Zai Lab Announces NASDAQ IPO to Accelerate Clinical Pipeline and New Drug Development

VCBeat (WeChat ID: vcbeat) has learned that Zai Lab listed on the NASDAQ in the United States last night, with the stock ticker “ZLAB.” The IPO price was $18 per share, and the opening price was reported at $24.25. The total gross proceeds from the offering were approximately $150 million, with expected net proceeds of $90 million. The underwriters were JPMorgan Chase, Citigroup, and Leerink.

The prospectus shows that Zai Lab’s valuation has reached $800 million, ranking third in China’s biopharmaceutical industry, behind BeiGene at $3.3 billion and Hutchmed at $3 billion.

Zai Lab is a clinical-stage innovative biopharmaceutical company. Its core business model involves establishing strategic collaborations with leading global multinational corporations or research and development institutions to select relatively mature clinical drug candidates worldwide, jointly conduct clinical studies, and build a comprehensive product pipeline through a dual approach of in-house research and development and licensing.

Since its establishment in 2014, Zai Lab has been highly favored by international venture capital firms, having previously completed three rounds of financing with a total amount reaching $164.5 million.

In August 2014, Zai Lab completed a $30 million Series A financing round, with investors including Sequoia Capital and Qiming Venture Partners; in January 2016, it completed a $100 million Series B financing round, with investors including Sequoia Capital, Qiming Venture Partners, and Shangcheng Capital; this July, it completed a $30 million Series C financing round, led by OrbiMed Capital, with participation from Vivo Capital, Cormorant Asset Management, and Rock Springs Capital.

In terms of shareholding structure, Qiming Venture Partners was the largest shareholder of Zai Lab prior to its IPO, having invested over $32 million in the company and holding a 25.3% equity stake. Following the IPO, Qiming Venture Partners’ shareholding ratio stood at 21.80%.

Following this IPO, Du Ying, the founder of Zai Lab, will become one of only two CEOs of Chinese biotechnology companies in China. Du Ying founded Hutchison MediPharma in 2002 and spearheaded its listing on the London Stock Exchange in 2006.

As planned, the proceeds from this IPO will be used to advance the clinical pipeline and pursue new business opportunities.

Specifically, $38 million will be allocated to complete Phase II clinical trials of ZL-2306 for ovarian cancer, breast cancer, and other indications in China; Phase III clinical trials of omadacycline (ZL-2401) in China; and Phase II/III clinical trials of ZL-2301 for liver cancer in China. $16 million will be used to support the commercialization of niraparib (ZL-2306) in mainland China, Hong Kong, and Macau. $25 million will fund new business development and opportunities for in-licensing new products to advance and expand the company’s clinical pipeline, particularly products with exclusive global development and commercialization rights. $10 million will be dedicated to the research and development and clinical studies of other candidate compounds.

According to the prospectus, Zai Lab plans to establish a more comprehensive drug discovery and development platform in the near future, thereby introducing or independently developing more drugs that meet the needs of patients in China and around the world.