IPO | Shengnuo Pharmaceutical-B will start offering shares now and is expected to be listed on December 30

News from Futu News on December 20, this Monday$SIRNAOMICS-B (02257.HK)$The announcement was announced that it will issue 7.54 million shares from December 20 to 23. The company plans to issue 7.54 million shares, including 754,000 shares for public sale and 6.786 million shares for international sale, with an issue price of HK$65.9-72.7, and 50 shares per lot. It is expected to be listed on December 30.

Shengnuo Pharmaceutical is an RNA therapy biopharmaceutical company. Its candidate products are in the preclinical and clinical stages, focusing on exploring and developing innovative drugs to treat indications with medical needs and huge market opportunities. The company was founded in 2007 when Sirnaomics was founded in the US. Currently, it has market positions in both China and the US, and has R&D centers in both countries.

The company's core product, STP705, has proven efficacy and safety in the oncology phase I/II clinical trial of non-melanoma skin cancer. It will further promote the use of STP705 for squamous cell carcinoma in situ (isSCC) in phase IIb clinical trials, phase II clinical trials to treat skin basal cell carcinoma (BCC), phase II clinical trials to treat keloids, and phase I/II clinical trials to treat proliferative scars (HTS).As of the last practical implementation date, two authorized US patents and seven pending patent applications covered the company's core product STP705, including 2 in China and 5 in the US.

In terms of financial data, the company currently does not generate any revenue from product sales. In 2019, 2020 and the first nine months of 2021, the company recorded total net losses of US$17.127 million, US$464.28 million and US$5.01 million respectively. The vast majority of net losses are due to R&D expenses, changes in the fair value of financial liabilities that include profit and loss at fair value, and administrative expenses.

On the industry side, the global market size of RNAi therapy for all indications increased from $12 million in 2018 to $362 million in 2020, with a compound annual growth rate of 449.2% and estimated to reach $25 billion in 2030. By 2030, the market size of RNAi therapy for common diseases and oncology will account for 54% of the total market size.

The market size of RNAi therapy in China will increase from about 4 million US dollars in 2022 to more than 300 million US dollars in 2025. The compound annual growth rate is over 300%, and it is estimated that it will reach about 3 billion US dollars in 2030.

In terms of Cornerstone investors, the two Cornerstone investors agreed to subscribe for the number of shares to be subscribed at the sale price, totaling US$29 million, including Kunming Jiashiqing and Jianxin Force Pharmaceuticals.

In terms of use of financing, the net proceeds of the company were approximately HK$420 million (based on the median issue price, assuming that the over-allotment rights were not exercised). According to the prospectus, the company intends to use the net proceeds from the sale of shares for the following purposes:

Approximately 57.9% will be used to fund the development and commercialization of STP705, about 15.6% will be used to fund the development of STP707, and about 15.4% will be used to fund the company's GalNAc plan products, such as STP122G, STP133G, and STP144G, and other pre-clinical candidate products; about 7.3% will be used for research and development of other pre-clinical drug candidates, and about 3.8% will be used for general corporate and working capital purposes.

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