PE-backed Hansoh Pharma completes $1b Hong Kong IPO
Hansoh Pharmaceutical Group, a Chinese drug developer that counts Hillhouse Capital and Boyu Capital among its investors, has raised HK$7.86 billion ($1 billion) through a Hong Kong IPO.
It is the 11th offering in the territory by a PE-backed Chinese healthcare company since the start of last year and the fourth of 2019. While the majority have been zero-revenue biotech players taking advantage of a relaxation in Hong Kong’s listing rules, Hansoh is one of two profitable candidates from 2019. The other is contract research organization Frontage Holdings, which also received a pre-IPO investment from Hillhouse.
Hansoh sold 551.3 million shares for HK$14.26 apiece, according to a filing. The stock gained 36% on debut, closing at HK$19.50 on June 14. As of mid-morning trading on June 17, it had fallen back to HK$17.70. Hillhouse had a 2.91% stake in the business on completion of the offering, having invested $179.9 million in 2016. A second pre-IPO commitment of $248.5 million came from Boyu earlier this year, giving it a 3.29% holding.
Both investors contributed to the cornerstone placement that covered approximately one-third of the IPO. There were nine investors in total, with GIC Private, Ally Bridge Group, OrbiMed, and Vivo Capital among the others.
Hansoh’s treatments cover central nervous system diseases, oncology, anti-infectives, and diabetes. It has eight core products and five newer offerings that are designated as having strong growth potential. Of the eight core products, one is an innovative drug and the rest are generics. The company claims to have a pipeline of nearly 100 treatments, including six innovative drugs that have reached stage-two clinical trials or beyond. It plans to launch 30 drug candidates in 2019 and 2020.
Revenue rose from RMB6.19 billion in 2017 to RMB7.72 billion ($1.1 billion) last year, with generic lung and breast cancer treatments accounting for 45% of sales. Drugs for central nervous system diseases and anti-infectives contributed 25% and 16%, respectively. Hansoh’s net profit came to RMB1.9 billion in 2018, up from RMB1.59 billion the previous year.
The company was founded in 1995 by Huijuan Zhong, who remains a controlling shareholder and currently serves as chairwoman.
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