Hillhouse-backed cancer drug maker InnoCare moves closer to $620m STAR Market listing

Source: Michael Longmire/Unsplash

InnoCare Pharma, a Chinese cancer drug developer backed by the Asian private equity (PE) major Hillhouse Capital Group, has moved closer to a planned secondary listing on Shanghai’s Nasdaq-style STAR Market that could raise about 4 billion yuan ($620.4 million).

The Listing Committee of the STAR Market on Monday started reviewing InnoCare’s application and disclosed its prospectus that indicates the firm’s plan of offering close to 264.7 million shares to raise as much as 4 billion yuan in the secondary share sale, show updates from the regulator’s website.

Investment bank China International Capital Corporation is the lead underwriter for the STAR Market IPO.

The public share sale, if successful, will see InnoCare join another 338 tech companies already listed on the two-year-old stock exchange that boasted of over 5 trillion yuan ($775.6 billion) in combined market value as of September 13.

The STAR Market, which reviews the listing of an applicant in no more than two months, officially commenced trading in July 2019 as a tech-focused board for startups that Beijing hopes will fund a technological edge over Washington.

InnoCare is targeting the secondary listing less than 18 months after the firm completed one of the most sought-after initial public offerings (IPOs) in Hong Kong. It raised $289 million in the primary listing in March 2020, with the retail tranche being oversubscribed by nearly 298.8 times.

With offices in China and the US, the pre-profit firm is stocking up more capital for follow-on investment in developing its pipeline of six drug candidates at the Phase I-III clinical stage and eight preclinical products.

Its BTK inhibitor orelabrutinib, which received approval from China’s National Medical Products Administration (NMPA) in December 2020, is its only commercialised product in the market.

In 2020, InnoCare registered net losses of 391.3 million yuan ($60.7 million), down from over 2.1 billion yuan ($325.7 million) in 2019. Its net loss in the first three months of 2021 stood at about 147.8 million yuan ($22.9 million).

“New drug R&D, production, and commercialisation is a process involving massive investment, a long development cycle, and high risks,” InnoCare noted in its prospectus.

The firm pointed out major risks of its business, such as its pre-profit status that could potentially continue post the listing, and a longer-term capital demand as it expects to invest heavily in the R&D of multiple pipeline products.

More than half of the IPO proceeds, which is nearly 2.2 billion yuan ($341.2 million), will be used to finance new drug development, according to the prospectus.

While putting aside another 1.2 billion yuan ($186.1 million) as working capital, the remaining part will fund the construction of the firm’s sales and marketing network, iteration of its drug R&D platform, and IT infrastructure upgrade, in priority order.

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. 
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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.