For years, Chinese language corporations similar to Alibaba and Baidu headed to the U.S. to record their shares, citing its deeper capital markets and better valuations. Now, one American biotech agency is betting on doing the other.
Axiom Biosciences, a San Diego-based developer of regenerative and genetic medicines, plans to go public in Hong Kong in 2027, adopted by a secondary U.S. itemizing in 2029. The corporate says the “contrarian” transfer will open the door to classy, biotech-focused traders whereas bringing it nearer to scientific and industrial companions throughout Asia.
“A number of the most necessary science on the earth is being inbuilt the USA, however the way in which it will get funded hasn’t saved tempo,” mentioned Remo Moomiaie-Qajar, founder and CEO of Axiom.
The Hong Kong alternate’s stricter itemizing requirements in comparison with the U.S. level to a mature biotech ecosystem, Moomiaie-Qajar informed CNBC, whereas noting that latest biopharma listings within the metropolis have outperformed these on the Nasdaq.
Public markets provide an alternate option to increase cash as biotech companies face a harder fundraising setting, he mentioned. Whereas scientific trials grow to be costlier as they progress, the pool of enterprise traders keen and in a position to write giant checks will get smaller – particularly for corporations that didn’t safe main backers early on, he added.
Chinese language biotech companies have flocked to the town’s bourse amid a authorities push and as modern drugmakers’ financing wants develop. The Hang Seng Biotech Index in Hong Kong has climbed greater than 75% since a low in January 2025, surpassing the roughly 40%-50% good points within the ICE Biotechnology Index and the Nasdaq Biotechnology Index, monitoring U.S.-listed companies throughout the identical interval, in accordance with LSEG information.
“The U.S. stays the deepest and most institutionalized biotech capital pool on the earth,” mentioned Danny Xiang, founding accomplice on the life science-focused personal fairness agency Fontus Capital. “That depth is exactly why probably the most fundable, globally aggressive property nonetheless increase and record within the U.S.,” and why it is uncommon for a purely American biotech agency to decide on Hong Kong as its main venue, he mentioned.
What’s modified, nevertheless, is Hong Kong’s rising attraction as one of many world’s largest biotech fundraising hubs, helped by reforms launched final 12 months that streamlined the IPO course of, Xiang mentioned. Since 2018, 86 companies have listed within the metropolis elevating greater than $17.8 billion, in accordance with Hong Kong Exchanges and Clearing.
World biotech companies are more and more drawn to the town’s increasing biopharma investor base and its proximity to Chinese language pharmaceutical companions, which may assist velocity up scientific trials and decrease prices.
Nonetheless, Xiang mentioned, native traders are inclined to favor corporations with a transparent China connection, backing property the place they see alternatives to co-develop, manufacture or promote merchandise with Chinese language companions.
HONG KONG, CHINA: Hong Kong has emerged as a serious biotech fundraising hub, attracting dozens of Chinese language biotech companies to record within the metropolis.
Cheng Xin | Getty Pictures Information | Getty Pictures
George Wu, a Hong Kong-based accomplice at regulation agency DLA Piper, mentioned the Hong Kong biotech sector’s decrease valuations, relative to the Nasdaq, have additionally attracted extra worldwide traders looking for upside potential.
The U.S. can also be on monitor for its strongest run of biotech IPOs in years, with each Parabilis Medicines, a clinical-stage most cancers drug developer, and Kailera Therapeutics, an obesity-drug maker, hovering round 60% on their debuts earlier this 12 months, after elevating greater than $600 million every. The SPDR S&P Biotech ETF (XBI) rallied 76% over the trailing 12 months as of Tuesday.
Inventing vs. scaling
Biotechnology has been a long-term precedence for Beijing, which has spent many years funding primary analysis, reforming drug regulation, and attracting skilled scientists and executives skilled overseas, together with within the U.S., again to China.
Decrease labor and manufacturing prices, a deep pool of science graduates, entry to giant datasets, focused makes use of of AI in areas similar to drug design, and China’s huge inhabitants – with many sufferers concentrated at main hospitals that may support clinical-trial recruitment – have helped China advance in biologics, genomics and drug growth, specialists say.
Nevertheless, a survey by the Treatment Innovation Index in June discovered that regardless of main in scientific growth and provide chains, China nonetheless lags the U.S. within the quality, commercial reach and cutting-edge strength of its biomedical science.
“The U.S. leads ‘0-to-1’,” in breakthroughs in foundational science and novel biology, Xiang mentioned, whereas China more and more leads “1-to-100,” which means quick, capital-efficient implementation to succeed in sufferers.
Axiom is co-developing a remedy with South Korea-based biopharma agency Medinno for newborns with extreme mind accidents linked to excessive dying charges. The remedy has obtained two U.S. Federal Drug Administration designations for uncommon pediatric ailments, and a Section 1 trial involving 9 newborns in South Korea has been accomplished.
Axiom additionally plans to check the remedy as a potential remedy for adults who’ve suffered strokes.
“As a result of there aren’t any regenerative therapies for these mind accidents, it is crucial that we transfer via scientific trials as quickly as potential. And I feel Asia is the correct place to do this,” Moomiaie-Qajar informed CNBC.
China closing in
In December, a bipartisan U.S. legislative fee warned that China was starting to outpace the U.S. in some areas of biopharmaceutical innovation, constructing on “benefits gained from non-market practices and brute drive economics” – a time period utilized by some in Washington to explain China’s state-led push for management in strategic industries.
The fee urged coordinated motion throughout the private and non-private sectors to retain – and in some areas regain – U.S. biotechnology management.
On Tuesday, President Donald Trump mentioned generic medicine imported into the U.S. will face a 100% tariff from August 2028, with the speed doubling to 200% a 12 months later.
Moomiaie-Qajar mentioned the corporate is monitoring geopolitical developments, however the transfer does not change its intention to record in Hong Kong, because it focuses on next-generation specialty merchandise fairly than generic medicine and seeks traders who perceive the dangers and growth timelines concerned.
Nasdaq and the New York Inventory Alternate permit biotech companies to use for an inventory earlier than they generate income or start human testing. Hong Kong additionally permits pre-revenue listings, however requires a minimum of 12 months of research and development and a core product previous the idea stage.
“A U.S. IPO is usually quicker for an organization that qualifies, and Hong Kong’s assessment instances have stretched as functions piled up,” Xiang mentioned.
— CNBC’s Evelyn Cheng contributed to this report.
