Amid Hong Kong unrest, Shanghai Henlius Biotech raises $410 million in IPO

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Shanghai Henlius Biotech raised $410 million in its initial public offering (IPO) on the Hong Kong stock exchange on Wednesday, on the bottom of the range listed on its term sheet, Reuters reported.

Why it matters: The Henlius IPO was seen as a test for investor appetite as political unrest in Hong Kong has slowed business activity in the financial hub.    

  • Hong Kong’s last biotech IPO was Hansoh Pharma in June, which raised $1 billion just days before protests rocked the city. 

Details: Henlius, which develops new drugs and replicas of drugs called biosimilars, priced its shares at HK$49.60 (around $6.34) apiece after indicating a range between HK$49.6 and HK$57.8.

  • According to its filing, the firm is selling 12% of the company and is dedicating 40% of the IPO proceeds to clinical development, regulatory filing, and registration of its core products.
  • While Henlius has commercially launched one biosimilar in China, the rest of its more than 20 products are still in clinical development. 
  • Four cornerstone investors, led by the Qatar Investment authority, will take $140 million worth of available shares. 

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Context: The IPO comes just days after the stock exchange in Hong Kong made an unsuccessful $36.6 billion bid to take over the London Stock Exchange. 

  • IPO activity on the Hong Kong exchange has been on the rise recently, with Anheuser-Busch InBev NV yesterday relaunching its attempt to publicly list its Asia business at a $6.6 billion valuation. 
  • Henlius’s $410 million raise makes it the fourth-largest biopharma IPO in 2019 globally.