China, IPOs

A China biotech unicorn scores big with $150M-plus IPO on Nasdaq, stock rockets up

Samantha Du

Zai Lab CEO Samantha Du is scheduled to step up and ring the opening bell on Nasdaq this morning — and she’ll have plenty to cheer about.

The Shanghai-based biotech raised $150 million from its upsized IPO on Wednesday, selling 8.3 million shares at $18 each. Then once trading began, the stock rocketed up more than 50%, building on a market cap that started out at a cool $1 billion. And underwriters are likely to add to its big haul, with a shot at acquiring 1.25 million more shares at the IPO price.

The big score this week underscores two key trends in the industry. Biotech IPOs are starting to look hot again. Company founder Du — a familiar figure in the Chinese biotech scene — had initially angled for about $115 million in the IPO. And the powerhouse China biotech industry is steaming along, with the most prominent companies like Zai Lab and BeiGene enjoying some major league deals as they position themselves in the big Asian healthcare market.

Du — a graduate of the University of Cincinnati and co-founder of China’s Hutchison Chi-Med — owns about 21% of the equity in Zai Lab, earning an enormous windfall this week for her work, with hundreds of millions of dollars in paper profit. Du is also the former managing director for Sequoia Capital China.

The strategy at Zai Lab focused early on grabbing Chinese rights to some advanced drugs. They gained niraparib from Tesaro in the fall of 2016, not long before the FDA’s approval came through for the PARP drug. Zai’s first Phase III gets underway later this year, with another to start in 2018. Tesaro retained co-promotion rights in China. Zai grabbed its number two program, the antibiotic omadacycline, from Paratek four months ago. And more deals followed for drugs from GSK, Sanofi and others as Zai Lab built its own labs and plotted its own pipeline.

As I’ve been saying, Asia and China in particular represent a boom market in biopharma, and the companies positioning themselves to take the lead on the drug front are benefiting handsomely.

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Sr. Manager, Regulatory Affairs, CMC
CytomX Therapeutics San Francisco, CA
Marketing Associate - Demand Generation
Catalytic Data Science Charleston, SC
Associate Principal, Life Sciences Partnerships
Flatiron Health New York City or San Francisco

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