Chinese language biotech firm BeiGene plunges on Shanghai debut By Reuters

0

© Reuters. FILE PHOTO: People enter a building of the biotechnology company BeiGene Ltd in Suzhou Industrial Park in Suzhou, Jiangsu Province, China, Nov 22, 2019. REUTERS / Stringer

BEIJING (Reuters) – Chinese biotech company BeiGene (NASDAQ 🙂 Ltd slumped on its Shanghai debut Wednesday after rising $ 3.5 billion in STAR’s largest market listing this year.

BeiGene, which posted consecutive years of losses, slumped more than 15% in early trading after opening 8.1% below the offering price of 192.6 yuan.

The offer, which Refinitiv data says is the largest public health company public offering in China in at least two decades, comes amid growing concerns that some Chinese companies may be asked to delist from the US stock market.

BeiGene’s Nasdaq-listed shares are down nearly 20% so far this month as U.S. securities regulators passed rules to kick non-compliant Chinese companies off American stock exchanges in three years – a risk that BeiGene has in its Shares prospectus in Shanghai pointed out.

“The money was valued very highly compared to Nasdaq and Hong Kong,” said Brad Loncar, whose Loncar Investments operates an ETF for Chinese pharmaceutical companies.

“STAR-IPOs are usually associated with long holding periods, which is a long-term vote of confidence from the institutes involved.”

BeiGene’s Hong Kong-traded shares fell over 4% on Wednesday, after also falling a fifth this month.

BeiGene’s poor debut performance in Shanghai means that underwriters will likely begin buying stocks in the secondary market to stabilize prices under what is known as the greenshoe option mechanism.

The proceeds from BeiGene’s Shanghai stock sale of 22.16 billion yuan ($ 3.5 billion) will be used primarily to fund clinical trials for potential treatments and to raise capital, the company said in its prospectus.

Investors who subscribed to BeiGene’s Shanghai share sale include China’s National Social Security Fund and the Abu Dhabi Investment Authority. Supported by existing shareholders such as Amgen (NASDAQ 🙂 and the Hillhouse-linked HHLR Fund, BeiGene is one of China’s most active innovative biotech companies, whose self-developed products have been out-licensed by global pharmaceutical giants.

Disclaimer: Fusion Media would like to remind you that the information contained on this website is not necessarily real-time or accurate. All CFDs (stocks, indices, futures) and forex prices are not provided by exchanges, but by market makers. Therefore, prices may not be accurate and may differ from the actual market price, meaning that prices are indicative and not suitable for trading purposes. Therefore, Fusion Media is not responsible for any trading losses you may incur as a result of using this data.

Fusion Media, or anyone involved in Fusion Media, assumes no liability for any loss or damage arising out of reliance on the information contained on this website, including data, prices, charts, and buy / sell signals. Please inform yourself comprehensively about the risks and costs associated with trading in the financial markets, as it is one of the riskiest forms of investment.

You might also like

Leave A Reply

Your email address will not be published.