Center Laboratories Inc’s (晟德大藥廠) China-based unit, TOT Biopharm International Co Ltd (東曜藥業), is to conduct an initial public offering (IPO) in Hong Kong on Friday next week to raise capital for its new drug business, the firm said yesterday.
The unit plans to raise HK$679.5 million (US$86.7 million) by issuing 90 million new shares at HK$7.55 each, Center Laboratories said in the prospectus.
Although Center Laboratories would see its stake in TOT Biopharm decline from 37.2 to 31 percent due to equity dilution after the IPO, it would remain the firm’s biggest shareholder, the company said in a statement.
‘NATURAL CALL’
It is to be the first time a biopharmaceutical firm with investment from a Taiwanese company conducts an IPO in Hong Kong, even though the Taiwan Stock Exchange has eased regulations to allow biotechnology firms, even if they are unprofitable, to become publicly listed companies.
“It is a natural call [to go public in Hong Kong], as TOT Biopharm has mainly concentrated on China’s oncology market since its establishment in 2009. Being listed on the Hong Kong Stock Exchange will make the firm known to more investors,” Center Laboratories spokeswoman Catherine Lin (林秀月) said by telephone.
The unit, registered in Hong Kong and headquartered in China’s Suzhou Industrial Park, focuses on the research and development, manufacturing and marketing of high-end anti-tumor drugs.
“It is also [Center Laboratories] chairman Lin Rong-jin’s (林榮錦) philosophy that new drug companies should gain financial support worldwide, as it takes a lot of money to develop the drugs,” Lin said.
TOT Biopharm’s other shareholders include the US investment firm Vivo Capital LLC with a 19.02 percent stake and venture capital firm Chengwei Capital (成為資本) with an 11.8 percent stake, she said.
BUSINESS POTENTIAL
Even though the unit has not turned a profit — with cumulative losses last year totaling 7.53 million yuan (US$1.07 million at the current exchange rate), a 55.3 percent increase from 4.85 million yuan in 2017 — it has passed the listing review due to its business potential, Lin said.
TOT Biopharm said that it expects to complete phase III trials in China for TAB008, a biosimilar of Roche Holding AG’s Avastin for the treatment of colorectal cancer, by the end of this year and plans to file a new drug application in March next year.
It added that it has another 11 drugs in the research stage.
Shares of Center Laboratories, which manufactures and markets oral liquid formulations and children’s formulations, gained 9.98 percent to NT$66.1 in Taipei trading yesterday.
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