business

Diabetes Drug Developer Hua Picks Hong Kong for IPO

Hua Medicine Ltd., a Shanghai-based developer of diabetes drugs, has picked Hong Kong over the U.S. for its initial public offering as the Asian financial hub makes a push for biotech listings, people with knowledge of the matter said.

The biotech drug developer is working with advisers Goldman Sachs Group Inc., CLSA Ltd. and UBS Group AG on a planned offering in the city this year, the people said. The offering could raise as much as $300 million, said one of the people, who asked not to be identified because the details are private.

The Hong Kong exchange has started to attract biotech firms after proposing new rules intended to make it easier for startups from the sector to list. The biotech unit of China’s Tasly Pharmaceutical Group Co. is planning an offering in the city, the people said. Grail Inc., a cancer screening company backed by the world’s two richest men, is also aiming to price a Hong Kong IPO, people familiar with the matter said earlier.

Representatives for Hua Medicine, CLSA and Tasly didn’t immediately respond to requests for comment. Representatives for Goldman Sachs and UBS declined to comment. IFR reported Hua Medicine’s IPO plans earlier Friday, citing unidentified people.

Hong Kong is close to formalizing rules that would allow biotech startups to list even before they turn a profit. The city has attracted $1.1 billion of first-time share sales from the industry over the past three years, while U.S. exchanges have hosted $6.9 billion of deals, data compiled by Bloomberg show.

Hua Medicine, led by Chen Li, the former chief scientist for China at Roche Holding AG, is running late-stage clinical trials for its oral drug used for the treatment of type 2 diabetes, the obesity-linked form that accounts for a majority of cases around the world. The company’s investors include Silicon Valley firms Arch Venture Partners and Venrock, as well as the Eight Roads fund, which is backed by Fidelity Investments.

— With assistance by Hui Li

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