diff --git a/packages/pyright-internal/src/analyzer/typeEvaluator.ts b/packages/pyright-internal/src/analyzer/typeEvaluator.ts
index ed220eb73..dd43a1bb7 100644
--- a/packages/pyright-internal/src/analyzer/typeEvaluator.ts
+++ b/packages/pyright-internal/src/analyzer/typeEvaluator.ts
@@ -13006,14 +13006,12 @@ export function createTypeEvaluator(
             );
         }
 
-        let classFlags = baseClass.details.flags & ~(ClassTypeFlags.BuiltInClass | ClassTypeFlags.SpecialBuiltIn);
-        classFlags |= ClassTypeFlags.Final | ClassTypeFlags.NewTypeClass | ClassTypeFlags.ValidTypeAliasClass;
         const classType = ClassType.createInstantiable(
             className,
             ParseTreeUtils.getClassFullName(errorNode, fileInfo.moduleName, className),
             fileInfo.moduleName,
             fileInfo.fileUri,
-            classFlags,
+            ClassTypeFlags.Final | ClassTypeFlags.NewTypeClass | ClassTypeFlags.ValidTypeAliasClass,
             ParseTreeUtils.getTypeSourceId(errorNode),
             /* declaredMetaclass */ undefined,
             baseClass.details.effectiveMetaclass
diff --git a/packages/pyright-internal/src/tests/samples/newType1.py b/packages/pyright-internal/src/tests/samples/newType1.py
index 0a51a0bdc..6a3dfa0dc 100644
--- a/packages/pyright-internal/src/tests/samples/newType1.py
+++ b/packages/pyright-internal/src/tests/samples/newType1.py
@@ -1,6 +1,7 @@
 # This sample tests the type handler's handling of the
 # built-in NewType function.
 
+from abc import ABC, abstractmethod
 from typing import Any, NewType, TypeVar, TypedDict
 
 MyString = NewType("MyString", "str")
@@ -76,3 +77,17 @@ def func2(x: MyString):
     # with a NewType.
     if issubclass(type(x), (MyString, int)):
         pass
+
+
+class AbstractBase(ABC):
+    @abstractmethod
+    def method1(self, /) -> int: ...
+
+
+class DerivedBase(AbstractBase):
+    def method1(self, /) -> int:
+        return 0
+
+
+NewDerived = NewType("NewDerived", AbstractBase)
+new_derived = NewDerived(DerivedBase())