Biotech Companies which cannot meet the financial eligibility tests of LR8.05, may list under Chapter 18A of the Hong Kong Stock Exchange Main Board Listing Rules if they are primarily engaged in the research and development (R&D), application and commercialisation of Biotech products, processes or technologies and meet the requirements set out below. For further details of the requirements for listing pre-revenue Biotech companies, please see New Rules for Listing Pre-Revenue Biotech Companies on the Hong Kong Stock Exchange.

Biotech is “the application of science and technology to produce commercial products with a medical or other biological application”.

 

Financial Requirements

  • HK$1.5 billion minimum market capitalisation at listing.
  • Available working capital for 125% of the group’s costs for 12 months after listing (including the IPO proceeds). IPO proceeds should be applied mainly in meeting R&D and general, administrative and operating costs.
 

TRACK RECORD

Track record of at least two financial years in the current line of business under substantially the same management. A change in ownership in the 12 months before the listing application may affect the company's suitability for listing.

 

REASON FOR LISTING

Primary reason for IPO must be to raise finance for R&D to bring Core Product(s) to commercialisation.

 

CORE PRODUCT

At least one Core Product must be developed beyond the concept stage.

Core Products are Biotech products that must be evaluated and approved for sale by a Competent Authority (the US Food and Drug Administration, the China Food and Drug Administration and European Medicines Agency) after clinical trials on humans.

 
  • Small Molecule Drugs and New Biologic Products - completed Phase I clinical trials and no objection to Phase II.

  • Core Products that are biosimilar - at least 1 clinical trial on humans completed and no objection to Phase II to demonstrate bio-equivalency.

  • Medical and Diagnostic Devices - Class II medical device, 1 clinical trial on humans completed and no objection to Phase II.
  • Other Biotech Products – considered by Hong Kong Stock Exchange case by case.

Concept stage 

 
  • Primary engagement in R&D for development of Core Product(s);
  • Engagement in the R&D of Core Products for 12 months before listing;
  • Patent(s), patent application(s) and/or intellectual property for Core Product(s) must have been registered; and
  • If the company is engaged in the R&D of potential pharmaceutical (small molecule drugs) products and biological products, it must demonstrate a pipeline of such products.

    Core Product Requirements

     

     

    MEANINGFUL INVESTMENT BY SOPHISTICATED INVESTOR(S)

    Meaningful investment by sophisticated investor(s) at least 6 months before listing and continuing at listing. 

     
     

    “Sophisticated investor” status will be assessed by the Stock Exchange by reference to net assets and assets under management, relevant investment experience, and the investor’s relevant knowledge and expertise. Examples are: 

    • a dedicated healthcare or Biotech fund or an established fund with a division/department investing in the biopharmaceutical sector;
    • a major pharmaceutical/healthcare company;
    • a venture capital fund of a major pharmaceutical/healthcare company; and
    • an investor, investment fund or financial institution with minimum assets under management of HK$1 billion.
     
     

    Meaningful investment will be assessed case by case by reference to the nature of the investment, amount invested, the size of the stake and timing. Examples are:

    • Market cap of HK$1.5-3 bln – 5% of issued share capital
    • Market cap of HK$3-8 bln – 3% of issued share capital
    • Market cap of  >HK8 bln – 1% of issued share capital
     

    PUBLIC FLOAT

    IPO subscriptions of Cornerstone Investors and existing shareholders do not count towards the 25% minimum Public Float

     

    LISTING DOCUMENT DISCLOSURE

    Additional Listing Document disclosure includes:

    • the stage of R&D for each Core Product;
    • summary of material communications with the relevant Competent Authority (unless disclosure is not permitted under applicable laws or regulations, or the directions of the Competent Authority);
    • all material safety data relating to Core Product(s);
    • details of any patent(s) granted, registered and applied for in relation to the Core Product(s) (unless the Exchange is satisfied that such disclosure would involve the disclosure of highly sensitive commercial information);
    • its material rights and obligations in respect of any in-licensed Core Products;
    • details of the company’s R&D experience;
    • details of the experience of its directors and senior management in the R&D, manufacturing and commercialisation of Biotech Products;
    • disclosure of risks, including potential risks in clinical trials and risks associated with the approval process for Core Product(s); and
    • estimate of cash operating costs, including costs related to R&D and clinical trials.