August 1, 2018 / 11:29 AM / 7 months ago

UPDATE 3-China's Ascletis closes flat on debut in HK's first float under new biotech rules

* Shares rise as much as 6.4 percent in initial trade

* First listing under rules to attract early-stage biotechs

* At least 10 more biotechs plan HK listings this year (Recasts; adds Ascletis' stock close)

By Julia Fioretti and Kane Wu

HONG KONG, Aug 1 (Reuters) - Chinese biotech firm Ascletis Pharma Inc saw its shares end their Hong Kong debut flat on Wednesday after rising as much as 6.4 percent, in the culmination of the city's first listing under new rules designed to attract drug developers.

The listing comes as Hong Kong seeks to establish itself as a financing centre for the growing number of Chinese biotechs by accepting applications from pre-profit, pre-revenue startups.

The rules, introduced in late April, are part of efforts to better compete with New York for listings. Currently, Nasdaq is the biggest centre for biotech initial public offerings (IPOs), with $2.4 billion worth of such shares sold last year.

So far, more than 10 biotechs - mostly Chinese and including Innovent Biologics and Shanghai Henlius Biotech - plan to list in Hong Kong, and some have dropped U.S. IPO plans in favour of listing closer to home.

Last month, Ascletis sold 224 million new shares, or 20 percent of its enlarged share capital, in an IPO priced at the middle of a HK$12 to HK$16 range. That valued the firm at $2 billion.

On Wednesday, its shares rose as high as HK$14.9 in early trade before ending unchanged from their IPO price at HK$14. The benchmark Hang Seng Index closed down 0.85 percent.

Hangzhou-based Ascletis, founded in 2013, has two hepatitis C virus drug candidates at or near commercial stage and one HIV drug that has completed a phase IIa clinical trial. It also has a liver cancer drug candidate that has completed phase I and phase I extension clinical trials.

Responding to questions about China's recent medical scandal, where a pharmaceutical company was found to have made and distributed poor quality vaccines, Ascletis founder Wu Jinzi said quality was "the lifeline" of his company.

"We are going to make the best quality, most effective and the safest drugs for patients in China and the world," Wu said at Ascletis' listing ceremony at the Hong Kong exchange.

China Merchants Securities, Goldman Sachs and Morgan Stanley led Ascletis' IPO.

Under previous rules requiring certain levels of cash flow or profitability, Hong Kong's biggest biotech IPOs were those of 3SBio Inc, which raised $818 million in 2015, and WuXi Biologics Cayman Inc, at $587 million last year.

Reporting by Julia Fioretti and Kane Wu; Additional reporting by Julie Zhu; Editing by Christopher Cushing and Stephen Coates

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