On April 15, 2024, Sunho Biologics, Inc. (hereinafter referred to as “Shenghe Biotech”) from Anji County, Huzhou, Zhejiang, disclosed its prospectus after passing the hearing on the Hong Kong Stock Exchange, or was listed in an IPO on the Hong Kong Main Board soon. The forms were submitted twice, on August 3, 2023 and February 9, 2024.
Link to Shenghe Biotech's prospectus after the hearing:
https://www1.hkexnews.hk/app/sehk/2024/106227/documents/sehk24041500864_c.pdf
Main business
Shenghe Biotech, from Huzhou, Zhejiang, was founded in 2018 as a biopharmaceutical company that directly regulates the innate and adaptive immune systems to regulate the immune microenvironment and develops various types of immunotherapy, including antibody cytokines for the treatment of cancer and autoimmune diseases. The company aims to develop innovative therapies to overcome the shortcomings of currently available treatments, including low response rates and drug resistance. According to Frost & Sullivan, the company is one of the world's leading companies in developing antibody cytokine products, and is also one of the few pioneers with the fastest clinically advanced antibody cytokine product candidates.
Shenghe Biotech has established fully integrated end-to-end independent R&D capabilities, covering all key biopharmaceutical development functions, including discovery, antibody and protein engineering, process development, preclinical pharmacology research, clinical development, and production in line with good manufacturing practices (GMP).
Shenghe Biotech has identified and developed 9 pipeline products, 6 of which are in the clinical stage and 3 are in the pre-clinical stage. The company obtained approval from regulatory authorities in China and the United States to conduct a new drug clinical trial application (IND) for a total of three antibody cytokines IAP0971, IAE0972, and IBB0979. According to Frost & Sullivan data, as of the last practical date, these three candidate products are the antibody cytokines with the fastest clinical progress in treating cancer patients in the world.
Shenghe Biotech's three core products include two antibody cytokines and an ADCC enhancing antibody. The two antibody cytokines IAP0971 and IAE0972 were developed based on the company's AICTM platform. The ADCC booster antibody IAH0968 was developed based on the company's ADCC enhanced antibody platform (AEATM platform). IAP0971, IAE0972 are well tolerated as monotherapy in patients who have failed multiple frontline treatments that have failed chemotherapy, targeted therapy, immunotherapy, or combination therapy, and have shown encouraging initial anti-tumor activity. Another core product, IAH0968, is an antibody-dependent cell-mediated cytotoxicity (ADCC) enhancing mAb, which targets human epidermal growth factor receptor 2 (HER2) and knocks out fucose 100%. Data from preclinical studies showed that IAH0968 had a 20-fold increase in binding affinity with trastuzumab or herceptin.
The other six candidate products being developed by Shenghe Biotech include clinical-stage products IBB0979, IBC0966, and IBD0333, and pre-clinical products IAN0982, ISH0988, and ISH0613.
Shareholder structure
According to the prospectus, Shenghe Biotech's pre-listing shareholding structure,
Mr. Zhang Feng holds 71.83% of Sunho Wisdom's shares through trusts and its Innovalue Investments;
No5xJR, holding 4.90% of shares;
* No5xJR is owned by InnoValue Investments with 8.34% interest, enabling 73.19% voting rights, and OriTure Limited holds 91..66% interest. Dr. Yin Liusong holds 90.9% of OriTure Limited's shares, and Zhu Zhenfei, an external legal adviser, holds 9.1% of the shares.
Equity incentive platform Sunho Stellar holds 4.90% of shares;
Mr. Zhang Feng can exercise the voting rights of the above shareholders. In total, he has about 81.62% of the voting rights.
Guocheng (Zhejiang) Industrial Development Co., Ltd. owns 99.99% of Yifeng Ansheng and holds 9.52% of the shares;
Guocheng (Zhejiang) Industrial Development Co., Ltd. owns 49.99% of Yifeng Anhe and holds 4.76% of the shares.
In the end, Yifeng Ansheng and Yifeng Anhe were all managed by Yifeng Holdings. Mr. Zhu Jinqiao owns 54% of Yifeng Holdings.
Yuexiu Industrial Investment Fund holds 4.09% of shares through Beijing Yuehe.
Directors and Executives
The board of directors of Shenghe Biotech consists of 7 directors, including 3 executive directors (Mr. Zhang Feng, Dr. Yin Liusong, and Ms. Jiang Xiaoling), 1 non-executive director (Mr. Fan Rongkui), and 3 independent non-executive directors (Mr. Chen Xiangrong, Ms. Feng Lan, and Mr. Shi Luwen).
In addition to the executive director, executives include Ms. Xu Chunqin, Chief Financial Officer and Joint Company Secretary, and Mr. Jiang Dongcheng, Vice President.
Company performance
According to the prospectus, in the past 2022 and 2023, Shenghe Biotech had no main business revenue; R&D expenses for the corresponding period were RMB 53.171 million and RMB 43.041 million, respectively; net losses for the corresponding period were RMB 51.988 million and RMB 132.701 million, respectively.
Intermediary team
Shenghe Biotech's intermediary team for this IPO mainly includes: CICC as its sole sponsor; Deloitte as its auditor; Jingtian Gongcheng and Mimex as its Chinese lawyers, and the company's Hong Kong and US lawyers respectively; Jiayuan and Smith Fell are its Chinese lawyers, and Hong Kong and US lawyers respectively; and Frost Sullivan is its industry advisor.