PE-backed Adlai Nortye pursues US listing

Within days of closing a USD 100m Series D round in mid-2021, Adlai disclosed its intention to go public in Hong Kong. It was one of a flurry of applications to list under the Hong Kong Stock Exchange regime that permits IPOs by pre-revenue biotech players. However, the application lapsed six months later.

There was renewed optimism regarding US offerings earlier this year following a resolution of a long-running audit dispute that threatened to result in compulsory de-listings of Chinese companies trading on US bourses. However, activity has since been relatively muted. Hong Kong, on the other hand, has seen a surge in listing applications in recent months.

Hong Kong-based investor ATCG, Hangzhou Jingfeng Investment Management, and ICBC International are the largest external shareholders with 7%, 6.2% and 5.1%, respectively. Other investors listed in the prospectus include Yingke Capital, Hong Kong-listed contract research organisation (CRO) Tigermed, Legend Star, and an industry fund managed by WuXi Biologics.

Adlai received USD 52m in Series B funding – denominated in US dollars and renminbi – led by YuanMing Capital and Matrix Partners China in 2018, AVCJ Research’s records show. This followed a Series A round of USD 5.4m in 2015. In between the two rounds, the company listed and then delisted from China’s onshore National Equities Exchange & Quotations (NEEQ), also known as the New Third Board.

In 2020, Adlai announced it had raised nearly USD 100m in Series C funding. It was led by Tigermed and Yingke, and featured ATCG and ICBC. However, the statement was subsequently removed from Adlai’s website and a revised entry indicates that USD 63.7m was raised.

The Series D – Adlai puts the final total at USD 97.4m – was led by Tigermed and CMG-SDIC Capital Management, a fund co-launched by China Merchants Group and the government-controlled State Development & Investment Corporation (SDIC).

Founded in Hangzhou in 2016, Adlai develops innovative cancer therapies for patients across the spectrum of tumour types. Its stated mission is to turn cancer into a chronic and eventually curable disease. The company has a pipeline of six drug candidates, of which three are currently undergoing clinical trials.

The most advanced programme is AN2025, which acts against solid tumours by disrupting the signalling function that regulates cancer cells. Adlai licensed the global development rights from Novartis and subsequently signed an out-licensing agreement with Nippon Kayaku regarding a commercial rollout in Japan. It is also working with Roche on specific versions of AN2025.

In addition, Adlai is collaborating with MSD International on a small-molecule treatment that targets several forms of cancer and developing a PD-L1 inhibitor on a solo basis. PD-1 and PD-L1 inhibitors stop cancer cells from evading immune systems by disrupting protein interaction.

The company is yet to generate any meaningful revenue while incurring sizeable R&D costs. The net loss widened slightly from USD 56.7m in 2021 to USD 58.8m in 2022.

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• Topics
• Greater China
• IPO
• Healthcare
• China
• Hong Kong (China)
• ICBC
• Legend Star
• Yingke Private Equity