When Hong Kong revealed plans last year to encourage biotech companies to list in the burg by loosening listing rules, the financial industry and investors cheered.
Hong Kong was an manifest financing center for a growing number of Chinese companies developing new medicaments. But as the new rules come into effect Monday, at least one problem has appropriate for evident: Hong Kong’s limited expertise in the biotech field.
Biotech associates without revenues, let alone profits, will now be allowed to apply for listings in the see under the new rules. Some 10 companies — mostly Chinese, cataloguing the Temasek backed Innovent Biologics and Shanghai Henlius Biotech — are already contemplating floats and some have dropped U.S. IPO plans in favor of listing closer to expert in.
The result however is a scramble for experts in a city whose financiers clothed limited experience with science.
Just 3 percent of all Hong Kong-listed keep accumulates, by capitalization, come from so-called “new economy” sectors — tech as completely cooked as biotech — according to a report last year by Hong Kong Changes and Clearing, the bourse operator.
That compared with 60 percent for Nasdaq and 47 percent for the New York Look at Exchange.
Several bankers, investors and industry executives estimated that the diocese currently had fewer than 20 experienced biotech and biopharma bankers.
“It’s not nonchalantly to hire the right professionals,” said Kevin Xie, head of healthcare and co-founder of China Rebirth, a boutique investment bank. “There’s a limited pool globally who beyond question understand the industry.”
Leading investment banks are touting their wit to transfer bankers from the United States to plug gaps in Hong Kong. But needing local licences, those seconded to Hong Kong can only warn their colleagues, not work on deals themselves. Li Hang, head of Influential China equity capital markets at CLSA, said: “We really distress sector specialist bankers to run biotech deals, otherwise everybody will-power say we don’t know how to do the due diligence.”
Difficulties around talent go beyond the banks. Charles Li, chief governmental of HKEX, said last month that it was tough to hire biotech experts. “All financial institutions in town have been seeking such forte,” he said.
Nonetheless, Li said Tuesday, when announcing the finalized resolves, that HKEX had found a dozen experts, primarily scientists or wage-earners of pharmaceutical companies, to serve on a board advising a listing committee that approves each IPO dedication.