Biotech listings in Hong Kong poised to surge in 2021 as city chases New York for fundraising crown in the nascent sector

Hong Kong has 29 listing applications by pre-revenue biotech firms in the pipeline, in addition to 10 IPOs already carried out by their peers this year, compared with 14 listings in the whole of 2020

As the second-biggest biotech fundraising hub in the world, reforms that allowed pre-revenue drugmakers to list are paying dividends

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Already the largest biotech fundraising hub in Asia, Hong Kong is striving to overtake Nasdaq to become the global leader. Photo: Shutterstock

Published: 9:30pm, 2 Sep 2021Updated: 11:26pm, 2 Sep 2021

The number of pre-revenue biotechnology companies seeking to list in Hong Kong could almost triple this year, pushing the city closer to New York as the world’s fundraising hub for pharmaceutical developers and medical device makers, according to the local stock exchange operator.

At the annual HKEX Biotech Summit on Thursday, officials from Hong Kong Exchanges and Clearing said the city has 29 new listing applications by pre-revenue biotech firms in the pipeline, in addition to 10 initial public offerings already carried out by their peers this year. That compares with 14 listings in the whole of 2020.

The growing number of share sales by biotech firms that are yet to turn a profit will help the city maintain its position as the top global exchange for IPOs.

Already the largest biotech fundraising hub in Asia, Hong Kong is striving to overtake Nasdaq to become the global leader. Biotech listings in the US raised a record US$18 billion last year, according to Bloomberg. That compares with the US$12.6 billion raised in Hong Kong.

“Biotech and health care will be a key engine of growth in the region in years to come, helping us shape Hong Kong as a market of the future,” said Laura Cha, chairman of HKEX. “We will continue to enhance the breadth and depth [of the market], and bring vibrancy and diversity to our markets, making us more attractive and competitive for biotech companies in China and beyond.”

Hong Kong has seen rapid growth in the number of health care listings, Cha said. There are some 70 health care companies each with a market cap of over US$1 billion currently listed on the city’s stock exchange.

Overall, IPOs in the city surged 85 per cent in the first seven months of 2021 from a year earlier.