Ascletis Pharma, Asia’s first pre-profit listed biotech, plunges in Hong Kong three days after debut
Analysts warn the fall in drug makers bodes ill for the other unprofitable biotechs queuing up to list
Shares of Ascletis Pharma, the first early-stage biotechnology company to list in Hong Kong under new rules, tumbled on Friday, their third day of trading.
Other pharmaceuticals fell too, a trend that bodes ill for a slew of biotech firms lining up to go public, according to analysts.
The Chinese pre-profit drug maker plunged 15.5 per cent to close at HK$10.02 on Friday, bringing the total loss since the shares’ debut on Wednesday to 32 per cent. The shares finished their first day of trading unchanged from the initial public offering price of HK$14 but have slumped over the last two days.
People are not even buying drug firms that have profits, not to mention these biotech firms that are not making money
The decline came as market sentiment continued to deteriorate on the back of escalating trade tensions between the US and China. The Hang Seng Index has sunk 3.9 per cent this week, the worst performance since early February.
“People are not even buying drug firms that have profits, not to mention these biotech firms that are not making money,” said Kingston Lin King-ham, a director at AMTD securities brokerage.
“It’ll be very hard to attract investors for the biotech firms to be listed.”
A recent safety scandal over vaccines in China also weighed on the pharmaceutical sector, as it involved several companies listed in the mainland.