10:43 AM
 | 
Sep 13, 2018
 |  BC Extra  |  Financial News

Hua raises $110M in Hong Kong IPO

Diabetes company Hua Medicine Ltd. (HKSE:2552) raised HK$867 million ($110.5 million) in an IPO through the sale of 104.8 million shares at HK$8.28. EVP and CFO George Lin said the offering, which priced at the low end of its HK$8.28-HK$9.28 range, values the company at HK$8.7 billion ($1.1 billion).

Underwriters are Goldman Sachs, CLSA, UBS and Guotai Junan International. The company expects to begin trading Friday.

The offering includes 5.2 million shares sold to Hong Kong investors and 99.5 million shares sold to the international community. In a regulatory filing, Hua said the Hong Kong portion of the offering was undersubscribed and the company subsequently reallocated about half of the original 10.5 million shares it allocated for Hong Kong investors to the international offering.

Hua filed for its IPO in June. The company is the second biotech to go public and the first prerevenue company to list in Hong Kong since the Hong Kong Exchanges and Clearing Ltd. (HKEX) created a new prerevenue chapter (see "Hong Kong's New Chapter").

Following the IPO, ABG II-Hua Ltd. will hold a 3.7% stake in Hua, GIC Private Ltd. a 3.1% stake, BlackRock Asset Management North Asia Ltd. a 1.8% stake and Raymond James & Associate a 2.6% stake. GIC is the sovereign wealth fund of Singapore.

According to the filing, Hua has earmarked about 75% of the offering to develop and commercialize lead candidate dorzagliatin (HMS5552), which is in Phase III testing in China as monotherapy and in combination with metformin, to treat Type II diabetes.

Hua expects data in 2H19 and hopes to submit an NDA for the glucokinase (GCK; GK) activator to China's National Medical Products Administration (NMPA) in 2020.

Hua has exclusive, worldwide rights to the dorzagliatin from Roche (SIX:ROG; OTCQX:RHHBY) under a 2012 deal.

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