Popular subscription and substantial room for rise in market value post IPO
The public offering of Ant Group last week froze a large amount of capital, posing pressure on other pre-listing companies. However, offering from RemeGen still gained great traction, with its institutional books hundreds multiple times covered and retail book over 50-time subscription in pool A and hundreds of times in pool B. With the sudden halt of Ant Group’s IPO and hundreds of billions of funds being refunded to Hong Kong investors, it is expected that RemeGen would become a new hit of the market.
Due to the over-subscription and the ‘claw-back’ mechanism, the shares distributed to institutional investors were extremely tight. Nevertheless, the structure of the institutional book was extremely strong. Majority of the investors areglobally renowned long-only funds, leading healthcare corporates in China, healthcare specialists as well as well-known tycoons and family offices from both Hong Kong and China. After the listing of RemeGen, these investors will continue to increase their position given the limited amount of allocation they received during the IPO due to the “claw-back” mechanism mentioned above. This will provide a margin of safety for the company’s post-market performance.
The estimated value of RemeGen after IPO is expected to be approximately HK$25 billion, comparing with BeiGene’s current market cap of ~HK$200 billion, Innovent’s current market cap of ~HK$80 billion and Junshi Biosciences’s current market cap of ~HK$40 billion. RemeGen has substantial room to continue to climb after the IPO. It is highly likely that the market will witness a strong post-market performance of RemeGen, which can fully represent its market value.
Star management team to ensure that the innovative drugs will receive marketing approval and enter the market within the next 3-8 months
Established in 2008, RemeGen has a management team featuring extensive industry experience and professional expertise. Dr. Fang Jianmin, the co-founder, CEO and CSO of RemeGen, is one of the few corporate founders in the domestic biopharmaceutical industry with a successful track record of progressing novel biological drugs from discovery through development and commercialization. Dr. Fang is the original inventor of Conbercept, which is a well-known biologic drug and was ranked top ten in terms of revenue in China last year. At the same time, he is also a member of scientific Expert Committee of the Special Major Project for Technologies of Innovative Manufacturing of Major New Drugs. Dr. Fang has more than 20 years of extensive experience in biopharmaceutical R&D and owns more than 40 patents for pharmaceutical invention.
Dr. He Ruyi, the CMO of RemeGen, is one of the most authoritative experts in China in the areas of clinical development and global regulatory regimes for medical products. With nearly 20 years of experience working at the FDA in the U.S., Dr. He has led multiple important policy initiatives during his tenure as Chief Scientist at the Center for Drug Evaluation (CDE) of the NMPA. In addition, Dr. He is an important committee member in the biotech expert committee at the Hong Kong Stock Exchange. Under Dr. He’s leadership, RemeGen is in the process of receiving market approval for two of its leading innovative drugs within the next 3-8 months.
What is worth mentioning is that among the pre-revenue biotech companies in the Hong Kong market, RemeGen is, other than BeiGene, the only enterprise with two innovative drugs, namely Telitacicept and Disitamab vedotin, which are both expected to receive marketing approval within the next 3-8 months. Telitacicept is mainly used for the treatment of B cell-mediated autoimmune diseases. As there is no effective cure for such diseases, Telitacicept is expected to be the best-in-class therapy in global SLE market which ever-growing with largely untapped potential. Disitamab vedotin is a kind of antibody-drug conjugates (ADC) which is mainly used for the treatment of common cancers. ADC is the branch of oncology therapeutics which attracts the most attention and investment given its therapeutic potential. Disitamab vedotin has the potential to become the first-to-market ADC in China and is well-positioned to capture large demand of the market.
In addition, RemeGen has global development and commercialization rights to the above candidates and will expand its businesses globally in the years to come. The dealings of RemeGen will officially commence on the Main Board of the Stock Exchange on 9 November. Given that the company has two innovative drugs about to reach the commercialization stage with more room for growth in the future, RemeGen is definitely a high-quality target of great investment value.
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