Coronavirus-Fighting CanSino Eyes $734 Million IPO on Shanghai's Star Market

A successful Covid-19 vaccine candidate from Cansino could help turn around its struggles in generating profits.

Author: Anthony Russo   

Working on developing a potential Covid-19 vaccine, the Chinese pharmaceutical firm CanSino Biologics Inc. (HKEX: 06185) looks to raise 5.2 billion yuan ($743 million) in an IPO on Shanghai's Nasdaq-like Star Market.

The Tianjin-based company said Thursday in a filing that it plans to offer 24.80 million common shares priced at 209.71 yuan ($29.96) each. The joint sponsors are International Capital Corp. Ltd. and Bohai Securities, while CITIC Securities is the principal and Morgan Stanley will serve as the financial advisor on the deal.

At the close of trading Thursday in Hong Kong, CanSino's shares closed nearly 8% higher from Wednesday. It also hit a 10-week trading high of HK$285.80 per share. As investors hope for a successful vaccine to combat the spread of Covid-19, shares of CanSino have surged nearly 353% year-to-date. CanSino has been Hong Kong-listed since March 2019, raising around $161 million in the city.

Investors are also bullish that a successful Covid-19 vaccine will help bring the three-year unprofitable run to an end, according to The South China Morning Post. In 2019, Cansino's loss widened by 13% to 156.8 million yuan, according to its filing. Its Covid-19 vaccine candidate, known as Ad5-nCoV, showed promising results in a Phase two trial that tested 508 healthy adults. The vaccine was showed to be safe and induced neutralizing antibody responses.

CanSino plans to use the IPO proceeds towards developing vaccine candidates, enhancing its manufacturing base, and replenishing working capital needs.

The good news for CanSino is that its losses are likely to narrow to 100.7 million yuan in 2020, according to Bloomberg's average projection of five analysts. However, it's Hong Kong-listed shares may tumble to HK$169.56 in the following 12 months, representing a 36% plunge from its current level, according to the data. 

CanSino will list its shares in Shanghai under the stock code "688185".