Move over, Hong Kong: Shanghai’s new tech board sees fervent demand for maiden biotech IPO
Days after taking off to a buoyant start, Shanghai’s STAR market — China’s push to open up a new fundraising avenue for domestic fledgling tech companies — has some good news to report about its biotech debutant.
Shenzhen Chipscreen Biosciences has priced its shares at RMB 20.43 ($2.96) per share in an oversubscribed IPO, the company said in a filing. That could translate to RMB 1 billion, or almost $145 million, in IPO proceeds, with a valuation of $1.21 billion, according to a filing cited by Reuters.
For those who’s been following Hong Kong’s attempt to lure Chinese biotech startups away from the Nasdaq, though, Chipscreen’s real test might just be starting.
Ascletis, the biotech pioneer on HKEX, is still down more than 60% from its listing price last April, when it raised $400 million — to much fanfare. The stocks of BeiGene and Hua Medicine have also languished, though several other subsequent listings such as CanSino and Junshi are still soaring.
It’s unclear how much, if at all, the two exchanges would be competing for biotech listings. The overall number of applicants that the Shanghai market has already attracted appears to dwarf Hong Kong’s tech board, but the latter — which has accumulated the confidence of international institutional investors — have proved lucrative for the few biotech players that managed to pull off an IPO.
In the case of Chipscreen, retail investors are accounting for about a fifth of the IPO. Many of them have likely been energized by a 140% first-day surge among the initial 25 firms to list on STAR.
Founded in 2001 by Xianping Lu, Chipscreen prides itself for being an early innovator in the Chinese small molecule space, adopting its namesake drug screening tool to hunt new drugs in oncology, metabolic disease, autoimmune and endocrinology.
Its first drug, Epidaza or chidamide, was approved in China as early as 2014 for refractory/recurrent peripheral T-cell lymphoma. The epigenetic regulator inhibits subtypes of the HDAC enzymes and has since been licensed to Huya Bioscience in the US and Europe, GNTbm in Taiwan, and Eisai in parts of Asia.
A second-gen insulin sensitizer for Type 2 diabetes is next on its regulatory agenda, followed by another mid-stage cancer drug.
Lu, who trained as a postdoc at UC San Diego with stints at La Jolla and Galderma, told a roadshow audience that the IPO proceeds will help “strengthen competitiveness, expand market share, and develop new products in a bid to make growth sustainable,” Reuters reported.
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