Chinese biopharmaceutical manufacturer HighTide Therapeutics is gearing up for an initial public offering (IPO) in Hong Kong, with ambitions to raise HK$278 million (US$35.6 million), a notable decrease from the originally targeted US$200 million. The Shenzhen-based company plans to offer 24.19 million shares at HK$11.50 each, with the listing scheduled for December 22. Despite the reduction in the fundraising goal, the IPO’s net proceeds are estimated at approximately HK$194.1 million after accounting for underwriting fees and expenses.
HighTide Therapeutics’ prospectus outlines its plan to commence order-taking from investors on Thursday, paving the way for its upcoming listing. Notably, 80% of the IPO’s net proceeds, amounting to around HK$155.3 million, will be allocated to clinical development activities, as well as research and development. Cangzhou Chuangrong, acting as a cornerstone investor, is set to subscribe to HK$110 million worth of HighTide’s shares.
UBS and Huatai International serve as joint sponsors for the IPO, reflecting the reputable backing for the biopharmaceutical company’s public debut.
The IPO climate in Hong Kong is experiencing a decline, with Deloitte’s recent report projecting a decrease of more than a fifth in the city’s IPO tally for the year. In 2023, approximately 65 IPOs are anticipated to raise around HK$45.8 billion, contrasting sharply with the 84 new listings that raised HK$99.6 billion the previous year. Factors contributing to this downturn include continuous US interest rate hikes and a slower-than-expected Chinese economic recovery, leading to diminished market valuations and constrained liquidity.
The absence of mega IPOs in 2023 is attributed to the challenging market conditions. However, industry experts, such as Billy Au, a partner at law firm Mayer Brown, express optimism that new funds can be raised on the secondary market once market conditions improve, particularly if interest rates decrease next year.
The recent decision by the Federal Reserve not to raise interest rates for the fourth consecutive time provides a glimmer of hope for potential relief in the financial markets. Chairman Jerome Powell’s statement indicating a willingness to cut rates before achieving the inflation goal is seen as a positive signal.
Hong Kong’s IPO scene in 2023 has witnessed significant listings, with Chinese baijiu distillery ZJLD’s US$676.4 million IPO in April and Indonesian courier services start-up J&T Global Express’s nearly US$500 million listing in October standing out. However, challenges persist, exemplified by the delay in Alibaba Group Holding’s plans to list its cloud unit AliCloud and the postponement of the Freshippo IPO due to weak market sentiment.
Despite these challenges, Alibaba’s logistics arm, Cainiao, remains on track for an IPO, aiming to raise approximately US$1 billion.
HighTide Therapeutics specializes in the development of novel multifunctional therapies for metabolic and digestive diseases. The company’s core product, HTD1801, is currently undergoing phase two evaluation by regulators in the US, China, and other countries. In January, HighTide secured US$107 million in a series C funding round led by TCM Healthcare Fund of Guangdong, reflecting investor confidence in the company’s innovative approach.
As HighTide Therapeutics embarks on its IPO journey, the global financial community will be closely watching to gauge investor response and assess the overall health of the biopharmaceutical sector in the current economic landscape.
(Source: SCMP | Endpoints News |
