Ascletis Pharma is the first company to make use of Hong
Kong’s new pre-revenue biotech listing rules. The
HK$3.5 billion ($457 million approximately) initial public
offering (IPO) on the main board of the Hong Kong Stock
Exchange (HKEx) presented regulatory challenges particularly as
the due diligence required was highly technical.
"One of the major reforms for biotech firms is that these
issuers are not required to fulfil any financial eligibility
tests of the main board," said Johnny Chan, chief legal and
compliance officer at China Merchant Securities, one of the
sponsors and underwriters. "While this is a big step forward to
attract emerging businesses, potential risks are also incurred,
such as the use of shell companies."
He believes that it is critical to set out sufficient
safeguards to protect the interests of investors, including
improved disclosure requirements and suitability tests to
refine the de-listing process.