Can Hong Kong successfully lure biotech firms from Nasdaq?

Mainland companies are already mulling their flotations in the city instead of the US.

Hong Kong’s bid to lure biotech listings away from global IPO leaders Nasdaq and NYSE may fall short due to the city’s limited expertise in the field, according to Reuters. 

Also read: Hong Kong approves dual class shares and unprofitable biotech listings in sweeping market reform

A number of companies from the Mainland like Shanghai Henlius Biotech and Hua Medicine are already mulling flotations in the nearby financial hub instead of the US which has led to a scramble for financiers with the adequate scientific expertise.

Just 3% of all Hong Kong-listed stocks, by capitalisation, come from so-called “new economy” sectors - tech as well as biotech - according to a report last year by Hong Kong Exchanges and Clearing, compared to 60% for Nasdaq and 47% for the NYSE.

“It’s not easy to hire the right professionals,” said Kevin Xie, head of healthcare and co-founder of China Renaissance, a boutique investment bank. “There’s a limited pool globally who truly understand the industry.”

Li Hang, head of Greater China equity capital markets at CLSA, said: “We really need sector specialist bankers to run biotech deals, otherwise everybody will say we don’t know how to do the due diligence.”

Here’s more from Reuters: