TASLY Pharmaceutical Group is planning to list its biopharma unit in Hong Kong to raise about US$1 billion, in what is likely to be the largest biotech float in the city this year, people with knowledge of the matter said.

The plan comes as Hong Kong Exchanges and Clearing, the city’s exchange operator, is proposing changes to its listing rules to woo early-stage drug developers.

Tianjin-based Tasly, well known for producing traditional Chinese medicines, aims to list its wholly owned biopharma arm, Shanghai Tasly Pharmaceutical, in the second half of 2018, according to the sources. Shanghai Tasly is working with advisors on the proposed share sale, the sources added.

Details on the valuation of Shanghai Tasly and what percentage of the company is expected to be floated are not disclosed yet.

The company is yet to decide whether to sell existing shares, or issue new shares, or do a combination of both, the people said.

Shanghai Tasly’s planned listing is expected to be the first in a series of biotech firms keen to test the Hong Kong market. Other hopefuls include Chinese biotech company Ascletis, Shanghai Henlius Biotech, a subsidiary of Shanghai Fosun Pharmaceutical, and U.S.-based cancer detection startup Grail, according to IFR, a Thomson Reuters publication.

Founded in 2001, Shanghai Tasly launched in China one drug aimed at treating blood-clot induced heart attacks, known as pro-UK, in 2012. It is also in the process of developing more than 10 other drugs, according to its website and one of the people.

In a consultation paper published late last month, HKEx said it will allow biotech companies at the pre-revenue stage to list in the city, subject to certain criteria, including that the firms must have developed at least one core product beyond the concept stage.

The stock exchange is expected to start accepting listing applications from such companies after the consultation process is concluded in April at the earliest.

Currently, China’s securities laws do not allow firms that have yet to turn profitable to go public on the mainland.

(SD-Agencies)