November 14 According to the US “Wall Street Journal” website reported on November 12, this year is a glorious year for Chinese medical companies. Boosted by the reform of the country’s medical system and the relaxation of listing regulations, the share prices of medical companies have soared.
According to the report, data from Diroki of the United States shows that as of November 11 this year, more than 60 Chinese medical companies have raised a total of 16.3 billion US dollars through initial public offerings (IPOs) and secondary listings in Hong Kong, Mainland China and other places.
This amount is 138% higher than the total amount of funds raised in 2019, and both the amount of funds raised and the number of listed companies set a record.
The report pointed out that as of November 11 this year, global medical companies have raised a total of 39.1 billion U.S. dollars in public listings, which is almost twice that of last year.
According to the report, Cathy Zhang, head of Morgan Stanley’s global capital market Asian healthcare business, said that many international investors are looking at Hong Kong, China from Western markets. She said that some investors acted as cornerstone investors—supporting the company’s listing by promising to buy and hold large amounts of shares—which helped attract other investors and support the company’s stock price.
According to reports, the market value of listed companies has surged. The Standard & Poor’s China Medical Companies Index-most of the companies it covers are listed in Hong Kong, Shanghai or Shenzhen-has risen nearly 32% so far this year. In contrast, the S&P 500 medical sector rose 8.9%.
The report also said that at the same time, the number of technology companies listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange Science and Technology Innovation Board has also increased significantly. The two stock exchanges have reduced the difficulty of listing startups by removing profit requirements and other measures.
According to data from Diroki, the medical industry ranks second only to the technology industry based on the amount of funds raised by newly listed companies in Hong Kong and Mainland China this year. Newly listed medical companies include traditional pharmaceutical manufacturers, companies that use biological processes to develop new drugs, medical device manufacturers, and operating institutions of hospitals and research centers.
According to reports, after the stock exchange implemented reforms, biotech startups (whose products are usually not yet listed) were able to raise large sums of money. Compared with traditional pharmaceutical and medical device companies, biotech companies are more prone to ups and downs.
The Hong Kong Stock Exchange said that since the implementation of the reform of the listing regulations in 2018, as of the end of October this year, newly listed medical companies have raised a total of US$16.9 billion on the exchange.
The report also said that at the same time, the Chinese government has implemented reforms in recent years, such as acknowledging international clinical trial data when approving new drugs. China reduces the prices of generic drugs through centralized procurement across the country, which can also encourage companies to develop new drugs. China has also taken other measures to encourage innovation, while at the same time increasing the approval of foreign drugs.
The report pointed out that Coronavirus pandemic has also promoted the development of the industry. The pandemic has promoted the development of vaccines and antibody therapies, and has promoted the use of online platforms.
