China, IPOs

In HKEX’s first test in 2019, CStone seeks up to $304M in IPO fortune

As the Nasdaq ushered in its first biotech unicorns of 2019 with the listings of Alector and Gossamer, CStone is kicking things off at the Hong Kong Stock Exchange with a potential $304 million (HK$2.39 billion) price tag on its IPO.

At the top of the range, each of the 186 million CStone shares would sell at $1.63 (HK$12.8). That’s down 23% from its original target of $400 million ($HK$3.1 billion), Caixin reported. While the valuation is unclear, the company disclosed in its prospectus that it was valued at $1.05 billion in its most recent venture round.

Backed by some of the flashiest names in biotech including ARCH, WuXi and Singapore’s GIC, and helmed by Sanofi vet Frank Jiang, CStone had boasted of pocketing the largest Series B round — $260 million — in the history of Chinese biopharma. And it’s put the money to work, having burned through $148 million by last September, doing some heavy R&D lifting for its I/O pipeline, licensing commercial rights to Agios’ AML drug and poaching a Goldman Sachs banker to be its CFO.

GIC has agreed to be a cornerstone investor alongside Boyu Capital, Indus Funds and Ishana Capital, pledging a total of $95 million, which would translate to 30%-plus of the total offering and a combined 6% stake in CStone.

Frank Jiang

It’s now late-stage crunch time, with the spotlight on its PD-L1 inhibitor CS1001. Catching up with the first wave of homegrown checkpoints to hit the Chinese market — following approvals for Innovent and Junshi, which both went public on the HKEX recently — 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.

CStone’s debut on February 26 (one week after it prices) will be closely watched as investors find out whether its stock will take a quick plunge like Ascletis’ and BeiGene’s — both have yet to recover — or enjoy the kind of cheerful rally Junshi and Innovent saw late last year.

Almost a year after the HKEX opened up to pre-revenue biotechs, the jury is still out.


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Skyhawk Therapeutics Waltham, MA
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Elektroki Boston, MA
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Elektroki Boston, MA
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Recursion Pharmaceuticals Salt Lake City, UT

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