01 Nov 2025 18 min read

Tax-Neutral Demerger - A case study

DISCLAIMER

This article is provided for informational and educational purposes only. It does not constitute legal, financial, tax, or investment advice. All information presented is derived from publicly available sources including corporate press releases, regulatory filings, Swiss Official Gazette entries, and published tax law provisions. The author is not a licensed attorney, tax advisor, or financial professional. Readers should not rely on this content for making legal, tax, or financial decisions. Any person or entity considering a corporate reorganization, cross-border transaction, or tax planning strategy should consult qualified legal counsel, tax advisors, and financial professionals licensed in the relevant jurisdictions. Swiss tax law is complex and subject to cantonal variation; the interpretation and application of tax neutrality provisions may differ based on specific facts and circumstances. No warranty is made regarding the accuracy, completeness, or currency of the information presented. Tax laws and regulations may have changed since publication. This analysis represents the author's understanding based on available public information and should not be treated as authoritative guidance.

Transaction Overview

On May 28, 2024, Numab Therapeutics AG (a Swiss biotechnology company domiciled in Horgen, Canton Zurich) announced an agreement to divest its investigational antibody program NM26 to Johnson & Johnson (J&J) in a transaction valued at approximately $1.25 billion. The transaction closed on July 11, 2024, following receipt of antitrust clearance under the Hart-Scott-Rodino Act.

Rather than a direct asset sale, the parties structured a tax-neutral demerger followed by acquisition: Numab carved out the NM26 program into a newly formed Swiss subsidiary called Yellow Jersey Therapeutics AG (YJT), which J&J subsequently purchased. According to J&J's official press releases, YJT was "formed through a demerger with Numab" and J&J acquired 100% of YJT's issued shares in an all-cash transaction.

This transaction structure was designed to achieve tax neutrality under Swiss federal and cantonal tax law, particularly Article 61(1) lit. b of the Swiss Federal Direct Tax Act (DBG). The deal secured J&J global rights to NM26 — a first-in-class, Phase 2-ready bispecific antibody targeting IL-4Rα and IL-31 for the treatment of atopic dermatitis. A separate agreement was executed with Numab's development partner Kaken Pharmaceutical to secure rights in six Asia-Pacific territories (Japan, China, South Korea, Taiwan, Singapore, and Hong Kong).

Pre-Demerger Structure and Rationale

Prior to the transaction, Numab Therapeutics AG owned the NM26 asset as part of its clinical development pipeline. Numab's shareholders — including specialized life sciences investors HBM Healthcare Investments, Forbion, Novo Holdings, and others — indirectly owned NM26 through their equity stakes in Numab.

Had Numab sold the NM26 program directly to J&J at the corporate level, the transaction would likely have triggered substantial Swiss corporate income tax on the realized gain — specifically, taxation of stille Reserven (hidden reserves or unrealized appreciation in the asset's value). Additionally, distributing the $1.25 billion in sale proceeds to shareholders would ordinarily incur Swiss withholding tax on dividends at a rate of 35%, along with potential income tax obligations for certain classes of shareholders.

To avoid these tax consequences, Numab pursued a tax-free demerger (German: Spaltung) of the NM26 business to its shareholders, followed by those shareholders selling the new entity to J&J. This approach effectively shifted the economic transaction from the corporate level to the shareholder level — a technique that can eliminate corporate tax on the realized gain and, in many cases, result in minimal or no tax to shareholders (Swiss-resident individual investors generally pay no tax on private capital gains from unlisted shares, while institutional investors may benefit from participation exemptions).

The economic rationale was to achieve tax neutrality on the transfer of the NM26 asset. Swiss law provides specific reorganization provisions under the Federal Direct Tax Act (DBG) and the Swiss Merger Act (Fusionsgesetz, FusG) that permit companies to spin off business divisions without triggering taxation, provided stringent statutory conditions are satisfied. By structuring the transaction as a qualifying demerger, Numab could distribute the NM26 asset to shareholders without a taxable event at either the corporate or shareholder level, after which those shareholders could sell their YJT shares to J&J.

This structure is conceptually analogous to a U.S. tax-free spin-off under Section 355 of the Internal Revenue Code, though implemented under Swiss law with distinct requirements and advantages. Notably, Swiss law does not impose the anti-avoidance 'device' test or mandatory holding periods that apply to U.S. spin-offs, allowing for greater flexibility in executing an immediate post-spin-off sale.

Mechanics of the Demerger Structure

Step 1: Formation and Capitalization of Yellow Jersey Therapeutics

Numab first transferred the NM26 program — including all related intellectual property rights, regulatory documentation, manufacturing know-how, the Kaken Pharmaceutical collaboration agreement, and any dedicated liabilities — into a newly formed Swiss subsidiary, Yellow Jersey Therapeutics AG. This transfer was structured as an Ausgliederung (demerger/spin-off) under Swiss corporate law.

YJT was formed on May 24, 2024 and registered in the Swiss Commercial Register. The Swiss Official Gazette of Commerce (SHAB) No. 99, published May 24, 2024, documents the formation as a Neueintragung (new registration) with Swiss company identification number (UID) CHE-305.167.117. The entry explicitly identifies the entity as an "Ausgliederung von Numab Therapeutics" (spin-off from Numab Therapeutics).

Under Swiss tax law, this push-down of assets into a subsidiary can qualify as a tax-neutral reorganization under Article 61(1) lit. b of the Federal Direct Tax Act, provided that: (1) the transferred assets constitute a Teilbetrieb (business unit or functional subdivision), (2) the assets transfer at book value rather than fair market value, and (3) both entities remain subject to taxation in Switzerland. At this stage, YJT was a wholly owned subsidiary of Numab; Numab's shareholders did not yet directly own YJT shares.

Step 2: Distribution of YJT Shares to Numab Shareholders (Naturaldividende)

The critical step for achieving tax neutrality involved distributing YJT's shares from Numab directly to Numab's shareholders on a pro rata basis. This distribution is economically analogous to a Naturaldividende (dividend in kind), where a company distributes an asset — in this case, equity securities — directly to its shareholders rather than cash.

However, rather than an informal dividend distribution, the transaction was legally structured as a formal demerger under the Swiss Merger Act (Fusionsgesetz, FusG). Specifically, the structure utilized provisions governing Abspaltung (spin-off), wherein a transferring company (Numab) allocates part of its business to a newly formed entity, and that new entity's shares are issued directly to the shareholders of the original company in proportion to their existing ownership stakes.

The result: Numab's shareholders collectively owned two independent sister companies — (1) Numab AG (holding all assets except NM26) and (2) Yellow Jersey Therapeutics AG (holding the NM26 program and associated assets). Critically, the ownership proportions remained identical across both entities. For instance, HBM Healthcare Investments, which held approximately 8% of Numab at the time of the transaction, received approximately 8% of YJT following the spin-off.

This symmetrical distribution is a statutory requirement for tax-neutral treatment under Swiss reorganization law. Following the spin-off, Numab AG itself no longer owned any interest in YJT; YJT became a standalone legal entity with an identical shareholder base to Numab.

Step 3: Sale of YJT Shares to Johnson & Johnson

Following the completion of the demerger, J&J acquired 100% of Yellow Jersey Therapeutics AG through a share purchase agreement with YJT's shareholders (the former Numab shareholders). The definitive agreement was announced on May 28, 2024, and the transaction closed on July 11, 2024, following the receipt of antitrust clearance under the U.S. Hart-Scott-Rodino Act.

At closing, YJT's shareholders transferred their shares to a J&J Swiss affiliate (likely Cilag Holding AG or a related entity) in exchange for cash consideration of approximately $1.25 billion. Under this structure, the $1.25 billion in proceeds flowed directly to the selling shareholders, not to Numab AG. This is a critical distinction: by avoiding a corporate-level sale, Numab did not become a cash-rich entity requiring subsequent distribution or reinvestment of proceeds.

Following J&J's acquisition, YJT was integrated into J&J's Swiss operations. Swiss commercial register filings indicate that Yellow Jersey Therapeutics AG was subsequently merged into Cilag GmbH International (CHE-103.478.083), a J&J Swiss entity, by October 2024. The Swiss Official Gazette (SHAB No. 210, published October 29, 2024) documents this absorption merger, after which YJT ceased to exist as an independent legal entity.

Summary of Ownership Changes

Before the transaction: Numab AG (the company) owned the NM26 asset, and Numab's shareholders owned Numab.

After the spin-off but before J&J's acquisition: The same shareholders owned two separate companies: (1) Numab AG (residual business) and (2) Yellow Jersey Therapeutics AG (NM26 program).

After J&J's acquisition: J&J owned YJT (and thereby NM26), while the original shareholders retained ownership of Numab AG and received cash proceeds from the YJT share sale.

This three-step structure enabled Numab's shareholders to extract and monetize the NM26 asset while preserving Numab's ongoing operations and minimizing Swiss tax exposure.

Swiss Tax Law Framework for Tax Neutrality

The demerger was structured to satisfy Swiss federal and cantonal tax provisions that permit tax-neutral corporate reorganizations. The governing provision is Article 61, paragraph 1, lit. b of the Swiss Federal Direct Tax Act (Bundesgesetz über die direkte Bundessteuer, DBG), which is mirrored in cantonal tax laws (including Canton Zurich, where Numab is domiciled) and harmonized under the Federal Tax Harmonization Act (Steuerharmonisierungsgesetz, StHG).

Requirements for Tax-Neutral Treatment

Article 61(1) lit. b DBG permits a spin-off (Spaltung) to be executed without triggering taxation of hidden reserves, provided four cumulative conditions are met:

1. Continuity of Swiss Taxation: Both the original company (Numab) and the newly formed spun-off entity (YJT) must remain subject to taxation in Switzerland after the reorganization. The statute requires that "tax liability continues in Switzerland" (soweit die Steuerpflicht in der Schweiz fortbesteht). In this transaction, both Numab AG and Yellow Jersey Therapeutics AG were Swiss corporations domiciled in Canton Zurich, satisfying this requirement.

2. Carryover of Book Values: The transferred assets and liabilities must be recorded at their existing tax book values (die bisher für die Gewinnsteuer massgeblichen Werte), meaning no step-up to fair market value is permitted. By maintaining book value carryover, any unrealized appreciation (stille Reserven) in the NM26 asset was preserved within YJT rather than recognized as taxable income to Numab at the time of transfer.

3. Transfer of a Business Unit (Teilbetrieb): The spin-off must involve the transfer of one or more business units or functional subdivisions (Betriebe oder Teilbetriebe), as opposed to an arbitrary collection of assets. A Teilbetrieb is generally defined as an organizationally and economically independent subdivision of a company capable of functioning as a standalone operation. Numab structured the transfer to ensure that the NM26 program — including all associated intellectual property, regulatory documentation, collaboration agreements, and operational resources — constituted a qualifying business unit.

4. Continuation of Business Activities: Both the transferring company and the newly formed entity must continue to operate a business following the spin-off (soweit die nach der Spaltung bestehenden juristischen Personen einen Betrieb oder Teilbetrieb weiterführen). Numab continued its other clinical development programs in immunology and oncology, while YJT continued the development of NM26 (which J&J subsequently advanced into Phase 2 clinical trials following the acquisition).

Additional Requirements: Capitalization and Holding Periods

Swiss tax practice also requires that an "appropriate" amount of equity (share capital or retained earnings) be allocated to the newly formed entity to ensure it is adequately capitalized for the business it assumes. This prevents the demerger from functioning as a thinly disguised dividend distribution. Numab likely capitalized YJT with equity reserves proportionate to the value and operational requirements of the NM26 program.

Critically, Swiss law does not impose a mandatory holding period or lock-up restriction on post-spin-off sales. Unlike U.S. tax law (which scrutinizes immediate post-spin-off sales under the Section 355 "device" test), Swiss reorganization law under Article 61(1) lit. b DBG explicitly eschewed any statutory sale restriction (Veräusserungssperrfrist) for qualifying spin-offs. This means that even if a spin-off is executed with the explicit intent of facilitating an immediate sale to a third-party acquirer, tax neutrality can still apply, provided all other statutory conditions are met.

This flexibility is a key advantage of Swiss reorganization law and enabled the Numab-YJT-J&J structure to proceed on an accelerated timeline (announcement on May 28, 2024; closing on July 11, 2024) without jeopardizing tax-neutral treatment.

Exemptions from Withholding Tax and Stamp Duties

When statutory conditions are satisfied, tax neutrality extends beyond corporate income tax to encompass Swiss withholding tax (Verrechnungssteuer) and issuance stamp duties (Emissionsabgabe). Ordinarily, distributing an asset or shares to shareholders would be characterized as a dividend distribution subject to 35% withholding tax, and issuing new shares might trigger a 1% issuance stamp duty.

However, under a qualified reorganization pursuant to Article 61 DBG and the Swiss Merger Act, these taxes are waived. The Swiss Federal Tax Administration (ESTV) treats the distribution of spin-off shares not as a taxable dividend but as part of a tax-neutral reorganization. Similarly, Article 6(1) lit. a^bis^ of the Swiss Stamp Duty Act (Stempelabgabegesetz, StG) provides an exemption for participation rights created or increased as a result of tax-neutral reorganizations under the Merger Act.

As a result, no Swiss withholding tax was due on the distribution of YJT shares to Numab's shareholders, and the creation of YJT was exempt from issuance stamp tax. This eliminated what would have been substantial tax friction (potentially exceeding $400 million in withholding tax alone on a $1.25 billion distribution).

Shareholder-Level Taxation

When Numab's shareholders subsequently sold their YJT shares to J&J, any capital gain was realized at the shareholder level. Under Swiss tax law:

Swiss-resident individual investors holding YJT shares as private assets (Privatvermögen) generally pay no capital gains tax on the sale of unlisted shares, provided they are not classified as professional securities dealers.
Swiss corporate investors may benefit from the participation exemption (Beteiligungsabzug), which can reduce or eliminate tax on gains from qualifying shareholdings (generally requiring at least 10% ownership and one year of holding).
Foreign investors are subject to the tax rules of their respective jurisdictions, which may impose capital gains tax on the sale. However, given that many of Numab's investors were institutional funds domiciled in Switzerland or treaty-protected jurisdictions, the effective tax rate on the $1.25 billion in proceeds was likely substantially lower than the combined corporate and withholding tax burden that would have applied to a direct corporate-level sale.

Comparison to U.S. Section 355 Tax-Free Spin-Offs

The demerger structure employed in the Numab-YJT-J&J transaction bears conceptual similarities to a U.S. tax-free spin-off under Internal Revenue Code Section 355. In both structures, a parent company's shareholders receive stock in a subsidiary on a pro rata basis without immediate taxation, resulting in two sister companies with identical ownership. However, there are critical differences:

Business Purpose and Device Test (U.S. vs. Swiss Law)

Under U.S. tax law, Section 355 requires that a spin-off not be used as a "device" to distribute earnings and profits, and the transaction must have a valid corporate business purpose unrelated to tax avoidance. Additionally, if a spin-off is executed as part of a plan or series of related transactions that includes a prearranged acquisition, the IRS will generally disallow tax-free treatment.

This creates significant complexity for U.S. spin-offs intended to facilitate an acquisition. Taxpayers must either: (1) avoid any negotiations or agreements with potential acquirers for a safe harbor period (typically two years post-spin-off), or (2) structure the transaction as a Reverse Morris Trust, wherein the spun-off entity merges with an acquirer in a tax-free reorganization (subject to stringent continuity-of-interest requirements).

Swiss law, by contrast, does not impose a statutory 'device' test or holding period. The Numab-YJT spin-off was structured explicitly to facilitate an immediate sale to J&J — something that would be extraordinarily difficult (if not impossible) to accomplish tax-free under U.S. Section 355. Swiss reorganization law's focus is on whether the formal criteria set forth in Article 61(1) DBG are satisfied at the time of the reorganization, not on the subjective intent or post-transaction plans of the parties.

Role of Section 355 in the J&J Transaction

Section 355 itself did not directly apply to this transaction, as J&J was simply an acquirer, not a participant in the spin-off of its own subsidiary. The tax planning was entirely on the seller's (Numab's) side under Swiss law. For J&J, the acquisition of YJT was a straightforward taxable cash purchase.

J&J disclosed in its Q3 2024 earnings materials that it treated the $1.25 billion purchase as an asset acquisition under U.S. GAAP, recording a one-time in-process research and development (IPR&D) charge of $1.25 billion in Q3 2024. This accounting treatment reflects that NM26 was a development-stage asset with no approved products or commercial revenue at the time of acquisition.

If any of Numab's shareholders were U.S. persons, they would need to analyze the U.S. tax consequences of receiving YJT shares in the spin-off, potentially under Section 355 (for qualifying distributions) or Section 367 (for cross-border reorganizations). However, given that Numab's investor base consisted primarily of European institutional investors, U.S. tax considerations were likely not material to the transaction structure.

Regulatory Approvals and Filings

As a private Swiss company, Numab was not required to make public SEC filings. However, the transaction structure and timeline are documented through Swiss commercial register filings, press releases from the parties, and regulatory compliance disclosures.

Swiss Commercial Register and SHAB Entries

The formation and subsequent integration of Yellow Jersey Therapeutics are documented in the Swiss Official Gazette of Commerce (Schweizerisches Handelsamtsblatt, SHAB):

SHAB No. 99 (May 24, 2024): Documents the formation (Neueintragung) of Yellow Jersey Therapeutics AG with UID CHE-305.167.117, registered at Bachtobelstrasse 5, 8810 Horgen, Canton Zurich. The entry explicitly identifies the entity as an "Ausgliederung" (spin-off/demerger) from Numab Therapeutics AG.
Post-Acquisition Changes: Following J&J's acquisition, YJT's registered address was changed from Horgen to Zug (the location of J&J's Swiss headquarters), and J&J representatives were appointed to YJT's board and management.
SHAB No. 210 (October 29, 2024): Documents the absorption merger of Yellow Jersey Therapeutics AG into Cilag GmbH International (CHE-103.478.083), a J&J Swiss entity. The entry states: "Aktiven und Passiven gehen infolge Fusion auf die Cilag GmbH International über. Die Gesellschaft wird gelöscht" (Assets and liabilities transfer as a result of merger to Cilag GmbH International. The company will be deleted). Yellow Jersey Therapeutics AG ceased to exist as an independent legal entity following this merger.

Shareholder and Board Approvals

Under Swiss law, a demerger requires approval by the shareholders of the transferring company (Numab) with a supermajority vote (typically two-thirds of the shares represented and an absolute majority of the share capital). Numab's shareholders would have approved the spin-off in a general shareholders' meeting.

The demerger plan would have been prepared by Numab's board of directors and reviewed by an independent auditor (as required by the Swiss Merger Act) to confirm that the demerger is legally compliant and that creditors' rights are protected. Creditors are afforded a brief objection period following publication of the demerger plan; given the accelerated timeline, Numab likely obtained creditor waivers to expedite the process.

Press Releases and Public Announcements

Numab and J&J issued coordinated press releases announcing the transaction structure:

May 28, 2024: Numab issued a press release (via GlobeNewswire) stating that J&J would acquire "its wholly-owned subsidiary Yellow Jersey Therapeutics including rights to NM26." J&J issued a coordinated press release describing the transaction structure: J&J would "acquire from Numab's shareholders its wholly-owned subsidiary" holding NM26, formed through a demerger. The press releases explicitly stated that closing was expected in H2 2024, subject to Hart-Scott-Rodino antitrust clearance.
July 11, 2024: J&J issued a press release announcing the completion of the transaction, confirming that it had acquired "Yellow Jersey, a demerged subsidiary of Numab Therapeutics" and secured global rights to NM26 (excluding the separate agreement with Kaken Pharmaceutical for Asia-Pacific rights).

Antitrust Clearance (Hart-Scott-Rodino Act)

Because the transaction involved a U.S. acquirer (J&J) and exceeded statutory thresholds, it was subject to mandatory filing and review under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). For transactions closing in 2024, the HSR filing threshold was approximately $119.5 million; the $1.25 billion Numab-YJT-J&J transaction substantially exceeded this amount.

The parties filed HSR notifications with the U.S. Federal Trade Commission (FTC) and Department of Justice (DOJ) following the execution of the definitive agreement on May 28, 2024. The transaction closed on July 11, 2024 (a 44-day timeline), indicating that the waiting period expired or early termination was granted without the agencies requesting a second request or challenging the transaction.

Switzerland does not appear to have required separate merger control approval for this transaction, as Numab was a small private biotech with minimal market share in any defined product market.

Tax Rulings

While not publicly disclosed, it is standard practice for Swiss taxpayers executing tax-neutral reorganizations to obtain an advance tax ruling (Ruling) from the relevant cantonal tax authority — in this case, the Canton Zurich Tax Administration.

Such a ruling would confirm that: (1) the planned demerger of the NM26 business qualifies as a tax-neutral reorganization under Article 61(1) lit. b DBG and corresponding Zurich cantonal law; (2) no corporate income tax, withholding tax, or stamp duties will be triggered at the time of the spin-off; and (3) the subsequent sale of YJT shares to J&J will not retroactively disqualify the tax-neutral treatment of the demerger.

The absence of any public disclosure of tax disputes or challenges suggests that the transaction structure was pre-approved by Swiss tax authorities and executed in accordance with the terms of any ruling obtained.

The NM26 Asset: Scientific and Commercial Background

Throughout the transaction, the NM26 antibody program transitioned from being an asset of Numab to a wholly owned asset of J&J, with Yellow Jersey Therapeutics serving as the transient holding vehicle.

Scientific Profile

NM26 is a first-in-class, bispecific, tetravalent antibody designed for the treatment of atopic dermatitis and other inflammatory skin disorders characterized by Th2-mediated inflammation and pruritus (itching). The molecule simultaneously targets two distinct cytokine pathways:

IL-4 Receptor Alpha (IL-4Rα): Blocks signaling by both interleukin-4 (IL-4) and interleukin-13 (IL-13), which drive Th2-mediated inflammation and barrier dysfunction in atopic dermatitis.
Interleukin-31 (IL-31): Inhibits the neuroinflammatory itch pathway, addressing the severe pruritus that is a hallmark of atopic dermatitis and significantly impairs quality of life.

According to peer-reviewed publications, NM26 is a tetravalent IgG4 antibody with a molecular weight of approximately 202 kDa, exhibiting binding affinities of ~209 picomolar (pM) for IL-4Rα and ~193 pM for IL-31. The dual-targeting mechanism is designed to provide superior efficacy compared to monoclonal antibodies targeting only a single pathway (such as dupilumab, which targets IL-4Rα alone).

Development Stage and Clinical Progress

At the time of the J&J transaction announcement (May 28, 2024), NM26 was described as Phase 2-ready. Numab had completed a Phase 1a/1b clinical trial (ClinicalTrials.gov identifier: NCT05859724) that enrolled 126 participants and demonstrated proof-of-concept efficacy and acceptable safety. The first patient was dosed in this study on May 15, 2023.

Following J&J's acquisition, NM26 was integrated into J&J's immunology pipeline and advanced into Phase 2 clinical development. J&J positioned NM26 as a potential differentiated treatment option for patients with moderate-to-severe atopic dermatitis, complementing its existing dermatology portfolio.

Kaken Pharmaceutical Collaboration

Prior to the J&J transaction, Numab had entered into a global co-development and regional licensing agreement with Kaken Pharmaceutical (a Japanese pharmaceutical company) in January 2021. Under this agreement:

Kaken obtained exclusive commercial rights to NM26 in six Asia-Pacific territories: Japan, China, South Korea, Taiwan, Singapore, and Hong Kong.
Numab retained all rights for the rest of the world, including North America, Europe, and other regions.
Kaken agreed to cover the majority of global development costs up to clinical proof-of-concept.

As part of the J&J acquisition, J&J entered into a separate agreement with Kaken Pharmaceutical to obtain rights in the Asia-Pacific region. This ensured that J&J secured truly global rights to NM26 following the transaction. The financial terms of the J&J-Kaken agreement were not publicly disclosed.

Asset Valuation and Strategic Rationale

The $1.25 billion valuation reflects J&J's assessment of NM26's commercial potential in the large and growing atopic dermatitis market. Atopic dermatitis affects an estimated 15-20% of children and 7-10% of adults globally, with a substantial proportion suffering from moderate-to-severe disease requiring systemic therapy.

J&J's strategic rationale for the acquisition was to secure a differentiated bispecific antibody that could address both the inflammatory (IL-4Rα) and pruritic (IL-31) components of atopic dermatitis with a single agent, potentially offering a best-in-class therapeutic profile compared to existing monoclonal antibody therapies.

Post Merger Development

In January 2025, Numab Therapeutics AG announced the completion of an oversubscribed CHF 50 million Series C extension, bringing its total Series C financing to CHF 180 million (≈ USD 200 million). The round was co-led by Cormorant Asset Management and Forbion, with participation from HBM Healthcare Investments, Novo Holdings, BVF Partners L.P., Octagon Capital Advisors LP, RTW Investments, and funds advised by BlackRock.

Proceeds from the financing will accelerate Numab’s multi-specific antibody pipeline in inflammation and oncology, reinforcing its focus on first-in-class and best-in-class immunotherapies. According to CEO David Urech, the financing follows “tremendous progress” during 2024—including the $1.25 billion acquisition of Numab’s spin-out Yellow Jersey Therapeutics by Johnson & Johnson—and strengthens Numab’s financial position to advance its proprietary λ-Cap™ and MATCH™ technology platforms.

Numab’s leading asset, NM32, a half-life-enhanced T-cell engager targeting ROR1 in solid tumors and hematologic malignancies, is currently in Phase I clinical trials. The company continues to leverage strategic partnerships with major pharmaceutical firms to validate its modular antibody platforms and expand its late-stage pipeline.

Conclusion

The Numab–Yellow Jersey–J&J transaction represents a sophisticated application of Swiss tax-neutral reorganization provisions to facilitate a high-value biotech asset divestiture. By executing a qualifying demerger under Article 61(1) lit. b of the Swiss Federal Direct Tax Act, Numab successfully distributed the NM26 asset to its shareholders without triggering corporate income tax, withholding tax, or stamp duties. The shareholders then sold their shares in the newly formed Yellow Jersey Therapeutics AG to J&J for $1.25 billion in cash, with minimal aggregate tax liability.

The transaction structure achieved several key objectives:

Tax efficiency: Avoided Swiss corporate income tax on the realized gain, Swiss withholding tax on the distribution, and Swiss issuance stamp tax on the creation of YJT.
Shareholder liquidity: Enabled Numab's investors to monetize their indirect interest in NM26 while retaining their stakes in Numab's ongoing business.
Operational continuity: Preserved Numab as an independent entity to continue developing its other pipeline programs in immunology and oncology.
Strategic value for J&J: Secured global rights to a differentiated Phase 2-ready asset for the treatment of atopic dermatitis.

The successful execution of this transaction underscores several advantages of Swiss reorganization law for cross-border M&A involving Swiss-domiciled companies:

Unlike U.S. tax law, Swiss law permits tax-neutral spin-offs to be executed with the explicit intent of facilitating an immediate third-party sale, without imposing mandatory holding periods or subjective 'device' tests.
The tax neutrality extends comprehensively to corporate income tax, withholding tax, and stamp duties, eliminating multiple layers of potential tax friction.
Swiss-resident individual investors enjoy a structural tax advantage on capital gains from unlisted shares, often resulting in zero taxation at the shareholder level.

For pharmaceutical and biotechnology companies domiciled in Switzerland, the Numab-YJT-J&J structure provides a valuable precedent for tax-efficient single-asset divestitures via push-down and spin-off strategies. The transaction demonstrates how Swiss reorganization provisions can be leveraged to maximize after-tax proceeds for shareholders while preserving the ongoing operations of the divesting entity.