Chinese biotech firm Ascletis said to raise $400m in HK IPO

Ascletis Pharma

Chinese biotech Ascletis Pharma Inc raised $400 million after pricing its initial public offering (IPO) in the middle of an indicative range, three sources said, in the first such Hong Kong listing under new rules designed to attract early-stage biotech firms.

The initial public offering (IPO) is widely seen as a test of the new regime as Hong Kong seeks to establish itself as a financing centre for the growing number of Chinese drug developers.

New York is currently the established centre for biotech IPOs, with $2.4 billion worth of such shares sold last year. The largest early-state biotech deal was in 2014 when Juno Therapeutics raised $304 million, Thomson Reuters data showed.

Nine biotechs have so far filed for Hong Kong listings, and at least another four plan to follow suit, bankers said.

Ascletis, which makes anti-viral, cancer and liver disease drugs, sold 224 million new shares, or 20 percent of its enlarged share capital, at HK$14 ($1.78) each, the middle of a price range of HK$12 to HK$16, the people said. The deal values the company at $2 billion.

Ascletis did not immediately respond to a request for comment. The people declined to be identified as the information was not public.

Company founder Wu Jinzi, a former GlaxoSmithKline executive, last week said Ascletis faced “some challenges” in valuing the company because its IPO was the first under the new rules.

“It’s always risky to invest in pre-revenue biotech firms because what they are working on is innovative. But you will only be rewarded if you take the risk,” he said.

Singapore sovereign wealth fund GIC Pte Ltd last week committed to buy $75 million worth of shares as a cornerstone investor.

Under the new rules, in place since April 30, biotech firms without revenue or profit can apply to list in Hong Kong. More than 10 companies – mostly Chinese, including Innovent Biologics, backed by Singapore state investor Temasek Holdings (Pte) Ltd, and Shanghai Henlius Biotech – plan to list and some have dropped U.S. IPO plans in favour of listing closer to home.

JPMorgan analysts forecast China’s biologics industry to double in size to $52 billion by 2021 compared with a global growth rate of 60 percent. Biologics are products made by biotechnology and biopharmaceutical firms.

Founded in 2013, Hangzhou-based Ascletis has two hepatitis C virus drug candidates near commercial stage and one HIV drug that has completed a phase IIa clinical trial. It also has a liver cancer drug candidate that has completed phase I and phase I extension clinical trials.

Its shares start trading on Aug. 1.

China Merchants Securities, Goldman Sachs and Morgan Stanley are joint sponsors for the deal.

Also Read:

Ascletis draws GIC as cornerstone investor for first pre-profit biotech IPO in Hong Kong

Goldman-backed biotech firm Ascletis becomes first to apply for HK IPO under new rules

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.