BeiGene heads to Nasdaq with $100M IPO in China oncology boom

China's BeiGene has announced plans to raise as much as $100 million on the Nasdaq in an initial public offering that follows a steady stream of venture capital to the oncology-focused biotech and expansion into manufacturing.

The IPO plans outlined in a filing to the U.S. Securities and Exchange Commission come at the same time as China oncology-focused Hutchison China MediTech, or Chi-Med, for a company with a geographic spread that already includes Hong Kong, mainland China, and London.

Chi-Med, with 7 drug candidates in clinical-stage trials--including licensed deals with AstraZeneca ($AZN), Eli Lilly ($LLY) and Swiss-based Nestle--sits among several oncology-focused companies in sharp focus that are either listed on the Nasdaq, like Cellular Biomedicine Group ($CBMG), or will be soon, like BeiGene.

BeiGene's bid to raise funds will be underwritten by Goldman Sachs, Morgan Stanley, Cowen and Baird. For a company without revenues from any products, the ability to raise funds on the Nasdaq led by major Wall Street firms is a major step forward in China biotech growth prospects. The company's Red Herring statements in the SEC filing highlighted its unique space.

John Oyler, CEO of BeiGene

"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 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. Our ability to achieve revenue and profitability is dependent on our ability to complete the development of our drug candidates, obtain necessary regulatory approvals, and have our drugs manufactured and successfully marketed."

The high stakes saw BeiGene snap up Changzhen Wu this month to head a manufacturing operation that is in the process of outfitting a major facility in Suzhou, building on another key hire snatched from WuXi AppTec ($WX) to build out a formidable team.

Wu will head the cGMP manufacturing facility in Suzhou's BioBAY, BeiGene said in a release. The operation was announced in August as part of the company's plans to branch out from its capital city headquarters and develop a novel oncology drug operation that is still in early stages.

That operation includes BGB-3111, an oral Bruton's tyrosine kinase inhibitor candidate in Phase I aimed at lymphoid malignancies, among other candidates, including PD-ligand 1, for which AstraZeneca is conducting trials for MED14736 and Roche's ($RHHBY) Genentech for MPD3280A.

Also this month, the company said it had dosed the first patient in a China Phase I for BGB-283, a novel RAF dimer inhibitor for the treatment of solid tumors harboring B-RAF mutations and other aberrations in the RAS-MAPK (mitogen-activated protein kinase) pathway. The study is being conducted across multiple centers in China.

In addition, the company has BGB-290, a PARP inhibitor candidate.

In May, BeiGene said it had completed financing of more than RMB600 million ($97 million) from initial angel and strategic investors as well as new investors Hillhouse Capital and CITIC PE, joined by an unnamed "blue chip U.S. public investment fund" specializing in life sciences.

Existing investors include Baker Bros. Advisors and affiliates with a nearly 26% stake. Newer entrants in the May round are said to include T. Rowe Price, Fidelity, Rock Springs Capital and Tavistock Life Sciences.

The move by oncology-focused companies to raise money from the U.S. comes as a few high-profile industry-related Chinese companies moved to exit U.S. listings. Last month, Shenzhen-based Mindray Medical ($MR) cut an offer price to $27 per share from $30 in a management-led buyout. China's top CRO WuXi PharmaTech is also expected to complete a $3.3 billion buyout and delist from the U.S. market.

At the same time, China's Innovent Biologics has deepened a pact with Eli Lilly by including immuno-oncology bispecific antibodies for Innovent in Greater China and for the Indianapolis-based company outside of the country, setting a new benchmark in a white-hot area of collaboration deals in oncology.

Under the terms, the companies will work to develop and commercialize as many as three anti-PD-1-based bispecific antibodies for cancer treatments over the next decade, according to a press release, that could lead to more than $1 billion in milestones from Lilly as well as additional royalties.

The widened collaboration follows a pact announced in September between China's Jiangsu Hengrui Medicine and U.S.-based Incyte ($INCY) that could be worth as much as $795 million with milestones to outlicense rights outside of Greater China for its clinical-stage anti-PD-1 monoclonal antibody candidate.

In March, Lilly and Innovent Biologics originally agreed to co-develop at least three experimental cancer drugs--including one from Lilly's research labs and two from Innovent--in a deal that saw Lilly pay $56 million upfront.

- here's the SEC document on the BeiGene IPO filing

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