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Biotech Startup Innovent Files for Hong Kong Debut

The Hong Kong stock exchange in April allowed pre-profit biotech firms to list. Photo: VCG
The Hong Kong stock exchange in April allowed pre-profit biotech firms to list. Photo: VCG

Innovent Biologics, a Chinese biomedical developer backed by Singapore’s Temasek Holdings, filed for an initial public offering (IPO) in Hong Kong after the bourse opened the door for pre-profit biotech startups to list.

Innovent didn’t disclose the size of the planned IPO in its prospectus submitted to the Hong Kong stock exchange last week. Reuters reported earlier that the company is looking to raise between $300 million and $500 million. Innovent said funds raised from the IPO will be used to accelerate its clinical trial work and commercialization of drugs.

Innovent is the third China-based pre-profit biotech company to apply for listing in Hong Kong under a regime revised in April to allow early-stage biotech issuers. Hepatitis C drugmaker Ascletis Pharma Inc. and diabetes drug developer Hua Medicine filed for Hong Kong listings in May and are waiting for regulatory reviews.

Founded in 2011, Innovent is a developer of biologically based anti-cancer drugs known as PD-1 inhibitors. Shorthand for “programmed cell death protein 1,” PD-1 is an immunotherapy that uses the patient’s own immune system to destroy cancer cells.

Innovent has built a portfolio of 17 potential products for treating cancer, autoimmune disorders and other diseases, seven of which are in clinical development. The company has also partnered with U.S. pharmaceutical giant Eli Lilly in developing cancer treatments, according to Innovent’s website.

Innovent reported combined losses of 1.49 billion yuan ($225.0 million) during its seven years in business, according to the prospectus. In 2016 and 2017, the company’s research spending totaled 997 million yuan. In 2017, Innovent booked 18.5 million yuan of revenue from services and licensing. The company has received 85.2 million yuan in subsidies from the Chinese government over the past two years.

Innovent initially submitted an application for approval of one of its injectable PD-1 inhibitor drugs to China’s regulator at the end of last year, as it raced to become the country’s first domestic producer to win approval for a drug from that class. But in February it withdrew the application and resubmitted it in April.

Innovent said in the prospectus that the withdrawal was to supplement clinical trial data for the new medicine in accordance with revised rules published in February.

Innovent has raised almost $490 million through five rounds of equity funding since its inception seven years ago. Major backers include Temasek, Fidelity, Hillhouse and Legend Capital.

In April, Innovent closed the latest $150 million fundraising from investors that included Capital Group Private Markets, Cormorant Asset Management, Rock Springs Capital and Ally Bridge Group. The funding round gave Innovent a valuation of more than $1 billion.

A number of biotech firms are considering Hong Kong listings under the new rules that are friendlier to biotech startups. In April, the Hong Kong overrode previous rules requiring that companies post three consecutive years of profitability before listing on the former British colony’s main board.

Contact reporter Han Wei (weihan@caixin.com)

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