PE-backed CStone files for Hong Kong IPO
CStone Pharmaceuticals, a cancer-focused Chinese biopharmaceutical developer with a number of PE and VC backers, has filed for an IPO in Hong Kong.
CStone, which raised $260 million in its Series B round this year led by Singapore’s GIC Private, is focused on developing and commercializing innovative drugs to address significant unmet medical needs in cancer treatment. Currently, the company has 14 drugs in its pipeline, one of which has been approved by the US Food and Drug Administration (FDA) and is currently in phase three testing in China, along with another of its candidates. Three other drugs are in phase one in China.
Proceeds from the IPO will be used primarily to accelerate clinical trials of CStone’s product candidates, with the remainder allocated to research and development for new treatments. Financial terms of the offering have not been disclosed.
Founded in 2015, CStone has raised several rounds of funding from a number of investors including Boyu Capital, WuXi Healthcare Ventures, and Oriza Seed Venture Capital, which participated in the company’s $150 million Series A round in 2016. According to CStone’s prospectus, WuXi and Boyu currently hold 73 million and 37 million shares in the company, respectively, giving each a total stake of more than 10%.
Additional investors include Sequoia Capital China, CITIC Private Equity, Hillhouse Capital, Yunfeng Capital, and Arch Venture Partners, all of which participated in the Series B round alongside GIC.
CStone has not recorded any revenue to date; its net loss for the year ended December 2017 came to RMB344 million ($49 million), up from RMB 253 million the previous year. The company is taking advantage of new rules announced earlier this year that allow biotech companies with no revenue or profit to list in Hong Kong, provided certain qualification criteria are met.
Four other companies have already taken advantage of this revised system, including Ascletis Pharma, BeiGene, Hua Medicine, and Innovent Biologics.
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