具有历史性的案例

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中国Biotech启示录

Behind the $1.3 Billion Deal: The “Rashomon” Between Novo Nordisk and KBP

Exclusive Interview with Feng Han, Founder and Managing Partner of Laurel Hollow Capital

What was once hailed as a “defining moment for China’s biotech industry” — a pipeline acquisition deal — has within just 15 months devolved into an international legal battle involving fraud allegations and an $830 million damages claim.

The controversy centers on Ocedurenone (KBP-5074), a third-generation non-steroidal mineralocorticoid receptor antagonist targeting uncontrolled hypertension in patients with advanced chronic kidney disease — a major unmet clinical need. The drug showed “best-in-class” potential during preclinical and Phase II trials.

In October 2023, Denmark’s pharmaceutical giant Novo Nordisk acquired the drug from Singapore-based KBP Biosciences, founded by Chinese entrepreneur Huang Zhenhua, under a deal structured as $700 million upfront + $100 million escrow + $500 million in milestones, totaling $1.3 billion. The transaction was celebrated as a milestone for China-origin innovation gaining global recognition.

However, in May 2024, Novo Nordisk terminated the drug’s Phase III trial after an erroneous futility analysis. What began as scientific disagreement quickly escalated into legal warfare: Novo Nordisk sued KBP and Huang for “fraudulent data concealment,” seeking $830 million in damages, and the Singapore High Court subsequently approved a global asset freeze.

KBP struck back, accusing Novo Nordisk of “failing to exercise commercially reasonable efforts,” and filed for arbitration in the U.S. in March 2025, with hearings scheduled for early 2026.

In today’s rapidly evolving global biotech landscape, this billion-dollar cross-border dispute has become more than a single case — it marks a watershed moment. It exposes the new challenges and rules of engagement that Chinese biotech innovators face when stepping onto the global stage.

As China’s innovation wave becomes irreversible, the key question for Chinese biotechs is how to balance collaboration with independence, pursue value while managing risk, and navigate the complexities of cross-border partnerships.

Against this backdrop, TONACEA in terviewed Mr. Feng Han, Founder and Managing Partner of Laurel Hollow Capital, a New York–based transaction expert with over 30 years of cross-border M&A experience. Mr. Han offers deep insights into the logic and implications behind this case — and lessons for Chinese biotech firms venturing abroad.

Q: The Novo Nordisk–KBP dispute has drawn major attention in China. How is the case viewed internationally?

Interest is just as strong abroad — especially among multinational pharma companies and advisory firms handling China-related cross-border deals. Opinions vary, but most see it as one of many commercial disputes arising from complex dealmaking. Our firm is studying it closely because it could affect how current and future clients view similar transactions and what lessons they take away.

Q: Why do you consider this case so important? What does it mean for future deals involving Chinese biotechs?

Several reasons:

1. It comes amid a global shift where China’s biotechs are increasingly driving drug innovation. Development costs are roughly one-quarter of those in the U.S.; Chinese scientists’ diligence and access to large patient populations enable faster trials. Last year, 40% of cross-border biotech deals originated from Chinese assets, and within five years, three-quarters of new drugs could come from China.

2. The deal’s $1 billion+ scale made it one of the largest cross-border licensing transactions in history. While terminated deals are common, being accused of fraud is almost unheard of — perhaps the first case of its kind.

3. The case underscores an industry evolution from chance to inevitability. Many Chinese biotechs, facing difficult funding environments, aim to monetize assets early through license-out deals. This case will serve as a wake-up call — teaching firms how to protect themselves in major transactions.

4. Lastly, amid today’s geopolitical climate, the stereotype of “Chinese fraud” must be addressed head-on. Clarifying facts is essential to protect the reputations of Chinese scientists, entrepreneurs, and the broader innovation community.

Q: Will this case impact China’s outbound BD trend?

No — the fundamentals remain unchanged. The three factors driving China’s innovation (cost, talent, population) still hold. But since Chinese biotech firms are often the weaker party at the table, they must learn to become more sophisticated sellers — better at protecting themselves legally and strategically.

Q: Could you elaborate on your opinions of the dispute between Novo Nordisk and KBP?

1. The Logic Behind Novo’s Accusation of Fraud Against KBP Is Laughable

We know from Singapore’s court file that Novo’s logic is that KBP knew the Phase II clinical results of Ocedurenone were ineffective but still proceeded with Phase III trials to find potential buyers and commit fraud.  The fact is that is that based on Phase II data, KBP was able to successfully raise over $100M financing round lead with some of the most sophisticated biotech investors including Hill House and 3E.   For a small biotech company like KBP, if Phase II had failed, it would be impossible to raise additional capital. Or are we saying either KBP has committed fraud against all these sophisticated investors, or were these investors also “in” for the fraud so KBP can initiate and continue the Phase III trial in the hope that someone like Novo would come in and buy the asset? The logic collapses. 

2. In Today’s World it is almost impossible to Conceal or Falsify Clinical Data

Drug development is one of the most complex tasks in the world, requiring large teams and extensive third-party collaboration. Data falsification, especially clinical data, is extremely difficult. In reality it would be impossible to coordinate global clinical centers and CRO companies to commit fraud. Moreover, starting a Phase III trial requires the approval of KBP’s investors, board, KOLs, and the FDA. Organizing such a fraud would require the cooperation of thousands of people. If anything, proving intention to fraud is nearly impossible in past cases in courts.

3. Novo had unmatched due diligence capabilities and resources.

As one of Europe’s largest companies – not just pharma companies, Novo has vast resources to turn over every rock over the diligence process.  Again from Singapore trial documents Novo’s claim is that KBP failed to provide an interim analysis from Phase II.

In majority of transactions, for a drug in the middle of Phase III, especially after a couple of blind reads of Phase III already, it is normal to consider an interim Phase II read as non-material information, as Phase II trial was completed a while ago and results were already published in scientific journals.   This is further supported by the fact that KBP provided all original Phase II data to Novo.  Novo could analyze and process this data in any way, further making Novo’s point mute.

4. Bulgarian clinical site and Novo’s decision to stop the trial.

Novo is claiming abnormalities from the Bulgarian clinical site which caused better result, but the independent clinical trial supervising committee does not think any problems with the site would cause data integrity questions. And it is a very reputable group of global KOLs. It is difficult to believe Novo’s blame on this site when they did the audit but didn’t find any findings that could affect data integrity. Then there is the CRO error in their Phase III interim statistical analysis errors and requested corrections, yet Novo insisted on using the wrong results.

Furthermore, the backdrop behind Novo’s stopping Phase III trial is questionable. Novo stopped the trial in a short time in April 2024, likely without verifying the CRO’s erroneous interim analysis. Also it is worth noting that in February 2024, NN’s GLP-1 CKD trial had positive results. Someone has to wonder if commercial considerations were involved. 

Finally, it is important to note that the veteran CEO and long-time EVP who launched fraud case against KBP were both let go.  In my experience dealing with large MNCs, there are so many internal politics that sometimes unfortunately drive commercial behavior which sometimes may not be appropriate.

Q: Now diving into more details of the case, what aspects are most noteworthy?

Novo’s initial asset-freeze motion in Singapore was a smart play from a purely commercial point of view, but it is also an unconventional way to break up a relationship with a biotech partner while applying unmatched legal resources and pressure where it has a significant advantage over a small biotech company.

From the transaction details learned from Singapore court, Novo argued that KBP didn’t provide full information during due diligence and relied on a “full (catch-all) representation” clause. The concept of “representations, warranties, and indemnifications” is very important.  In their contract there is likely an untypical clause. 

In a typical transaction process, both parties conduct a Q&A based on a due diligence checklist, which requires ongoing communication between their teams. Normally, the seller commits through representations and warranties that all responses provided are true and accurate.

However, Novo Nordisk added an additional obligation beyond standard terms: besides the questions already answered, the seller must proactively disclose any other information it believes is relevant or material to the transaction. This means the seller is not only responsible for the truthfulness of its responses but also for ensuring full disclosure of all information it deems relevant.

Novo Nordisk’s core legal argument is that, because they did not conduct a full due diligence, they relied on these “full representations, warranties, and indemnification” clauses — and on that basis accused KBP of insufficient disclosure.

From our years of deal experience, such broadly defined representation and warranty clauses are rarely acceptable to sophisticated counterparties. This serves as a reminder: when dealing with multinational corporations, one must never let their guard down — every clause deserves careful scrutiny.

Q: So, according to what you mean, Novo Nordisk’s claim is not a customary practice in past BD or M&A cases?

Yes, but such cases are rare. It’s quite simple: since you are the one acquiring me, all data has been made available — you can review all relevant information and ask any questions you wish, and I’m responsible for answering them. But now the requirement has become: not only must I ensure that my responses are completely accurate, but I must also proactively identify and disclose any information you might consider relevant? How could I possibly know or predict which information might affect your decision-making?

Of course, the transaction documents are confidential, and we don’t know the exact content of the representations, warranties, and indemnification clauses, nor the details of the negotiations at the time. The above is only our guess based on the parties’ testimonies in the Singapore court.

That said, another possibility cannot be ruled out: KBP may have done a very good job controlling legal risk on this point — and since seller liability is typically unlimited in cases of fraud, it’s possible that Novo Nordisk resorted to a fraud accusation as the only legal strategy to recover its money.

Q: Under the backdrop of Chinese innovative drugs moving toward internationalization and globalization, what key insights does this case provide for Chinese Biotech? What suggestions do you have for Chinese Biotech companies engaging in transactions with multinational corporations?

In cross-border transactions, Chinese companies must clearly recognize that, while they are partners with multinational pharmaceutical companies, they are also adversaries in a game of competing interests at the negotiation table. This complex identity positioning requires Chinese Biotech companies to enhance their professional capabilities, adeptly utilize professional advisors, and, while pursuing commercial returns, strictly manage risks and meticulously address every detail in the transaction. Specifically, this can be approached from three aspects:

First, during the initial material preparation stage, a high level of rigor must be maintained. From the preparation of the initial financing documents or project proposals, it is essential to ensure that the foundational information is accurate and error-free, and to include necessary legal disclaimers. All disclosed materials and information may potentially serve as courtroom evidence in the future.

Second, during the due diligence process, attention to detail management is crucial. Every response to a question—whether it’s “Not applicable,” “None,” or another option—must be precisely articulated. These subtle differences often influence the direction of the entire transaction.

Finally, engage professional advisors with extensive experience in cross-border transactions. These advisors, distinct from lawyers, can provide comprehensive guidance on market practices, negotiation strategies, and more. In the U.S., there are many advisors like us with substantial transaction experience. In contrast, Chinese Biotech companies are still in the early stages of transaction and operational experience. The guidance and advice provided by professional advisors, based on their experience and expertise, can reduce risks from various aspects.