China, IPOs

Right on the heels of $150M raise, Ascentage files the latest in a rush of HKEX biotech IPOs — but is the market too jittery?

When I spoke to Ascentage CEO Dajun Yang last month about their $150 million raise, he dodged my question about the prospects for an IPO. As it turned out, we didn’t have to wait long for the answer.

The fast-growing biotech posted their application on the Hong Kong stock exchange Monday, marking the 10th biopharma company to line up their IPO pitch — all debuts except for BeiGene — since the city opened up to pre-revenue biotechs in April.

Dajun Yang

At 8 years old, Ascentage is a well-known name in the Chinese biotech circle that, in the lead-up to HKEX’s official rule change, stoked the enthusiasm by putting word out that they are dropping original plans to list on the Nasdaq in favor of the Hong Kong public markets.

As is familiar practice by now, Ascentage heavily redacted the filing and did not give away the exact amount they are looking to raise. But we do know that whatever money they collect will fund their first potential marketed product: While HQP1351 is still very early in Phase II/III trials for chronic myeloid leukemia, the company singled it out as the only asset with money allocated for commercialization.

The rest of Ascentage pipeline, chiefly built on their work on a form of programmed cell death known as apoptosis, is also getting some love.

One of them is a c-Met receptor tyrosine kinase inhibitor licensed from Merck that — as we now know from the filing — Ascentage paid $500,000 upfront for. The milestones for a first indication would cost up to $8 million.

Another is APG1252, the subject of a licensing deal where anti-aging upstart Unity Biotechnology paid for rights to develop the Bcl-2/Bcl-XL inhibitor for non-oncology uses. Ascentage stands to earn $38 million in stock and cash in this pact.

If that sounds like a lot of programs to keep track of, it is. Yang told me that their $150 million Series C will allow the team to push six programs into Phase II multicenter trials by the end of the year.

To keep up with the pace — with work taking place in China, the US and Australia — Ascentage plans to build the team up to 300 in the coming six months, and reach 400 by the end of next year. Then there are the R&D center and manufacturing facility it’s planning to construct in its China base of Suzhou, which are expected to be completed by 2019 and 2020, respectively. The IPO will foot some of those bills, too.

Have the shaky performances of BeiGene and Ascletis, the first biotechs to test the waters at HKEX (and, to be sure, reaped huge amounts), affected his expectations for Ascentage’s float? I asked Yang for some thoughts and will update the story when I hear back.


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