The latest: Jiangsu Recbio Technology Co. Ltd (2179.HK), a producer of human papillomavirus (HPV) vaccines, received a muted reception as it made its trading debut in Hong Kong on Thursday. According to the allotment results, its offer of 3.055 million shares received orders from 7,853 subscribers, equating to an over-subscription rate of 9.65 times. Successful subscribers purchased shares at an IPO price of HK$24.80 per share.

Looking up: The share sale raised a net HK$670 million ($85.9 million), of which 47.3% will be used for the development, production and commercialization of the company’s HPV vaccines. Another 17.7% will go to its Covid-19 vaccine candidate, which, if successful, will help to broaden Recbio’s revenue streams.

Take Note: Market response to the international offering – typically reflective of institutional investor demand – was relatively lukewarm. That portion of the offering attracted a modest 167 applications, and was just 0.39 times oversubscribed.

Digging Deeper: Founded in 2012, Jiangsu Recbio has a pipeline of 12 vaccine candidates, including for HPV, Covid-19 and adult tuberculosis. But none of those has been commercialized, and only one has reached Phase Three clinical trials. According to its IPO prospectus, the company recorded revenue of 27.81 million yuan last year, mainly from government subsidies and bank interest. R&D expenses amounted to 473 million yuan, up 263% from 2020. That, together with administrative expenses and finance costs, led the company’s loss for last year to balloon 267% to 658 million yuan, nearly equal to the funds raised in the IPO.

Market Reaction: The stock opened up 0.8% and rose as much as 2.2% in the morning session. It was unchanged at the midday break, closing at the $24.80 IPO price.

Translation by Jony Ho

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