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Zai Lab Limited lists in Nasdaq Global Market Initial Public Offering

time:10/09/2017 page views: resource:BioBAY
ADSs rise by more than 55 percent in the first day.  

Zai Lab Ltd (ZLAB) went to Nasdaq Global Market Initial Public Offering (IPO) to issue stock (ticket symbol: ZIAB; Price: $ 16-$18). Its shares began trading on Eastern Time September 20, 2017, and have risen by more than 55 percent in the first day.  

According to the company's announcement, they aim to raise as much as $150 million through the IPO of American depositary shares (ADS). Each ADS represents one ordinary share of Zai Lab. 8,333,333 ADSs is expected to sell in the IPO at a price of $18.00 per ADS. In addition, Zai Lab has granted the underwriters a 30-day option to purchase up to an additional 1,250,000 ADSs at the IPO price. Closing of the IPO is expected to occur on or about September 22, 2017, subject to customary closing conditions.

J.P. Morgan, Citigroup and Leerink Partners act as joint book-running managers for the IPO.

There are only 52 employees

Zai Lab, found in 2014, is an innovative biopharmaceutical company focused on bringing transformative medicines for cancer, autoimmune and infectious diseases to patients in China and around the world. There are only 52 employees. Samantha Du has been the director, chairman and chief executive officer since Zai Lab's inception. Prior to founding Zai Lab, Dr. Du served as the chief executive officer of Hutchison Medi-Pharma, where she made outstanding achievements. Later, she spent two years as managing director of healthcare investments at Sequoia Capital China. 2 

Base on the above table, it is found that so far, many new medicines have entered into the middle and late stage of clinical research and development.

Their experienced team has secured partnerships with leading global companies (BMS,GSK) and research and development institutions. Their job is to select the license–in drugs around the world, and then conduct clinical research and promote the new drugs to list in the market.  

In July, the company just announced that it has raised $30 million in a Series C preferred equity financing round. OrbiMed Captial led this round of financing with other new investors Vivo Capital, Cormorant and Rock Springs Capital. In August 2014, the company raised $30 million in a Series A financing round, and the investors included the Sequoia Capital and Qiming Venture Partners. In January 2016, it secured $100 million in its Series B financing round. Sequoia Capital and Qiming Venture Partners and Advantech Capita served as its investors.

The total financing reached $160 million from product introduction, new drug research and development to industrial investment, showing that the development route that Samantha Du built for Zai Lab became gradually clear. According to prospectus, the company is valued at $800 million behind BeiGene with a value of $3.3 billion and Hutchison Medi-Pharma with a value of $3 billion. 

Focus on risk factor

As is known to all, the biggest characteristics of innovative biopharmaceutical companies are long-term cycle, high investment and high risk. Therefore, it is necessary to keep capital circulate within the powerful research and development institutions. Only by this way can these companies make rapid progress. 

In the prospectus, Zai Lab also discloses a number of risk factors. On the one hand, the company can't make accurately evaluation on all of the developed drugs. On the other hand, candidate drugs face extensive regulation, so the company cannot guarantee that each candidate drug can be approved or successfully commercialized. In addition, in terms of the drug itself, each candidate drug has a risk of failure. Therefore, it is necessary for Zai Lab to list in America for the purpose of further expanding its financing channels.

Source: Biodiscover