Charltons Biotech highlights the key issues for pre-revenue biotech companies considering a listing on the Main Board of the Hong Kong Stock Exchange under new Listing Rules which came into effect on 30 April 2018.
Charltons is a leading boutique Hong Kong law firm with extensive experience of listing companies on the Hong Kong Stock Exchange, both the Main Board and its second board, GEM, including some biotech companies. For further information about Charltons, our work and people, please see our main website at charltonslaw.com.
The adoption of new Listing Rules for listing biotech companies which cannot meet the financial eligibility tests for listing represents a major step for the Hong Kong market. Previously, biotech companies which invest heavily in research and development (R&D) have generally been unable to list in Hong Kong due to the profit or revenue qualifying criteria for listing.
Newly implemented Chapter 18A of the Listing Rules for pre-revenue biotech companies, together with new Listing Rules allowing the listing of companies with weighted voting rights (WVR) structures, which are commonly adopted by tech and other new economy companies, aim to ensure that Hong Kong provides a listing venue for the latest generation of tech, biotech and other disruptive and innovative companies and investor access to the high growth sectors of the future. The new Listing Rules’ removal of the bar on WVR structures and the need for biotech companies to meet the profit or revenue eligibility requirements is aimed at attracting to the Hong Kong Stock Exchange the companies which might otherwise list on Nasdaq or the Mainland stock exchanges.
The new Rules look set to establish the Hong Kong Stock Exchange as the major international listing venue for biotech and technology companies from China and the rest of Asia. They also represent a major opportunity for biotech and technology companies worldwide which want access to Asian investors.
For further information on the listing of biotech companies on the Hong Kong Stock Exchange, please contact:
Charltons
Telephone: (852) 2905 7888