China’s Ascentage Pharma files for HK IPO

Ascentage did not disclose financial details about the offering in its prospectus, though media reports from earlier this year indicated it aimed to raise up to $300 million. The company will primarily use the new capital to support clinical trials and commercialization of its drug pipeline, along with the construction of its new R&D and manufacturing facility in Suzhou.

Founded in 2010 as a spin-out from US-based Ascenta Therapeutics, Ascentage develops novel therapies for cancers, hepatitis B, and age-related diseases. The company specializes in treatments that restore normal cell death in cancer cells, using technology licensed from the University of Michigan, where one of its co-founders formerly led the cancer drug discovery program.

Ascentage received $3 million in angel funding from Chinese biotech player 3SBio shortly after its founding, followed by a RMB95 million ($15 million) Series A round from Oriza Holdings and YuanMing Capital. Domestic investors Efung Capital, Yuan Sheng Ventures, and Grains Valley Capital also participated.

SDIC Fund Management, which manages capital for a range of Chinese government agencies and state-owned enterprises, led the RMB500 million Series B round in 2016, with participation by Shiyu Capital and Qianlong Capital, as well as YuanMing and Oriza. The $150 million Series C round earlier this year was led by YuanMing and Oriza.

Currently YuanMing is the largest external shareholder in Ascentage, with a 10.48% stake; SDIC holds 9.79%, while Oriza has a 6.6% stake in the company. US-based hedge fund Teng Yue Partners holds a 3.52% stake and Efung owns 4.72%, while CTS Capital and CCB International hold stakes of 1.62% and 1.03% respectively. Several other investors hold stakes of less than 1%.

According to Frost & Sullivan, about 15.9 million new cancer cases were diagnosed worldwide in 2017, a number that is expected to reach 21.6 million by 2030. As a result, the global market for cancer drugs is projected to grow from $111 billion to $407 billion over the same period. The global market for hepatitis B treatments is also expected to grow from $4.4 billion to $8.3 billion.

For the year ended December 2017, Ascentage recorded RMB6.3 million in revenue, down from RMB7.7 million the year before. Over the same period its net loss grew from RMB107 million to RMB118 million.

Several Chinese pharmaceutical players have filed for Hong Kong IPOs in recent months, taking advantage of rules introduced earlier this year that allow listings by biotech companies with no revenue or profits. The first was Ascletis, a hepatitis drug developer that made its filing in May; cancer drug specialist Innovent Biologics followed in June.

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• Topics
• Greater China
• IPO
• Healthcare
• Hong Kong (China)
• Exit
• Pharmaceuticals
• SDIC Fund Management
• YuanMing Capital