Qiming-backed CANbridge gets its Hong Kong IPO as Nasdaq slowdown prompts renewed market analysis
Though IPO activity has slowed in the US significantly, a Qiming Venture-backed biotech took the public leap in a Hong Kong debut Friday.
CANbridge Pharmaceuticals began trading on the HKEX after raising about $77.4 million in its IPO, according to a Qiming release. The move comes a little less than two years after CANbridge’s last raise, when it pulled in $98 million from a global syndicate joined by RA Capital.
Shares of CANbridge debuted at HK$12.18 apiece, but when Friday’s session ended they had fallen about 27% to HK$8.90 each.
The biotech has a heap of rare disease and gene therapy programs, with 10 products and candidates being researched across 13 different indications. Roughly half of the IPO cash is expected to go toward the glioblastoma program CAN008, a glycosylated CD95-Fc fusion protein currently in Phase II studies.
About one fourth of the raise will go toward CANbridge’s other major programs, the company said. While most of CANbridge’s pipeline focus is centered around rare diseases — most of its clinical candidates and its only approved products are in this space — the IPO signifies a renewed emphasis in cancer indications as CAN008 is the biotech’s sole oncology candidate.
But the biotech has also been pushing into the gene therapy space, though that’s a bit farther behind. CANbridge is researching three gene therapies in Fabry disease, Pompe disease and an as yet undisclosed indication, all of which remain in the preclinical phase.
The IPO comes as US biotech activity grinds to a near halt following a pandemic boom that saw tens of billions of dollars funneled to the industry. While the total figure raised throughout 2021 remains around $15 billion and reached $16.5 billion last year, more and more companies have priced at the low ends of their ranges, ostensibly leading to more hesitancy to go to Nasdaq.
Over the weekend, Evercore analyst Josh Schimmer put out a note detailing the slowdown, detailing how mean and median performance for 2021’s IPO class have both been negative, down 20% and 29% respectively. That contrasts with each of the last 10 years of IPOs, where mean performance is positive and median is negative.
Rather than fund IPOs, investors have taken to early-stage financings as their new preferred choice, with Schimmer writing the shift “has presumably been driven by a combination of low interest rates, exciting new emerging technologies, and challenges with commercialization which makes later stage companies less attractive for new capital.”
Part of the commercial challenge has to do with the huge number of biotechs working in oncology — Schimmer notes nearly half of all private and IPO biotechs focus on this area.
Going forward, Schimmer says the industry may see more M&A action next month, as after most “tough biotech years” there is historically strong merger appetite in January. It’s remains to be seen if that will play out, but Schimmer’s analysis came at somewhat of a fortuitous moment, with Pfizer announcing early Monday it would acquire Arena Pharmaceuticals in a $6.7 billion deal.