Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

<p>BeiGene has outlicensed ex-China rights to its PD-1 tislelizumab to Novartis on favorable terms, validating the competitive position of this compound in a crowded market. Further, the agreement marks a growing trend of Chinese companies outlicensing products to multinationals, which can have a leveraged benefit on their P&amp;Ls and valuations.</p>

BeiGene has outlicensed ex-China rights to its PD-1 tislelizumab to Novartis on favorable terms, validating the competitive position of this compound in a crowded market. Further, the agreement marks a growing trend of Chinese companies outlicensing products to multinationals, which can have a leveraged benefit on their P&amp;Ls and valuations.

BeiGene: Novartis Grabs Tislelizumab Rights

Equity Capital Markets

Jacobio Pharmaceuticals / Equity Capital Markets

<p>The terms of Jacobio's listing have been announced: a price range of HKD12-14, resulting in a pre-money valuation of US$1.1-1.3 billion and proceeds of US$140-160MM. The relatively small raise and limited uptake from Cornerstone investors indicate that the company is placing more emphasis on valuation over the amount raised. </p>
<p>The company has cutting-edge technology; a credible partner in <a href="https://www.smartkarma.com/entities/abbvie-inc" target="_blank" data-smartkarma-citation="entities:1135:1" rel="noopener">Abbvie Inc (ABBV US);</a> and extensive trial readouts in 2021. We like the deal in the lower half of the range, but caution that buyers need a long-term view given the long road to NDA filings and likely limited trading volume post-deal. </p>

The terms of Jacobio's listing have been announced: a price range of HKD12-14, resulting in a pre-money valuation of US$1.1-1.3 billion and proceeds of US$140-160MM. The relatively small raise and limited uptake from Cornerstone investors indicate that the company is placing more emphasis on valuation over the amount raised. 
The company has cutting-edge technology; a credible partner in Abbvie Inc (ABBV US); and extensive trial readouts in 2021. We like the deal in the lower half of the range, but caution that buyers need a long-term view given the long road to NDA filings and likely limited trading volume post-deal. 

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

HBM Holdings Limited / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/harbour-biomed-holdings-limited" target="_blank" data-smartkarma-citation="entities:29717:1" rel="noopener">Harbour Biomed (HMD HK)</a> is a biopharmaceutical company with a focus on discovering, developing and commercialising differentiated antibody therapeutics in immunology and oncology disease areas. Harbour is backed by Legend Capital, GIC, CDH Investments, <a href="https://www.smartkarma.com/entities/sk-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:393:1" rel="noopener">SK Holdings (034730 KS)</a>, OrbiMed, Octagon Capital and Sage Partners. The Series C round in July 2020 raised $102.8 million at a post-money valuation of $780 million. </p><div class="content-highlight"><p>Harbour is seeking to raise $300 million through a Hong Kong IPO, according to press reports. Harbour’s three antibody platforms (HCAb Platform, HBICE Platform and H2L2 Platform) are a key source of differentiation. Overall, we believe that Harbour’s clinical assets are attractive. </p></div>

Harbour Biomed (HMD HK) is a biopharmaceutical company with a focus on discovering, developing and commercialising differentiated antibody therapeutics in immunology and oncology disease areas. Harbour is backed by Legend Capital, GIC, CDH Investments, SK Holdings (034730 KS), OrbiMed, Octagon Capital and Sage Partners. The Series C round in July 2020 raised $102.8 million at a post-money valuation of $780 million. Harbour is seeking to raise $300 million through a Hong Kong IPO, according to press reports. Harbour’s three antibody platforms (HCAb Platform, HBICE Platform and H2L2 Platform) are a key source of differentiation. Overall, we believe that Harbour’s clinical assets are attractive. 

HBM Holdings (Harbour Biomed) IPO Initiation: Making Resistance Futile

<div><p><a href="https://www.smartkarma.com/entities/antengene-corporation-limited" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a> is a biopharmaceutical company with a focus on discovering, developing and commercialising global first-in-class, only-in-class and/or best-in-class therapies. Antengene has launched a Hong Kong IPO to raise net proceeds of HK$2,467.2 million ($318 million) at the mid-point of the IPO price range of HK$15.80-18.08 per share.</p></div><div><p>Ten cornerstone investors have agreed to invest about $179.4 million in the IPO (53.25% of the offer shares at the mid-point of the IPO price range). Cornerstone investors include Fidelity, GIC, BlackRock, Hillhouse Capital, Boyu Capital, Cormorant Asset Management, Hillhouse Capital, Sequoia Capital, CRF Investment, Laurion Capital and Octagon Capital.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/antengene-ipo-initiation-hunting-for-a-cure" target="_blank" data-smartkarma-citation="insights:44855" rel="noopener">Antengene IPO Initiation: Hunting for a Cure</a>, we stated that the prospectus Antengene’s core drug assets are favourable. Overall, a strong cornerstone investor lineup and our valuation analysis suggest that the IPO price range is attractive. </p></div></div></div>

Antengene (6996 HK) is a biopharmaceutical company with a focus on discovering, developing and commercialising global first-in-class, only-in-class and/or best-in-class therapies. Antengene has launched a Hong Kong IPO to raise net proceeds of HK$2,467.2 million ($318 million) at the mid-point of the IPO price range of HK$15.80-18.08 per share.Ten cornerstone investors have agreed to invest about $179.4 million in the IPO (53.25% of the offer shares at the mid-point of the IPO price range). Cornerstone investors include Fidelity, GIC, BlackRock, Hillhouse Capital, Boyu Capital, Cormorant Asset Management, Hillhouse Capital, Sequoia Capital, CRF Investment, Laurion Capital and Octagon Capital.In Antengene IPO Initiation: Hunting for a Cure, we stated that the prospectus Antengene’s core drug assets are favourable. Overall, a strong cornerstone investor lineup and our valuation analysis suggest that the IPO price range is attractive. 

<p>This Insight is a brief follow-up to our prior Insight <a href="https://www.smartkarma.com/insights/antengene-gunning-to-move-up-in-line" target="_blank" data-smartkarma-citation="insights:44790" rel="noopener">Antengene: Gunning To Move Up in Line</a> which discusses the company in greater detail. In brief, we would take the deal. The offering puts a pre-money valuation of the company at the low end of the US$1-2 billion range mentioned in our prior Insight. In addition, the results of the SEAL trial tops up the market opportunity for ATG-010 (XPOVIO).</p>

This Insight is a brief follow-up to our prior Insight Antengene: Gunning To Move Up in Line which discusses the company in greater detail. In brief, we would take the deal. The offering puts a pre-money valuation of the company at the low end of the US$1-2 billion range mentioned in our prior Insight. In addition, the results of the SEAL trial tops up the market opportunity for ATG-010 (XPOVIO).

Hong Kong

CStone Pharmaceuticals operates as a biotechnology company. The Company develops immuno-oncology and molecularly targeted drugs to address unmet medical needs for cancer patients. CStone Pharmaceuticals serves customers worldwide.

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CStone Pharmaceuticals (2616 HK)

BeiGene: Novartis Grabs Tislelizumab Rights

BeiGene's deal with Novartis for PD-1 tislelizumab validates its competitive position, and marks a rising trend of Chinese companies licensing...

Kemp Dolliver, CFA

Jacobio: Management Solves for Valuation

We think that the offer terms for Jacobio's IPO are fair, but buyers need to take a long view given the small deal size and shares' limited liquidity.

Kemp Dolliver, CFA

HBM Holdings (Harbour Biomed) IPO Initiation: Making Resistance Futile

Harbour is seeking to raise $300 million through a Hong Kong IPO. Harbour’s three antibody platforms are a key source of differentiation. Overall,...

Arun George

Antengene IPO: Valuation Insights

Antengene has launched an HK IPO to raise net proceeds of $318 million at the mid-point of the price range. Overall, strong cornerstones and our...

Arun George

Antengene: We Like the Deal

This Insight recommends participating in the IPO of Antengene considering the proposed valuation and market opportunity.

Kemp Dolliver, CFA

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