A Hot Time for a Hong Kong IPO: InnoCare Raises $288 Million

The Chinese cancer drug developer is taking advantage of the relaxed listing rules of the HKEX - and of eased fears of coronavirus in China.

Anna Vodopyanova
    Mar 17, 2020 12:50 PM  PT
A Hot Time for a Hong Kong IPO:  InnoCare Raises $288 Million
author: Anna Vodopyanova   

InnoCare Pharma Ltd. (HKEX: 9969), a Chinese cancer drug developer, is set to float its shares worth $288 million on the Stock Exchange of Hong Kong next week.

A clinical stage biopharmaceutical company, InnoCare currently has nine drug candidates, which are undergoing registrational, Phase 1 or 2, and IND-enabling stages, according to the company's prospectus. InnoCare said it is also building a factory in Guangzhou for "commercial scale production with an annual production capacity of one billion pills," expected to complete by the year-end.

The company reported revenues of  839,000 yuan in the nine months through September (unaudited) and losses of 653 million yuan.

InnoCare said it intends to use half of the proceeds from the offering in Hong Kong for advancing the clinical trials and commercialization of orelabrutinib for treatment of B-cell malignancies and autoimmune diseases in both China and the U.S. The rest will be used for other clinical and IND stage candidates, as well as to fund the R&D of the six IND-enabling stage candidates in InnoCare's pipeline and the R&D, and in-licensing of new drug candidates, according to the prospectus.

The deal was secured by big-name banks. They were Morgan Stanley Asia Ltd., Morgan Stanley & Co. International plc, Goldman Sachs (Asia) L.L.C., UBS AG Hong Kong Branch, China Merchants Securities (HK) Co. Ltd., CMB International Capital Ltd., and SPDB International Capital Ltd.

Shares in InnoCare are expected to float on Monday, March 23, under "9969." Cornerstone investors have subscribed to acquire up to $164 million in the deal.

The company has priced its shares at the top end of the expected range of HK$8.18 to HK$8.95 per share.

The listing will be the city's biggest since January, Reuters reported, when restaurant chain operator Jiumaojiu International Holdings (HKEX: 9922), raised $326 million.

The timing  of the offering may be just right, after cases of the coronavirus have eased in the region – unlike in the West.

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