IPO pricing | Lepu Bio-B was subscribed 5.65 times, priced at HK$7.13 per share

Futu News, February 22, this Tuesday$LEPU BIO (02157.HK)$The announcement announced that the company will issue about 127 million shares, priced at HK$7.13 per share, 1,000 shares per lot, and is expected to go public on February 23.

During the public sale phase, Lepu Biotech received about 5.65 times more subscriptions. The final number of shares offered for sale was 12.688 million shares, accounting for about 10% of the total number of shares offered (before any over-allotment rights were exercised). A total of 6141 valid applications were received, with a first-hand winning rate of 22.31%, and a steady stream of 5 subscriptions.

Furthermore, the international offering was slightly oversubscribed (about 1.53 times), and the final number of shares offered was approximately 114 million shares, equivalent to about 90% of the total number of shares offered (before any overallotment rights were exercised). Futu Information collates the relevant data in the following table:

The net proceeds of approximately HK$804 million will be used for the following purposes: 68.5% for core products; 6.3% for other major clinical-stage drug candidates and major pre-clinical drug candidates; 15.8% for the acquisition of potential technology and assets and the expansion of the drug candidate pipeline, including the discovery of new drug candidates and business development activities, and fulfilment of the company's ongoing payment obligations under the acquisition of HX008 from Hans; 9.4% for general corporate purposes.

Founded in 2018, Lepu Biotech is a biopharmaceutical company focusing on the field of cancer treatment. It has built multiple oncology product pipelines, with broad-spectrum anti-tumor drugs (mainly including anti-PD-1 antibody candidate products) as the backbone. ADC and oncolytic virus candidate drugs go hand in hand, thus maximizing the synergy between commercialization and drug efficacy.

As of the last practical date, there are eight clinical-stage drug candidates, three pre-clinical drug candidates, and a combination therapy of three clinical-stage drug candidates in the company's product pipeline. Among them, five of the eight clinical-stage drug candidates are targeted therapies, three are immunotherapy drugs, two of these three are immune checkpoint drugs and one is an oncolytic virus drug. As of the last practical date, the company has initiated 28 clinical trials, of which 3 have entered the registration phase and 2 are ongoing 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 eight months of 2021, the company recorded other revenue of RMB 5,553 million, $7.964 million and $460.1 million. The net losses for the same period were RMB 515 million, $613 million and $668 million respectively. According to the prospectus, the vast majority of the company's operating losses result from R&D expenses and administrative expenses, and changes in the fair value of financial assets and liabilities measured at fair value and whose changes are included in current profit and loss.

In terms of R&D investment, in 2019, 2020 and the first eight months of 2021, the company's R&D expenses were RMB 229 million, RMB 354 million and RMB 509 million respectively. As of the last practical date, the company's R&D personnel accounted for 47.3%.

On the industry side, the global and Chinese biopharmaceutical markets have grown rapidly in recent years, and are expected to grow significantly in the near future. The global biopharmaceuticals market in 2019 was US$286.4 billion, and is expected to reach US$456.7 billion and US$768 billion in 2024 and 2030 respectively. The compound annual growth rate from 2019 to 2024 is 9.8%, and the compound annual growth rate from 2024 to 2030 is 9.0%.

The global oncology drug market is growing strongly. The global market size of oncology drugs in 2020 is US$150.3 billion, and is expected to reach US$304.8 billion in 2025 and US$482.5 billion in 2030. The compound annual growth rate from 2020 to 2025 is 15.2%, and the compound annual growth rate from 2025 to 2030 is 9.6%.