In the world of China healthcare companies, the halt to initial public offerings on China's Shanghai and Shenzhen exchanges has not stopped the action in the capital markets.
In May, for example, Sichuan Maker Biotechnology listed on the Shenzhen exchange after raising nearly $170 million and Zhejiang Huatong Pharmaceutical also got on the board in Shenzhen with a bit more than $41 million.
Those listings, however, are only a portion of the China biopharma story for raising, and spending, cash. At least two companies right now, WuXi PharmaTech ($WX) and Mindray International ($MR), are looking to give up U.S. listings under management buyout offers.
In other recent cases, a consortium of Chinese companies bought San Diego-based biotech Ambrx, which abandoned a U.S. IPO last year, and one Chinese company that left the U.S. market two years ago, 3SBIO, came back via Hong Kong this year at $710 million.
Alibaba ($BABA) also engaged in a complex deal to get online healthcare sales ramped up in China through Hong Kong-listed Alibaba Health Information Technology. And exciting cutting-edge companies such as BGI and BeiGene may look to list soon, as well as biotech Innovent's recent success in raising $100 million in venture capital to build a pipeline of biosimilars.
So capital market action continues for Chinese companies. In the case of the Hong Kong Stock Exchange, China-focused drug and medical companies also still see momentum. Last month, Zhongzhi Pharmaceutical made a global offering of 200 million shares at a maximum price of HK$3.08 each and China's Universal Medical Financial & Technical Advisory Services priced its IPO at $447 million in a squeaker this month.
But as Bloomberg News reports, a monthlong drop of nearly a third for the main indexes of Shanghai and Shenzhen called into question the rationale for one company over another.
That has boiled down to retail investors, the main drivers for both indexes. The main concern, analysts say, is that they lose so much money that a backlash against the government's economic policies would follow.
To that end, China corralled the country's largest stock brokerage companies to buy $19.3 billion worth of stock in already public companies. As well, IPOs were also suspended. But this is a bit of déjà vu all over again--in late 2012 IPOs were suspended amid volatility and lifted in December 2013. IPOs were again suspended in 2014 for two months and lifted in April, for pretty much the same reasons. China is awash in cash, and making a quick buck never goes out of style.
Bloomberg, citing the state-run People's Daily newspaper, said the message was simple why this stop and go happens--and told investors how to react.
"During this process, investors should have confidence and patience, instead of losing their minds and not knowing what to do amid anxiety and panic," the newspaper posted on Weibo, China's Twitter-like microblogging service, Bloomberg said.
- here's the story from Bloomberg