China's Connect Biopharma gains 8% on debut after $191m US IPO

The company sold 11.25 million American Depository Shares (ADS) – having upsized the offering from 9.38 million shares – for $17 apiece, according to a filing. There is an overallotment option of up to 1.69 million shares. The stock opened at $19.55 on March 19 before falling back to close at $18.49. This equates to a market capitalization of about $1 billion.

Qiming Venture Partners, which led Connect’s $20 million Series A in 2017 and re-upped for the $55 million Series B in 2019 and the $115 million Series C a year later, holds an 8.7% stake in the company. Advantech Capital and RA Capital Management own 8.5% and 6.5%, respectively. Advantech led the Series B, and RA played the same role in the Series C.

Total private funding to date is approximately $220 million. Other investors include BlackRock, Lilly Asia Ventures, Boxer Capital, HBM Healthcare, Northern Light Venture Capital, and Cowin Venture.

Founded in 2012, Connect has established a drug screening platform based on T cell immune regulation. T cells are white blood cells that play a key role in adaptive immune responses to drugs. It directly screens molecules with functional assays, which it is claimed could lead to more rapid identification of relevant molecules and avoids eliminating attractive molecules.

The company has two treatments in phase-two clinical trials. They are CBP-201, which targets inflammatory diseases such as atopic dermatitis or asthma, and CBP-307, a drug candidate for inflammatory bowel disease. Preclinical projects include two small-molecule treatments for severe inflammatory diseases. Connect owns global rights to all new drug products in the pipeline.

Connect has bases in Taicang, Jiangsu province as well as San Francisco and San Diego. It is running clinical trials in the US, Australia, and New Zealand. CEO Zheng Wei previously worked for California-based biopharma players Arena Pharmaceuticals and ChemoCentryx. Wubin Pan, the company’s chairman, was formerly China president at contract research organization Crown Bioscience.

With no products in commercialization, Connect has yet to generate meaningful revenue. It posted a net loss of RMB779.2 million ($119.4 million) in 2020, up from RMB168.6 million a year earlier, mainly due to rising R&D expenditure.

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• Topics
• Greater China
• North America
• Healthcare
• IPO
• China
• USA
• Pharmaceuticals
• Qiming Venture Partners
• Advantech Capital
• Lilly Asia Ventures
• Northern Light Venture Capital
• Cowin Capital
• BlackRock