Amgen-backed BeiGene Sends Stock Soaring on $2 Billion Fundraising

The stock in the Chinese biopharma giant rose 12% early Monday.
Belinda ZhouJul 14,2020,06:55

Shares in BeiGene, Ltd. (NASDAQ: BGNE; HKEX: 06160) rose 13% on Monday morning on its announcement that announcement of an approximately $2 billion direct offering.

The Beijing-based biotechnology giant said in a statement on Sunday that it will issue approximately 145.8 million ordinary shares at a purchase price of $14.2308 per share, or $185 per American depositary share.

Under the deal with certain existing investors, these shares will be sold at a 5.6% discount to Friday's close of $196.03 per ADS on the Nasdaq.

The net proceeds, after estimated offering expenses like $0.3 million registration fee, reached $2.07 billion, which was planned to be used for working capital and other general corporate purposes. 

California-based biotechnology firm Amgen (NASDAQ: AMGN) announced an additional investment of approximately $421 million in BeiGene's registered direct offering. Amgen is the shareholder of BeiGene with an ownership of 20.3%.

“This additional investment reflects Amgen's confidence in the progress the companies are making in their ongoing oncology collaboration in China, the world's second-largest pharmaceutical market,” Amgen said in the statement.

Securing the deal is Credit Suisse as the corporate finance advisor and Goodwin Procter LLP as the legal counsel.

The offering deal is expected to close on or about July 15.

BeiGene works on molecularly-targeted and immuno-oncology drugs for the treatment of cancer. The company spent nearly doubled expenses of $304.30 million on research and development in the three months ended March compared to $178.35 million in the same period last year, according to its earnings report.

The company reported first-quarter revenues of $52.06 million, down 33% from the corresponding period in the previous year and doubled its net loss to $365 million in the three months through March from $168 million in the first quarter last year.

China's pharmaceutical market is estimated to reach $161.8 billion by 2023, taking 30% of the global market after the U.S., according to Fu Xudong, senior vice-president of global pharmaceutical giant Bristol-Myers Squibb, in December 2019.

Shares in BeiGene closed at HK$121.6 per share in Hong Kong, up 2% on Monday. In New York, shares of BeiGene have gained over 30% since 2020, and were trading at $221.77 per share Monday morning, up 12%.

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