CDH-backed Mabpharm files for Hong Kong IPO

The company’s prospectus did not reveal any details about the offering. Proceeds will support continued research and development on Mabpharm’s product candidates, along with construction costs and purchase of equipment for its new production facilities in Taizhou.

Mabpharm was founded three years ago as Taizhou Pharmaceutical, a subsidiary of Chinese biopharmaceutical company Sinomab Bioscience. The company focuses on monoclonal antibody (MAB) drugs for cancer and autoimmune diseases; it currently has a pipeline of nine candidates, three of which are undergoing phase III clinical trials.

According to Frost & Sullivan, the market for MAB drugs in China was worth RMB11.8 billion ($1.7 billion) in 2017, representing about 5.4% of the overall biologics market in the country. The MAB market is projected to grow to RMB69.6 billion by 2022, by which time its share of the biologics market will have reached 14.5%. Cancer and autoimmune diseases are expected to account for over 90% of the demand for MAB treatments.

CDH committed $111 million to Mabpharm in 2015 and currently holds a 22% stake. Shuge Jiao, the GP’s CEO, is also chairman of Mabpharm’s board, having joined earlier this year.

Mabpharm has recorded no revenue to date, and reported a loss of RMB47.7 million for the year ended December 2017, up from a RMB34.7 million loss the prior year primarily due to research and development and administrative expenses. The company expects to continue operating at a loss for the foreseeable future until it can commercialize its drug pipeline.

Mabpharm joins a number of industry peers that hope to take advantage of Hong Kong’s biotech listing rules announced earlier this year. Under these rules companies with no revenue or profit can list as long as they have a minimum market capitalization of HK$1.5 billion ($191 million) and enough working capital for at least 12 months, and secure support from a sophisticated investor such as a PE firm specializing in healthcare or a major pharmaceutical player at least six months before the IPO.

Ascletis was the first company to file under the new requirements. In its IPO earlier this month the company sold 224 million new shares at HK$14 each, in the middle of its price range. The share price has fallen since the listing: at midday August 23 it was trading around HK$8.60.

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• Topics
• Greater China
• IPO
• Healthcare
• Hong Kong (China)
• Pharmaceuticals
• Exit
• CDH Investments Management