HONG KONG, CHINA – JULY 8: Guests view an AI Metropolis show on the Huawei exhibition sales space throughout LEAP East 2026 on the Hong Kong Conference and Exhibition Centre on July 8, 2026, in Hong Kong, China.
Cheng Xin | Getty Photos Information | Getty Photos
For years, Chinese language corporations akin to Alibaba and Baidu headed to the U.S. to record their shares, citing its deeper capital markets and better valuations. Now, one American biotech agency is betting on doing the other.
Axiom Biosciences, a San Diego-based developer of regenerative and genetic medicines, plans to go public in Hong Kong in 2027, adopted by a secondary U.S. itemizing in 2029. The corporate says the “contrarian” transfer will open the door to stylish, biotech-focused buyers whereas bringing it nearer to scientific and industrial companions throughout Asia.
“A number of the most vital science on the planet is being in-built america, however the way in which it will get funded hasn’t saved tempo,” mentioned Remo Moomiaie-Qajar, founder and CEO of Axiom.
The Hong Kong trade’s stricter itemizing requirements in comparison with the U.S. level to a mature biotech ecosystem, Moomiaie-Qajar informed CNBC, whereas noting that current biopharma listings within the metropolis have outperformed these on the Nasdaq.
Public markets supply an alternate strategy to increase cash as biotech corporations face a harder fundraising atmosphere, he mentioned. Whereas scientific trials change into dearer as they progress, the pool of enterprise buyers keen and capable of write massive checks will get smaller – particularly for corporations that didn’t safe main backers early on, he added.
Chinese language biotech corporations have flocked to town’s bourse amid a authorities push and as progressive drugmakers’ financing wants develop. The Cling Seng Biotech Index in Hong Kong has climbed greater than 75% since January 2025, surpassing the roughly 40%-50% good points within the ICE Biotechnology Index and the Nasdaq Biotechnology Index, monitoring U.S.-listed corporations throughout the identical interval, in keeping with LSEG information.
“The U.S. stays the deepest and most institutionalized biotech capital pool on the planet,” mentioned Danny Xiang, founding companion on the life science-focused non-public fairness agency Fontus Capital. “That depth is exactly why essentially the most fundable, globally aggressive property nonetheless increase and record within the U.S.,” and why it is uncommon for a purely American biotech agency to decide on Hong Kong as its major venue, he mentioned.
What’s modified, nonetheless, is that Hong Kong’s rising attraction as one of many world’s largest biotech fundraising hubs, with greater than 70 listings within the sector and reforms launched final 12 months that streamlined their IPO course of, Xiang mentioned.
International biotech corporations are more and more drawn to town’s increasing biopharma investor base and its proximity to Chinese language pharmaceutical companions, which might assist velocity up scientific trials and decrease prices.
Nonetheless, Xiang mentioned, native buyers are inclined to favor corporations with a transparent China connection, backing property the place they see alternatives to co-develop, manufacture or promote merchandise with Chinese language companions.
George Wu, a Hong Kong-based companion at regulation agency DLA Piper, mentioned the Hong Kong biotech sector’s decrease valuations, relative to the Nasdaq, have additionally attracted extra worldwide buyers in search of upside potential.
The U.S. can also be on monitor for its strongest run of biotech IPOs in years, with each Parabilis Medicines, a clinical-stage most cancers drug developer, and Kailera Therapeutics, an obesity-drug maker, hovering round 60% on their debuts earlier this 12 months, after elevating greater than $600 million every. The SPDR S&P Biotech ETF (XBI) rallied 76% over the trailing 12 months as of Tuesday.
Inventing vs. scaling
Biotechnology has been a long-term precedence for Beijing, which has spent many years funding fundamental analysis, reforming drug regulation, and attracting skilled scientists and executives skilled overseas, together with the U.S., again to China.
Decrease labor and manufacturing prices, a deep pool of science graduates, entry to massive datasets, focused makes use of of AI in areas akin to drug design, and China’s huge inhabitants – with many sufferers concentrated at main hospitals that may help clinical-trial recruitment – have helped China advance in biologics, genomics and drug improvement, specialists say.
Nevertheless, a survey by the Treatment Innovation Index in June discovered that regardless of main in scientific improvement and provide chains, China nonetheless lags the U.S. within the high quality, industrial attain and cutting-edge power of its biomedical science.
“The U.S. leads ‘0-to-1’,” in breakthroughs in foundational science and novel biology, Xiang mentioned, whereas China more and more leads “1-to-100,” that means quick, capital-efficient implementation to achieve sufferers.
Axiom is co-developing a remedy with South Korea-based biopharma agency Medinno for newborns with extreme mind accidents linked to excessive loss of life charges. The remedy has acquired two U.S. Federal Drug Administration designations for uncommon pediatric illnesses, and a Part 1 trial involving 9 newborns in South Korea has been accomplished.
Axiom additionally plans to check the remedy as a potential remedy for adults who’ve suffered strokes.
“As a result of there are not any regenerative therapies for these mind accidents, it is crucial that we transfer via scientific trials as quickly as potential. And I believe Asia is the correct place to try this,” Moomiaie-Qajar informed CNBC.
China closing in
In December, a bipartisan U.S. legislative fee warned that China was starting to outpace the U.S. in some areas of biopharmaceutical innovation, constructing on “benefits gained from non-market practices and brute drive economics” – a time period utilized by some in Washington to explain China’s state-led push for management in strategic industries.
The fee urged coordinated motion throughout the private and non-private sectors to retain – and in some areas regain – U.S. biotechnology management.
Washington has moved in opposition to outstanding Chinese language biotech corporations in recent times.
The Commerce Division has imposed export restrictions on a number of entities linked to genomics large BGI Group, whereas the Pentagon final month added the pharmaceutical firm WuXi AppTec to its record of corporations that it alleges have ties to the Chinese language army. WuXi sued the Division of Protection days later, in search of to overturn what it known as an inaccurate designation.
Whereas Nasdaq and the New York Inventory Change permit biotech corporations to use for a list earlier than they generate income or start human testing, Hong Kong requires not less than 12 months of analysis and improvement and a core product previous the idea stage.
“A U.S. IPO is mostly quicker for a corporation that qualifies, and Hong Kong’s overview occasions have stretched as purposes piled up,” Xiang mentioned.
— CNBC’s Evelyn Cheng contributed to this report.
