(CapitalWatch, Nov. 1, New York) LianBio (Nasdaq: LIAN) raised $325 million in a momentous China-U.S. initial public offering in New York on Monday and watched its stock tumble 13% intraday.
The clinical-stage biopharma company operating in both China and the United States sold 20.3 million American depositary shares at $16 apiece, the midpoint of the expected range. That gave LianBio a nearly $1.7 billion value.
The IPO, underwritten by Goldman Sachs & Co. LLC, Jefferies LLC, BofA Securities Inc. and Raymond James, was expected to take place last Thursday but was moved to today. The floatation marked the end of a four-month freeze on Chinese listings in New York since Beijing said it is reviewing its regulations on overseas fundraisings.
LianBio's drop below issuance level shows hesitation among U.S. investors on Chinese stocks. The vast majority of Chinese U.S.-listed companies lost billions of dollars in the market this year amid Beijing's regulatory crackdown. This included investor favorites "too-big-to-fail" giants like Alibaba Group (NYSE: BABA; HKEX: 9988), Pinduoduo Inc. (Nasdaq: PDD), Didi Global (NYSE: DIDI), and New Oriental Education & Technology Group Inc. (NYSE: EDU; HKEX: 9901), to name a few.
Indeed, it seems Beijing pursued the nation's leading independent innovators in a cross-industry clampdown. However, biotech firms have escaped the fate, being in one China's focus development sectors. Some of the strongest Chinese stocks this year have been in the biopharma segment. Among them were I-Mab (Nasdaq: IMAB), Beigene Ltd. (Nasdaq: BGNE; HKEX: 6160), and Legend Biotech (Nasdaq: LEGN). Although, there is a number of losing biopharma stocks as well.
For LianBio, the firm has yet to prove its standing. Headquartered in Princeton, New Jersey, LianBio conducts the majority of its operations in China. With nine product candidates in its pipeline and three near Phase 3 trial stage, the company focuses on in-licensing assets to Greater China and other Asian markets. The firm counts Pfizer (NYSE: PFE) and BlackRock (NYSE: BLK) among its backers, and lists some major names in the industry as it partners.
Still in the clinical stage, LianBio has yet to turn up revenue. According to its prospectus, losses were $139.6 million in 2020 and $162 million in the first half of 2021. LianBio has a pipeline of nine product candidates in five therapeutic areas including oncology.