The Hong Kong stock exchange is witnessing another wave of biopharma IPO applications. Between October 26 and 31, eight companies including Dingtai Pharma Research, NewBridge Biopharma, and Libang Pharmaceuticals filed listing applications within just six days. This surge reflects both the industry's collective push to capitalize on improved market liquidity and the growing divergence among sector players.
The IPO rush comes amid significantly improved market conditions in Hong Kong. Secondary market gains have created a wealth effect, while anticipated Fed rate cuts are redirecting capital from dollar assets to emerging markets. Daily trading volumes on the HKEX surpassed hundreds of billions of HKD post-October 2024, marking a several-fold increase that has revived institutional interest.
The eight applicants reveal distinct specialization strategies. Oncology remains the dominant battlefield: NewBridge focuses on CLDN18.2×4-1BB bispecific antibody givastomig for gastric/esophageal cancers, targeting a $22.3 billion global market by 2034. Lupeng Pharma leverages its BeyondX platform to develop three clinical-stage candidates for cancer and autoimmune diseases, maintaining over 82% R&D expenditure since 2023.
Niche players are carving complementary positions. Libang specializes in chronic kidney disease complications, with phosphate binder AP301 completing Phase III trials in China. Jiangxi Biopharma dominates China's human TAT market through 50+ years of antiserum expertise, supplying 23,500 medical institutions. Dingtai emerges as a leading cardiovascular CRO, attracting top-tier investors like Legend Capital.
Financial disclosures highlight the sector's high-risk profile. NewBridge accumulated $239M losses by H1 2025, with R&D spending plunging 63.9% YoY - potentially delaying givastomig's Phase II trials. Lupeng swung to a RMB35.9M H1 profit but remains wholly dependent on uncommercialized pipelines. Revenue-generating firms face profitability challenges: Demei Pharma's 62.9% sales expense ratio dwarfs the 35% industry median, while gross margins eroded from 76.9% to 61.8% since 2023.
Supply chain vulnerabilities surface in concentration risks. Demei derives 61.3% revenue from top 5 clients and 81.6% supplies from 5 vendors, suffering 58.3% product revenue drop from single-supplier disruption. NewBridge's 51.4% reliance on key vendors raises governance concerns regarding ex-director-linked transactions.
Post-IPO challenges loom large in valuation and competition. The 2024 privatization wave (e.g., China Traditional Chinese Medicine) demonstrated HKEX's harsh valuation logic. NewBridge trails competitors by 3-5 years in CLDN18.2 drug development, with givastomig's Phase II delayed to 2026. Lupeng's bRo5 platform carries high clinical risk, while Jiangxi Biopharma must prove its antivenom pipeline can diversify beyond TAT dominance.
The sector's valuation recovery remains fragile. For pre-revenue innovators, maintaining R&D continuity is paramount - NewBridge's spending cuts serve as a cautionary tale. Commercialized players like Demei must rebalance sales/marketing efficiency, as unsustainable expense ratios erode margins. Traditional firms like Jiangxi exemplify the "stabilize legacy, cultivate innovation" approach gaining investor favor.
While revived HKEX listings provide crucial liquidity, the market's heightened selectivity demands clearer differentiation and sustainable models from biopharma aspirants.