BRIEF: CStone raises $134 million in share placement at 7% discount

Drugmaker CStone Pharmaceuticals (2616.HK) announced on Wednesday it will place 118 million new shares at HK$8.97 each, representing about 7.4% of its enlarged share capital. The placement price reflects a discount of about 6.95% to the previous trading day’s close, with the sale expected to generate net proceeds of about HK$1.05 billion ($134 million).

The company said about 90% of the proceeds will be used to fund its “Pipeline 2.0” oncology drug development, including the trispecific antibody CS2009 and the ROR1 ADC candidate CS5001, with the remainder allocated for general working capital.

According to earlier disclosures, CS2009 is currently in Phase I/II clinical trials and is expected to enter global Phase Three multi-regional clinical trials by the end of this year, targeting indications such as non-small cell lung cancer, colorectal cancer and small cell lung cancer.

The company reported revenue of 270 million yuan last year, down 33.8% year-on-year, while its net loss widened sharply from 91.2 million yuan to 437 million yuan. The increase was mainly due to channel compensation expenses related to one of its product’s inclusion on China’s National Reimbursement Drug List, as well as margin pressure and a 131% surge in R&D spending to 312 million yuan.

CStone’s shares opened lower on Wednesday and were trading at HK$9.43 by the midday break, down 2.18%. The stock is up more than 77% so far this year.

By Lee Shih Ta

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