China-based biotech Innovent Biologics Inc., (HKG: 1801) has issued a notice stating its intention to release 68 million shares priced at HKD 38.30 (USD 4.90), offering an 8.8% discount to the September 11, 2023, closing price. Morgan Stanley is acting as the agent for the placement, responsible for securing purchasers for the shares. This strategic move is anticipated to raise a net HKD 2.36 billion (USD 301 million) for the company.
Share Impact and Capital Allocation
The 68 million shares represent approximately 4.2%-4.4% of the existing total on the market. The placement’s dilutive impact led to a roughly 6% decrease in Innovent’s share price during trading. Innovent plans to allocate 60% of the proceeds to support its preclinical and clinical programs on a global scale, as well as to construct its global infrastructure and facilities. Furthermore, 30% of the funds raised will be directed towards the commercial launch of mazdutide, a GLP1R/GCGR dual agonist in-licensed from Eli Lilly in 2019, which is currently in the advanced stages of development for diabetes and obesity indications.
Financial Performance and Outlook
Innovent reported total revenues of RMB 4.556 billion (USD 625 million) for 2022, marking a 6.7% increase year-on-year. However, the company’s extensive pipeline has resulted in significant R&D costs, amounting to RMB 2.871 billion (USD 394 million), with net losses reaching RMB 2.179 billion (USD 299 million). Despite these losses, Innovent’s total cash holdings stand at RMB 9.166 billion (USD 1.3 billion), providing a solid foundation for the company’s future investments and growth.-Fineline Info & Tech
