Hit the first domestic RNA therapy!

At the end of 2021, another loss-making non-product commercial enterprise has landed in Hong Kong stocks
.

On December 30, Sinochem-B was officially listed on the Hong Kong Stock Exchange and became the first nucleic acid drug in China
.

It is reported that its IPO price per share is 65.

During the IPO period, Sino Pharmaceuticals introduced a total of 2 cornerstone investors, who subscribed for a total of approximately 28,610,800 US dollars (approximately 223 million Hong Kong dollars).
Among them, Kunming Jiashiqing and Zhejiang Jianxin Original Force Pharmaceutical subscribed for 23,610,800 US dollars and 5 million US dollars, respectively.
Of the offer shares
.

Both cornerstone investors' investment in the company will be completed through the China Qualified Domestic Institutional Investor (QDII) program

According to the prospectus, about 243 million Hong Kong dollars from the IPO of Sinochem will be used to fund the development and commercialization of STP705; about 65.
7 million Hong Kong dollars will be used to fund the development of STP707; about 64.
5 million Hong Kong dollars will be used for the GalNAc plan Products, such as STP122G, STP133G, STP144G and other preclinical stage candidate products; approximately HK$64.
5 million will be used for GalNAc plan products, such as STP122G, STP133G, STP144G and other preclinical stage candidate products, and approximately HK$15.
9 million will be used for general enterprises And the use of working capital
.

Balance of 10 drugs in development among the world's RNA therapeutics "first tier"

Balance of 10 drugs in development among the world's RNA therapeutics "first tier"

Sino Pharma, established in the United States in 2007, is the only clinical-stage RNA therapy biopharmaceutical company operating in both China and the United States; it is also the first RNA therapy for the core product STP705 to achieve positive phase IIa clinical results in the field of oncology The company uses the complementary regulatory systems of China and the United States to accelerate development and obtain regulatory approvals, including seeking drug candidates and indications that can achieve orphan drug certification in the United States; it has an important market position in China and the United States
.

RNA therapy is gene editing technology therapy.
It refers to a targeted therapy based on specific RNA sequences.
Using RNA as a target greatly enriches the choice of drug targets.
These drugs are cost-effective and relatively simple to manufacture.

.

The emergence of RNA drugs has overturned the logical thinking of traditional drug development
.

Theoretically speaking, as long as the sequence of the disease-causing gene is known and the RNA complementary to the disease-causing sequence is designed, the translation and expression of the disease-causing protein can be controlled from the source to achieve the purpose of treating the disease

At present, the research and development hotspots of RNA therapy are concentrated in three major directions: messenger RNA (mRNA), RNA interference (RNAi) and antisense oligonucleotide (ASO) therapy
.

According to the prospectus, SinoPharm currently focuses on RNAi therapy and mRNA vaccines and therapies, and has built a rich product pipeline of more than 10 products under development.
Among them, the core products and products with the fastest clinical progress are STP705 and STP707.
, Both are dual-targeted siRNA therapies for TGF-β1 and COX-2
.

And STP705 has obtained FDA orphan drug certification in the United States for 3 indications, including primary sclerosing cholangitis, cholangiocarcinoma and HCC (the most common type of primary liver cancer)

Sino Pharmaceutical Product Pipeline

Image source: Sino Pharmaceutical Prospectus

With the development of nucleic acid drugs, RNA drugs are also facing challenges in how to improve RNA stability and cell uptake rate in the subsequent development
.

RNAi drugs are easily degraded, poorly targeted, and difficult to be endocytosed by target cells.

It is worth noting that at present, Sinochem has no commercial products on the market.
It will lose 17.
127 million U.
S.
dollars in 2019, 46.
428 million U.
S.
dollars in 2020, and 500.
1 million U.
S.
dollars in the first three quarters of 2021; nevertheless, it continues to increase R&D investment.
In 2019, 2020, and the first three quarters of 2021, the company's R&D expenses were 10.
213 million U.
S.
dollars, 14.
894 million U.
S.
dollars, and 22.
014 million U.
S.
dollars
.

Will Sinopharm's pre-IPO valuation of 4.
2 billion yuan be favored by capital?

Will Sinopharm's pre-IPO valuation of 4.
2 billion yuan be favored by capital?

Since the outbreak of the new crown epidemic at the end of 2019, the successful development and large-scale use of mRNA new crown vaccines around the world has made the RNA drug track become hot, and with the advancement of target discovery technology and the maturity of chemical modification and delivery technology, RNA Drugs are quickly becoming a major treatment sector
.

According to Sinopharm’s prospectus, the global market for RNAi therapy has increased from US$12 million in 2018 to US$362 million in 2020, with a compound annual growth rate of 449.
2%, and is estimated to reach US$25 billion in 2030
.

By 2030, the market size of RNAi therapy for common diseases and oncology will account for 54% of the total market size

Image source: Sino Pharmaceutical Prospectus

Prior to the Hong Kong stock IPO, Senno Pharmaceuticals has received 5 rounds of financing.
Investors include Rotary Stone Capital, Watson Bio, Xiantong Capital, Watson Bio, etc.
On July 2 this year, Sanno Pharmaceuticals announced the completion of a US$105 million investment.
Series E financing
.

The prospectus shows that after the latest E round of financing of Sino Pharmaceutical, the valuation is 656 million US dollars, which is equivalent to about 4.

Image source: Sino Pharmaceutical Prospectus

In terms of shareholding ratio, Lu Yang, the former founder of ipo, holds 15.
52% of the shares of Shengnuo Pharmaceutical, and non-executive director Dai Xiaochang holds 9.
62% of the shares
.

In addition, Watson Biotech holds 4.

Concluding remarks

Concluding remarks

Since the Hong Kong Stock Exchange revised in 2018, the Shanghai Stock Exchange revised the Listing Rules in 2018 and introduced Chapter 18A to allow unprofitable biotech companies to list in Hong Kong.
Hong Kong has become the world's second largest biotech fundraising center, and the Hong Kong Stock Exchange It has become the preferred listing place for more and more biotech companies.
According to statistics, as of now, more than 40 biotech companies have been listed on the Hong Kong stock market
.

Although the capital market has opened the door to unprofitable biopharmaceutical companies; however, in 2021, innovative biopharmaceutical companies will frequently "break" their IPOs, gradually reflecting the differentiation of biopharmaceutical companies' value
.
So, Sinopharm holds the most promising and promising RNA therapies at present, will it break the curse of the recent IPO of biotech companies tomorrow? Wait and see!