Report on Hong Kong-Listed Biotech Companies

Skadden Publication

Kai Sun Paloma Wang Lillian Lian Anthony Pang Martina To


Our third annual report on Hong Kong-listed biotech companies examines how the sector performed during the challenging conditions for capital markets globally over the past 12 months. Although aggregate listing and subsequent fundraising activity for biotech firms in Hong Kong decreased over the past year, Hong Kong continues to serve a thriving biotech ecosystem and is well positioned to attract further companies to list as global market conditions recover. The report provides a comprehensive overview of the market in its current state, examining key data points for biotech companies undertaking IPOs on the Stock Exchange of Hong Kong Limited (HKEX) in calendar year 2022 and analyzing the corporate governance practices of all 56 biotech companies listed on HKEX as of December 31, 2022.

Some of our findings include the following:

  • Eight new biotech companies listed on HKEX in 2022, raising an aggregate of US$473 million, which is a significant reduction compared to previous years in terms of both number of deals and aggregate funds raised.
    • By comparison, in the calendar year 2023 to date, one biotech company has passed its HKEX Listing Committee hearing and published a post-hearing listing document in preparation for launching its IPO, and a further five biotech companies have made initial listing application filings with HKEX.
  • Average biotech IPO size in 2022 was US$59.1 million, notably less than the average for 2018 to 2021, reflecting reduced deal sizes in challenging market conditions.
  • Of the 56 listed biotech companies, only 13 were trading at or above their IPO price as of December 31, 2022. However, that overall trend masked outperformance by individual companies, with some companies showing share price gains of between 130% and 200% during the same period.
  • Follow-on fundraising was also muted in 2022: Nine of the 50 biotech companies listed for at least six months as of December 31, 2022, had conducted follow-on fundraising during the year, with an average of US$227 million raised. (A further six companies have conducted follow-on equity capital raisings from January 1, 2023, through the date of this report.)
  • Board diversity continues to be an issue in the sector. While the proportion of companies with at least one woman on the board of directors has increased (only six out of 56 companies, or 11%, have no female director, compared to 21% of companies in last year’s report), women represent only 17% of directors overall.
  • The biotech initiative is showing success in creating sustainable companies: Two more companies demonstrated the necessary profit and/or revenue to remove the “B” marker from their stock codes during 2022, raising the total to six companies that have achieved this milestone since the listing regime was introduced.

Read the full report here.