On July 10, 2024, Sichuan Biokin Pharmaceutical Co., Ltd. ("Bailitianheng" or 688506.SH), a Shanghai STAR Market-listed company from Chengdu, Sichuan, submitted its prospectus to the Hong Kong Stock Exchange and plans to be listed on the main board of the Hong Kong Stock Exchange.

Bailitianheng was listed on the Shanghai STAR Market on January 6, 2023, issuing 40.1 million shares at a price of RMB 24.70 per share and raising approximately RMB 990 million.

Link to the prospectus of Bailitianheng:

https://www1.hkexnews.hk/app/sehk/2024/106606/documents/sehk24071001001_c.pdf

Main Business

Bailitianheng is dedicated to becoming an innovative global pharmaceutical company in the field of cancer treatment and is at the forefront of innovative anti-tumor antibody drugs (ADCs, bispecific antibodies, and multispecific antibodies) worldwide. The company can trace its history back to Baili Pharmaceutical, established in 1996, which mainly produces Chinese patent medicines and other drugs. In 2010, the company strategically entered the innovative drug business and invested most of the revenue from the generic drug and Chinese patent medicine business into innovative drug research and development. In 2014, the company founded SystImmune in Seattle, USA, to develop anti-tumor drugs with breakthrough efficacy through innovative research and development.

Bailitianheng has reached a total of USD 8.4 billion, with an initial payment of USD 0.8 billion, for the BL-B01D1 (first-in-class EGFR × HER3 bispecific ADC), the largest global strategic licensing and collaboration transaction to date in the ADC field, with Bristol-Myers Squibb (BMS). Accordingly, Bailitianheng will work with BMS on a global strategic collaboration to jointly develop and commercialize BL-B01D1.

As of now, Bailitianheng has established:

• A leading global innovative ADC drug research and development platform, which has successfully developed six innovative ADC drugs pipelines, including BL-B01D1, which have entered clinical stages, and has conducted about 60 clinical studies, including nine phase III clinical studies and 13 phase II clinical studies.

• A leading global innovative multi-specific antibody drug research and development platform, which has successfully developed four GNC innovative multi-specific antibody drug pipelines, including GNC-077, which have entered IND or clinical stages, and has conducted 10 clinical studies.

During the track record period, all Bailitianheng's candidate innovative drugs were still in clinical or preclinical development stage. Bailitianheng's revenue during the track record period came from the sales of drugs. The company generated revenue from selling 29 approved drugs in more than 100 specifications, including chemical drugs (covering a wide range of treatment areas such as anesthesia, parenteral nutrition, anti-infection, and pediatrics) and Chinese patent medicine products. The revenue from listed products of Bailitianheng plays a crucial role in supporting the development of the company's innovative drugs.

Shareholder Structure

According to the prospectus, as of July 3, 2024, the shareholding structure of Bailitianheng before its listing in Hong Kong was as follows:

Dr. Zhu Yibo, with a shareholding of 74.34%;

OAPIII, with a shareholding of 7.11%;

Ms. Zhang Suya, with a shareholding of 2.39%;

Mr. Kang Jian, with a shareholding of 0.06%;

Other A-shareholders, including Guangzhou Defu, with a shareholding of 16.09%.

Management Team

The board of directors of Bailitianheng consists of 10 directors, including:

• Five executive directors: Dr. Zhu Yibo (Chairman of the Board, General Manager and Chief Scientist), Ms. Zhang Suya (Executive Vice General Manager and Chief Financial Officer), Mr. Kang Jian (Deputy General Manager), Mr. Zhuo Shi, and Dr. Zhu Haibo (Dr. Zhu Yibo's son);

• One non-executive director: Dr. Wang Guowei;

• Four independent non-executive directors: Mr. Li Mingyuan, Mr. Yu Xiong, Mr. Yang Min, and Dr. Xiao Geng.

There are 3 supervisors: Ms. Wang Jie, Mr. Liu Liang, and Ms. Fu Ting.

In addition to executive directors, senior management includes Ms. Chen Yingge, the board secretary.

Corporate Performance

According to the prospectus, BaiLi Tianheng's revenue was RMB 0.795 billion, 0.702 billion, 0.56 billion, and RMB 5.497 billion in 2021, 2022, 2023, and the first four months of 2024, respectively. Corresponding R&D expenses were RMB 0.279 billion, 0.375 billion, 0.746 billion, and RMB 0.334 billion, respectively. The corresponding net profits were -RMB 0.108 billion, -RMB 0.282 billion, -RMB 0.78 billion, and RMB 4.864 billion, respectively.

* In the first four months of 2024, BaiLi Tianheng also generated revenue through license fee income, which was part of the down payment under the BMS agreement. According to the BMS agreement, in March 2024, BaiLi Tianheng received a non-refundable and non-deductible down payment of USD 0.8 billion (approximately RMB 5.68 billion) from BMS, and in the first four months of 2024, the company granted license performance confirmation income of USD 0.751 billion (approximately RMB 5.332 billion) to BMS. The remaining down payment of USD 49 million is allocated to the performance obligation of transferring manufacturing technology and is included in the contract liability. The transfer time is at the discretion of BMS.

Intermediary Team

The main intermediary teams for BaiLi Tianheng's IPO are: Goldman Sachs, JPMorgan, and Citic Securities as its joint sponsors; Deloitte as its auditor; JunHe and Cooley as its Chinese and Hong Kong and American lawyers, respectively; Tongshang and K-Yee as its brokerage lawyers in China and Hong Kong, respectively; and Zhuo Shi Consulting as its industry consultant.