Hong Kong IPO de­liv­ers $421M to In­novent as an­oth­er one of Chi­na's biotech uni­corns hauls in big mon­ey

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.

Jonathan Wang

“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.

Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

Daniel O'Day [via AP Images]

UP­DAT­ED: Gilead un­leash­es a $5B late-stage cash al­liance with Gala­pa­gos — lay­ing out O'­Day's R&D strat­e­gy

Daniel O’Day is executing his first major development deal since taking over as CEO of Gilead $GILD. And he’s going in deep to ally himself with a longstanding partner.

O’Day announced today that he is spending $5 billion in cash to add new late-stage drugs to Gilead’s pipeline, picking up rights to Galapagos’ $GLPG Phase III IPF drug GLPG1690 alongside adoption of the biotech’s Phase IIb drug GLPG1972 for osteoarthritis. And Gilead is also putting billions more on the table for milestones, gaining options for everything else in Galapagos’ pipeline, with a shot at all rights outside of Europe.

Altogether, Gilead is gaining rights to 6 clinical-stage assets, 20 preclinical programs and everything else being hatched in translation.

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Pe­ter Kolchin­sky and Raj Shah raise a $300M fund de­vot­ed to biotech star­tups

Peter Kolchinsky and Raj Shah have another $300 million-plus to play with on the biotech venture side of their investment business. 

The two announced Monday morning that they’ve put together their first pure-play venture fund at RA Capital Management, which has been known to bet on just about every angle in healthcare investing — from rounds to follow-on investments at public companies. This new fund of theirs arrives well into a go-go era of new startup financing, with a particular focus on building new biotechs.

Boehringer buys Swiss biotech in its lat­est M&A deal, go­ing the next-gen can­cer vac­cine route

Boehringer Ingelheim has snapped up a Swiss biotech startup and added their group as a new platform for the oncology pipeline. 

The German biopharma company has bagged Geneva-based AMAL Therapeutics, paying out an unspecified upfront in a $358 million deal — cash, milestones and everything else, all in. Plus there’s 100 million euros on the line for commercial milestones.

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Ab­b­Vie beefs up the on­col­o­gy pipeline, bag­ging an up­start STING play­er with its own unique ap­proach

AbbVie isn’t letting its $63 billion buyout of Allergan stop its M&A/deals team from continuing their work.

Monday morning we learned that the pharma giant is snapping up tiny Mavupharma out of Seattle, a Frazier-backed startup that has its own unique take on STING — which is on the threshold of their first clinical trial.

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Hal Bar­ron's team at GSK scores a win with pos­i­tive Ze­ju­la PhI­II front­line study — now comes the hard part

Score one for Hal Barron and the new R&D team steering GlaxoSmithKline’s pipeline.

The pharma giant reported this morning that its recently acquired PARP, Zejula (niraparib), hit the primary endpoint on progression-free survival in a frontline maintenance setting for women suffering ovarian cancer — following chemo and regardless of their BRCA status.

GSK bet $5 billion on the Tesaro buyout primarily to get this drug, drawing the shaking heads of biopharma. Why pay a big premium for a drug like this when AstraZeneca was going from strength to strength with Lynparza, ran the argument, having won a hugely important accelerated approval to jump out ahead — way ahead — of the rest of the PARP players? Lynparza — now co-owned by a powerhouse cancer team at Merck — won the first approval in frontline maintenance in ovarian cancer.

Billing it­self as the first AI biotech to launch hu­man tri­als, Re­cur­sion adds $121M C round

Billing itself as the first AI biotech with programs in the clinic, Salt Lake City-based Recursion now has a $121 million bankroll to start gathering human data to see if it’s on the right track. 

“We’re trying to build this discovery engine,” Recursion CEO Chris Gibson tells me ahead of the C round news. “We now have the first two programs in the clinic.” And that, he adds, qualifies as a first for any AI establishment “that actually have something in the clinic.”

FDA bats back As­traZeneca's SGLT di­a­betes drug for Type 1 di­a­betes — block­ing a class on safe­ty fears

The FDA has just fired its latest salvo at the SGLT class of diabetes drugs, blowing up some commercial opportunity at AstraZeneca as part of the collateral damage.

The pharma giant reported early Monday that the FDA has rejected its blockbuster drug Farxiga for Type 1 diabetes that can’t be controlled by insulin. And while the pharma giant maintained its usual grim silence in the face of a setback, this one should be easy to interpret.

Jonathan Symonds [via HSBC]

GSK to tap Jonathan Symonds as chair­man, lever­ag­ing Big Phar­ma ex­pe­ri­ence for con­sumer biz deal

Six months into its search for a new board chairman, GlaxoSmithKline has apparently found the perfect candidate in a seasoned executive groomed at AstraZeneca and Novartis. Jonathan Symonds is in the final stages of being appointed, Bloomberg reports.

In January Sir Philip Hampton announced his intention to step down and make way for a new leader to oversee the consumer health joint venture GSK is setting up with Pfizer. The deal — announced a month prior — would spin out the unit formerly headed by GSK CEO Emma Walmsley and merge it with the equivalent division at Pfizer to create a new entity to be listed separately.