DEAL: Ascletis Pharma’s HKEx IPO

Author: Karry Lai | Published: 29 Aug 2018

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.