Innovent Biologics gains on debut after $421m IPO
Chinese cancer drug developer Innovent Biologics, which has a number of PE backers, closed up on its Hong Kong trading debut, following a HK$3.3 billion ($421 million) IPO.
The company sold 215 million shares at HK$13.98 apiece, close to the top end of the indicative range. The stock closed up 18.6% on October 31 at HK$16.58.
The offering was slightly oversubscribed, according to a filing. Ten cornerstone investors - including Sequoia Capital China, Lilly Asia Ventures (LAV), Capital International, and Greenwoods Asset Management - contributed HK$1.92 billion.
Innovent Biologics is the fourth pre-revenue biotech player to list in Hong Kong since the exchange relaxed listing rules for companies of this type that meet certain qualification criteria. The other three are all trading at substantial discounts to the IPO prices. Ascletis Pharma and BeiGene - which is also listed on NASDAQ - have shed around 60% since their offerings in August. Hua Medicine went public in September and is down 17%.
Like its three peers, Innovent currently has no products approved for commercial sale and has generated no revenue to date, incurring net losses of RMB545 million ($82 million) and RMB716 million in 2016 and 2017, respectively. It expects to continue posting operating losses for the next several years until its drugs begin commercialization.
Founded in 2011, Innovent has 17 drugs in its pipeline. Of the four most developed, three are biosimilars – drugs with nearly identical effects to medications already on the market – for cancer medications Avastin and Rituxan and arthritis treatment Humira. They are in phase-three clinical trials. Sintilimab, a novel cancer treatment, is awaiting final approval by China’s Food & Drug Administration.
The company has raised more than $560 million across several private funding rounds. Investors include F-Prime Capital Partners, Eight Roads Ventures, LAV, 6 Dimensions Capital, Legend Capital, Temasek Holdings, Cowin China, Hillhouse Capital, China’s State Development & Investment Corporation, Capital International, and Ally Bridge Group.
Fidelity International, which controls F-Prime and Eight Roads, is the largest external shareholder with 13.97%, followed by Capital International with 6%, and Temasek with 5.77%, according to a prospectus.
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