Nanyang Biologics to list via $1.5bn SPAC — What it means for The9 investors and biotech markets

Nanyang Biologics Pte. Ltd., a Singapore-based drug discovery company backed by The9 Limited (Nasdaq: NCTY), announced that it will go public through a business combination with RF Acquisition Corp II (Nasdaq: RFAI), a special purpose acquisition company. The transaction values Nanyang Biologics at approximately $1.5 billion and will see the merged entity trade on Nasdaq under the ticker “NYB” once the deal closes, which is expected in the first or second quarter of 2026. The announcement lifted The9’s shares, signaling fresh investor interest in the Chinese gaming company’s pivot toward biotechnology and artificial intelligence-driven healthcare.

Why is Nanyang Biologics choosing the SPAC route for its $1.5 billion Nasdaq listing?

The choice of a SPAC merger rather than a traditional initial public offering reflects the urgency among AI-powered biotech firms to gain quicker access to U.S. capital markets. For companies like Nanyang Biologics, where research pipelines are still in early development stages, the need for substantial upfront capital is significant. By merging with a listed shell company such as RF Acquisition Corp II, Nanyang Biologics avoids the longer timelines, higher disclosure burdens, and market risks associated with conventional IPOs.

The9’s involvement in this transaction also underscores a diversification strategy that has been underway for years. Known primarily for gaming and, more recently, for volatile ventures in crypto mining, The9 has used its public listing to position itself as a holding company with exposure to new growth industries. Its backing of Nanyang Biologics indicates an attempt to link investor capital with one of the hottest frontiers in science: artificial intelligence in drug discovery.

This deal also marks a second wave of biotech-SPAC activity after the 2020–2021 boom, when a flood of speculative transactions often left investors holding overvalued shells. Market conditions are stricter in 2025, with institutional investors now demanding robust governance, defined pipelines, and clear partnerships before supporting such transactions.

How does Nanyang Biologics’ AI drug discovery platform differentiate it from competitors?

At the core of Nanyang Biologics’ story is the Vecura™ AI platform, which uses a proprietary Drug-Target Interaction Graph Neural Network, or DTIGN, to identify and optimize new molecules. Benchmarking in 2024 showed that DTIGN performed about 27 percent better than comparable models, suggesting real promise in early target prediction. The company’s emphasis on natural compound libraries — over 50,000 unique organisms and chemical extracts — distinguishes it from many biotech peers who rely solely on synthetic libraries.

The lead therapeutic candidate, NB-A002, is designed to address a previously “undruggable” target, ILF2, with potential application in cancers exhibiting homologous recombination deficiency and DNA damage response vulnerabilities. If clinical trials confirm the scientific hypothesis, the therapy could carve out a unique niche in the oncology market, which analysts expect to expand into tens of billions of dollars in annual revenues over the next decade.

Partnerships with technology and infrastructure players such as NVIDIA, Hewlett Packard Enterprise, and Equinix provide the compute backbone required to train, test, and scale AI models in drug discovery. In addition, a joint laboratory agreement with Nanyang Technological University in Singapore provides scientific validation and an academic pipeline for ongoing research. These alliances reinforce the perception that Nanyang Biologics is more than a speculative AI startup and is instead building a robust ecosystem for AI-enabled drug discovery.

What does the transaction structure reveal about The9’s long-term biotech ambitions?

The structure of the merger is telling. Existing shareholders, including The9 and early backer Mercatus Capital, will roll over 100 percent of their equity into the combined entity. They will retain majority control of both shareholding and board composition after the merger. This indicates that the backers are not using the listing to cash out but rather to secure long-term growth capital.

Such an arrangement can provide stability in strategic direction, but it also concentrates risk. Minority shareholders will expect strong governance and transparency to ensure their interests are protected. Still, the alignment of incentives between management and early investors sends a signal that the company is prepared to remain accountable for clinical and commercial outcomes.

The boards of both Nanyang Biologics and RF Acquisition Corp II have approved the deal. The next milestones will be the filing of proxy statements, shareholder approval votes, and regulatory clearances before the transaction closes in early 2026.

How did The9’s stock perform following the announcement, and what is investor sentiment?

The9’s stock reacted positively to the news, rising as markets opened after the announcement. With a market capitalization hovering around $125–130 million before the news, The9 has long struggled to maintain consistent revenue growth. Its trailing revenues are in the low tens of millions of dollars, while earnings remain negative.

The announcement offered a much-needed narrative shift for investors. By anchoring itself to a biotech growth story, The9 presented an alternative to its history of volatility in gaming and crypto. Early institutional flows suggested modest buying activity, with momentum-driven retail traders also entering positions.

In technical terms, The9’s stock has traded between $6.28 and $20.59 over the past 12 months, with thin institutional ownership and low liquidity. The SPAC transaction could draw new institutional coverage if the biotech thesis gains traction. Analysts watching the stock now caution that while the news is a short-term catalyst, sustainable gains will depend on whether Nanyang Biologics can deliver on its clinical milestones. For now, sentiment is leaning bullish with speculative buy calls, though risk-tolerant investors are the primary participants. Conservative institutions remain on hold until more details on pipeline progress and dilution structures are disclosed.

What are the key risks and challenges that could reshape the outcome of this merger?

The primary risk is scientific. NB-A002, while promising in concept, remains at a preclinical stage. Clinical trials are the true test of efficacy and safety, and most novel oncology candidates face high attrition rates. Should NB-A002 or subsequent candidates fail to deliver results, the valuation case for Nanyang Biologics would weaken considerably.

Another risk lies in the translation of AI predictions into biological reality. Even the most advanced neural networks can struggle to account for biological complexity, making the move from computational predictions to clinical results uncertain.

From a financial perspective, the SPAC structure itself carries execution risks. Delays in SEC approvals, potential redemptions by SPAC investors, or dilution from warrants and PIPE financings could reduce the effective capital raised.

Finally, governance and competition pose challenges. With majority control retained by original shareholders, concerns around board independence and transparency could weigh on investor confidence. Meanwhile, the AI drug discovery field is becoming increasingly crowded, with both startups and established biotech firms racing to secure a foothold. Nanyang Biologics must prove that its natural compound-driven model provides defensible differentiation in this environment.

What does this deal mean for the future of AI-powered biotech and investor trends?

For the broader sector, the Nanyang Biologics–The9 merger signals that investors remain open to funding ambitious biotech-AI stories, albeit with more scrutiny than during the first SPAC boom. Should NYB successfully transition to public markets and demonstrate clinical progress, it may encourage other AI drug discovery firms in Asia and beyond to pursue similar transactions.

The deal also illustrates a deepening integration between capital markets and technology-driven biotech strategies. Partnerships with global computing and academic leaders suggest that AI drug discovery is no longer a fringe idea but is becoming institutionalized.

For The9, the merger represents more than just diversification; it is a rebranding exercise that positions the company as a participant in the biotech revolution rather than a relic of the gaming boom. Investors will be watching closely to see whether the company can sustain momentum and leverage its public market position to provide continued funding for Nanyang Biologics.

The path ahead will not be easy, but if milestones such as IND filings, early-phase clinical trial results, and regulatory submissions are met on schedule, this transaction could reshape investor perceptions of both The9 and its biotech investee. For now, the market’s optimism reflects a willingness to believe that artificial intelligence may finally begin to deliver transformative results in drug discovery.