Soaring 100% on the first day, this "unprofitable" pharmaceutical company was snapped up.
Text | Hu Xiangyun
Editor | Hai Ruojing
On July 25th, LigoCyte Pharmaceuticals officially listed on the Hong Kong Stock Exchange. On the first day of listing, the stock price soared by 117% at one point, and by the close, the increase was over 90%, with a total market value of HK$13 billion.
LigoCyte Pharmaceuticals was founded in 2012 and is mainly engaged in the R & D of tumor immunotherapy products. This time, although the company's IPO fundraising amount was only about HK$1 billion, in the subscription that ended on the 22nd, the subscription amount reached a staggering HK$339.8 billion, and the retail subscription multiple exceeded 3,000 times. In the grey - market trading the day before the listing, the stock price of LigoCyte Pharmaceuticals had already risen by more than 90%. Without considering handling fees, successful subscribers could earn more than HK$3,000 per lot.
Since the beginning of this year, as many as 50 enterprises have submitted listing applications to the Hong Kong Stock Exchange. Among them, including LigoCyte Pharmaceuticals, a total of 7 innovative drug companies have listed in Hong Kong, and the trend of share prices falling below the issue price has not continued. For example, InnoCare Pharma, which listed in April, also saw a first - day increase of more than 110%.
Such a large amount of real money flowing into innovative drugs would have been unthinkable half a year ago. Is the great bull market for innovative drugs finally coming?
The High Premium for the "World's First"
Among the innovative drug companies listed this year, LigoCyte Pharmaceuticals' listing performance can be described as "phenomenal". Looking into the reasons behind it, there are accidental factors at play. For instance, the market for innovative drugs in the Hong Kong stock market has been rising continuously, and there were no other biotech companies listing in late July. On the other hand, the backing of a luxurious lineup of 9 cornerstone investors such as ZhenFund, Gao Yi Asset Management, and Tencent, as well as LigoCyte Pharmaceuticals' own business situation, are also influencing factors.
"Accurate judgment, prompt action, willingness to take risks, and openness to investors' suggestions" is Dr. Deng Lingquan, a partner at Mifang Health Fund's impression of LigoCyte Pharmaceuticals' core team. In 2021, when Deng Lingquan was still working at Hankang Capital, he participated in LigoCyte Pharmaceuticals' Series C financing and served as a director of the company. He admitted that as an investor, he did not expect the company to be so heavily over - subscribed at the time of listing.
According to the prospectus, LigoCyte Pharmaceuticals currently has 14 drugs in the R & D pipeline, and 6 of them have entered the clinical trial stage. These include the next - generation IO therapy LBL - 007 targeting the LAG3 after PD - 1, the PD - L1/4 - 1BB bispecific antibody LBL - 024, as well as the popular TCE and ADC molecular products in the past two years, and even "relatively radical TCE - ADC candidate drug molecules".
"These types of products are all based on antibodies and proteins, and there are commonalities in technology. Developing ADC also has an additional technical barrier in small - molecule chemistry, but it can be gradually accumulated and expanded. Given LigoCyte Pharmaceuticals' situation at that time, these directions were not to be missed. The company has also achieved clinical and BD results in each direction. Therefore, the potential we saw in this company around 2021 is now being recognized by more people in the market, which might be the reason why everyone is willing to invest in and support it." Deng Lingquan said.
Source: LigoCyte Pharmaceuticals' Prospectus
Taking LigoCyte Pharmaceuticals' current core pipeline LBL - 024 as an example, the 4 - 1BB target is a very important co - stimulatory receptor on T cells. Its development has a history of many years, but there are still no products on the market because most of them have difficulty bypassing the problem of liver toxicity. Both Bristol - Myers Squibb and Pfizer have suffered setbacks in this regard. In response, LigoCyte Pharmaceuticals did not choose to directly develop 4 - 1BB drugs but instead developed a bispecific antibody in combination with PD - L1. While activating 4 - 1BB and avoiding liver toxicity, it retains a strong tumor - killing effect.
In terms of clinical progress, LBL - 024 is also in a relatively leading position. At this year's American Society of Clinical Oncology (ASCO) annual meeting, LigoCyte Pharmaceuticals announced the Phase Ib/II clinical data of LBL - 024 in combination with etoposide/platinum - based chemotherapy for extrapulmonary neuroendocrine cancer. The results showed that the objective response rate (ORR) and disease control rate (DCR) of the LBL - 024 treatment group were 75% and 92.3% respectively, while the ORR of chemotherapy alone was 30% - 50%.
Source: LigoCyte Pharmaceuticals' Prospectus
Although the incidence of extrapulmonary neuroendocrine cancer is not as high as that of "major cancer types" such as non - small cell lung cancer, the number of new cases in China in 2024 was 17,000. There is a lack of standard treatment. In this indication, the Phase Ib/II clinical study of LBL - 024 can be used as a key trial for the listing application and is expected to become the first approved drug. In addition, the clinical trials of this product for cancers with larger markets, such as small - cell lung cancer and non - small cell lung cancer, are also in progress.
"The market is often willing to pay a high premium for an imaginative 'first', because people value more the potential of the drug to be extended to more disease areas rather than just the size of the initial indication." Deng Lingquan believes.
In addition, LigoCyte Pharmaceuticals has more than just LBL - 024 as a "world - leading" product. For example, the two TCE bispecific antibodies LBL - 034 and LBL - 033 targeting GPRC5D and MUC16 respectively are also at a similar R & D level as multinational pharmaceutical companies.
These also lay the foundation for LigoCyte Pharmaceuticals to strive for the title of "the first TCE - related listed company". "These labels are also important for the company's listing and financing. At least, they show the company's ambition in the market and may also play a certain role in promoting the subscription process."
Unprofitable Pharmaceutical Companies Rush to IPO Collectively
Has the Innovative Drug Industry Finally "Recovered"?
In 2012, 67 - year - old Lai Shoupeng began to establish LigoCyte Pharmaceuticals. He and his partner Kang Xiaoqiang both have medical backgrounds and met at the US National Cancer Institute. They have a strong interest in tumor immunology research. At that time, they caught the wave of the rise of the Chinese innovative drug industry. The financing progress of LigoCyte Pharmaceuticals after its establishment was relatively smooth. Before the IPO, the company completed a total of 8 rounds of financing, raising a total of HK$1.084 billion. The investors included Enran Venture Capital, Shenzhen Capital Group, ZhenFund, and Kunming Pharmaceutical Group.
It was these financings that supported LigoCyte Pharmaceuticals through the most difficult years of the industry's "winter".
Like many innovative drug companies in the R & D stage, LigoCyte Pharmaceuticals has not yet had any products on the market since its establishment. From 2023 to the first quarter of 2025, the company accumulated a loss of nearly HK$500 million. However, in 2024, the annual salaries of Kang Xiaoqiang and Lai Shoupeng exceeded HK$20 million and HK$6.3 million respectively.
In the past few years, LigoCyte Pharmaceuticals' main way to "recover funds" has been through BD transactions. One was the licensing cooperation on LBL - 007 with BeiGene in 2021, but it was terminated before the listing due to BeiGene's adjustment of its internal "product portfolio priorities".
The other was the NewCo project in cooperation with the US venture capital firm Aditum Bio last year. By licensing the autoimmune - related TCE trispecific antibody LBL - 051, LigoCyte Pharmaceuticals will receive an upfront payment of US$35 million and milestone revenues of up to US$579 million. However, among the domestic TCE products licensed last year, this amount is not outstanding.
After this listing, LigoCyte Pharmaceuticals will also obtain more funds to support its subsequent R & D. In addition, it is understood that the company is also considering more possibilities for BD cooperation.
From an industry perspective, similar to LigoCyte Pharmaceuticals, among the 6 innovative drug companies listed on the Hong Kong stock market this year, all except Hengrui Medicine have not achieved profitability. For example, InnoCare Pharma, PAI Health, and Pharmaron Biotech had losses of HK$1.05 billion, HK$283 million, and HK$275 million respectively in 2024. However, the total fundraising amount of the 7 companies has approached HK$14 billion.
In the past few years, there have been concerns in the industry. Innovative drug companies rely on BD transactions to maintain their cash flow, which essentially relies on the release of the industry's accumulated achievements over more than a decade. However, as the innovative achievements are gradually realized and licensed, if there is no new capital inflow, how can the Chinese innovative drug industry survive the next decade?
Now, the secondary - market financing channel has reopened for unprofitable biotech companies, sending the most positive signal to the outside world: the innovative drug market has finally started a positive interaction, which may also drive the pharmaceutical industry back onto the prosperous track.
In addition, Deng Lingquan mentioned that the fact that leading pharmaceutical companies such as Hengrui Medicine are starting to list on both the A - share and H - share markets may also trigger a butterfly effect in Hong Kong stock investment. "The problem with the Hong Kong stock market in the past was that it was dominated by'small - cap stocks', and large - scale capital may not be interested. However, as Chinese veteran pharmaceutical and medical leading companies with large market capitalizations on the international stage start to enter the Hong Kong capital market, they will attract more and more international capital to study and consider investing in Hong Kong stocks, thereby benefiting more small and medium - sized Hong Kong - listed companies in the same field."