SinoCellTech's Sci-Tech Innovation Board IPO Application Accepted; A Leading Biopharma with Multiple Late-Stage Candidates Advances Toward Listing

Sep 16, 2019 18:36 CST Updated 18:36

VCBeat has learned that on the afternoon of September 16, the updated list of accepted applications for the STAR Market showed that the listing application of Beijing Sinocelltech Group Co., Ltd. had been accepted by the Shanghai Stock Exchange. The number of shares to be issued is expected not to exceed 68 million, with the specific share price yet to be disclosed.

In 2018, it incurred a loss of RMB 435 million; the funds raised will be used for R&D and to supplement working capital.

Sinocelltech is a leading innovative biopharmaceutical R&D company, specializing in the research, development, and industrialization of biological products for the treatment and prevention of various diseases, including malignant tumors, autoimmune disorders, infectious diseases, and genetic conditions. Sinocelltech is committed to developing best-in-class innovative biologics with differentiated competitive advantages in clinical settings, aiming to bring independently developed and manufactured Chinese biologics to markets in Europe and the United States, benefit patients worldwide, and establish a premier international biopharmaceutical brand.

SinoCellTech has not yet disclosed any financing information to date; however, according to its prospectus, the company’s valuation exceeded RMB 11 billion following its most recent funding round. Its shareholding structure also features familiar names such as CDH Furan, Qiming Rongxin, and Qiming Rongchuang.

Like most innovative drug companies, Sinocelltech is currently in a loss-making state due to high R&D investment. The R&D expenditure was approximately RMB 435 million in 2018. In the first quarter of 2019, R&D spending amounted to RMB 104 million, with no further expansion. From a cash flow perspective, Sinocelltech’s total current assets stood at RMB 632 million, including RMB 244 million in cash and cash equivalents and RMB 352 million in accounts receivable. Current liabilities totaled RMB 285 million. Given this situation, Sinocelltech’s working capital can only sustain the company’s operational needs for another year. The funds raised from this IPO are therefore critical for Sinocelltech.

Therefore, Sinocelltech also stated in its prospectus that a portion of the funds raised in this offering will be used to supplement working capital. The proceeds from this public offering will be primarily allocated to clinical research of its products and the supplementation of working capital. In the event that the funds raised are insufficient, priority will be given to the clinical research of its products.

Multiple Products Enter Phase III Clinical Trials; Recombinant Protein Therapies for Hemophilia A May Be the First to Market

Investors need not be overly concerned about investment returns. Although Sinocelltech has yet to commercialize any products, multiple candidates in its R&D pipeline have entered Phase III clinical trials, with some of these trials nearing completion.

In Sinocelltech’s drug pipeline, five candidates have advanced to Phase III clinical trials. These include two biosimilars (SCT510/bevacizumab and SCT630/adalimumab), one recombinant protein for the treatment of hemophilia A (SCT800), and two monoclonal antibodies for oncology indications (SCT400 and SCT110A). The clinical trials for both oncology drugs are being conducted as combination therapies.

SCT800 is a recombinant coagulation factor VIII protein independently developed by Sinocelltech since 2008, intended for the treatment of hemophilia A. Recombinant coagulation factor VIII protein is an essential therapeutic product for patients with hemophilia A. Due to the high technical barriers and significant manufacturing challenges associated with its production process, there are currently no approved domestically produced recombinant coagulation factor VIII drugs on the market in China.

As of June 30, 2019, Sinocelltech had completed the Phase III clinical study of its product SCT800 and was engaged in data cleaning and preparation of the clinical study report. Meanwhile, Sinocelltech was preparing for further clinical trials of SCT800, including international multi-center clinical studies. SCT800 is likely to become the key product that turns Sinocelltech from loss-making to profitable.