HONG KONG & BEIJING – Chinese biosimilar maker Shanghai Henlius Biotech Inc. is ready to list on the Hong Kong Stock Exchange (HKEX) on its second try. The firm plans to issue 64.7 million shares globally under the stock code 2696. The maximum offer price is HK$57.8 per share, which means the biosimilar maker could raise as much as HK$3.74 billion (US$477 million).
Henlius first filed for a HKEX listing in December, but the application lapsed after six months. The firm resubmitted the application and updated its post-hearing document on Tuesday.
This IPO is backed by five investors, including China International Capital Corp. Ltd., Bank of America Merrill Lynch, CMB International, Fosun Hani and Citi.
"Hong Kong has always been a good destination for Chinese companies looking to raise funds," said Qiyu Chen, chairman and nonexecutive director of Henlius, at the company's press conference in Hong Kong on Wednesday.
Founded in 2009, Henlius is a joint venture formed by Shanghai Fosun Pharmaceutical (Group) Co. Ltd. and Henlius Biopharmaceuticals Co. Ltd. After going public in Hong Kong, Henlius will be an indirect non-wholly owned subsidiary of Fosun.
Henlius applied to list on the HKEX as a pre-revenue biotech player. It recorded a loss of ¥504 million (US$71 million) in 2018 and ¥384 million in 2017.
During Henlius' eight-month HKEX listing journey, it has moved from the clinical stage and is expecting more marketing approvals for its core assets.
"We are working on 10 biosimilars, 20 novel biologics and four combination therapies, and there will be a number of product launches in the next three years," said Scott Shi-Kau Liu, CEO, president and executive director of Henlius, at the press conference.
In February, its HLX-01, a biosimilar referencing Roche Holding AG's Mabthera (rituximab) to treat non-Hodgkin lymphoma, obtained marketing clearance from Chinese regulators. It is marketed as Hanlikang in the country. (See BioWorld, Feb. 27, 2019.)
"It was the fruit of the entire team's 600,000 hours of painstaking effort in which we all take tremendous pride," Liu wrote in an open letter in the updated application.
The first prescription for HLX-01 was issued in May, and Henlius commenced commercial sales of the drug in the same month. Clinical work on HLX-01 continues, as a phase III trial in rheumatoid arthritis is ongoing in China.
Meanwhile, its second core asset, HLX-02, a trastuzumab biosimilar, is under priority review by Chinese regulators for treating HER2-positive early stage breast cancer, metastatic breast cancer and metastatic gastric cancer. It is also under regulatory review by the EMA, through business partner Accord Healthcare Ltd. The MAA was accepted in June.
Liu said HLX-02 is the "first biosimilar developed in China to seek commercialization approval in the European Union." It is also the first biosimilar developed in China to enter global phase III trials in China, Poland, Ukraine and the Philippines.
Another asset under priority review in China is HLX-03, an adalimumab biosimilar for plaque psoriasis, rheumatoid arthritis and ankylosing spondylitis. The NDA was accepted in China in January.
A China NDA submission for HLX-04, a bevacizumab biosimilar, to treat metastatic colorectal cancer and nonsquamous non-small-cell lung cancer, is also scheduled.
According to Wenjie Zhang, Henlius' senior vice president, chief commercial operation officer and chief strategy officer, the company will submit the NDA for HLX-04 by mid-2020. The drug candidate is currently undergoing phase III trials.
Plans for the IPO proceeds
The three near-commercial-stage biosimilar candidates, together with the marketed HLX-01, are expected to bring in ¥16.7 billion for the drugmaker in China next year, according to market researcher Frost & Sullivan.
But before Henlius declares revenue, it plans to use 90% of the proceeds from the IPO to speed up commercialization of HLX-02 and advance the clinical study of HLX-04 and other drug candidates.
Furthermore, Henlius has another six monoclonal antibody candidates in phase I/II studies, including HLX-06 (a novel VEGFR2 inhibitor), HLX-07 (an EGFR inhibitor), HLX-10 (a novel PD-1 inhibitor), HLX-12 (a VEGFR2 inhibitor), HLX-20 (a novel PD-L1 inhibitor) and HLX-22 (a novel HER2 inhibitor).
Two immuno-oncology combination therapies are also undergoing phase III trials.
"The objective response rate of PD-1 antibody is normally around 20% but it works on more types of cancers, so to raise the response rate, combination therapy with [a] PD-1 antibody as a backbone is definitely an area pharma companies would want to explore," said Liu on Wednesday. "There are more than 1,000 ongoing clinical trials for combination therapies worldwide. Henlius is definitely a front-runner in this field."
To date, nine pre-revenue biotech companies have been listed on the HKEX since April 2018.
Seven are pending approval, including Immunotech Biopharm Ltd., Venus Medtech (Hangzhou) Inc., Alphamab Oncology, Sinomab Bioscience Ltd., Tasly Biopharmaceuticals Co. Ltd., Tot Biopharm International Co. Ltd. and Ascentage Pharma Group International.