Hutchison China Meditech, or Chi-Med, a biopharmaceutical company specialising in cancer and immunological drugs controlled by Hong Kong conglomerate CK Hutchison Holdings, has applied to list on the city’s stock exchange through a flotation comprising Hong Kong and global offerings. CK Hutchison, which currently holds a majority 60.2 per cent stake, plans to reduce its shareholding to below 50 per cent, as this will allow the deconsolidation of Chi-Med numbers into its financial statements. Details of its share offering, including newly issued shares for its Hong Kong offer, were redacted in its application to the Hong Kong exchange. Chi-Med is already listed on the AIM market of the London Stock Exchange and as American depository shares (ADS) on the Nasdaq Global Select Market. It plans to use part of the net proceeds from its Hong Kong listing for the late-stage clinical development of its global and China pipeline, and to advance its pipeline of clinical-stage drugs. Simon To Chi Keung, its chairman, said there was “great benefit” in seeking a listing in Hong Kong to supplement the company’s AIM and Nasdaq listings. “We expect the listing to enhance liquidity for our shareholders and strengthen our access to capital with a view to ensuring that we can fully realise the considerable potential of our drug portfolio,” he said. “The current pace of development of the biotech ecosystem in China is remarkable. It is being fuelled by the major unmet medical needs in China, systemic regulatory reforms that are accelerating new drug innovation and deepening market access,” To said. The company also manufactures, markets and distributes prescription drugs in hospitals across China. Bank of America Merrill Lynch and Goldman Sachs are joint sponsors of the listing, which is targeted for the third quarter this year. Chi-Med will execute a share split whereby one share will be subdivided into 10 shares. Based on this ratio, its ADS, which represented half a share in the company, will now represent five shares. Its AIM-listed shares will see a reduction in price to just a tenth of their trading price before the share split. The company said it will provide more details to shareholders, whose approval will also be sought at an extraordinary general meeting. Chinese biotech firm Ascletis first to apply for Hong Kong IPO under new rules In March, the company issued a financial guidance for the current year to holders of its ADS, indicating that research and development expenses for the 2019 financial year will be US$160 million to US$200 million, while adjusted group net cash flows excluding financing activities will be at US$120 million to US$150 million. For the 2018 and 2017 financial years, its net losses attributable to the company stood at US$74.81 million and US$26.74 million, respectively, reversing a net profit in 2016 of US$11.7 million. China’s oncology market is expected to grow at a compound annual growth rate of 15 per cent from 2018 to 2023, before slowing to 11.1 per cent between 2023 and 2030.