China, IPOs

Finally! Innovent hikes on Hong Kong debut amid cloudy market sentiments

Innovent Biologics has surged on its closely watched Hong Kong IPO, hitting a 21% rise at one point and ending the day at 18.6% above its IPO price after raising a record setting $421 million. The Suzhou-based unicorn, which earned a valuation of $2 billion with its pipeline of 17 monoclonal antibodies, is the fourth pre-revenue biotech to list on the HKEX and the only one whose stock didn’t go down on the first day of trading: Ascletis, Hua Medicine and Nasdaq-listed BeiGene are all still trading below their debut price.

While its robust performance is likely a boon for Innovent’s 10 cornerstone investors — a marquee group featuring Temasek, Sequoia Capital China and Capital Group — UOB Kay Hian analyst Steven Leung warned against reading too much into it. “The strong debut is seen to be a one-off, thanks to a rebound in the broader market,” he told Reuters. “It doesn’t suggest a return of interest to the IPO market yet.”

Brad Loncar, an independent investor who’s been watching China closely, credits Innovent’s initial success to its being a “best of breed company.”

“They have been around since 2011 and have put in the time and work required to develop a first rate biologics platform and pipeline. Honestly, I wish this had been the first company to go public under the new HK biotech rule because it really puts a best foot forward for the region,” he told me. “This is an easy one for investors to get behind because their pipeline is rich and the targets they are initially pursuing are mostly well understood unmet needs. So the commercial potential is without doubt.”


Innovent COO Qinwei Zhou 周勤伟 speaks at the Endpoints/Pharmcube BIIS18 summit in Shanghai on October 22, 2018 Endpoints News


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