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‘Hua Medicine is preparing a USD 400mn float’
Posted on Friday, 09 March 2018 11:45
Chinese drug developer Hua Medicine could be the latest biotechnology firm to explore a Hong Kong listing in recent weeks as the city formulates new rules to bring in such businesses, according to recent media reports.

People familiar with the matter told Reuters that the Shanghai-based company plans to raise USD 400.00 million in an initial public offering (IPO) with plans of going public in the second half of 2018.

Hua Medicine, which focuses on diabetes treatments, is said to be working with Goldman Sachs and Citi Securities’ CLSA platform on the deal.

Bloomberg also commented on the potential flotation, citing sources in the know as saying the group has picked Hong Kong over a US bourse amid the shift by the Asian financial hub to attract biotech listings.

However, the news provider set the price range at around USD 300.00 million.

The articles follow an earlier Reuters report suggesting the Hong Kong dollar has fallen to a 33-year-low after the city’s de facto central bank said it would not intervene until the currency touches the floor of its trading band.

It hit HKD 7.84 per US dollar, its weakest since 1984, according to the news provider.

While New York is the typical stock exchange favoured by companies in the biotech industry, Hong Kong is looking to bring in a new listing regime, expected to be in place in the coming months, a source with knowledge of the deliberations told Reuters.

At the start of the week, the news provider cited other sources as saying Tasly Pharmaceutical is considering a stock market listing in Asia for its biotechnology business in a deal that could raise around USD 1.00 billion.

Others considering Hong Kong for an IPO include Shanghai Henlius Biotec and US-based cancer detection start-up Grail.

Hua Medicine’s likely valuation and size of the stake sold are yet to be determined, the sources told Reuters and Bloomberg.

The group is in the process of running late-stage clinical trials for its oral drug used for the treatment of type 2 diabetes, with approval expected by 2019.

In January, Hua Medicine announced it was seeking funding for a USD 200.00 million diabetes drug development plan.

The company raised USD 50.00 million in April 2016 from investors including Arch Venture Partners, Ally Bridge Group and Frontline BioVentures.

© Zephus Ltd