China's Innovent Biologics looks to raise up to $422 mln in HK IPO - sources

Hua Medicine

15/10/2018 06:52

By Julia Fioretti and Julie  Zhu
    HONG KONG, Oct 15 (Reuters) - Chinese biotech firm Innovent
Biologics is looking to raise up to $422 million in its Hong
Kong IPO, three sources said, in what could be the biggest
biotech IPO in the financial hub this year.
    Innovent, which is backed by mutual fund giant Fidelity and
Singapore state investor Temasek, has set an indicative price
range of HK$12.5-HK$14.00 ($1.59-$1.79) per share for its
initial public offering (IPO), the sources said, giving the
company a valuation of about $2 billion.
    It is the latest company looking to take advantage of new
rules introduced by the Hong Kong stock exchange to woo
early-stage drug developers, after Ascletis Pharma  1672.HK ,
Hua Medicine  2552.HK  and Nasdaq-listed BeiGene  6160.HK .
    Biotech firms with no profit or revenue are now allowed to
go public in Hong Kong as the Chinese territory looks to attract
more new-economy companies in its competition for public floats
with New York.
    However previous biotechs that listed in Hong Kong under the
new rules have fared poorly, casting a shadow on the sector,
while a market rout last week drove Tencent Music Entertainment
to postpone its own IPO.  urn:newsml:reuters.com:*:nL8N1WS0AK
    Maiden applicant Ascletis Pharma is down 55 percent from its
IPO price, while BeiGene has dropped 29 percent since its
dual-primary listing in Hong Kong.  urn:newsml:reuters.com:*:nL8N1VF1X4
    Innovent managed to secure 10 cornerstone investors
including Sequoia Capital, Value Partners, Prime Capital,
Cormorant and Capital Group who together committed to buy $245
million in shares, the sources said.
    The company did not immediately respond to a request for
comment.  
    The Shanghai- and Suzhou-based firm, which develops products
for treating cancer, autoimmune disorders and other diseases,
had revenue of 4.4 million yuan ($636,030) in the first half of
this year and 18.5 million yuan in 2017 from a licence granted
to a biopharmaceutical company in China. It had no revenue in
2016.
    It has no products approved for commercial sale and has not
generated revenue from product sales, according to its draft
prospectus.
    Innovent plans to use the proceeds from its IPO to fund
ongoing and planned clinical trials as well as preparations for
registration filings and planned commercial launches of antibody
drug sintilimab.
    The IPO is expected to price on Oct. 23 and begin trading on
Oct. 31.
    China Merchant Securities  600999.SS , Goldman Sachs  GS.N ,
JPMorgan  JPM.N  and Morgan Stanley  MS.N  are joint sponsors
for the deal.

($1 = 7.8376 Hong Kong dollars)
($1 = 6.9179 Chinese yuan renminbi)

 (Reporting by Julia Fioretti and Julie Zhu; Editing by Stephen
Coates)
 ((julia.fioretti@thomsonreuters.com; +852 2912 6686; Reuters
Messaging: julia.fioretti.thomsonreuters.com@reuters.net))