This Biotech Just Had a $903 Million IPO—And It’s Disappointed

For all intents and purposes, you’d think a $900 million-plus IPO would be considered a smashing success. In the case of Beijing-based biotech BeiGene, it’s a disappointment.

BeiGene, which debuted to a $158 million public offering on the NASDAQ back in 2016, just had its secondary IPO on the Hong Kong exchange HKEX. It raised a whopping $903 million, according to Reuters, and is part of an effort by Hong Kong to attract secondary listings as it implements new, more lenient rules for drugmakers that are still in the earliest stages of the clinical trial process without any products on the market.

Here’s the thing—BeiGene wanted to hit $1 billion, capital that it would use to fund R&D and studies of its pipeline of cancer immunotherapy drugs. In fact, the $903 million raise represents about a 1.6% discount to its NASDAQ closing price on Wednesday (shares of the biotech fell about 2.2% in Thursday afternoon trading, although the stock is still up 83% on the year and nearly 430% since going public in February 2016). The overall IPO range sought by BeiGene was reportedly between $908 million and $1.07 billion.

The South China Morning Post alludes to one reason why the biotech didn’t quite reach its aspirational goal: Health care stocks in the country have been in a slump following the loss of investor and public confidence following a major scandal over ineffective vaccines and falsified data which has been rocking China. “While the eight-year-old Beijing-based cancer drug maker has nothing to do with the scandal, brokers however said the incident has hurt investors’ confidence in the sector and hence affected the retail response to its IPO, which closed at noon on Thursday,” reports the Post‘s Enoch Yiu.

Miss aside, the volume of the raise still underscores the Hong Kong exchange’s ambitions in attracting biotechs and becoming a major listing competitor to U.S. markets.

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