An innovative pharmaceutical company sought after by 300 billion in funds soared 110% on its first day of listing.

Text | Hu Xiangyun

Editor | Hai Ruojing

The Hong Kong stock market has welcomed its 11th listed innovative drug company this year.

On September 19th, GenFleet Therapeutics was listed on the Hong Kong Stock Exchange. On its first day of trading, its share price soared by nearly 110%, and its market value approached HK$15 billion. The grey - market trading the day before its listing saw a gain of over 100%, continuing the hot trend of new - share subscriptions for innovative drug companies this year. The final subscription multiple exceeded 2200 times, with the subscription amount nearing HK$350 billion. In addition, the company has a strong lineup of cornerstone investors, including RTW Fund, OrbiMed, TruMed, etc. More than half of them are professional pharmaceutical investment institutions, and the total subscription amount reached US$100 million, setting a new high among 18A innovative pharmaceutical companies in 2022.

Before its IPO, GenFleet Therapeutics had completed a total of 7 rounds of financing, raising a cumulative amount of RMB 1.421 billion. After the final Series C+ financing, its post - investment valuation reached RMB 3.124 billion. The investors behind it include well - known institutions such as Huagai Capital, CDH Investments, Baidu Ventures, and Shenzhen Capital Group.

GenFleet Therapeutics is highly sought after by capital. This is not only due to the continuous recovery and rise of the innovative drug sector in the Hong Kong stock market but also related to its fundamentals. The company was founded in 2017 and is mainly engaged in the R & D of oncology and autoimmune drugs. It was founded by Dr. Lu Qiang, a returned overseas scientist. After returning to China, Lu Qiang has worked in companies such as WuXi AppTec, Yangtze River Pharmaceutical Group, and CStone Pharmaceuticals. His work experience covers CXO companies, traditional pharmaceutical companies, and emerging biopharmaceutical companies, giving him a profound understanding of the domestic innovative drug ecosystem.

In terms of business, the KRAS target that GenFleet Therapeutics focuses on is not a very popular one. Currently, the overall market for such products is just in its infancy and has not entered the explosive growth stage. However, the company excels in integrating R & D resources and has high efficiency. In 2024, it had already launched products and successfully entered the first echelon of KRAS inhibitors. At the same time, GenFleet Therapeutics has completed multiple BD transactions at home and abroad, enabling the company to have a continuous and stable cash - flow income before its listing. This is quite rare among innovative drug companies in the Hong Kong stock market.

With a founding team with overseas - return backgrounds, core products already on the market, and multiple BD partnerships, it can be said that GenFleet Therapeutics is the type of innovative drug company that best meets the current market expectations. Now, after achieving phased success in the capital market, can GenFleet Therapeutics continue its "model student" performance?

"Undruggable" anti - cancer target finally goes public,

but the market is still in its infancy

All along, the capital market has criticized innovative drug companies for their slow monetization speed. However, GenFleet Therapeutics has broken this "curse". In August 2024, the company's core product, Fuzerese, was approved for marketing, and it only took 3 years from IND to approval. Currently, Fuzerese is the first marketed product of this 7 - year - old innovative drug company. It is also the first approved KRAS G12C inhibitor in China and the third in the world.

KRAS, known as the murine sarcoma virus oncogene, has a crucial impact on tumorigenesis. Data shows that among the approximately 18 million newly diagnosed cancer patients worldwide each year, about 14% (2.6 million) carry KRAS mutations. However, due to the unclear mechanism, KRAS was regarded as an "undruggable target" by the industry for a long time.

It was not until 2013 that overseas scientists discovered the feasibility of using small molecules to covalently bind to the KRAS G12C mutation, and the path to developing KRAS inhibitors got on the right track. The G12C mentioned in the research is also one of the most common mutation sites in the KRAS gene, accounting for about 15%.

For example, an epidemiological study on domestic patients showed that in non - small cell lung cancer (NSCLC), a major cancer type, about 10% of patients have KRAS mutations, and nearly 30% of them carry the KRAS G12C mutation subtype.

For this reason, G12C has become the preferred target for domestic and overseas pharmaceutical companies when developing KRAS inhibitors. Currently, 5 KRAS G12C inhibitors have been approved globally, and more than 20 products are in the clinical development stage. However, the problem is that the indications of the existing approved products are all for second - line treatment, and the market has not really been opened up.

Illustration of marketed KRAS G12C inhibitors (Source: GenFleet Therapeutics' prospectus)

A R & D personnel from a pharmaceutical company introduced that overall, the KRAS target is still in the stage of "just starting to perform and far from reaching the explosive stage". "Currently, the single - drug effect of KRAS is not sufficient. For any mutation, combination therapy is the mainstream. We regard this as the exploration direction for the first - generation KRAS products. However, even for the relatively fast - progressing G12C, the combination therapy for first - line treatment has not been promoted. Only about 5 companies have entered the clinical stage, and the combination drugs they choose are also different, such as chemotherapy and PD - 1. But it's still impossible to judge which one has a better effect. As for the second - generation products, such as whether to develop them into PROTAC or ADC, it's still in an earlier research stage."

"For KRAS to explode, at least one pharmaceutical company needs to achieve sales of over US$3 billion. We're still far from that," the R & D personnel believes.

Judging from the existing sales performance, even the overseas products that were launched two years earlier are still far from this goal. In 2023, the sales of Amgen's Sotorasib and Bristol - Myers Squibb's Adagrasib were only US$350 million and US$126 million respectively. In China, GenFleet Therapeutics did not disclose the sales of Fuzerese, but the prospectus mentioned the "sales of goods" revenue in 2024 and the first 4 months of this year, which were RMB 14.668 million and RMB 1.27 million respectively.

Therefore, from a R & D perspective, exploring subsequent iterative products has become the next - step plan for pharmaceutical companies to further expand the market ceiling of KRAS inhibitors. For example, developing subtypes with a higher mutation rate, such as G12D (about 29%) and G12V (about 23%), or simultaneously exploring the development direction of Pan - KRAS, which can cover more mutation types.

This is also GenFleet Therapeutics' choice. In addition to Fuzerese, another core product of the company is GFH375, a KRAS G12D inhibitor, which is expected to enter Phase 3 clinical trials in the third quarter of this year. At this year's World Conference on Lung Cancer (WCLC), GenFleet Therapeutics disclosed data on GFH375, showing that the objective response rate (ORR) of 26 non - small cell lung cancer patients was 57.7%, and the disease control rate (DCR) was 88.5%.

GenFleet Therapeutics' product pipeline (Source: GenFleet Therapeutics' prospectus)

Multiple BD authorizations have been achieved, contributing most of the revenue

Since September, there have been few healthcare companies officially announced to be listed on the Hong Kong stock market, so GenFleet Therapeutics has become quite popular. After the grey - market trading the day before its listing, the company's market value reached HK$14 billion, exceeding that of Gacos Pharmaceuticals (HK$8.5 billion), which has also been engaged in the R & D of KRAS inhibitors and has been listed on the Hong Kong stock market for many years.

Compared with some innovative drug companies listed during the same period, another advantage of GenFleet Therapeutics lies in its BD transactions. Currently, the rights and interests of the company's two core KRAS inhibitors, Fuzerese and GFH375, have been sold to varying degrees. Among them, the domestic rights of Fuzerese were sold to Innovent Biologics in 2021. The license fee for the Greater China region and the option payment for outside China were US$8.5 million and US$13.5 million respectively. Subsequently, in 2022 and 2023, Innovent Biologics paid US$5 million and US$10 million in R & D milestone payments respectively.

It is the overseas rights of GFH375 that have been sold. In 2023, GenFleet Therapeutics reached a cooperation with Verastem, a NASDAQ - listed company also focusing on RAS pathway research, granting the latter the overseas rights of GFH375 and two other products, with a total price of US$625 million. In June this year, Verastem launched a Phase I/IIa clinical trial of GFH375 for the treatment of advanced solid tumors.

In addition, in 2022, GenFleet Therapeutics also reached a cooperation with SELLAS Life Sciences Group, selling the overseas rights of GFH009, a CDK9 product for the treatment of leukemia. The upfront payment was US$10 million, and there were also subsequent development and sales milestones worth US$140 million, as well as certain royalties.

Although the overall amount of GenFleet Therapeutics' BD transactions is not very large in these two years when "sky - high transactions" are frequent, in terms of finance, these BD authorizations have become a core source of income for GenFleet Therapeutics to some extent and have "replenished the blood" for product R & D.

According to the prospectus, in 2023, 2024, and the first 4 months of 2025, GenFleet Therapeutics' revenues were RMB 73.73 million, RMB 105 million, and RMB 82.15 million respectively; the corresponding losses were RMB 508 million, RMB 678 million, and RMB 66 million respectively, mainly due to R & D investment and other reasons. However, the company said that thanks to the "intellectual property authorization income", the net loss in 2025 is expected to decrease.

However, over - relying on the income from BD transactions still poses risks, because during the subsequent implementation stage, the judgment on product development and market value may change at any time.

At the beginning of 2024, GenFleet Therapeutics signed a supplementary agreement with Innovent Biologics, terminating the option for Fuzerese outside China. GenFleet Therapeutics also needs to pay Innovent Biologics a non - refundable termination fee of a total of US$20 million, as well as a share of the future overseas sales revenue of the product.

Although GenFleet Therapeutics did not disclose whether the termination of the transaction was because Innovent Biologics was not optimistic about the overseas market, or the company found a better partner again, or planned to develop independently, it still made the outside world worried about the future market prospects of this core product. Its subsequent development is also worthy of attention.