|BeiGene CEO John Oyler|
Details on the initial public offering for Beijing-based biotech BeiGene are out with the offer topping the $100 million early estimate and insiders slated to take more than half in an offering that will be closely watched as a sentiment gauge for other China-focused biotech firms into the U.S. market.
A brief outline posted on the Nasdaq website from Renaissance Capital said the oncology-focused company would raise $126.5 million at the mid point of an offer of 5.5 million American Depositary Shares priced from $22 to $24 each.
"Insiders intend to purchase 50% of the offering," the report said. "At the midpoint of the proposed range, BeiGene would command a fully diluted market value of $756 million."
The final pricing details are expected in the first week of February, according to a Renaissance Capital release, just ahead of the Chinese New Year.
A spokeswoman for BeiGene said in an email the company could not offer more details during a quiet period.
It also marks a return of China-based drug companies to markets that witnessed Shanghai-based WuXi PharmaTech leave the New York Stock Exchange in a management-led buyout completed in December, as well as plans by Shenzhen-based Mindray ($MR) to do a similar deal and leave the Nasdaq.
At the same time, in the past year, companies such as 3SBio and Simcere that were formerly listed in the U.S. and taken private by management came roaring back to the public markets via the Hong Kong Stock Exchange.
BeiGene's bid to raise funds will be underwritten by Goldman Sachs, Morgan Stanley, Cowen and Baird. The Nasdaq story said the company had $6 million in sales for year ended Sept. 30, 2015.
But as noted in the company's Red Herring filing, the company has to come up with the goods.
"Our ability to generate revenue and become profitable depends upon our ability to successfully complete the development of, and obtain the necessary regulatory approvals for, our drug candidates, such as BGB-3111, BGB-283, BGB-290 and BGB-A317, as we do not currently have any drugs that are available for commercial sale," the SEC statement released in October said.
"We expect to continue to incur substantial and increasing losses through the projected commercialization of our drug candidates. None of our drug candidates have been approved for marketing in the United States, the European Union, the People's Republic of China or any other jurisdiction and may never receive such approval."
In January, BeiGene said the U.S. FDA has given the nod for clinical development of oncology mAb BGB-A317, marking the first biologic candidate from the company to head for U.S.-based trials.
Also slated for an IPO on the Nasdaq, Hong Kong-based Hutchison China MediTech, or Chi-Med, is looking to raise the same range of cash for a China-focused drug firm with a geographic spread that already includes a London listing.