Is HKEX ready to return to biotech business? InnoCare tests waters with hopes to fetch $257M in IPO
The Covid-19 outbreak may have forced InnoCare Pharma to postpone investor meetings ahead of its public debut on the Hong Kong Stock Exchange, but it hasn’t stopped the biotech from carrying on with an IPO that could bring in $257 million (HKD1.993 billion) at the midpoint.
The real test begins today. Investors now have five days to file their share applications before the final expected price is determined next Monday and announced next Friday. Trading is expected to commence the week after.
Having cancelled plans to meet potential investors face-to-face, InnoCare reportedly hosted virtual talks to gauge interest in its offering.
Reception to InnoCare’s float will illustrate whether biotech IPOs in Hong Kong are indeed, as independent investor Brad Loncar puts it, “getting back in gear.” Days ago Immunotech Biopharm also submitted an application to list, presumably because their original filing from last September has lapsed.
There’s no sign that the epidemic caused by SARS-CoV-2, which appears to be dying down in China even as it ravages the world, would impact its day-to-day operations just yet, the company added in an updated filing.
To minimize the impact of the COVID-19 outbreak, we have also implemented company-wide self-protection policies for employees to either work remotely or onsite with protective masks and sanitization. We currently do not anticipate any material deviation from our commercialization plans, as such plans are based upon CDE approval timeline and nothing has come to our attention at this stage that the CDE review process is experiencing delays.
Centered around cancer and autoimmune drugs — with an eye to be first- or best-in-class — their pitch is reminiscent of a number of up-and-coming biotech startups in China. But with Merck vet Jasmine Cui as CEO and prestigious academic Yigong Shi as president of the scientific advisory board, InnoCare is betting that they can do it better than most.
Cui imported most of her core team, as well as a portfolio of assets, from BioDuro, a drug discovery services company owned by PPD, where she was first recruited as CSO then promoted to CEO. But with the exception of the lead drug, orelabrutinib, the other drug candidates were all discovered in-house, the company wrote in its filing.
In four years the discovery team has swelled to 100 staffers, plus 60 responsible for clinical development.
With orelabrutinib, a BTK inhibitor, InnoCare is entering a space dominated by giants. While J&J and AbbVie currently market the only such drug in China (Imbruvica), AstraZeneca’s Calquence and BeiGene’s Brukinsa are both in better positions to catch up with regulatory approvals in the US and elsewhere.
Soon after InnoCare first filed an IPO application in Hong Kong, the National Medical Product Administration accepted an NDA for orelabrutinib in relapsed/refractory chronic lymphocytic leukemia or small lymphocytic lymphoma (CLL/SLL). In recent days, regulators also added the R/R mantle cell lymphoma (MCL) indication to the queue.
Half of the proceeds will go toward the orelabrutinib program, the company wrote, bolstering everything from clinical trials to a commercial manufacturing facility in Guangzhou to a field team comprising 80 to 90 sales reps.
Cui and Renbin Zhao, InnoCare’s executive director of biology and clinical development strategy, each hold large chunks of the stock — which would stand at 8.85% and 12.07% post-IPO even if the over-allotment option is fully exercised. Hebert Chan, a founding partner of Advantech Capital, would be in for 12.52% in that scenario. Other shareholders include Singapore’s sovereign wealth fund GIC (9.26%), Vivo Capital (6.60%), TMF (10.59%) and LVC Entities (9.38%).
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