China biotech Junshi Biosciences seeks up to $414mln in Hong Kong IPO

Hua Medicine

10/12/2018 12:39

By Julia Fioretti
    HONG KONG, Dec 10 (Reuters) - Chinese biotech company
Shanghai Junshi Biosciences is seeking up to $414 million in a
Hong Kong initial public offering (IPO), making it the latest
company to take advantage of new listing rules to attract
early-stage drug developers.
    Hong Kong's new rules allow biotech firms with no revenue or
profit to list on the city's stock market, a change designed to
lure start-ups away from other financial centres such as New
York. The new regulations were introduced in April.
    Junshi Biosciences is selling 158.9 million shares at a
price range of HKD19.38-HKD20.38 ($2.48-$2.61), according to a
term sheet seen by Reuters.
    The company could raise as much as $476 million if a
greenshoe, or over-allotment option - is exercised within the
first month of trading.
    Junshi Biosciences did not respond to a request to comment
outside regular business hours.
    The performance of shares listed under the new regime has
been patchy. Ascletis Pharma  1672.HK , the first company to
list under the new regulations, is down almost 60 percent since
it began trading in August.  urn:newsml:reuters.com:*:nL4N1US413
    Beigene Ltd  6160.HK  and Hua Medicine  2552.HK , the other
two biotechs to list under the new rules, have also fallen since
their shares began trading.
    But Innovent Biologics  1801.HK  bucked the trend and is up
42 percent since its debut on Oct. 31.  urn:newsml:reuters.com:*:nL3N1XB1I6
    Bankers hope that will set the tone for upcoming biotechs,
as investors in Hong Kong get more familiar with the sector.
    Junshi Biosciences has a pipeline of 13 biologic drug
candidates including immuno-oncology drugs and drugs targeting
metabolic and inflammation or autoimmune diseases, according to
its draft prospectus.
    Junshi Biosciences has no revenues from drug sales as it has
not commercialised any drugs yet. It had revenues of 1.14
million yuan ($165,859.19) in 2017 from consulting and research
services, while it recorded no revenues in the first half of
this year.
    Its losses for the first half of 2018 widened to 272.9
million yuan from 154.5 million yuan in the same period last
year.
    The company expects to launch its first drugs commercially
in 2019 and 2020, including toripalimab, a monoclonal antibody.
    Junshi Biosciences expects to price its IPO between Dec. 14
and Dec. 15 and shares will begin trading on Dec. 24.
    CICC is the sole sponsor for the float while Credit Suisse
 CSGN.S  is a joint bookrunner. 

($1 = 7.8159 Hong Kong dollars)

($1 = 6.8733 Chinese yuan renminbi)

 (Reporting by Julia Fioretti. Editing by Jane Merriman)
 ((julia.fioretti@thomsonreuters.com; +852 2912 6686; Reuters
Messaging: julia.fioretti.thomsonreuters.com@reuters.net))