Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

Everest Medicines / Equity Capital Markets

<p>The valuation of pre-revenue biotechnology companies is, at best, an imprecise exercise. The traditional valuation tools (DCF, peer company comparisons, M&amp;A valuations) still apply, but require some modifications to reflect the unique circumstances. One tool is to consider the company's valuation in the context of the "step-up" from its last funding round to the pre-money valuation for the IPO. This Insight analyzes this data for pre-revenue biotechnology companies that have listed under the HKEX's "Biotech Chapter" and how investors can use this data to frame their analysis of these deals.</p>

The valuation of pre-revenue biotechnology companies is, at best, an imprecise exercise. The traditional valuation tools (DCF, peer company comparisons, M&amp;A valuations) still apply, but require some modifications to reflect the unique circumstances. One tool is to consider the company's valuation in the context of the "step-up" from its last funding round to the pre-money valuation for the IPO. This Insight analyzes this data for pre-revenue biotechnology companies that have listed under the HKEX's "Biotech Chapter" and how investors can use this data to frame their analysis of these deals.

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.

<div><p><a href="https://www.smartkarma.com/entities/jw-therapeutics" target="_blank" data-smartkarma-citation="entities:29679:1" rel="noopener">JW Therapeutics (2126 HK)</a> is a leading clinical and pre-clinical stage cell therapy company in China. It was founded in 2016 by Juno, a <a href="https://www.smartkarma.com/entities/bristol-myers-squibb-co" target="_blank" data-smartkarma-citation="entities:1133:1" rel="noopener">Bristol Myers Squibb Co (BMY US)</a> company, and <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a>. JW has launched a Hong Kong IPO to raise net proceeds of HK$2,017.6 million ($260 million) at the mid-point of the IPO price range of HK$20.00-23.80 per share.</p></div><div><p>Ten cornerstone investors have agreed to invest about $150 million in the IPO (54.33% of the offer shares at the mid-point of the IPO price range). Cornerstone investors include Rock Springs Capital, Oaktree Capital, Platinum Investment Management, Veritas Asset Management, RWC, Hillhouse Capital, Taiping Assets Management, AVICT Global, Loyal Valley Capitaland and Temasek. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/jw-therapeutics-ipo-initiation-potent-medicine" target="_blank" rel="noopener">our initiation note</a>, we stated that JW’s core drug candidate’s competitive advantage in the CAR-T market in China is supported by its potential best-in-class safety profile with competitive efficacy, physicians’ familiarity due to a large number of clinical sites in China and manufacturing quality. Overall, a strong cornerstone investor lineup and our valuation analysis suggest that the IPO price range is attractive. </p></div></div></div>

JW Therapeutics (2126 HK) is a leading clinical and pre-clinical stage cell therapy company in China. It was founded in 2016 by Juno, a Bristol Myers Squibb Co (BMY US) company, and WuXi AppTec Co. Ltd. (2359 HK). JW has launched a Hong Kong IPO to raise net proceeds of HK$2,017.6 million ($260 million) at the mid-point of the IPO price range of HK$20.00-23.80 per share.Ten cornerstone investors have agreed to invest about $150 million in the IPO (54.33% of the offer shares at the mid-point of the IPO price range). Cornerstone investors include Rock Springs Capital, Oaktree Capital, Platinum Investment Management, Veritas Asset Management, RWC, Hillhouse Capital, Taiping Assets Management, AVICT Global, Loyal Valley Capitaland and Temasek. In our initiation note, we stated that JW’s core drug candidate’s competitive advantage in the CAR-T market in China is supported by its potential best-in-class safety profile with competitive efficacy, physicians’ familiarity due to a large number of clinical sites in China and manufacturing quality. Overall, a strong cornerstone investor lineup and our valuation analysis suggest that the IPO price range is attractive. 

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<p>JW Therapeutics is a leading China-based cell therapy company with the most advanced progress for CAR-T commercialization. The company has started book building to raise up to USD 300m to list in Hong Kong.</p><p>In our previous note, we discussed that the company is backed by a strong shareholder Juno, and has a strong foundation in the technology underlying the CAR-T therapy, which is demonstrated by its superior safety data for its Relma-cel. In addition to the CD19 target, the company has also obtained the technology for the BCMA target. The company's T-cell receptor-based pipeline products for solid tumor (liver cancer) with anti-T cell exhaustion enhancement based on the technologies from Eureka and Lyell have good potential as well. </p><p>We think at the high-end pricing, investors are getting a free option for their potential in-license products. The deal attracted strong investor backing but there's still a lack of presence of international healthcare specialist funds.</p><h2>Our previous coverage on JW Therapeutics</h2><ul>
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/jw-therapeutics-pre-ipo-car-t-leader-in-china" target="_blank" rel="noopener">JW Therapeutics (药明巨诺) Pre-IPO: CAR-T leader in China</a></p></li>
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/jw-therapeutics-pre-ipo-pricing-with-in-license-potential" target="_blank" rel="noopener">JW Therapeutics (药明巨诺) Pre-IPO: Pricing with in-license potential</a></p></li>
</ul>

JW Therapeutics is a leading China-based cell therapy company with the most advanced progress for CAR-T commercialization. The company has started book building to raise up to USD 300m to list in Hong Kong.In our previous note, we discussed that the company is backed by a strong shareholder Juno, and has a strong foundation in the technology underlying the CAR-T therapy, which is demonstrated by its superior safety data for its Relma-cel. In addition to the CD19 target, the company has also obtained the technology for the BCMA target. The company's T-cell receptor-based pipeline products for solid tumor (liver cancer) with anti-T cell exhaustion enhancement based on the technologies from Eureka and Lyell have good potential as well. We think at the high-end pricing, investors are getting a free option for their potential in-license products. The deal attracted strong investor backing but there's still a lack of presence of international healthcare specialist funds.Our previous coverage on JW Therapeutics
JW Therapeutics (药明巨诺) Pre-IPO: CAR-T leader in China
JW Therapeutics (药明巨诺) Pre-IPO: Pricing with in-license potential


JW Therapeutics (药明巨诺) IPO: Free Options for Potential License-In

<p><a href="https://www.smartkarma.com/entities/jw-therapeutics" target="_blank" data-smartkarma-citation="entities:29679:1" rel="noopener">JW Therapeutics (2126 HK)</a> was founded in 2016 by Juno, a <a href="https://www.smartkarma.com/entities/bristol-myers-squibb-co" target="_blank" data-smartkarma-citation="entities:1133:1" rel="noopener">Bristol Myers Squibb Co (BMY US)</a> company, and <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a>. JW has built an integrated platform focused on developing, manufacturing and commercializing breakthrough cell-based immunotherapies for haematological cancers and solid tumours. JW has launched a Hong Kong IPO to raise net proceeds of HK$2,017.6 million ($260 million) at the mid-point of the IPO price range.</p><div class="content-highlight"><p>JW’s core drug candidate’s competitive advantage in the CAR-T market in China is supported by its potential best-in-class safety profile with competitive efficacy, physicians’ familiarity due to a large number of clinical sites in China and manufacturing quality. Overall, we believe that the prospectus JW’s core drug asset is favourable. </p></div>

JW Therapeutics (2126 HK) was founded in 2016 by Juno, a Bristol Myers Squibb Co (BMY US) company, and WuXi AppTec Co. Ltd. (2359 HK). JW has built an integrated platform focused on developing, manufacturing and commercializing breakthrough cell-based immunotherapies for haematological cancers and solid tumours. JW has launched a Hong Kong IPO to raise net proceeds of HK$2,017.6 million ($260 million) at the mid-point of the IPO price range.JW’s core drug candidate’s competitive advantage in the CAR-T market in China is supported by its potential best-in-class safety profile with competitive efficacy, physicians’ familiarity due to a large number of clinical sites in China and manufacturing quality. Overall, we believe that the prospectus JW’s core drug asset is favourable. 

JW Therapeutics IPO Initiation: Potent Medicine

<p>JW Therapeutics is a leading China-based cell therapy company with the most advanced progress for the CAR-T commercialization. The company aims to raise up to USD 300m.</p><p>In our previous note, we discussed that the company is backed by a strong shareholder Juno, and has a strong foundation in the technology underlying the CAR-T therapy, which is demonstrated by its superior safety data for its Relma-cel. In addition to the CD19 target, the company has also obtained the technology for the BCMA target. The company's T-cell receptor-based pipeline products for solid tumor (liver cancer) with anti-T cell exhaustion enhancement based on the technologies from Eureka and Lyell have good potential as well. </p><p>In this note, we provide a bottom-up rNPV based valuation for its key drugs, plus additional valuation for the potential in-licensing from Juno.</p><p>Our previous coverage on JW Therapeutics</p><ul><li dir="ltr"><p><a href="https://www.smartkarma.com/insights/jw-therapeutics-pre-ipo-car-t-leader-in-china" target="_blank" rel="noopener">JW Therapeutics (药明巨诺) Pre-IPO: CAR-T leader in China</a></p></li></ul>

JW Therapeutics is a leading China-based cell therapy company with the most advanced progress for the CAR-T commercialization. The company aims to raise up to USD 300m.In our previous note, we discussed that the company is backed by a strong shareholder Juno, and has a strong foundation in the technology underlying the CAR-T therapy, which is demonstrated by its superior safety data for its Relma-cel. In addition to the CD19 target, the company has also obtained the technology for the BCMA target. The company's T-cell receptor-based pipeline products for solid tumor (liver cancer) with anti-T cell exhaustion enhancement based on the technologies from Eureka and Lyell have good potential as well. In this note, we provide a bottom-up rNPV based valuation for its key drugs, plus additional valuation for the potential in-licensing from Juno.Our previous coverage on JW TherapeuticsJW Therapeutics (药明巨诺) Pre-IPO: CAR-T leader in China

JW Therapeutics (药明巨诺) Pre-IPO: Pricing with In-License Potential

China

JW (Cayman) Therapeutics Co. Ltd operates as a clinical stage therapy platform company. The Company offers developing, manufacturing and commercializing breakthrough cell-based immunotherapies forhematological cancers and solid tumors. JW (Cayman) Therapeutics provides services in China.

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JW Therapeutics (2126 HK)

What HKEX Biotech "Step-Ups" Can Tell Us

This Insight explains the concept of valuation "step-ups" for pre-revenue biotechnology companies listing on the HKEX and how to use this data to...

Kemp Dolliver, CFA

JW Therapeutics IPO: Valuation Insights

The core drug candidate’s competitive advantage in the China CAR-T market, a good cornerstone investor lineup and our valuation analysis suggest...

Arun George

JW Therapeutics (药明巨诺) IPO: Free Options for Potential License-In

We think at the high-end pricing, investors are getting a free option for their potential in-license products for JW Therapeutics.

Ke Yan, CFA, FRM

JW Therapeutics IPO Initiation: Potent Medicine

JW’s core drug candidate’s competitive advantage is supported by its potential best-in-class safety profile with competitive efficacy, physicians’...

Arun George

JW Therapeutics (药明巨诺) Pre-IPO: Pricing with In-License Potential

We provide a bottom-up rNPV based valuation for its key drugs, plus additional valuation for the potential in-licensing from Juno

Ke Yan, CFA, FRM

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