China, IPOs

Ascletis reaps record $400M from Hong Kong investors in the exchange’s first-ever pre-revenue biotech listing

The first pre-revenue biotech to list on Hong Kong’s stock exchange has landed. And its success will likely spur plenty of more such offerings in search of a big payoff.

Ascletis has raised $400 million by selling 224 million new shares at around $1.78 (HK$14) — right in the middle of its anticipated HK$12 to HK$16 range, Reuters reported. It’s scheduled to begin trading on August 1, less than three months after it first filed for the IPO.

GIC, Singapore’s sovereign wealth fund, signed on to be the cornerstone investor and committed $75 million for around 19% of the IPO shares. The rest — which in turn accounts for about 20% of Ascletis’ enlarged share capital — was all snapped up in an oversubscribed frenzy.

Jinzi Wu

Founded by ex-GSK exec Jinzi Wu in 2011, Ascletis has a reputation in China for being the first domestic company to develop a hep C cure. The drug, Ganovo, is expected to be approved in Q3 of 2018. The team plans to follow that up with another HCV treatment, ravidasvir (in-licensed from Roche), along with HIV drug ASC09, and liver cancer therapy HASC06.

Being the first biotech to test the new listing rules wasn’t easy. Wu previously said that Ascletis faced “some challenges” in nailing down the company’s valuation.

The smooth trajectory of Ascletis’ IPO likely paves the way for the six other biotechs and one CRO — from Hua Medicine to Stealth BioTherapeutics — that’s offered their own IPO pitch.

It’s also a milestone for HKEX, which has been angling to become an IPO destination for biotech upstarts, especially the kind that’s been popping up in mainland China the past decade.

Just a few days ago, word came out that the listing committee is discussing a secondary listing with BeiGene $BGNE — the Beijing-based, Celgene-partnered biotech whose Nasdaq listing (and immense success) had been seen as an impetus for Hong Kong to change its rules.

In its filing, BeiGene wrote that it believes it’s “well positioned to capture the significant market opportunities in China” with its core assets zanubrutinib, tislelizumab and pamiparib, all of which would benefit from the raise, from clinical trials to registration and commercialization in both China and the US.

But the star today is Ascletis. The past year has brought a rush of biotech debuts in the US, with Rubius claiming the largest biotech IPO so far on Nasdaq — raising $241 million — while Denali scored $250 million in late 2017. Now Ascletis, a company not well known outside of China, has left those top performers in the dust, including Axovant, which held the record for the biggest biotech IPO.

With the fresh infusion of cash, Wu and his team can now carry on with the planned R&D and commercialization of core products, as well as in-licensing more drugs.

Two previous rounds of financing had brought a collective $155 million into Ascletis’ accounts. Among their backers: C-Bridge Capital, QianHai Equity Investment FOF, Goldman Sachs, and Tasly Pharmaceutical. Wu and his wife July He are still the largest shareholders of the company at the moment, owning over 60% of the shares.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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