Qiming, Hillhouse-backed Biotech Firm Jacobio Raises $174m In HK IPO

Jacobio Pharmaceuticals Group, a Chinese clinical-stage pharmaceutical firm focusing on oncology therapies, has raised about HK$1.35 billion ($174.1 million) in an initial public offering (IPO) on the main board of the Stock Exchange of Hong Kong on Monday.

Beijing-based Jacobio sold nearly 96.5 million shares at a price of HK$14.0 ($1.8) apiece, the higher end of its proposed price range of HK$12.0 to HK$14.0. Its shares opened at about HK$16.0 ($2.1), up 14.1 per cent from the offering price, with a market capitalisation of HK$12.1 billion ($1.6 billion).

Jacobio, which counts Qiming Venture Partners and Hillhouse Capital among its backers, has joined a record wave of fundraising in the biotech sector to ride on a surge in investors’ appetite amid the coronavirus pandemic.

The Hong Kong IPO market is estimated to wrap up this year with 17 biotech listings, raising a combined HK$61 billion ($7.9 billion) – an increase of almost 64.9 per cent from HK$37 billion in 2019, according to estimates by KPMG China.

The retail tranche of Jacobio’s IPO was oversubscribed by approximately 298.6 times, while the oversubscription rate of its international portion stood at 9.9 times. If it exercises an over-allotment option, the firm can list another 14.5 million shares to raise an additional HK$203 million ($26.2 million).

Founded in July 2015, Jacobio operates as a clinical-stage pharmaceutical firm that focuses on the in-house discovery and development of first-in-class novel oncology therapies. With R&D centres in Beijing and Boston, the firm’s lead drug development programs include two allosteric SHP2 inhibitors, JAB-3068 and JAB-3312, which have entered the clinical-stage in China and the US.

The Chinese loss-making biotech firm went public in Hong Kong under the Chapter 18A, which was introduced by the local authorities in April 2018 to allow the IPO of pre-revenue biotech companies in an effort to attract high-growth, innovative businesses.

As it has yet to generate any revenue, Jacobio posted widened losses of 155.9 million yuan ($23.8 million), 425.8 million yuan ($65.0 million), and 810.9 million yuan ($123.7 million) in 2018, 2019 and the six-month period ended June 30, 2020, respectively, according to its prospectus.

Chinese venture capital major Qiming retains as Jacobio’s largest third-party institutional investor after the IPO offering, although its stake in the firm reduced from 12.3 per cent to about 10.8 per cent.

In an announcement to celebrate Jacobio’s IPO, Qiming said that it had first invested in the firm’s Series A round in 2017 and continued to participate in its Series $55-million C round in 2018 and Series C+ round in 2020. The listing marks the 12th IPO among Qiming’s portfolio companies this year.

After the IPO, China-based biomedical VC Lilly Asia Ventures (LAV) and Asia-focused private equity firm Hillhouse Capital hold a 7.9 per cent and a 7.5 per cent stake in Jacobio, respectively.

Shares of Jacobio are listed under the ticker “1167.” Goldman Sachs and China International Capital Corporation (CICC) served as the joint bookrunners of the IPO offering.