Eversheds Sutherland advises on latest biotech issuance in Hong Kong

• Hong Kong
• Global

10-06-2019

Eversheds Sutherland Hong Kong and Eversheds Sutherland (US) LLP have advised China International Capital Corporation, the Sole Sponsor, Sole Global Coordinator and Sole Bookrunner, on the IPO of Chinese biotechnology company Mabpharm Limited (‘Mabpharm’), which raised approximately HK$1.2 billion (approximately USD 153 million) at the IPO. At the time of listing, Mabpharm had a market capitalisation of approximately HK$6.2 billion (approximately USD 791 million). This included a Rule 144A issuance in the United States.

Mabpharm is based in Taizhou in Jiangsu province. The company focuses on the research, development and production of monoclonal antibody drugs for cancers and autoimmune diseases. Mabpharm is one of a number of Chinese organisations operating in the biologics sector (drugs synthesised from biological sources), one of the fastest-growing segments of the global pharmaceutical industry. US-based research & consulting firm, Frost & Sullivan, reports that the global market for biologic products is expected to grow at an annual rate of almost 10%. 

The Mabpharm IPO follows changes to the Listing Rules changes announced last year by the Hong Kong Stock Exchange (‘Exchange’). The changes, which were published in the ‘Consultation Conclusions on a Listing Regime for Companies from Emerging and Innovative Sectors’ create two new categories of companies that can list on the Exchange - (i) pre-revenue biotech companies and (ii) innovative and high growth issuers which have weighted voting rights (WVR) structures. The changes are designed to attract listings of the new generation of Chinese biotech companies amidst growing competition from the US and Chinese stock exchanges. 

Mabpharm will use the proceeds of the listing for ongoing research and development of both existing and new products, together with the expansion of production facilities.

The Eversheds Sutherland Hong Kong team was led by capital markets partner Amy Yu, assisted by Senior associate Crystal Kwok, Associates Anthony Lam and Jasmine Xu together with Clive Lam (Senior paralegal), Christina Wang and Clio Li (paralegals).

Amy added:

“We are delighted to have advised China International Capital Corporation on this listing. This is Eversheds Sutherland’s first listing of a biotech company under Chapter 18A of the Listing Rules, which is the biggest overhaul of the Hong Kong’s stock exchange Listing Rules and procedures in three decades. The successful listing further cements our team’s reputation as leading specialists for IPO work in Hong Kong. 

We were pleased to work alongside our colleagues in the US team together with the other legal advisers: Cleary Gottleib, Walkers, Commerce & Finance Law Offices and Zhong Lun Law Firm.”

Philip Ho, Executive Director, China International Capital Corporation commented:

‘Eversheds Sutherland acted as the Underwriter’s Hong Kong and US counsel in the initial public offering of Mabpharm Limited on Hong Kong Stock Exchange.  Throughout the entire transaction the Eversheds Sutherland team delivered the highest standards of due diligence, legal and Hong Kong Listing Rules advice.’

The Eversheds Sutherland US team was led by partners Herbert J. Short Jr. and Darryl Smith.

Herbert commented:

‘The Mabpharm transaction is the first time we have worked on a Rule 144A issuance with our colleagues in Hong Kong and it is a significant milestone. We were excited for the opportunity to advise our international client on accessing the US capital markets and we look forward to further opportunities to work together.’  

• Amy Yu
• Partner
• +852 2186 3238
• +852 2186 3238

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