Innovent Biologics, a Chinese biotech firm, plans to increase up to $422 million in Hong Kong Initial Public Offering (IPO). According to reports, it could be the biggest biotech IPO in the financial hub in 2018.
Innovent is backed by Fidelity, a mutual fund giant, and Temasek, a Singapore state investor. The biotech firm has indicated its price range of HK$12.5-HK$14.00 per share for its IPO which is expected to give the company a valuation of about $2 billion.
Innovent is one of the companies that plan to take advantage of the latest trading rules introduced by the Hong Kong exchange that aims to attract early-stage drug developers like Ascletis Pharma, Hua Medicine, and Nasdaq-listed BeiGene.
Hong Kong's new rules give chance to young Biotech firms to market their products in Hong Kong as China aims to attract more new-economy companies as it competes with New York's market.
According to reports previous biotechs that listed in Hong Kong fared poorly under the new rules which affected the business sector. Tencent Music Entertainment postponed its own IPO last week because of a market rout.
It was recorded that Ascletis Pharma fell by 55 percent from its IPO and BeiGene is also down by 29 percent since its dual-primary listings in Hong Kong.
Sources said that Innovent managed to secure 10 cornerstone investors that include the Sequoia Capital, Value Partners, Prime Capital, Cormorant and Capital Group. The investors decided to purchase $245 million in shares.
Innovent is based in Shanghai and in Suzhou. The company develops medicines to treat cancer, autoimmune disorders, and other diseases. According to records, the company had revenue of 4.4 million yuan in the first six months of the year and it earned 18.5 million yuan in 2017 from a license granted to a biopharmaceutical company in China.
The proceeds of Innovent's IPO is planned to be funded on an ongoing and planned trial and also on the preparations for registration filings and commercial launches of antibody drug sintilimab. IPO prices are expected on Oct. 23 and the trading will start on Oct. 31. The sponsors of the Innovent deal are China Merchant Securities, Goldman Sachs, JPMorgan, and Morgan Stanley.
According to KPMG, Hong Kong is on track to be the leading IPO market globally in 2018. The CNBC reported that Hong Kong topped global rankings for initial public offering volumes in the first six months of 2018 and it is expected to continue at the top for the whole year.
