Chinese biotech company BeiGene dives for Shanghai debut

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People walk into a building of the biotechnology company BeiGene Ltd in the Suzhou Industrial Park in Suzhou, Jiangsu province, China on November 22, 2019. REUTERS / Stringer

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BEIJING, Dec. 15 (Reuters) – Chinese biotech firm BeiGene Ltd plunged on its Shanghai debut on Wednesday after raising $ 3.5 billion on the market’s biggest STAR list this year.

BeiGene, which has recorded consecutive years of losses, fell more than 15% early in the session, after opening 8.1% below its offer price of 192.6 yuan.

The offer, a healthcare company’s biggest float in China for at least two decades according to Refinitiv data, comes as growing concerns may be placed on some Chinese companies that they will be ordered to exit the market. American stock market.

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Nasdaq-listed shares of BeiGene have fallen nearly 20% so far this month, as U.S. securities regulators finalized rules to exclude non-compliant Chinese companies from U.S. stock exchanges in three years – a risk that BeiGene reported in its prospectus to sell shares in Shanghai.

“The money was raised at a very high valuation against the Nasdaq and Hong Kong,” said Brad Loncar, whose Loncar Investments manages an ETF for Chinese pharmaceutical companies.

“STAR’s IPOs are generally accompanied by long periods of ownership, which is a sign of confidence in the duration on the part of the institutions which have subscribed to them.”

Hong Kong-traded shares of BeiGene (6160.HK) fell more than 4% on Wednesday, after also falling a fifth this month.

BeiGene’s poor performance in its early days in Shanghai means that its underwriters will likely start buying shares in the secondary market to help stabilize prices under the so-called “greenshoe” option mechanism.

Proceeds from the sale of 22.16 billion yuan ($ 3.5 billion) of BeiGene shares in Shanghai will be used primarily to fund clinical trials for potential treatments and to replenish capital, the company said in its statement. prospectus.

Investors who have subscribed to the sale of shares of BeiGene in Shanghai include the Chinese National Social Security Fund and the Abu Dhabi Investment Authority.

Backed by existing shareholders such as Amgen (AMGN.O) and the HHLR fund linked to Hillhouse, BeiGene is among the most active innovative biotech companies in China whose self-developed products have obtained license agreements from pharmaceutical giants. global.

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Reporting by Ryan Woo, Roxanne Liu and Samuel Shen; Editing by Shri Navaratnam and Stephen Coates

Our Standards: Thomson Reuters Trust Principles.


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