4:02 PM
Dec 05, 2018
 |  BC Extra  |  Financial News

Grail declines comment on change in IPO plans

Grail Inc. (Menlo Park, Calif.) declined to comment on a Bloomberg report that said the company is potentially backing away from plans to list on the Hong Kong stock exchange in favor of a U.S. listing as early as 2019.

“Grail is definitely a company that has a choice. They have a big presence in both regions, so both places as a venue would be appropriate,” said Loncar Fund’s Brad Loncar, who is not a Grail shareholder.

In February, Bloomberg reported the company had planned to raise up to $500 million in an IPO in Hong Kong. Both reports cited unidentified sources.

Grail, which is developing blood-based tests for early cancer detection, has raised $1.3 billion in venture capital, including a $300 million series C round in May from Chinese investors (see "Grail's Asia Incentives").

Last year, Grail merged with Hong Kong cancer diagnostics developer Cirina Ltd., which operates as a subsidiary of Grail with a focus on Asia.

Loncar suspects the mixed trading performance of the first biotechs on the Hong Kong stock exchange is leading the company to reconsider a U.S. listing. "Feedback from potential shareholders is probably what's causing them to look back at the U.S. right now. If the first Hong Kong IPOs had gone terrific and all were trading above the offering price, then I'm sure they wouldn't even be thinking about it."

Antiviral company Ascletis Pharma Inc. (HKSE:1672), diabetes play Hua Medicine Ltd. (HKSE:2552) and biologics company Innovent Biologics Inc. (HKSE:1801) were among the first innovative biotechs to list under Hong Kong's new prerevenue chapter. As of Wednesday, Ascletis is trading nearly 50% below its list price; Hua is trading about 2% below its list price; and Innovent Biologics Inc. (HKSE:1801) is 62% above its list price.

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