China, IPOs

Can a $1B IPO attract leery investors on HKEX? WuXi AppTec is set to find out

An intrepid WuXi AppTec is sticking to its reported initial ambition as it moves closer to a $1 billion listing in Hong Kong that will bankroll a number of initiatives for its expansive global operation.

The CRO powerhouse, which reaped $354 million from a Shanghai IPO back in May, is hoping to raise between $954 million and $1.06 billion, Reuters reported on Wednesday. The asking price in Hong Kong is expected to be between $8.19 and $9.13 per share for 116.47 million shares, a roughly 21% to 29% discount to its current share price.

Hong Kong regulators’ decision to open up the stock exchange to pre-revenue biotechs this April has coincided with a turbulent season for the overall market, with some of the hottest stocks, including maiden biotech Ascletis, which has slumped despite initial fervent interest. Nevertheless, Innovent Biologics’ has experienced an impressive surge — it is now trading at almost 1.5 times its IPO price — following its $421 million raise, which suggests there’s still ample room for well-established domestic companies on the HKEX.

WuXi can raise as much as $1.2 billion if an over-allotment option is exercised. In a separate filing, the company said the proceeds will go toward expanding its own capabilities — from bioanalysis and manufacturing to R&D and AI — as well as acquiring companies and nurturing startups in the broad healthcare space.

But with 4.41 billion yuan ($630 million) booked in revenue just in the first half of 2018, WuXi doesn’t have to wait long to get started. Weeks ago, it announced the launch of a joint venture focused on drug discovery with the computational chemistry experts at Schrödinger.

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Skyhawk Therapeutics Waltham, MA
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Elektroki Boston, MA
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Elektroki Boston, MA
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Recursion Pharmaceuticals Salt Lake City, UT

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