Biotechnology in Focus: European pharmaceutical companies interested in coming to Hong Kong, HKND.YB1 and other future forces

As a veritable “sunrise industry”, biotechnology and healthcare companies are increasingly becoming the darlings of the capital market.

With the implementation of the new listing rules in 2018, the HKEx has opened its doors to unprofitable biotechnology companies, making Hong Kong one of the world’s leading biotechnology financing hubs, attracting biotechnology and healthcare companies from all over the world, especially from Mainland China, creating a global boom in biotechnology IPOs.

Moreover, in addition to Asian market biotech companies led by Mainland companies, more and more European pharmaceutical companies are also becoming interested in listing in Hong Kong.

HKEx CEO: more and more European pharmaceutical companies are interested in listing in Hong Kong

The inaugural Asia Healthcare Summit, co-organised by the HKSAR Government and the Hong Kong Trade Development Council (HKTDC), was held yesterday (24 November) in a hybrid format at the Hong Kong Convention and Exhibition Centre and online simultaneously. At a press conference held earlier, the Hong Kong Trade Development Council (HKTDC) said it expected the forum to promote further investment and cooperation among Hong Kong, the Mainland and the global biotechnology and healthcare industries.

The forum’s theme is “Building a sustainable future through resilience and change” and will focus on several forward-looking topics. Over 70 speakers worldwide, including officials, medical experts, business and investment leaders, will share the latest developments in public health, medical technology, international business cooperation and investment, and discuss business opportunities and cooperation in the healthcare industry in Asia.

Speaking at the inaugural Asia Healthcare Summit yesterday, HKEx Chief Executive Officer Mr Ou Guan — shang said the HKEx had initially attracted listings of biopharmaceutical companies mainly from the mainland but had recently received an increase number of enquiries from European and other foreign companies about listing in Hong Kong.

After the new HKEx listing rules in 2018, HKEx allowed unprofitable biotech companies to list in Hong Kong. O’Connell said that since the listing reform, more and more biotech companies are interested in listing in Hong Kong. 79 healthcare companies have already been listed in Hong Kong, raising more than $200 billion, and the market capitalisation of healthcare-related listed companies exceeds $600 billion. 55 other such companies are currently applying for listing in Hong Kong, showing the industry’s rapid growth.

He continued that with an ageing population and increasing demand for medical products, the HKEx’s job is to focus on developing all the channels that can link capital and opportunities, and Hong Kong, as the most international city in China, believes that the HKEx will play an even more crucial role in the future. The biomedical industry is growing rapidly and is huge, and many of the listed biomedical companies are unprofitable. The financial sector provides access to finance, creates jobs and solves public health crises for this industry, and is an example of the financial sector’s contribution to the real economy.

While the healthcare industry has continued to thrive in recent years, the market faces many challenges. The impact of the new epidemic has made the world realise the need to work together to promote technological innovation in global healthcare in order to achieve a resilient and sustainable future,” said Mr Raymond Fong, President of HKTDC. At the same time, Asia’s changing demographics have created a growing demand for healthcare technologies and solutions, creating huge investment opportunities for the healthcare industry.

Hong Kong stocks have welcomed 17 18 A-listed companies during the year, with total IPO capital raised of over $35 billion.

Indeed, in the post-epidemic era, the development of all industries worldwide is always full of pressure and challenges, but the biopharmaceutical sector is a prominent representative of both risk and opportunity. With its longer innovation cycle and greater scope for innovation, the biopharmaceutical industry has become a natural target for global capital, supported by the huge market demand for healthcare services.

In recent years, with the HKEx allowing unprofitable biotechnology companies to list in Hong Kong, the Hong Kong capital market has become a popular financing and listing venue for global biotechnology and pharmaceutical and health companies. The implementation of the new Hong Kong listing rules in 2018 is marking the official opening of a new era of financing and capitalisation for biopharmaceutical companies, which have increasingly become the mainstay of the IPO circuit in the domestic science and technology board, Hong Kong and US capital markets in recent years.

Looking back at the past four years, the team of biotechnology companies listed in Hong Kong through the 18A channel has gradually grown. In recent years, it can be said that companies in the biopharmaceutical industry are increasingly becoming the mainstay supporting the flourishing development of the Hong Kong capital market. Moreover, the Hong Kong stock market is also committed to building a top global capital market in the biotechnology sector by actively introducing biotechnology companies with potential through this listing system reform.

Now that Hong Kong has become the largest biotechnology capital-raising centre in Asia and the second largest globally, more and more companies in the biotechnology industry are looking forward to accessing Hong Kong’s capital market as an international platform to obtain broader financing channels and development opportunities.

According to AWSG Biotech’s Investment Banking Division, the total IPO capital raised by the five biotechnology companies listed on the Main Board of Hong Kong Stock Exchange under Chapter 18A of the new listing rules in 2018 was HK$18.457 billion; The total IPO capital raised by the nine unprofitable biotechnology companies listed in Hong Kong in 2019 was HK$16.064 billion, and the total IPO capital raised by the 14 unprofitable biotechnology companies listed in Hong Kong in 2020 was HK$40.362 billion. The total amount of funds raised by 14 unprofitable biotechnology companies in Hong Kong IPOs in 2019 is HK$40.362 billion.

As of November 12 this year (the latest list of listed companies on the HKEx is only updated to November 12), Hong Kong stocks have welcomed 17 unprofitable biotechnology companies to list on the Main Board, and these 17 IPOs of 18A listed companies have also raised a total of HK$35.199 billion.

Originally scheduled to list on Friday, Baxinan-B postponed: Biotech IPOs pick their time too.

Since the first week of November, three biotech companies (Wicresoft Robotics-B, Clover Biology-B and Eagle Pupil Technology-B) have been listed one after another. The “reserve” team of IPOs in Hong Kong’s 18A channel is still growing, and public information shows that several companies in the biomedical sector have formally filed their forms and are waiting for their meetings. In the last two months of 2021, the biotechnology and healthcare sectors of the Hong Kong IPO market are still full of interest.

However, as the capital market is cyclical, especially in recent times when the Hong Kong stock market is relatively quiet, many biotech companies wishing to put their IPOs on the agenda would like to take a break and wait for the market to pick up before making a push for an IPO. The listing was delayed due to “prevailing market conditions”. The company, which had previously completed its IPO from 16th to 19th of this month. Decided to postpone the listing and refund all subscriptions as planned.

In fact, for biotech companies that rely on the support of the capital markets to fund their long-term growth, going public is a very important route to financing and growth, and therefore the timing of the IPO is quite important — — although biotech IPOs have been in full swing in the last two years, it is necessary to choose the timing according to market conditions The move.

Of course, in addition to the biotechnology as mentioned earlier, companies that have already reached the IPO stage and are gradually moving towards the main stage of the capital market, there are also a large number of emerging biotechnology and new drug creation fields that are expected to take over the baton and move towards the broad capital market in the future. Perhaps the next unicorn in the biotechnology field will come out from these newcomers.

Recently, many biotechnology companies in the relatively early stage of development have also launched financing activities. For example, HKND which has developed the biomolecule drug delivery vehicle YB1, is in the process of raising a Pre-A round of financing to accelerate their respective R&D landing process and is expected to enter the Hong Kong capital market as soon as possible in the future to usher in a new stage of development in a larger arena.

With a focus on two research areas, namely cancer immunotherapy and thrombolytic therapy for antithrombotic diseases, HKND is currently developing lysis bacteriotherapy and thrombolytic bacteriotherapy through its core technology product, YB1, a biomolecular drug delivery vehicle, and has already laid out the corresponding innovative product pipeline.

Overall speaking, the Hong Kong market, as an important bridge connecting the Mainland and international capital, is relatively active and has a lasting appeal to global investors. It is also expected that more emerging reserves will continue to support the face of Hong Kong’s stock market in the future and create more surprises for the global capital market with “role model power”.