FAST NEWS: CStone Raises $50 Million in New Share Placement

The latest: CStone Pharmaceuticals (2616.HK) on Wednesday announced it placed 84.8 million new shares at a price of HK$4.633 per share, raising approximately HK$393 million ($50.4 million). The sale price represented a discount of 8.8% to yesterday’s closing price of HK$5.08.

Looking up: The company will use proceeds from the placement mostly on its product development and commercialization, which will help to broaden its revenue sources.

Take Note: Upon completion of the placement, majority shareholder WuXi Healthcare Ventures’ stake will be reduced from 24.47% to 22.85%, lowering its influence on the company.

Digging Deeper: Founded in 2015 and listed in Hong Kong in 2019, CStone posted its first revenues in 2021 when four of its drugs for non-small cell lung cancer, gastrointestinal tumors and acute myeloid leukemia were approved for sale. The company recently said it expected to report its revenue doubled to 475 million yuan ($70 million) or more last year, mainly due to a big increase in revenue from precision medicine sales and royalties from its sugemalimab drug. At the end of June last year, its cash and cash equivalents totaled 1.1 billion yuan, down 31.4% from the end of 2021. The new placement will boost the company’s cash by about 31%.

Market Reaction: CStone’s shares fell on Wednesday, closing down 7.9% at HK$4.68 by the midday break, slightly higher than the HK$4.633 sale price. The stock now trades at the upper end of its 52-week range.

Translation by Jony Ho

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