IPO pricing | Ricoh Bio-B was subscribed 10.65 times, priced at HK$24.8 per share

News from Futu Information on March 30, this Wednesday$RECBIO-B (02179.HK)$ An announcement was issued. The company issued 30854,500 shares, priced at HK$24.8 per share, and 500 shares per lot. It is expected to go public on March 31.

During the public offering phase, Ricoh Biotech received about 10.65 times more subscriptions, and the final number of offered shares distributed to the public sale was 3,085,500 shares, accounting for about 10% of the total number of shares offered (before any over-allotment rights were exercised). A total of 7853 valid applications were received, with a first-hand winning rate of 9.28%, and a stable first-hand purchase of 12 lots.

Furthermore, the international offering has been slightly oversubscribed (about 1.39 times), and the final number of shares offered was 277.69 million shares, which is equivalent to about 90% of the total number of shares offered (before any over-allotment rights are exercised). Futu News has compiled relevant data in the following table:

The net proceeds of approximately HK$672 million will be used for the following purposes: approximately 47.3% will be allocated to the HPV vaccine pipeline of companies that continue to optimize, develop and commercialize, including core products (recombinant HPV nine-valent vaccine REC603); approximately 17.7% will be used for pre-clinical and clinical research and registration of the COVID-19 vaccine (i.e. RecOV); about 21.1% will be used for pre-clinical and clinical research and registration of other vaccine candidates; about 6.7% will be used to further strengthen R&D capabilities and improve operating efficiency; and about 7.2% will be used for the company's working capital and general corporate use.

Ricoh Biotech is a vaccine company founded in 2012. It operates a business model based on independent research and development of novel vaccines, mainly focusing on the development of HPV vaccine candidates.

At present, the company has established a vaccine portfolio composed of 12 vaccine candidates, including the core product REC603, a recombinant HPV nine-valent vaccine used to prevent cervical cancer. It is currently in phase III clinical trials. The company has completed the recruitment of subjects for REC603, and plans to complete the administration of three doses in the first half of 2022, and submit a BLA application to the National Drug Administration by 2025.

According to the prospectus,Ricoh Biotech has received investment from well-known institutions such as Qingchi Capital, Temasek, Junlian Capital, and Sequoia Capital.

In terms of financial data, up to now the company has no approved products for commercial sale, nor has it generated any revenue from vaccine sales. In 2019, 2020 and the first nine months of 2021, the company recorded total overall losses of RMB 138 million, $179 million and $520 million respectively.

On the industry side, in China, the HPV vaccine market has huge potential, and is expected to grow rapidly in the next few years. China's first HPV vaccine was approved in 2017. Since then, the market size of the HPV vaccine has increased to RMB 13.5 billion in 2020, and is expected to reach RMB 69 billion by 2030, with a compound annual growth rate of 17.7% from 2020 to 2030. The HPV nine-valent vaccine market is expected to have the largest market share in the HPV vaccine market in 2030.

The HPV market in China is still undersupplied. According to Frost & Sullivan, in terms of the total population, as of the end of 2020, the overall HPV vaccination rate in China was low, less than 1%. Even considering the expected increase in the HPV vaccination rate, it is expected that by 2025, there will still be 233.9 million women aged 9 to 45 in China who have not received the HPV vaccine. Assuming 3 doses per person, an additional 701.7 million doses may be needed.

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