Fosun's $1.5 Billion Biotech Arm Mulls Hong Kong IPO

Updated on
  • Billionaire-backed drug developer may test proposed new rules
  • Henlius Biotech’s offering could raise at least $500 million

Shanghai Henlius Biotech Inc., backed by Fosun Group, is planning an initial public offering that could make it one of the first to take advantage of proposed Hong Kong listing rules aimed at attracting early-stage drug developers, people familiar with the matter said.

The subsidiary of Shanghai Fosun Pharmaceutical (Group) Co. is considering selling shares in Hong Kong as soon as the second half of this year, according to the people. The offering could raise at least $500 million, one of the people said, asking not to be identified because the information is private.

Selling shares could help Henlius Biotech fund more research as it develops treatments for oncology and autoimmune diseases. Henlius Biotech raised $140 million in December from investors including Hong Kong-listed Jacobson Pharma Corp. in a deal valuing the company at more than $1.5 billion. Fosun Pharma, backed by Chinese billionaire Guo Guangchang, owns about 62 percent of Henlius Biotech, according to a statement at the time.

Henlius Biotech, which currently has no marketed products, is pursuing a Hong Kong listing as the city’s stock exchange weighs proposals intended to attract more innovative companies. The bourse said in December it was considering allowing biotech companies to list before they turn a profit, in addition to permitting dual-class share structures often used by technology firms.

Deliberations on a listing of Henlius Biotech are at early stage, and details could change, the people said. The company hasn’t made a final decision on the listing venue and could consider other overseas bourses, one of the people said. A Hong Kong-based external spokesman for Fosun Pharma declined to comment, while Henlius Biotech didn’t immediately respond to an email seeking comment.

Henlius Biotech had previously pursued a listing on a Chinese over-the-counter market known as the Third Board, according to a December 2016 filing.

Priority Review

The Hong Kong exchange aims to finalize the new rules and begin taking applications around June, Chief Executive Officer Charles Li said last month. It plans to add people with biotech expertise to its listing division, Li told reporters Jan. 24.

Henlius Biotech is seeking to repeat the success of other innovative Chinese drugmakers, which have mostly listed in the U.S. Shares of Chinese cancer drug developer BeiGene Ltd. have risen more than fivefold since the company’s February 2016 IPO. Zai Lab Ltd., a Shanghai-based biopharmaceutical company run by a former Pfizer Inc. scientist, has gained 47 percent since its September debut.

Fosun Pharma and Henlius Biopharmaceuticals Co. set up Henlius Biotech in 2009. It has a pipeline of copies of biotechnology drugs, known as biosimilars, in various stages of human trial inside and outside China. The drug developer operates research and development centers in Shanghai, Taipei and California, according to its website.

Henlius Biotech’s first antibody drug was placed under priority review, a fast track to approval, by China’s Food and Drug Administration at the end of January. The drug is a biosimilar version of Rituxan, a cancer therapy developed by Roche Holding AG.

— With assistance by Crystal Tse, and Hui Li

    Before it's here, it's on the Bloomberg Terminal.