In today’s briefing:
- Henlius (2696 HK): Deal Break as HKEx Merger Arb Rulebooks Are Rewritten
- Henlius (2696)’s Fail Sets (Another) Bad Precedent
- Shanghai Henlius Biotech (2696 HK) – About the Deal Break and the Valuation Outlook
- Beta Bionic, Inc. (BBNX): IPO Terms Set for Medical Device Company Aiding Insulin Patients
- Beta Bionics IPO: Will The Innovative MedTech Company Repeat The Success of Livongo Health?
- Sionna Therapeutics, Inc. (SION): Biotech for Patients with Cystic Fibrosis Filed for IPO
- EDSA: IND Expected in 2025 for EB06 for the Treatment of Vitiligo
- ENSC: Encouraging Test Results
- Samsung Biologics (207940 KS): Record High Revenue in 2024; Accelerated Growth Expected in 2025
Henlius (2696 HK): Deal Break as HKEx Merger Arb Rulebooks Are Rewritten
- Shanghai Henlius Biotech (2696 HK) shareholders have voted against Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer. The minority participation rate was high, and the NO vote comfortably cleared the threshold.
- The China Traditional Chinese Medicine (570 HK) and Henlius deal breaks have rewritten the HKEx merger arb rulebook. The Henlius deal break offers several lessons.
- The 27.5% share price decline since 9 January points to a well-flagged deal break. Nevertheless, precedent deal-breaks suggest that the shares remain vulnerable and could touch HK$15.
Henlius (2696)’s Fail Sets (Another) Bad Precedent
- The question was asked in Henlius (2696 HK): So, When Was The Last Time A PE/VC Outfit Blocked A Deal? Well, now we have one as LVC inexplicably blocked.
- It didn’t appear to make economic rationale for LVC to crash the party – knowing they would do so, and not bother to reduce their position accordingly.
- In tandem with the TCM (570 HK) debacle, it sets another bad precedent for future/existing Hong Kong events. Expect spreads for HK arbs to widen. And Henlius to crater.
Shanghai Henlius Biotech (2696 HK) – About the Deal Break and the Valuation Outlook
- Lin Lijun voted against the privatization, which is in line with our analysis.Lin and some other long-term investors expressed their “dissatisfaction” by opposing the privatization due to disappointing Cancellation Price.
- Due to deal break, Henlius’ share price could be under pressure in short term.Investors may need to wait until the implementation of biosimilar VBP in 2025 to see situation clearly.
- Despite biosimilar VBP, we remain optimistic about the outlook of Henlius, because its future development positioning will not be limited to just biosimilars, but will focus on internationalization.
Beta Bionic, Inc. (BBNX): IPO Terms Set for Medical Device Company Aiding Insulin Patients
- Beta Bionic, Inc. set terms for an IPO that could raise up to $120 million
- The IPO is led by Bank of America Securities and is scheduled to debut on Thursday, 1/30.
- The company’s product, iLet Bionic Pancreas, was approved by the FDA in May 2023 and posted $44.7 million in sales for the nine months ended September 30, 2024.
Beta Bionics IPO: Will The Innovative MedTech Company Repeat The Success of Livongo Health?
- Beta Bionics, a high-growth medtech company and developer of an integrated bionics pancreas system called iLet, filed for an IPO in the United States.
- Maker of insulin delivery device cleared by the FDA offers 7.5M shares at a price range between $14.00 and $16.00 per share.
- With the most recent S-1/A, Beta Bionics plans to raise ~$122M at the high end of range at $16.00 per share, including a concurrent private placement.
Sionna Therapeutics, Inc. (SION): Biotech for Patients with Cystic Fibrosis Filed for IPO
- Biopharmaceutical company on a mission to revolutionize the current treatment paradigm for cystic fibrosis filed for IPO.
- Company’s NBD1 stabilizers, are both in Phase 1 healthy volunteer trials in Australia to evaluate their PK profile, safety and tolerability.
- RA Capital, TPG’s the Rise Fund, Atlas Venture, OrbiMed and Enavate Sciences are all among existing investors.
EDSA: IND Expected in 2025 for EB06 for the Treatment of Vitiligo
- On December 13, 2024, Edesa Biotech, Inc. (EDSA) announced financial results for the fourth quarter and full fiscal year 2024 that ended September 30, 2024 and provided a business update.
- The company is continuing to advance its pipeline, which includes EB06, and anti-CXCL10 monoclonal antibody for the treatment of vitiligo, EB05 for the treatment of acute respiratory distress syndrome (ARDS) and pulmonary fibrosis, and EB01 for the treatment of allergic contact dermatitis (ACD).
- We anticipate an IND being filed before the end of 2025 for EB06 such that a Phase 2 clinical trial can initiate in 2026.
ENSC: Encouraging Test Results
- Ensysce Biosciences is committed to finding a solution to the opioid crisis plaguing the US and other developed countries around the world.
- Through its proprietary TAAP technology Ensysce is in the process of receiving approval for an abuse-resistant yet still pain-relieving opioid.
- The company announced interim data on testing on its PF614-MPAR treatment, designed to reduce the potential for opioid abuse, that showed that goal appeared to be achieved.
Samsung Biologics (207940 KS): Record High Revenue in 2024; Accelerated Growth Expected in 2025
- Samsung Biologics (207940 KS) reported 2024 revenue of KRW4.55T, up 23% YoY, ahead of guidance of 15–20%. Growth was driven by increased contribution from Plant 4 and milestone payment.
- Ramp-Up at Plant 4 is expected to drive further revenue growth, while Plant 5, scheduled to begin operations in April 2025, will expand total production capacity to 784,000 liters.
- Samsung Biologics is well positioned to be resilient to the industry challenges. The company has guided for 20–25% YoY revenue growth to KRW5456–5684B in 2025.
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