China, IPOs

BeiGene takes a hit after historic $903M Hong Kong IPO with negative biotech sentiment

The first day of its secondary listing in Hong Kong has proven slightly disappointing for BeiGene.

The Beijing-based cancer drugmaker closed its trading debut down 1% after falling as much as 5% during the day. Despite recruiting eight heavyweight investors to cement its whopping $903 million IPO, BeiGene failed to stir up excitement in the retail tranche, which made up 9% of the total shares offered.

Meanwhile, the cornerstone investors — including New York-based hedge fund Baker Bros Advisors, Singapore’s sovereign wealth fund GIC, and two of China’s most influential biotech VCs, Hillhouse Capital Management and Ally Bridge — collectively bought 31% of the international shares.

BeiGene — a tremendous Nasdaq success that’s trading at over seven times its listing price — said it’s “satisfied” with how its secondary listing turned out.

“Through the Hong Kong listing, we have met our main objectives of increasing our visibility and expanding our shareholder base in Asia, especially long-term investors,” CFO Howard Liang told the South China Morning Post.

The underwhelming debut performance casts another shadow over an anticipated biotech boom on the Hong Kong exchange. China’s first pre-profit biotech to go public — Ascletis — suffered a 15% plunge days after its stock went live. Six others have filed IPO pitches.

Some analysts have attributed the lackluster demand to poor market sentiments dragged down by trade war tensions, while others have interpreted it as collateral damage of recent vaccine scandals in China.

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

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