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Chi-Med goes for third IPO in Hong Kong

New listing follows first product launch

Hutchison China MediTech, known as Chi-Med, has filed for an initial public offering in Hong Kong which according to some reports could to raise up to $500m.

It will be the third public listing for the biotech after earlier IPOs on the Nasdaq and London Stock Exchange, and the proceeds will be used to accelerate its late-stage pipeline of cancer drugs through registration trials and regulatory submissions, according an HKEX filing.

Chi-Med achieved a major milestone for itself and China’s fast-developing pharma sector when it launched cancer drug Elunate (fruquintinib) as a colorectal cancer treatment. It was the second VEGF inhibitor to reach the Chinese market, after Bayer’s Stivarga, and Chi-Med is partnering with Eli Lilly to commercialise the drug across China whilst also developing it for the US market.

Elunate could be eclipsed however by Chi-Med’s other late-stage candidates, especially potential first-in-class MET inhibitor savolitinib that is partnered with AstraZeneca and is being tested in combination with the latter’s EGFR inhibitor Tagrisso (osimertinib) and PD-L1 checkpoint inhibitor Imfinzi (durvalumab) in a series of proof-of-concept trials in solid tumours.

Following after is surufatinib, an inhibitor of VEGF, FGFR and CSF-1R that is the first oncology candidate that Chi-Med has taken through proof-of-concept on its own. It is in a clutch of trials as a monotherapy in neuroendocrine tumours and biliary tract cancer, as well as in combination with Shanghai Junshi Biosciences’ PD-1 checkpoint inhibitor Tuoyi (toripalimab) in solid tumours.

It’s an ambitious late-stage programme that will need plenty of cash to bring to fruition, particularly on the global stage. The Hong Kong IPO – tipped to make between $400m and $500m according to Reuters although some estimates come in much lower at around $300m – comes on top of the $100m Chi-Med raised via the Nasdaq in 2016.

Chi-Med is 60.2% owned by conglomerate CK Hutchison, which will see its stake reduce to below 50% when the IPO goes through.

The company is the latest of a series of Chinese biotechs to opt for a HKEX listing, after new regulations introduced last year allowed companies without revenues or profits to list on the exchange.

Last August, BeiGene raised a whopping $903m in its HKEX debut, near the top of its target range, to help it fund its own portfolio of cancer drugs headed by PD-1 inhibitor tislelizumab for relapsed/refractory classical Hodgkin’s lymphoma.

“The current pace of development of the biotech ecosystem in China is remarkable,” said Simon To, Chi-Med’s chairman. “It is being fuelled by the major unmet medical needs in China, systemic regulatory reforms that are accelerating new drug innovation and deepening market access.”

“We expect the listing to enhance liquidity for our shareholders and strengthen our access to capital with a view to ensuring that we can fully realise the considerable potential of our drug portfolio and continue to strive to become a global biopharmaceutical company,” he added.

Article by
Phil Taylor

16th April 2019

From: Marketing

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