Biotech group Chi-Med files for HK listing, may raise up to $500m

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Biotech company Hutchison China MediTech, known as ChiMed, has filed for a Hong Kong listing, which four sources close to the matter said could raise up to $500 million.

ChiMed, which is already listed on the London Stock Exchange and the Nasdaq in New York, filed its listing application with the Hong Kong stock exchange on Monday.

“We are delighted to announce our proposed Hong Kong listing and global offering of shares,” said Simon To, Chairman ofChiMed, which is 60.2 percent owned by CK Hutchison.

ChiMed‘s statement did not say how much it planned to raise.

The company did say it expected to use net proceeds from any primary sale of shares in the offering to fund the late-stage clinical development of its global and China pipeline and advance its pipeline of clinical-stage drug candidates.

ChiMed also said it wanted to list in Hong Kong to improve liquidity for shareholders and strengthen its access to capital.

The deal, which also includes a secondary share sale by parent CK Hutchison Holdings, could raise up to $500 million, the people said, with one saying the size would be between $400 million and $500 million. Another source said the deal size would likely be around $300 million.

Deal sizes can change and are often smaller than the original target size.

CK Hutchison plans to reduce its stake to below 50 percent and will include a secondary share sale as part of the Hong Kong listing.

Hong Kong has sought to transform itself into a listing hub for emerging biotech companies to compete with other financial centres such as New York by changing its listing rules to allow companies with no revenues in the sector to list.

While the first few listings performed poorly, the two biotech companies that completed their initial public offerings (IPOs) in Hong Kong this year have done well.

CanSino Biologics is up 89 percent from its IPO price while CStone Pharmaceuticals is up 30 percent from its offer price.

Two sources said the company was aiming for a listing by the summer.

ChiMed reported a loss of $74.8 million on revenues of $214.1 million in 2018, its draft IPO prospectus showed. It loss in 2017 was $26.7 million on revenues of $241.2 million.

Bank of America Merrill Lynch and Goldman Sachs are joint sponsors for the ChiMed listing.

Reuters

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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).

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  • 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.