Pfizer Alum's China Startup Is Said to Select Banks for IPO

  • Zai Lab picks Citigroup, JPMorgan to arrange U.S. offering
  • Drug developer plans IPO that could raise about $150 million

Zai Lab Ltd., a Chinese drug developer working on cancer treatments, has picked banks to arrange a planned U.S. initial public offering that could raise about $150 million, people with knowledge of the matter said.

The Shanghai-based biopharmaceutical company, started by former Pfizer Inc. senior scientist Samantha Du, is working with Citigroup Inc. and JPMorgan Chase & Co., according to the people. It is targeting a market capitalization of about $1 billion, one of the people said, asking not to be identified because the information is private. Zai Lab plans to start taking investor orders as soon as September, the people said.

China’s pharmaceutical market has been given a boost by entrepreneurs like Du, known as “hai gui” or “sea turtles,” who returned to the country after stints working or studying overseas. Since starting Zai Lab in 2014, Du has attracted investors including Kleiner Perkins Caufield & Byers, Sequoia Capital China and Qiming Ventures.

Details of the Zai Lab offering haven’t been finalized, and it’s possible the timeline could change, the people said. Representatives for Zai Lab and Citigroup declined to comment, while a representative for JPMorgan didn’t immediately respond to a request for comment.

Building Pipeline 

Zai Lab has established its own early-stage drug discovery team focused on immuno-oncology. The company has also licensed experimental medicines from big pharmaceutical companies to populate its immediate pipeline, including a potential treatment for lung cancer from France’s Sanofi and a liver drug candidate from Bristol-Myers Squibb Co.

China is speeding up the regulatory process for new medicines to enter the world’s second-largest pharmaceutical market. The reforms have put many innovative drugs from domestic developers and multinationals on the fast track for approvals, boosting the prospects of startups like Zai Lab.

The company said in June that it raised $30 million in Series C funding, following a $100-million Series B last January from a group of backers including Advantech Capital and OrbiMed Asia.

First-time share sales from Chinese health-care companies have raised $6.2 billion in the past 12 months, data compiled by Bloomberg show. BeiGene Ltd., a Chinese developer of immuno-oncology drugs, has more than tripled since it began trading in the U.S. last year and announced Thursday it plans to raise $125 million in a follow-on share sale. 

BGI Genomics Co., a unit of the world’s biggest DNA-sequencing group, has surged more than sevenfold since its Shenzhen debut last month. Wuxi Biologics Cayman Inc. has risen 53 percent from the offer price in its June IPO, making it the best performer this year among Hong Kong new listings that raised more than $500 million, according to the Bloomberg-compiled data.

— With assistance by Crystal Tse, Hui Li, and Jonathan Browning

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