Today (September 28), Zai Lab (09688.HK) officially listed on the Hong Kong Stock Exchange, becoming another biopharmaceutical company listed on the "US stocks + Hong Kong stocks" after BeiGene Since then, the 19th unprofitable biopharmaceutical company successfully listed.
Zai Lab opened 9.16% higher on the first day of listing. As the leader of the domestic license in a model, Zai Lab in the Hong Kong stock market does not know whether it can enjoy the same capital pursuit as its NASDAQ. However, in the early stage, Zai Lab's subscription enthusiasm seemed a little bleak. The number of applicants was only 10,349, the subscription multiple was 3.43 times, and the call-back ratio was 0, which aroused market concern.
In September 2017, Zai Lab was successfully listed on NASDAQ in the United States. The issue price is $18 per share. As of the close of the market on September 25, Zai Lab closed at $79.33 per share on the Nasdaq, a 340.7% increase from the issue price, and the total market value reached $5.98 billion.
After entering the Hong Kong stock market, as yet another class B biopharmaceutical stock that has not yet made money, what Zai Lab will perform has become the focus of attention.
01 Leading the license in loss continues to be under pressure
Zai Lab was established in 2014. It faces the world and has established a rich R&D pipeline under the license-in model, covering the fields of anti-tumor, autoimmunity, and anti-infection.
The development history of Zai Lab:
In August 2014, Zai Lab completed a US$30 million Series A financing;
The established R&D center in Shanghai, China in October 2015;
Completed a US$106 million Series B financing in January 2016;
In May 2017, the global R&D headquarters was completed in Zhangjiang, Shanghai;
In June 2017, a US$30 million Series C equity financing was completed;
In September 2017, the qualification certification of Suzhou small molecule production plant was completed;
Listed on the Nasdaq in the United States in September 2017; listed on the Nasdaq in the United States in September 2017;
In September 2018, it completed a $150 million refinancing on Nasdaq in the United States;
In May 2019, completed a refinancing of US$200 million on Nasdaq in the United States;
In January 2020, it completed a refinancing of US$261.3 million on Nasdaq in the United States.
Like all innovative pharmaceutical companies that need to burn a lot of money in the early stage, Zai Lab has not gotten out of the loss dilemma since its establishment, and the loss is increasing day by day.
It can be seen that according to the financial report, in 2018, 2019, and the first half of 2020, Zai Lab's R&D investment was 120 million U.S. dollars, 142 million U.S. dollars, and 102 million U.S. dollars, respectively, and the company's net losses were 139 million U.S. dollars and 1.94 million, respectively. Billion U.S. dollars and 128 million U.S. dollars.
Among them, it is worth noting that in the first half of 2020, Zai Lab's R&D investment and net losses have reached more than 65% of the entire year of 2019. Zai Lab has increased its R&D investment this year.
From the perspective of revenue, Zai Lab's revenue in the first half of 2020 has increased significantly compared with previous years. The main reason is that its two products have been commercially launched in mainland China this year. They are -
Zele® (Niraparib), a PARP inhibitor for the treatment of all patients with advanced ovarian cancer, is currently the only PARP inhibitor widely approved by the FDA for the treatment of all patients with advanced ovarian cancer. It will be available in Mainland China in January 2020. Official commercial listing. In 2019, it was approved to supplement the new drug listing application for the maintenance treatment of adult patients with advanced epithelial ovarian cancer, fallopian tube cancer, or primary peritoneal cancer after first-line platinum-containing chemotherapy has achieved complete or partial remission.
Optune®, a portable device for Tumor Treating Fields (TTFields). Epdun® was listed in Hong Kong in 2018 and will be commercially listed in Mainland China in June 2020. According to Zai Lab's 2020 mid-year report, the company will start a global Phase 3 key clinical study of Epton® for non-small cell lung cancer, locally advanced pancreatic cancer, and brain metastasis indications in early 2021. Mainland China submitted a marketing application for malignant pleural mesothelioma.
The active expansion of the new indications of the two drugs will undoubtedly help to further open up the sales market for Zai Lab. However, some investors also said that there may be some market uncertainty due to the high price of Epdun®.
Besides, according to the official website, Zai Lab's current product pipeline includes more than 15 drug candidates, covering the fields of tumors, anti-infection and autoimmune diseases. There are more than 20 clinical trials underway or planned.
02 The pace of financing accelerates, the second half of the battle for commercialization
As another class B biopharmaceutical stock that has not yet made money, or a pharmaceutical stock listed in both places, Zai Lab has attracted much attention.
According to the latest statistics from Sina Pharmaceuticals, Zai Lab is the 19th unprofitable biopharmaceutical company to successfully go public since the Hong Kong Stock Exchange New Deal. (In April 2018, the Hong Kong Stock Exchange revised the Main Board Listing Rules and added Chapter 18A "Biotech Companies", allowing biotech companies with no income or profits to submit listing applications.)
Today, 19 companies have been the first to enter the Hong Kong stock market for more than two years. Except for Zai Lab, the latest Yongtai Biotech has only been in more than one month. These unprofitable pharmaceutical companies received mixed treatments in the Hong Kong stock market. Except Zai Lab, as of September 25, there were 10 companies whose stock prices had risen from the issue price and 8 companies had fallen.
Among them, Golly Pharmaceuticals, which was the first to eat crabs, led with a decline of 80.5%, vaccine upstart Cansino Biologics led with a 663.6% increase, and BeiGene, Junshi Biologics, and Cinda Biologics, which picked "B" this year, took the lead with a decline of 54.4. %, 148%, and 314% are among the top gainers.
From the performance of these companies, it can be found that profitability and commercialization prospects are always a "big test." Although Golly Pharma has commercialized two products, Ganovo and Peloxin, the market space is not optimistic, coupled with the failure of medical insurance negotiations last year, which severely dampened market confidence, and the stock price continued to fall.
Affected by the new crown epidemic, Cansino Bio, which has no products or income for 10 years, is highly sought after because of the "new crown vaccine concept", leading the way with a 663.6% increase.
At the same time, companies with outstanding performance have also become capital. According to the financial report, BeiGene ranked first among the above companies with 428 million U.S. dollars in 2019, and Cinda Biotech and Junshi Biosciences received 1.048 billion yuan and 1 billion yuan respectively. 778 million yuan ranks second and third, and these stocks are also rising in the Hong Kong stock market. Among them, Cinda Biosciences achieved sales of 1.0159 billion yuan in 2019 by relying on the PD-1 monoclonal antibody Daboshu (sintilimab injection), which was only on the market for 10 months, and became one of the best-selling drugs in the country. , Was enthusiastically sought after by capital, with an increase of 314%.
R&D is just a golden beast. Although the situation of various companies in the Hong Kong stock market is mixed, it does not seem to affect the enthusiasm of biopharmaceutical companies to embrace capital. At present, for most innovative pharmaceutical companies that have no products on the market and no profitability, the desire for capital is undoubtedly huge. Pharmaceutical companies such as Rongchang Bio and Simcere are also lining up to go to Hong Kong for listing.
Zai Lab is another company listed on the "US stocks + Hong Kong stocks" after BeiGene, and multiple listings have become another financing channel for biopharmaceutical companies. At present, after the hottest Junshi Biotech and Kangsino Biotech have successfully launched the H+ sci-tech innovation board, companies such as Fuhong Hanlius are also lining up on the H+ sci-tech innovation board.
It can be seen that under the background of speeding up the review and approval of innovative drugs, enterprises are accelerating the pace of the second half of the game by opening diversified financing channels to seize reform dividends, achieve rapid development, and compete for commercialization.
As the leader of the domestic license in the model, Zai Lab has enabled Zai Lab to quickly introduce the research results of advanced foreign companies, enrich its product pipeline, and enter the harvest period soon. But at the same time, the license-in model also puts Zai Lab under heavy cash flow pressure. In the eyes of industry professionals, the license-in model also has some disadvantages. If the authorized party terminates the authorization, Zai Lab will not be able to continue research and development, and Commercializing its alternative drugs will greatly negatively affect the company's revenue, continuing operations, and market valuation.
Besides, the market value of Zai Lab at the beginning of its listing today has exceeded 52 billion, which is close to Cinda Bio's 83.2 billion Hong Kong dollars and Junshi Bio's 78.7 billion Hong Kong dollars. However, some investors believe that the core product PARP inhibitor does not have a relatively mature market like Junshi and Cinda’s PD-1 blockbuster products. Therefore, based on Zai Lab’s current valuation and reserve pipeline, It doesn't seem to be cheap.
Regarding how innovative pharmaceutical companies should develop in the future, Liang Yi, Chief Commercial Officer of Zai Lab and President of Greater China, said in a public speech recently: "The tumor track will enter the post-PD-1 era, and we must pay attention to the domestic and international dual cycle. Take a correct view of the capital and technical support of the international market. China’s future development of innovative enterprises should pay attention to the four "Ds"-drugs, diagnostics, data, and medical devices."
Original title: Open 9.16% higher! Zai Lab is listed in Hong Kong today, and how does the main license play in the second half of commercialization?
, Zai Lab (09688.HK) officially listed on the Hong Kong Stock Exchange, becoming another biopharmaceutical company list…){kind=link}
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