Say what you may about the biotech chapter of the Hong Kong Stock Exchange, but it has not stopped Innovent Biologics from reaping $421 million in its public debut — the largest of the three maiden IPOs so far.
Sources have told Reuters and Bloomberg that the Suzhou-based unicorn priced 236.35 million shares near the top of the range at HK$13.98 — roughly $2 USD — marketing them in the HK$12.50 to HK$14 range.
A group of 10 cornerstone investors chipped in $245 million for the raise, which pegs Innovent’s total valuation at around $2 billion. They include Singapore sovereign wealth fund Temasek, Sequoia Capital China, Shanghai-based Greenwoods Investment, Hong Kong-based asset management company Value Partners and American financial services company Capital Group.
Despite raising ample capital, pre-revenue biotechs listed under HKEX’s new rules have all given less-than-rosy performances. Ascletis, which raised $400 million, is trading at less than 50% of its IPO price; Hua Medicine has fallen 14% after bagging $110.5 million raise; and Nasdaq-listed BeiGene has seen its shares decline by a third since its $903 million secondary listing.
“The new biotech section of the HKEX is like a newborn,” said Jonathan Wang, senior managing director of OrbiMed Asia, in a recent interview. “It’s impossible to guarantee that it never gets sick and is always blissful. No stock market would see all its stocks go up and never come down. Even mature markets like the Nasdaq are not immune to volatility. In fact it went through quite a down period two years ago, and it wasn’t until recently that it climbed back to the level we saw three years ago.”
Natalie Chan, an assistant VP at the HKEX, echoed the sentiment at the US-China Biopharma Innovation and Investment Summit hosted by Endpoints and PharmCube:
Every market experiences an adjustment process. Are the valuations too high? We render to the market what is the market’s. In three to five years when we get more biotech analysts and when general investors have more knowledge, things could be different.
In the meantime, Innovent will see in a week whether the immediate reactions have changed. It begins trading on October 31.
Morgan Stanley, Goldman Sachs, JPMorgan Chase and China Merchants Securities were joint sponsors of the sale.
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