Chinese biotech 3SBIO launches up to $712 mln HK IPO – Reuters

(Reuters) – Biotech company 3SBIO, which delisted from the Nasdaq two years ago, on Wednesday launched an up to $712 million IPO in Hong Kong to fund acquisitions and recruit staff to help it grab a bigger piece of the booming Chinese drug market.

The company, which produces drugs to treat bleeding disorders, hopes to benefit from greater liquidity by listing in Hong Kong alongside other firms which are targeting the Chinese biopharmaceutical market’s double-digit growth.

3SBIO and shareholder CITIC Private Equity are offering 606.1 million shares at an indicative price range of HK$8.30 to HK$9.10 each, putting the total deal at up to HK$5.51 billion, the terms showed.

3SBIO is selling 484.9 million new shares and CITIC Private Equity another 121.2 million shares.

China’s biopharmaceutical market grew at an average rate of 25.2 percent from 2009 to 2013, when it accounted for about 4.4 percent of the global market of $100.5 billion, 3SBIO said, citing research firm IMS Health Inc.

It was forecast to expand another 18 percent a year through 2018, when it would be worth 62.1 billion yuan ($10.01 billion).

Founded in 1993 by researcher Jing Lou and his father Dan Lou, 3SBIO went public on the Nasdaq in February 2007 in a $123.2 million IPO. It was taken private six years later by CITIC Private Equity, Jing Lou and other shareholders, with a price just 4.4 percent above its IPO.

3SBIO plans to use 45 percent of the IPO proceeds to expand its portfolio of drugs through acquisitions, 15 percent to hire more sales staff and open offices around China, and another 15 percent for new production lines. The remainder would be spent on research and development and working capital.

The IPO is expected to be priced on June 4, with a debut on the Hong Kong stock exchange slated for June 11.

Citic Securities, Goldman Sachs and Morgan Stanley were hired as joint bookrunners on the deal.

The company said it delisted from the Nasdaq because of poor liquidity and to give its management more room to improve results as a private company.