Bil­lion-dol­lar biosim mak­er mulls $500M Hong Kong IPO

A Chi­nese biosim­i­lar mak­er val­ued at $1.5 bil­lion might be the first to list its stock on Hong Kong’s ex­change un­der new rules al­low­ing star­tups and biotechs to go pub­lic.

The com­pa­ny, called Shang­hai Hen­lius Biotech, could do an IPO rais­ing $500 mil­lion as ear­ly as the sec­ond half of this year, ac­cord­ing to un­named sources in­ter­viewed by Bloomberg.

A list­ing like this could be a first for Hong Kong’s stock ex­change. Un­til re­cent­ly, Hong Kong did not al­low pre-rev­enue and pre-prof­it com­pa­nies to list, as they were a per­ceived risk to in­vestors. But this cut out the bulk of biotechs op­er­at­ing in the red while de­vel­op­ing drugs. The strict rules led Chi­nese biotech com­pa­nies like BeiGene to raise cap­i­tal in the US. On the Nas­daq, BeiGene’s stock has grown near­ly 310% over the past two years, bring­ing its mar­ket cap up to $6.3 bil­lion. Not bad for a com­pa­ny with bare­ly any rev­enue, and none from prod­uct sales as of their lat­est 10-K.

New rules an­nounced in De­cem­ber (and tak­ing ef­fect this year), how­ev­er, al­low com­pa­nies that haven’t earned rev­enue or prof­it to ap­ply for IPOs in Hong Kong — as long as they’re val­ued at HK$1.5 bil­lion (US$192 mil­lion). The com­pa­nies must meet some cri­te­ria first, like be­ing at least two-years old and hav­ing some patents.

“Biotech was cho­sen as the ini­tial fo­cus in widen­ing mar­ket ac­cess for ear­ly stage com­pa­nies as the sec­tor tends to be strict­ly reg­u­lat­ed un­der a regime that sets ex­ter­nal mile­stones on de­vel­op­ment progress,” the Hong Kong stock ex­change wrote in a state­ment to the South Chi­na Morn­ing Post.

Since the new rules were an­nounced, about two dozen tech star­tups and biotech com­pa­nies have made in­quiries di­rect­ly through the ex­change or have en­gaged in­vest­ment banks and pro­fes­sion­al con­sul­tants to ask about rais­ing cap­i­tal in Hong Kong, SCMP re­ports.

Shang­hai Hen­lius makes mon­o­clon­al an­ti­body biosim­i­lar drugs, in­clud­ing a copy­cat of Roche’s can­cer ther­a­py Rit­ux­an that got pri­or­i­ty re­view last month. The com­pa­ny is a joint ven­ture launched by Shang­hai Fo­s­un Phar­ma­ceu­ti­cal and Hen­lius Bio­phar­ma­ceu­ti­cals in 2009. It raised $140 mil­lion last month from in­vestors in­clud­ing Ja­cob­son Phar­ma Corp. in a deal valu­ing the com­pa­ny at more than $1.5 bil­lion.


Il­lus­tra­tion: Sky­scrap­ers in Hong Kong. Shut­ter­stock

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His­toric drug pric­ing re­forms pass; Pfiz­er ac­quires GBT; The long search for non-opi­oid pain drugs; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

The Endpoints Weekly has officially crossed the 60,000 mark on subscribers — thanks to all of your support. As the editorial team grows, we’ve been able to do a lot more, with many of those on display this week. Be sure to check out Lei Lei Wu’s deep dive on pain R&D. If you missed it, you may also rewatch her companion panel here.

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Gold for adults, sil­ver for in­fants: Pfiz­er's Pre­vnar 2.0 head­ed to FDA months af­ter Mer­ck­'s green light

Pfizer was first to the finish line for the next-gen pneumococcal vaccine in adults, but Merck beat its rival with a jab for children in June.

Now, two months after Merck’s 15-valent Vaxneuvance won the FDA stamp of approval for kids, Pfizer is out with some late-stage data on its 20-valent shot for infants.

Known as Prevnar 20 for adults, Pfizer’s 20vPnC will head to the FDA by the end of this year for an approval request in infants, the Big Pharma said Friday morning. Discussions with the FDA will occur first and more late-stage pediatric trials are expected to read out soon, informing the regulatory pathway in other countries and regions.

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No­var­tis re­ports two pa­tient deaths af­ter treat­ment with Zol­gens­ma

Two children with spinal muscular atrophy have died after receiving Novartis’ Zolgensma, a gene therapy designed as a one-time treatment for the rare fatal disease.

The deaths, which resulted from acute liver failure, occurred in Russia and Kazakhstan, Novartis confirmed in a statement to Endpoints News. Having notified health authorities across all the markets where Zolgensma is available, it will update the drug label “to specify that fatal acute liver failure has been reported,” a spokesperson wrote.

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House pass­es his­toric drug pric­ing re­forms, lin­ing up decades-in-the-mak­ing win for Biden and De­moc­rats

The US House of Representatives today voted along party lines (all Dems voted for it), 220-207 to pass new, wide-ranging legislation that will allow Medicare drug price negotiations for the first time ever, and cap seniors’ drug expenses to $2,000 per year and seniors’ insulin costs at $35 per month.

Setting up a major victory for President Joe Biden, representatives returned from their summer recess to pass the Inflation Reduction Act, even as many noted the bill would only modestly reduce inflation.

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Senate Finance Committee Chair Ron Wyden (D-OR) (Francis Chung/E&E News/POLITICO via AP Images)

Sen­ate Fi­nance chair con­tin­ues his in­ves­ti­ga­tion in­to phar­ma tax­es with re­quests for Am­gen

Amgen is the latest pharma company to appear on the radar of Senate Finance Committee Chair Ron Wyden (D-OR), who is investigating the way pharma companies are using subsidiaries in low- or zero-tax countries to lower their tax bills.

Like its peers Merck, AbbVie and Bristol Myers Squibb, Wyden notes how Amgen uses its Puerto Rico operations to consistently pay tax rates that are substantially lower than the U.S. corporate tax rate of 21%, with an effective tax rate of 10.7% in 2020 and 12.1% in 2021.

FDA ap­proves sec­ond in­di­ca­tion for As­traZeneca and Dai­ichi's En­her­tu in less than a week

AstraZeneca and Daiichi Sankyo’s antibody-drug conjugate Enhertu scored its second approval in less than a week, this time for a subset of lung cancer patients.

Enhertu received accelerated approval on Thursday to treat adults with unresectable or metastatic non-small cell lung cancer (NSCLC) whose tumors have activating HER2 (ERBB2) mutations, and who have already received a prior systemic therapy.

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J&J to re­move talc prod­ucts from shelves world­wide, re­plac­ing with corn­starch-based port­fo­lio

After controversially spinning out its talc liabilities and filing for bankruptcy in an attempt to settle 38,000 lawsuits, Johnson & Johnson is now changing up the formula for its baby powder products.

J&J is beginning the transition to an all cornstarch-based baby powder portfolio, the pharma giant announced on Thursday — just months after a federal judge ruled in favor of its “Texas two-step” bankruptcy to settle allegations that its talc products contained asbestos and caused cancer. An appeals court has since agreed to revisit that case.

CSL is gathering its four business units under a unified brand identity strategy (Credit: CSL company site)

CSL brings Se­qirus, Vi­for un­der par­ent um­brel­la brand in iden­ti­ty re­vamp

CSL is gathering its brands under the family name umbrella, renaming its vaccine and newly acquired nephrology specialty businesses with the parent initials.

CSL Seqirus and CSL Vifor join CSL Plasma and CSL Behring as the four now uniformly branded business units of the global biopharma. The Seqirus vaccine division was formed in 2015 with the combination of bioCSL and its purchase of Novartis’ flu vaccine business. CSL picked up Vifor Pharma late last year in an $11.7 billion deal for the nephrology, iron deficiency and cardio-renal drug developer.

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