YiChang IPO joins other drug companies in tough IPO market

China's YiChang HEC ChangJiang Pharmaceutical launched book-building on Tuesday for its planned HK$1.67 billion ($215 million) initial public offering and the company said it has lined up four cornerstone investors that will contribute $80 million. The cornerstones include Saxi Electric ($30 million), Pinpoint Asset Management ($22 million), Ally Bridge ($18 million) and China Southern Dragon Dynamic Fund ($10 million), according to FinanceAsia.

The company develops, manufactures and sells antivirus medicines and others for treating endocrine and metabolic diseases, as well as cardiovascular diseases. It said money raised from the share sale will be used to build plants and for marketing.

The IPO launch was one of three that initially received a cool response from investors. Chuangmei Pharmaceutical, which is considered the third-largest drug distributor in southern China, saw its shares slide 7% from the IPO price and Modern Dental, a Hong Kong-based dental prosthetic provider, saw its shares drop 4.52% on the gray market, according to a report by the Hong Kong Standard.

Other reports said companies like YiChang needed to come up with strong selling points to lure investors. YiChang's director of strategic development, Dong Suisui, told reporters at a press conference he believes the high barrier to entry for the company's influenza drugs is one selling point.

Dong said the company's flu drug Kewei is increasingly important and accounted for more than 70% of annual revenues in the first 6 months of this year compared to 3.4% in 2012, according to a report in FinanceAsia.

- here's the story from the HK Standard and one from FinanceAsia