Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Jacobio Pharmaceuticals / Equity Capital Markets

Jacobio is a clinical stage China biotech company with a focus on small molecule oncology drugs. The company was founded by Dr. Wang, co-founder of Betta Pharma. , and aims to raise up to USD 174 m.In our previous discussion, we had highlighted that the company's  SHP2 inhibitors show a synergistic effect with PD-1 and KRAS inhibitors in pre-clinical studies but not efficacy as monotherapy in clinical trials. The out-licensing agreement to AbbVie, with a total payment of up to USD 855m plus sales royalties, is significant for a China biotech company. Its BET inhibitor (JAB-8263) is also in the early stage of clinical development which demonstrated strong affinity and anti-tumor activities as compared to benchmark products. We think both the management team and investor backing is strong. Besides the efficacy of the JAB-3068, we are concerned about the long lead time to commercialization which is as late as 2025.In this note, we provide a valuation for its SHP products and we think the deal is fairly valued at the low end even considering the founder's background. We would avoid the deal. <h2>Our previous coverage on Jacobio</h2><ul><li dir="ltr"><a href="https://www.smartkarma.com/insights/jacobio-pre-ipo-right-team-but-long-time-to-market" target="_blank" rel="noopener">Jacobio (加科思药业) Pre-IPO: Right team but long time to market</a></li></ul>

Jacobio is a clinical stage China biotech company with a focus on small molecule oncology drugs. The company was founded by Dr. Wang, co-founder of Betta Pharma. , and aims to raise up to USD 174 m.In our previous discussion, we had highlighted that the company's  SHP2 inhibitors show a synergistic effect with PD-1 and KRAS inhibitors in pre-clinical studies but not efficacy as monotherapy in clinical trials. The out-licensing agreement to AbbVie, with a total payment of up to USD 855m plus sales royalties, is significant for a China biotech company. Its BET inhibitor (JAB-8263) is also in the early stage of clinical development which demonstrated strong affinity and anti-tumor activities as compared to benchmark products. We think both the management team and investor backing is strong. Besides the efficacy of the JAB-3068, we are concerned about the long lead time to commercialization which is as late as 2025.In this note, we provide a valuation for its SHP products and we think the deal is fairly valued at the low end even considering the founder's background. We would avoid the deal. Our previous coverage on JacobioJacobio (加科思药业) Pre-IPO: Right team but long time to market

Jacobio (加科思药业)  IPO: Faith on Founder

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

The terms of Jacobio's listing have been announced: a price range of HKD12-14, resulting in a pre-money valuation of US$1.1-1.3 billion and proceeds of US$140-160MM. The relatively small raise and limited uptake from Cornerstone investors indicate that the company is placing more emphasis on valuation over the amount raised. 
The company has cutting-edge technology; a credible partner in <a href="https://www.smartkarma.com/entities/abbvie-inc" target="_blank" data-smartkarma-citation="entities:1135:1" rel="noopener">Abbvie Inc (ABBV US);</a> and extensive trial readouts in 2021. We like the deal in the lower half of the range, but caution that buyers need a long-term view given the long road to NDA filings and likely limited trading volume post-deal.

The terms of Jacobio's listing have been announced: a price range of HKD12-14, resulting in a pre-money valuation of US$1.1-1.3 billion and proceeds of US$140-160MM. The relatively small raise and limited uptake from Cornerstone investors indicate that the company is placing more emphasis on valuation over the amount raised. 
The company has cutting-edge technology; a credible partner in Abbvie Inc (ABBV US); and extensive trial readouts in 2021. We like the deal in the lower half of the range, but caution that buyers need a long-term view given the long road to NDA filings and likely limited trading volume post-deal. 

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Recently, <a href="https://www.smartkarma.com/entities/jacobio-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:29696:1" rel="noopener">Jacobio Pharmaceuticals (1588148D CH)</a> got the approval to list on the main board of the Hong Kong Stock Exchange. Founded in 2015, Jacobio is committed to providing products and solutions to people’s health with a platform and expertise in developing allosteric inhibitors against protein tyrosine phosphatase, KRAS and transcriptional factors. In China, Jacobio is the first to explore the KARS signaling pathway and is also the leading company in this field. Since the establishment more than five years ago, Jacobio has developed rapidly and steadily, and its pipeline is very distinctive. The following provides the insights on its pipeline.

Recently, Jacobio Pharmaceuticals (1588148D CH) got the approval to list on the main board of the Hong Kong Stock Exchange. Founded in 2015, Jacobio is committed to providing products and solutions to people’s health with a platform and expertise in developing allosteric inhibitors against protein tyrosine phosphatase, KRAS and transcriptional factors. In China, Jacobio is the first to explore the KARS signaling pathway and is also the leading company in this field. Since the establishment more than five years ago, Jacobio has developed rapidly and steadily, and its pipeline is very distinctive. The following provides the insights on its pipeline.

Pre-IPO Jacobio Pharmaceuticals - Insights on Pipeline

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/jacobio-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:29696:1" rel="noopener">Jacobio Pharmaceuticals (1588148D CH)</a> is a clinical-stage pharma company focusing on the in-house discovery and development of innovative oncology therapies. Jacobio’s strategy of “drugging the undruggable” is based on developing clinical-stage small-molecule drug candidates to modulate enzymes by binding to their allosteric sites. Jacobio is backed by Qiming Venture Partners, Hillhouse Capital, LAV, <a href="https://www.smartkarma.com/entities/center-laboratories-inc" target="_blank" data-smartkarma-citation="entities:10778:1" rel="noopener">Center Laboratories (4123 TT)</a> and CICC Capital Management. The Series C+ round in February 2020 raised $26.0 million at a post-money valuation of $455 million. <div class="content-highlight">Jacobio is seeking to raise $300 million through a Hong Kong IPO. Jacobio is one of the few Chinese biotechs which have licensed out their drug candidates to leading global pharma companies such as <a href="https://www.smartkarma.com/entities/abbvie-inc" target="_blank" data-smartkarma-citation="entities:1135:1" rel="noopener">Abbvie Inc (ABBV US)</a>. Jacobio claims to have discovered several drug candidates with the potential to be among the first few market entrants in their respective drug classes globally. Overall, we believe that Jacobio’s clinical assets are attractive. </div>

Jacobio Pharmaceuticals (1588148D CH) is a clinical-stage pharma company focusing on the in-house discovery and development of innovative oncology therapies. Jacobio’s strategy of “drugging the undruggable” is based on developing clinical-stage small-molecule drug candidates to modulate enzymes by binding to their allosteric sites. Jacobio is backed by Qiming Venture Partners, Hillhouse Capital, LAV, Center Laboratories (4123 TT) and CICC Capital Management. The Series C+ round in February 2020 raised $26.0 million at a post-money valuation of $455 million. Jacobio is seeking to raise $300 million through a Hong Kong IPO. Jacobio is one of the few Chinese biotechs which have licensed out their drug candidates to leading global pharma companies such as Abbvie Inc (ABBV US). Jacobio claims to have discovered several drug candidates with the potential to be among the first few market entrants in their respective drug classes globally. Overall, we believe that Jacobio’s clinical assets are attractive. 

Jacobio Pharma IPO Initiation: Drugging the Undruggable

We have reviewed Jacobio's PHIP and have updated our DCF, analyzed the use of proceeds, and compiled a calendar of 2021 events. We have trimmed our NPV in light of higher expected clinical trial costs for the company's lead compounds. We will give our opinion of the deal in a future Insight once terms are announced.

We have reviewed Jacobio's PHIP and have updated our DCF, analyzed the use of proceeds, and compiled a calendar of 2021 events. We have trimmed our NPV in light of higher expected clinical trial costs for the company's lead compounds. We will give our opinion of the deal in a future Insight once terms are announced. 

Jacobio: Updated Valuation and Other Thoughts

China

Jacobio Pharmaceuticals Co. Ltd. operates as a biotech company. The Company develops and sells cancer innovative drugs, autoimmune drugs, infectious diseases drugs, and other products. Jacobio Pharmaceuticals markets its products throughout China.

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Jacobio Pharmaceuticals (1167 HK)

Jacobio (加科思药业) IPO: Faith on Founder

We provide a valuation for its SHP products and we think the deal is fairly valued at the low end even considering the founder's background. We...

Ke Yan, CFA, FRM

Jacobio: Management Solves for Valuation

We think that the offer terms for Jacobio's IPO are fair, but buyers need to take a long view given the small deal size and shares' limited liquidity.

Kemp Dolliver, CFA

Pre-IPO Jacobio Pharmaceuticals - Insights on Pipeline

This article analyzed the compelling and distinctive pipeline of Jacobio Pharmaceuticals in terms of projects. Meanwhile, it also disclose the...

Xinyao (Criss) Wang

Jacobio Pharma IPO Initiation: Drugging the Undruggable

Jacobio is seeking to raise $300 million through a Hong Kong IPO. Overall, we believe that Jacobio’s clinical assets are attractive.

Arun George

Jacobio: Updated Valuation and Other Thoughts

This Insight updates our NPV (reduce by ~US$100MM) of Jacobio, analyzes the use of proceeds, and has a list of 2021 events. We will give our...

Kemp Dolliver, CFA

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