InnoCare Pharma Soars in Hong Kong Debut, Shares Surge Past HK$10

VCBeat learned that on March 23, 2020, InnoCare confirmed its listing on the Hong Kong Stock Exchange. The company’s IPO was oversubscribed by nearly 300 times, with a total issuance of 250 million shares at HK$8.95 per share, priced at the upper end of the indicative offer range. According to the announcement released by InnoCare,After deducting the payable underwriting commissions and other related expenses, InnoCare’s net proceeds from this fundraising amounted to approximately HK$2.093 billion.

InnoCare: Basic Information (Source: Tiger Brokers)

The Hang Seng Index plummeted by nearly 1,150 points, or over 5%, at the open today. By the 4:00 p.m. close, it settled at 21,696 points, down 1,109 points, representing a 4.86% decline.

Amid a challenging macroeconomic environment, InnoCare still demonstrated strong performance, with its share price rising to HK$9.4 at the open, reflecting a 5% gain in the grey market. After the opening, the stock continued to climb, briefly surpassing HK$10. By the 4:00 p.m. close, the real-time price settled at HK$9.81, marking a 9.61% increase for the day.

InnoCare was founded by Dr. Shi Yigong andCo-founded by Dr. Cui Jisong, the current actual controller isDr. Cui Jisong and the wife of Dr. Shi YigongDr. Renbin Zhao.

As a renowned structural biologist in China, Dr. Shi Yigong’s curriculum vitae speaks for itself.

Dr. Ji Song CuiOnce in the United StatesServed as Head of the Early Development Team for Cardiovascular Diseases at Merck & Co., Inc. in the United States, and was subsequently invited by PPD to serve as CEO and Chief Scientific Officer of its China-based company, BioDuro.Co-founding InnoCare with Dr. Shi Yigong, Dr. Cui Jisong also assumed the roles of Chairman of the Board and Chief Executive Officer, taking full charge of the company’s operations and management.

Dr. Renbin Zhaothen had onceHe successively served as Senior Scientist, Researcher, and Chief Scientist at Johnson & Johnson, and later as Director of Pharmaceutical Research Biology at BioDuro, a PPD company, accumulating extensive experience in clinical research.Therefore, after joining InnoCare, Dr. Zhao Renbin served as Executive Director and Executive Director of Biology and Clinical Development Strategy, fully leveraging his expertise.

In addition to its management team, InnoCare boasts a truly star-studded Scientific Advisory Board. Notable members include Dr. Yigong Shi; Dr. Zemin Zhang, Deputy Director of the BIOPIC Center at the School of Life Sciences, Peking University, and former Chief Scientist of Bioinformatics at Genentech and Roche; Dr. Zhanguo Li, Director of the Clinical Immunology Center and Department of Rheumatology and Immunology at Peking University People’s Hospital, as well as Director of the Institute of Rheumatology and Immunology; and Dr. Arnold J. Levine, Member of the U.S. National Academy of Sciences and the National Academy of Medicine, Permanent Honorary Professor at the Institute for Advanced Study in Princeton, and the co-discoverer of p53. Such a distinguished Scientific Advisory Board has laid a solid technical foundation for InnoCare.

InnoCare's Pre-IPO Financing History

Backed by a stellar team, InnoCare secured a total of $218.8 million in financing prior to its IPO. Among its investors were prominent biopharmaceutical investment firms such as Vivo Capital, CCB International Capital, and Zenovo Innovation Capital.For InnoCare’s IPO and fundraising, Morgan Stanley and Goldman Sachs were engaged as joint sponsors. On March 12, the company further announced the introduction of 12 cornerstone investors.Subscribed for a total of approximately US$164 million (approximately HK$1.28 billion) in shares.

InnoCare's Key Pipeline in Development

According to the disclosures in InnoCare’s prospectus, its pipeline currently comprises five major products under development, each targeting a different molecular target. Three of these products have entered the clinical stage, while the other two remain in the preclinical stage.

Its flagship product, orelabrutinib (ICP-022), is a novel BTK inhibitor with the potential to be best-in-class, indicated for the treatment of various B-cell malignancies and autoimmune diseases. To date, the development of orelabrutinib has progressed smoothly, and its New Drug Applications (NDAs) for two major indications have both been accepted by China’s Center for Drug Evaluation (CDE).Orelabrutinib has demonstrated significant efficacy in clinical trials and exhibited a safety profile superior to that of its peers. InnoCare is currently making preparations for commercial launch.

ICP192 and ICP105 are two additional drug candidates of InnoCare currently in clinical development, targeting pan-FGFR and FGFR4, respectively.In China, ICP-192 is the pan-FGFR inhibitor with the most advanced clinical progress, second only to erdafitinib. Regarding FGFR4 inhibitors, only InnoCare’s ICP-105 and CStone Pharmaceuticals’ CS3008 have entered clinical trials in China. This means that both drugs are currently among the leading candidates in the country.

In terms of preclinical drug pipeline, InnoCare has developed six candidate drugs currently in the preclinical stage. Among them, ICP-723 and ICP-330 have largely completed their preclinical studies and are poised to enter the clinical development phase.

Primary Use of Funds Raised by InnoCare

Of the funds raised in InnoCare’s latest financing round, the largest portion—50% of the total amount (approximately HK$1 billion)—will be allocated to orelabrutinib-related activities. Around 20% of the remaining funds will be used for the regulatory filings and clinical trials of ICP-192, while only 5% has been assigned to ICP-105. This indicates that InnoCare’s top priority in its next phase will be advancing the market launch of orelabrutinib, while simultaneously accelerating the development progress of ICP-192. The R&D of other products will continue to advance as planned.

InnoCare is currently in the drug development stage and has not generated any revenue from product sales. Therefore, the company’s primary cost structure consists mainly of R&D expenses and administrative expenditures. As its product pipeline advances, particularly with the initiation of Phase III clinical trials for orelabrutinib, InnoCare’s R&D spending is expected to increase significantly in the future.

Although significant cash burn remains inevitable in the future, InnoCare is well-prepared. According to disclosures in its prospectus, as of September 30, 2019, InnoCare held total current assets amounting to RMB 2.4 billion. Coupled with approximately HKD 2 billion raised through this IPO, these funds are sufficient to meet InnoCare’s capital requirements for the coming years.