Everest Medicines soars on debut after $451m IPO

Everest sold about 63.5 million shares at HK$55 apiece, the upper end of the indicative range. The stock opened at $HK70.55 on October 9 and was trading at HK$75 as of midday.

The company has raised about $500 million since its inception in 2017, $200 million of which has come from CBC Group. The investor has reduced its stake from 62.4% to 49.9% but will continue to direct the company’s next phase of growth. “I keep telling my investors, the IPO is a financial activity – it’s not a sell-down activity,” Wei Fu, CEO of CBC and chairman of Everest, told AVCJ.

There are 16 other institutional investors in the company, mostly from the US, all of which had stakes of less than 5% at the time of listing, according to a filing. Janchor Partners, RA Capital Management, and Hillhouse Capital led a $250 million investment in June, which extended a staged Series C round to $310 million.

Jiashan SDIC, Decheng Capital, GT Fund, Janus Henderson Investors, Rock Springs Capital, Cormorant Asset Management, Temasek Holdings-owned Pavilion Capital, HBM Healthcare Investments and Octagon Investments also participated in the Series C.

CBC’s approach is to maximize returns by incubating biotech companies from scratch. The idea is to put the assets and team in place from the beginning in order to expedite the clinical trials process. Everest is the firm’s second project under this strategy; the first, I-Mab Biopharma, raised $104 million in a NASDAQ IPO in January and continues to be actively supported by CBC.

The decision to list Everest in Hong Kong was based on a desire to be closer to Chinese markets and follows measures taken by the exchange earlier this year that effectively tighten disclosure requirements for pre-revenue biotech companies. These measures have come amid concerns that local retail investors have little relevant expertise with exposure to unproven companies in this field.

“Hong Kong is as international as the US in terms of investor participation during COVID-19. A lot of US investors are coming to Hong Kong because China is the first market to recover,” Fu said. “I’ve met quite a few New York-based fund managers who don’t mind being quarantined in China for two weeks just to invest in Asian healthcare stocks.”

Everest is arguably the most advanced company of its kind in China, with six drugs in phase-three trials and two already having received regulatory approval in the US. There are expectations to have 10 products fully commercialized in China within the next few years and another 10 in the pipeline, mostly in oncology and immunology. Operations focus on in-licensing currently, but there are plans to create an in-house drug discovery platform in time.

Recent work building out the company includes the appointment of a new CEO, Kerry Blanchard, who previously served as co-chairman of the investment committee at Lilly Asia Venture and an operating partner at CBC. He replaced Sean Cao, another CBC executive, who has returned to the firm to help incubate younger portfolio companies.

“We can always choose the best CEO for each portfolio company at a different stage of development,” Fu said. “We have a triple tier of talent that we can reuse and circulate within our ecosystem. We keep building new businesses and always offer opportunities for every kind of talent, whether it’s in the investment or operations team.”

CBC was founded as C-Bridge Capital in 2014 by Fu, who was previously head of principal investment at Hong Kong-listed financial services company Far East Horizon and before that worked for Goldman Sachs and Temasek. Last year, CBC closed its third healthcare fund at $850 million, after increasing the hard cap. It raised $300 million for a healthcare credit fund in February.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Healthcare
• Technology
• IPO
• China
• Hong Kong (China)
• CBC Group
• Hillhouse Capital Management
• Pharmaceuticals