, particularly for high-need indications in the neuromuscular field. Its investor base includes 5AM Ventures, Avidity Partners, Fidelity International, and Wedbush Healthcare Partners, with founding investments from Fairmount, Tellus BioVentures, and Venrock.

The complement system, a major component of the innate immune system, plays a critical role in both physiological and pathological processes within the human body. However, aberrant or excessive activation of the complement cascade can lead to tissue and organ damage, contributing to the pathogenesis of various diseases.

Prior to the introduction of DNTH212 (LBL-047), Dianthus' pipeline consisted of a single asset: claseprubart (DNTH103). This monoclonal antibody targets the active form of complement C1s and is positioned as a best-in-class, highly selective, and potent complement inhibitor for the treatment of anti-acetylcholine receptor-positive (AChR+) generalized myasthenia gravis (gMG).

Within the same indication (gMG), the currently approved mainstay therapies primarily consist of complement C5 antibodies and FcRn antibodies.

Regarding the same target (complement C1s), Sanofi's monoclonal antibody Sutimlimab (Enjaymo) has already received FDA approval for the treatment of adult patients with cold agglutinin disease (CAD). It works by reducing the need for red blood cell transfusions due to hemolysis and erythrocyte destruction. It is worth noting that Sutimlimab was acquired by Sanofi through its $11.6 billion purchase of Bioverativ in 2018.

Enjaymo lacks selectivity for C1s and requires high dosing—intravenous administration of 6500mg to 7500mg every two weeks. Its 2024 sales reached $113 million, reflecting its relatively limited market in the currently approved indication.

In contrast, Claseprubart's key advantage lies in its specific targeting of the classical complement pathway via C1s, without affecting the lectin or alternative pathways. This mechanism offers a potential reduction in infection risk and the capacity to address a broader gMG patient population. It is administered via a subcutaneous injection that can be completed within 10 seconds. Additionally, Claseprubart is being explored for other indications, including chronic inflammatory demyelinating polyneuropathy (CIDP) and multifocal motor neuropathy (MMN).

On September 8, the Phase II MaGic trial of Claseprubart for gMG achieved its primary endpoints, marking a clinical success. A Phase III study is scheduled to initiate in 2026. Additionally, topline results from the Phase II study evaluating Claseprubart for the treatment of MMN are expected in the second half of 2026.

Regarding the competitive landscape, Sanofi's second-generation C1s monoclonal antibody, riliprubart, which is also primarily developed for CIDP, has already entered Phase III clinical trials. In prior preclinical studies, DNTH103 demonstrated comprehensively superior molecular activity compared to riliprubart, suggesting the potential for enhanced therapeutic efficacy.

As a typical single-asset biotech, this license-in deal represents a significant strategic shift for Dianthus. The company is transitioning from relying solely on its proprietary complement platform and core late-stage clinical asset to introducing an external program, which will be directly advanced into Phase 1 trials. Therapeutically, it is also expanding from neuromuscular diseases into the broader "major autoimmune" domain, which includes more prevalent conditions like systemic lupus erythematosus (SLE) and addresses a larger patient population.

For Leads Biolabs, Dianthus brings substantial overseas clinical experience, established channels, and strong financial backing, which are expected to pave a smooth pathway for the global clinical development of LBL-047. Following the licensing of DNTH212 and after accounting for the $30 million upfront and near-term milestone payments to Leads Biolabs, Dianthus projects a cash balance of approximately $525 million.