BIOTECH company Shanghai Junshi Biosciences is seeking up to US$414 million in a Hong Kong initial public offering (IPO), making it the latest company to take advantage of new listing rules to attract early-stage drug developers.

Hong Kong’s new rules allow biotech firms with no revenue or profit to list on the city’s stock market, a change designed to lure startups away from other financial centers such as New York. The new regulations were introduced in April.

Junshi Biosciences is selling 158.9 million shares at a price range of HK$19.38-HK$20.38 (US$2.48-US$2.61), according to a term sheet.

The company could raise as much as US$476 million if a greenshoe, or over-allotment option, is exercised within the first month of trading.

The performance of shares listed under the new regime has been patchy. Ascletis Pharma, the first company to list under the new regulations, is down almost 60 percent since it began trading in August.

Beigene Ltd. and Hua Medicine, the other two biotechs to list under the new rules, have also fallen since their shares began trading.

But Innovent Biologics bucked the trend and is up 42 percent since its debut Oct. 31.

Bankers hope that will set the tone for upcoming biotechs, as investors in Hong Kong get more familiar with the sector.

Junshi Biosciences has a pipeline of 13 biologic drug candidates including immuno-oncology drugs, according to its draft prospectus.

Junshi Biosciences has no revenues from drug sales as it has not commercialized any drugs yet. (SD-Agencies)