Biotech player Ascentage gains on debut after $53m HK IPO

The Chinese drug developer sold 12.18 million shares for HK$34.20 apiece, according to a filing. The Hong Kong portion of the offering was enlarged after subscriptions exceeded the available volume of shares by 752 times. The international tranche was also oversubscribed. The stock closed at HK$37.60 on October 28 but was down marginally by mid-morning trading the following day.

Ascentage – which filed for an IPO in August 2018 but let the application expire before refiling in April – counts YuanMing Capital, a healthcare specialist that focuses on China-US cross-border deals, as its largest external investor. YuanMing led a $150 million Series C round for the company in July 2018, accompanied by Oriza Seed Venture Capital, US-based hedge funds Teng Yue Partners and ArrowMark Partners, HDY International Investment, CTS Capital, and CCB International.

YuanMing holds a 10.01% stake, followed by SDIC fund Management, which manages capital for a range of Chinese government agencies and state-owned enterprises, on 9.21%, the prospectus shows. SDIC led Ascentage’s RMB500 million ($70.8 million) Series B round in 2016, with participation by Shiyu Capital and Qianlong Capital, as well as YuanMing and Oriza. The latter two investors also featured in the RMB95 million Series A in late 2015.

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, in part using technology licensed from the University of Michigan, where one of its co-founders formerly led the cancer drug discovery program.

As of June, the company was conducting 28 phase-one or phase-two clinical trials for eight drug candidates across the US, Australia, and China. Its most advanced treatments both target leukemia.

Ascentage posted RMB6.8 million in revenue for 2018, a marginal increase on the previous year. Over the same period, its net loss widened from RMB118.5 million to RMB345.3 million, largely due to R&D expenses. It is one of numerous Chinese pharmaceutical players to go public in Hong Kong following a regulatory amendment last year permitting listings by biotech companies with no revenue or profit.

This is the first such offering since Shanghai Henlius Biotech raised $410 million in September.

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• Topics
• Greater China
• Healthcare
• IPO
• China
• Pharmaceuticals
• SDIC Fund Management
• YuanMing Capital