Why one U.S. biotech firm is listing in Hong Kong before Wall Street

For years, Chinese language corporations equivalent 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 classy, biotech-focused traders whereas bringing it nearer to medical and industrial companions throughout Asia.

“A few of the most necessary science on this planet is being inbuilt the US, however the best way 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 advised CNBC, whereas noting that current biopharma listings within the metropolis have outperformed these on the Nasdaq.

Public markets supply an alternate method to elevate cash as biotech corporations face a more durable fundraising setting, he mentioned. Whereas medical trials turn out to be costlier as they progress, the pool of enterprise traders 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 modern drugmakers’ financing wants develop. The Hang Seng Biotech Index in Hong Kong has climbed greater than 75% since a low in January 2025, surpassing the roughly 40%-50% positive factors within the ICE Biotechnology Index and the Nasdaq Biotechnology Index, monitoring U.S.-listed corporations throughout the identical interval, based on LSEG information.   

“The U.S. stays the deepest and most institutionalized biotech capital pool on this planet,” mentioned Danny Xiang, founding associate on the life science-focused personal fairness agency Fontus Capital. “That depth is exactly why probably the most fundable, globally aggressive property nonetheless elevate and record within the U.S.,” and why it is uncommon for a purely American biotech agency to decide on Hong Kong as its main venue, he mentioned.

What’s modified, nonetheless, is Hong Kong’s rising attraction as one of many world’s largest biotech fundraising hubs, helped by reforms launched final yr that streamlined the IPO course of, Xiang mentioned. Since 2018, 86 companies have listed within the metropolis elevating greater than $17.8 billion, based on Hong Kong Exchanges and Clearing.

International biotech corporations are more and more drawn to town’s increasing biopharma investor base and its proximity to Chinese language pharmaceutical companions, which may assist velocity up medical trials and decrease prices.

Nonetheless, Xiang mentioned, native traders are likely 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 associate at legislation agency DLA Piper, mentioned the Hong Kong biotech sector’s decrease valuations, relative to the Nasdaq, have additionally attracted extra worldwide traders in search of upside potential. 

The U.S. can 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 yr, after elevating greater than $600 million every. The SPDR S&P Biotech ETF (XBI) rallied 76% over the trailing yr as of Tuesday.

Biotechnology has been a long-term precedence for Beijing, which has spent a long time funding primary analysis, reforming drug regulation, and attracting skilled scientists and executives skilled overseas, together with within 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 equivalent 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, consultants say.

Nevertheless, a survey by the Remedy Innovation Index in June discovered that regardless of main in medical improvement and provide chains, China nonetheless lags the U.S. within the quality, commercial reach and cutting-edge strength 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 dying charges. The remedy has obtained 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 review the therapy as a doable 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 medical trials as quickly as doable. And I feel Asia is the fitting place to try this,” Moomiaie-Qajar advised CNBC.

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 power 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.

On Tuesday, President Donald Trump mentioned generic medicine imported into the U.S. will face a 100% tariff from August 2028, with the speed doubling to 200% a yr later.

Moomiaie-Qajar mentioned the corporate is monitoring geopolitical developments, however the transfer would not change its intention to record in Hong Kong, because it focuses on next-generation specialty merchandise relatively than generic medicine and seeks traders who perceive the dangers and improvement timelines concerned.

Nasdaq and the New York Inventory Alternate permit biotech corporations to use for a list earlier than they generate income or start human testing. Hong Kong additionally permits pre-revenue listings, however requires not less than 12 months of research and development and a core product previous the idea stage. 

“A U.S. IPO is mostly quicker for a corporation that qualifies, and Hong Kong’s evaluate instances have stretched as functions piled up,” Xiang mentioned.

— CNBC’s Evelyn Cheng contributed to this report.