China's Broncus raises $215m in IPO, struggles on HK debut

The company sold approximately 89.4 million shares at HK$18.70 apiece, the top end of the indicative range, according to a filing. Ten cornerstone investors, including Lake Bleu Capital and Springhill Fund, contributed $91 million to the offering.

Broncus’ stock opened at HK$17.20 on September 24 and fell as low as HK$14.60. It closed at HK$15, giving the company a market capitalization of around HK$7.88 billion. The most recent private funding round, which closed in January, valued Broncus at $739.8 million.

Qiming Venture Partners is the largest external shareholder with 15.49%, followed by Dinova Capital on 15.28%, according to a prospectus. Springhill is the public equities investment unit of Qiming. The venture capital firm first backed a Series A round for Broncus in 2014 and re-upped in the Series B and C rounds.

The Series C in September 2020 was led by Lake Bleu and featured Ascendum Capital, Baidu Capital, DCP Capital, and Qiming, among others. The Series D earlier this year included commitments from FountainVest Partners, Exome Asset Management, Summer Capital Management, and Valliance Asset Management, AVCJ Research’s records show.

Founded in 2012, Broncus focuses on chronic obstructive pulmonary disease and lung cancer. It claims to have developed the world’s first and only real-time whole lung access augmented reality navigation system. This enables access to any part of the entire lung, both inside and outside of the airways. It forms the basis of a medical device product portfolio.

The company has 17 products encompassing navigation, diagnosis, and treatment, of which 12 have been launched for sale in China, the US, and the EU.

The most commercially advanced products are LungPro or Archimedes lung navigation system and various tools – such as balloons and needles – used to support diagnoses. However, Broncus sees most potential in its technologies designed to treat tumors by administering thermal vapor energy and high-energy radio waves.

Although commercialization of certain products started as early as 2009, the company’s global commercialization efforts and R&D investment means it has yet to turn profitable. Revenue reached $3.26 million in 2020, down from $8.1 million the previous year. The net loss widened from $32.6 million to $48.8 million.

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• Topics
• Greater China
• IPO
• Healthcare
• China
• Qiming Venture Partners
• Lake Bleu Capital
• Fountainvest Partners
• DCP Capital Partners
• Baidu