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• Beigene stumbled in its trading debut after releasing an IPO worth $3.5 billion
• The company has reported $827.7 million in net losses consecutively, in the first three quarters of 2021
Shares of Chinese biotech firms fell nearly 16% after its trading debut on Wednesday at Shanghai’s STAR Market. The company raised $3.5 billion in its IPO and became the first company to be listed in the US, Hong Kong as well as Shanghai’s STAR Market.
The company has reported $827.7 million in net losses consecutively, in the first three quarters of this year and closed 16.4% lower than its offer price of 192.6 yuan ($30.26) in Shanghai. Its Hong Kong-traded shares fell 7.6% on Wednesday.
The company’s IPO was sponsored by the China International Capital Corp. and Goldman Sachs Gao Hua Securities, the Chinese unit of Goldman Sachs Group which became the first U.S. bank in China’s domestic A-share market, reported Wall Street Journal (WSJ).
WSJ reported that BeiGene has 11 drugs in clinical trials or commercial use, including Brukinsa, a lymphoma treatment that was the first Chinese cancer drug to receive U.S. Food and Drug Administration approval.
BeiGene intends to use the majority of the proceeds to fund its research and development projects. Experts told WSJ that companies that haven’t shown great profits and want to raise capital for research and development undergo vigorous investor scrutiny.
The U.S. government intends to add more Chinese companies, including those in the tech and biotech sectors, to its export and investment blacklists, reported Financial Times.
Earlier this week, SenseTime postponed its Hong Kong IPO worth $767 million after the US Treasury Department placed it on the investment blacklist.
US’s action comes as a response to China’s policies in Xinjiang, where more than 1 million Uyghurs and other minorities have been held in detention camps.
Picture Credits: Business Wire
(With inputs from Wall Street Journal)