China, IPOs

CStone braves the HKEX with late-stage plans brewing for newly beefed up I/O pipeline

This May, when CStone bagged $260 million in what it said was the largest Series B funding in the history of the Chinese biopharma industry, CEO Frank Jiang heralded the round as critical for the company’s “current and near-term growth.” It quickly became clear how: Within weeks, the fast-growing Chinese immuno-oncology player sealed licensing deals with two rising US biotech stars, diversifying the molecular targets being addressed by its clinical pipeline, and poached seasoned Goldman Sachs healthcare managing director Richard Yeh to be its new CFO.

Frank Jiang

Now, with a pipeline more heavily tilted toward late-stage development, CStone is ready for another big ask — this time on the Hong Kong Stock Exchange. As is typical for the HKEX, we don’t yet know how big an ask this new filing is. But if its predecessors offer any indication, it’s likely sizable for this company, which counts WuXi as a major investor.

The spotlight continues to shine on CS1001, the PD-L1 inhibitor that’s been CStone’s anchor since it launched in 2015. Gunning for a place among the first wave of homegrown checkpoints to hit the Chinese market, CStone is starting out with smaller indications like classical Hodgkin’s lymphoma and natural killer T cell lymphoma, with plans to submit NDAs in H2 2019 and H1 2020, respectively.

Phase III trials in non-small cell lung cancer, gastric cancer and hepatocellular carcinoma will commence some time before those submissions, the company writes in its filing.

Meanwhile, CStone is hoping to take full advantage of all the work Agios has done and will do to obtain FDA approvals for ivosidenib, proposal bridging and joint trials that would yield a basket of China and overseas data in their final regulatory package — something that the newly renamed National Medical Products Administration is quite open to.

A similar approach will be deployed to develop the three assets from Blueprint. Among them, avapritinib (CS3007) is in Phase II/III in the US for gastrointestinal stromal tumor and systemic mastocytosis, while CS3009 (non-small cell lung cancer, medullary thyroid cancer) and CS3008 (hepatocellular carcinoma) are in Phase Ib. They all hit novel receptors unlike CStone’s in-house drugs, which inhibits more traditional targets like CTLA4, PD-1 and MEK.

Together with CMO and BeiGene vet Jianxin Yang, CEO Jiang — the former head of Asia Pacific R&D at Sanofi — has evidently been prepping his team of 119 for the challenge. In the first half of 2018, CStone spent $73 million on R&D — double the amount it spent in the years 2016 and 2017.

CStone’s IPO pitch arrives as Innovent Biologics, after scoring a $421 million raise, continues to trade above its debut price — a first among the biotech pioneers on the HKEX. Disappointing performances from Ascletis, Hua Medicine and BeiGene appear to have kept others at bay, with WuXi AppTec filing the only other IPO application since August.

Goldman Sachs and Morgan Stanley acted as joint sponsors of the IPO.


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Biotech Investment Analyst
SV Health Investors Boston, MA
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Recursion Pharmaceuticals Salt Lake City, UT
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Recursion Pharmaceuticals Salt Lake City, UT
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Cadent Therapeutics Cambridge, MA
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