The biotech arm of a high-profile traditional Chinese medicine maker is reportedly planning a $1 billion dollar IPO — exactly the kind of money regulators wanted to see when they decided to open up Hong Kong’s stock exchange to pre-revenue biotechs. And it’s coming after regulators in China sent signals that they are concerned about overheated market conditions on the exchange.
Shanghai Tasly Pharmaceutical — the wholly-owned subsidiary of Tianjin-based and Shanghai-listed Tasly Pharmaceutical Group — aims to be listed in the second half of 2018, sources told Reuters. The firm is working with advisers on the proposed share sale, though details on the valuation, the type of shares to be sold and the exact percentage of the company to be floated weren’t available.
Founded in 2001, Shanghai Tasly is a core component of its parent company’s positioning as a modern pharma business comprising both refined Chinese meds and innovative drugs. It is marketing a drug dubbed pro-UK in China, which treats blood-clot induced heart attacks. More than 10 other drugs are in the pipeline.
If confirmed, Tasly will join a group of high profile candidates in the spotlight for reported Hong Kong IPO talks that includes GV-backed cancer detection startup Grail, Chinese liver disease biotech Ascletis, and biosimilar maker Shanghai Henlius Biotech.
Such listing has become possible thanks to new rules at the Hong Kong Exchanges and Clearing, which scrapped previous restrictions that prohibited pre-revenue and pre-profit companies to list. Seeing the promising performance of Chinese biotechs like BeiGene and ZaiLab on Nasdaq, the city’s regulators changed the rules to lure startups to raise capital there as long as they meet certain criteria — valued at HK$1.5 billion (US$192 million), at least two-years old with some patents, among others. The new regulations will take effect as early as April.
Tasly is also entertaining the idea of a pre-IPO fundraising, Reuters reported.
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