SinoMab's $223m IPO extends HK biotech craze

SinoMab pushes forward with what could be the fourth-largest biotech listing in Hong Kong this year as investors' appetite for the sector picks up.

SinoMab BioScience is set to become the tenth biotech listing in Hong Kong so far this year as it looks to raise HK$1.75 billion ($223 million) from an initial public offering.

The Hong Kong-headquartered firm seeks to sell 182 million shares priced between HK$7.6 and HK$9.6 according to the deal prospectus, with a roadshow underway.

Around $60 million worth of shares have been set aside for cornerstone investors, Yunnan Baiyao Group and Reach Software.

The pharmaceutical firm is the latest in a series of IPOs to launch this month, bringing the total value of Hong Kong IPO shares traded this quarter to $8.15 billion according to Bloomberg data. 

Despite ongoing protests triggered by a now-revoked extradition bill, Hong Kong has reclaimed the title of top IPO market from Nasdaq and the New York Stock Exchange, which raised $7.17 billion and $3 billion respectively since September 1.

Budweiser APAC's $5 billion initial public offering in September accounts for the bulk of total funds raised on the Hong Kong market this quarter, alongside warehouse operator ESR's $1.6 billion deal.

SinoMab's upcoming flotation also extends a string of listings in the biotech sector. It is set to come on the heels of bigger biotech companies like Cstone, Hansoh Pharma and Jinxin Fertility.

The firm derives its name and products from monoclonal antibodies (mAb), a form of immunotherapy that stimulates a patient’s immune system to attack diseased cells.

SinoMab’s flagship product SM03 is in the final phase of Chinese clinical trials as a rheumatoid arthritis treatment with plans to complete patient enrollment by the new year according to the prospectus. Another drug, SN1011, is now in the first phase of trials in Australia.

Currently unprofitable, the company posted $1.2 million in profits last year, more than double that of 2017 while R&D costs have grown from $4.6 million in 2017 to $6.7 million in 2018.

Half of the IPO proceeds will go to R&D and bringing SM03 to market, while another 40% has been earmarked for expansion of production facilities in Suzhou which will increase output fivefold.

An expected pricing date has been set for next Tuesday with the final listing planned a week later, according to the IPO term sheet.

Joint sponsors of the IPO are investment bank CICC and securities brokerage DFZQ.

¬ Haymarket Media Limited. All rights reserved.
Share our publication on social media
Share our publication on social media