A home-grown Hong Kong company plans to join a growing list of firms tapping the city’s stock market for capital for health care-related investment amid the Covid-19 pandemic.
GeneHarbor (Hong Kong) Biotechnologies, which produces anti-ageing supplements, plans to make an initial public offering before June next year for funds to develop compounds to treat neurological diseases such as Alzheimer’s, chief executive officer Wang Jun said.
“We are [already] a profitable company,” he told the Post in an interview. “The reason we want to raise money is to extend our product line and diversify from supplements into medicines.”
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The dietary supplement producer, established in 2004, spent 2 billion yuan (US$294 million) to build a factory this year in Ningbo in eastern Zhejiang province, capable of producing 100 tonnes of nicotinamide mononucleotide (NMN) annually. The company claims the compound helps delay the ageing process and has the potential to treat Alzheimer’s.
A successful listing would be a rare feat for Hong Kong, which has hosted predominantly mainland China-based biotechnology firms since an April 2018 reform opened the floodgate for so-called pre-profit drugs and medical device developers to sell shares to the public.
Some 20 such entities have raised more than US$5 billion since then, many chalking up tremendous price appreciation since their trading debuts. GeneHarbor has more than 20 investors who have each put in “a few million US dollars” to fund its operations, Wang said, but declined to name them.
It derives around two-thirds of its NMN sales from mainland China via cross-border e-commerce sales and 15 per cent from Hong Kong market. Its revenue has grown “100-fold” since 2017 after it launched NMN, Wang claimed, declining to disclose the figures.
The company is working on technology to enhance the purity and reduce the cost of cannabidiol, a compound extracted from cannabis plants and used as a medicine for neurological diseases.
“We have the technology to make this very expensive compound into a better quality medication at a fraction of the cost, as we did for NMN,” said Wang, who is an adjunct biochemistry professor at the Chinese University of Hong Kong.
The US Food and Drug Administration in 2018 approved Epidiolex, which contains a purified form of cannabidiol for treating severe seizures associated with rare Lennox-Gastaut and Dravet syndromes.
Global cannabidiol sales totalled US$1.74 billion in 2019 and may surge at a compound annual average rate of 24.3 per cent through 2025, according to ResearchAndMarkets, as more countries legalise cannabis for medical, recreational and research applications.
NMN was discovered a century ago, but its anti-ageing benefits were only identified by Harvard Medical School’s genetics professor David Sinclair in 2013, Wang said.
GeneHarbor has invested HK$1 billion (US$129 million) on manufacturing technology that allows it to reduce the cost to US$2,500 per kg from about US$2.5 million several years ago, Wang said. As a result, GeneHarbor can price its product 95 per cent cheaper than its rival, Tokyo-based Shinkowa Pharmaceutical, he added.
Still, it is not possible to objectively measure ageing and the benefits of NMN, which unlike drugs, are not required to go through human clinical trials to prove efficacy, Wang conceded.
Deep Longevity, another Hong Kong Science Park-based start-up entity recently acquired by Regent Pacific Group, is seeking to fill the gap.
It recently launched artificial intelligence tools to help track “biological age” and the pace of ageing by collecting and analysing data from body scans, laboratory tests and genetic sequencing.
“The future of medicine lies in treating ageing as a condition,” chief executive Alex Zhavoronkov told reporters recently. “There are already ways, some we have invented, that can help slow down ageing and promote healthy longevity.”
More from South China Morning Post:
- Hong Kong’s population will be a little smaller, a lot greyer by 2069, according to new government projections
- How savvy Li Ka-shing profits from this loss-making firm’s ‘healthy ageing’ product
- Hong Kong to surpass Nasdaq as king of biotech listings in five to 10 years as Chinese scientists dominate field, HKEX chief predicts
- JD Health makes an US$3 billion IPO appointment in Hong Kong for later this year
This article GeneHarbor plans Hong Kong IPO to fund new medicinal products, widen anti-ageing supplements line first appeared on South China Morning Post