August 22, 2018 / 4:48 AM / a month ago

U.S.-listed Chinese biotech Zai Lab plans Hong Kong float -sources

* HK listing plan comes after its U.S. float in September 2017

* Sale could be up to 20 percent of enlarged share capital-source

* Would be second U.S.-listed Chinese biotech to seek HK float

By Julie Zhu and Fiona Lau

HONG KONG, Aug 22 (Reuters/IFR) - Zai Lab Ltd is planning a Hong Kong float after its Nasdaq debut last year, in what would be the second U.S.-listed Chinese biotech firm to return to the city following an implementation of new listing rules, sources said.

Zai Lab is in talks with advisers for a share sale plan in Hong Kong, which is seeking to establish itself as a financing hub for pre-revenue drug developers, the sources added.

While the Shanghai-based company has yet to finalise the size of its Hong Kong offering, one of the sources said it would likely sell 10-20 percent of its enlarged share base.

The deal is expected to be launched early next year, sources added on condition of anonymity as the plans were not public.

When contacted by Reuters, Zai Lab, however, said it does not have any firm plans for a Hong Kong listing at this time.

The biopharmaceutical firm raised $172 million from its Nasdaq IPO in September 2017. It had a market capitalisation of $1.18 billion at Tuesday's close in New York.

A listing in Hong Kong would help raise the firm's profile in China, the world's No.2 drug market, as it is looking to commercialize its ovarian cancer treatment niraparib in Hong Kong this year, the sources said.

Its float would follow that of Chinese biotech firm BeiGene Ltd that raised $903 million from a dual primary listing in Hong Kong earlier this month.

Shares of BeiGene, however, closed at HK$96.7 on Tuesday, 10.5 percent below its debut price, with U.S.-China trade tensions making investors cautious toward new listings.

The two are among a steady stream of Chinese biotechs looking to take advantage of Hong Kong's efforts to become a listing hub for the industry. In April, it eased its rules to allow biotech firms with no profits or revenues to list.

More than 10 companies, mostly Chinese, plan to list in the Asian financial hub this year while some have dropped U.S. IPO plans in favour of listing closer to home.

Shanghai-based Hua Medicine, a diabetes treatment developer, started pre-marketing a Hong Kong IPO of about $200 million on Monday. Ascentage Pharma Group International, which focuses on cancer and hepatitis B treatments, filed a listing application this week for a float of up to $300 million in the city.

Zai Lab, which develops drugs for cancer, autoimmune and infectious diseases, was co-founded in 2014 by Samantha Du, a former Pfizer research scientist. She also sits on the Biotech Advisory Panel of Hong Kong Exchanges and Clearing. (Reporting by Julie Zhu, Fiona Lau of IFR; Editing by Himani Sarkar)

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