Beijing-based cancer drug manufacturer InnoCare Pharma managed to raise HK$2.2 billion or roughly around $289 million from its initial public offering (IPO) in Hong Kong. Raising the money was a commendable feat for the company given the current state of affairs in the region's equities market.
The company was able to sell its share during its debut at the higher-end of its asking price. The IPO itself was nearly 300 times oversubscribed, with most of the interest coming from long-term oriented institutional investors. The turnout of the IPO was surprising for most given that it was launched during one of the worst economic and stock market downturns in decades.
InnoCare Pharma co-founder and chief executive officer, Jasmine Cui Jisong, mentioned in an interview that the company's IPO was very well received by investors worldwide. The executive stated that the IPO had also received strong support from its cornerstone investors.
Through a six-month share sale moratorium beginning on the time of the listing, the company's cornerstone investors purchased a total of HK$1.28 billion worth of shares with a price range of HK$8.18 to HK$8.95 each. During its debut, retail investors had subscribed to more than 7.48 billion of the company's shares, close to 300 times the shares that were initially offered.
When asked why the company had chosen to push through with the IPO given the current state of affairs, Cui explained that they had already prepared the necessary documents for the listed. She added that It was better for them to launch the IPO and have it be done with so that they can focus more on their scientific projects.
The Chinese cancer drug company currently has nine novel cancer treatments under human clinical trials. One of its treatments Orelabrutnib, which is used to treat blood cancers such as chronic lymphocytic leukemia, small lymphocytic leukemia and mantle cell lymphoma, has already completed phase two trials. The company is still waiting for marketing approval from regulators for the particular treatment.
When it is approved, Orelabrutnib will be directly competing with Johnson & Johnson's ibrutinib, Britain-based AstraZeneca's acalabrutinib and Beijing-based BeiGene's zanubrutinib in the highly lucrative market. Data from market researcher Frost & Sullivan revealed that more than 20,000 people in China could benefit from treatment, with thousands more standing to benefit from the drug in other countries.
According to InnoCare Pharma, the proceeds from its IPO will be used to fund further development of the drug in China and the United States. It still needs to conduct further clinical trials to prove the treatment's safety and efficacy.
