China's JW Therapeutics trades up after $300m Hong Kong IPO

The company sold 97.7 million shares for HK$12.80 apiece, according to a prospectus. Ten cornerstone investors, including Rock Springs Capital, Hillhouse Capital, Loyal Valley Capital, and Temasek Holdings, covered 50% of the offering, assuming the over-allotment option isn't exercised.

The stock debuted on November 3, opening at HK$24.90 and falling back to close at HK$21.20. It ended November 4 at HK$21.00, which equates to a market capitalization of HK$7.9 billion.

JW was established in 2016 by Bristol Myers Squibb-owned Juno Therapeutics and China's WuXi AppTec, with a view to leveraging the former's expertise in cell therapy technologies and the latter's capabilities in contract drug development and manufacturing services. Juno holds a post-IPO stake of 19.91%, while WuXi AppTec has 10.16%.

Temasek owns 6.03%, having led the company's Series A alongside Sequoia Capital China and Yuan Ming Capital, and having participated in the Series B. When announced in 2018, the Series A was $80 million. However, the prospectus indicates JW raised $168 million across two tranches. Oriza Holdings, Arch Venture Partners, Loyal Valley, and AVICT Global Holdings also took part.

The $100 million Series B earlier this year was led by CPE – formerly CITIC Private Equity – and Mirae Asset. Additional commitments came from Oriza, CR-CP Life Science Fund, Loyal Valley, Temasek, Sequoia, and Arch. CPE and Mirae Asset now own 5.2% and 3.64%, respectively. No other external investor holds more than 3%.

JW's most advanced treatment is Relma-cel, a CAR-T therapy for lymphoma that has reappeared after a period of remission or is not responding to other treatments. The drug – which specifically targets the CD19 antigen, one of the most common proteins in white blood cells – was submitted to Chinese regulators for new drug application (NDA) approval in June. It is expected to be the first CAR-T therapy released in China as a category-one biologics product.

JW has six other treatments in its pipeline, of which only one has reached phase-one clinical trials. The IPO proceeds will be used to develop more drug candidates, as well as to take Relma-cel to monetization.

According to Frost & Sullivan, the market for CAR-T therapies in China is expected to be worth RMB24.3 billion ($3.6 billion) in 2030, up from RMB600 million in 2021. Several other companies are targeting the space, with Loyal Valley leading a $186 million Series C round for CARsgen Therapeutics this week. Another recent deal saw Gracell Biotechnologies – which is working on products intended to make CAR-T cell drug development cheaper and faster – raise $100 million in Series C funding.

JW has yet to generate any revenue and is listing under provisions that allow pre-revenue biotech companies to go public in Hong Kong. Its net loss for 2019 was RMB633.3 million, up from RMB272.6 million a year earlier, largely due to R&D spending.

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• Topics
• Greater China
• Healthcare
• IPO
• China
• Pharmaceuticals
• Temasek Holdings
• Sequoia Capital
• Loyal Valley Capital
• Oriza Holdings
• Arch Capital
• Citic Private Equity