Qiming-Backed AI Drug Discovery Startup Insilico Medicine Files For Hong Kong IPO

Insilico Medicine, a Hong Kong and New York-based company that uses AI for drug discovery, has filed for an initial public offering in the Asian financial hub that’s slowly recovering from a drought of major listings.

Insilico Medicine did not disclose details of its IPO in its filing to the Hong Kong stock exchange on Tuesday, although a report by local newspaper South China Morning Post said it’s planning to raise $200 million, citing unnamed sources.

The company had previously filed confidentially for a U.S. IPO to raise around $300 million, Bloomberg News reported in November 2021.

Insilico Medicine didn’t immediately respond to a comment request.

The biotech company was valued at approximately $895 million after raising $95 million last July from the likes of leading Chinese healthcare-focused firm Qiming Venture Partners and Singapore-based billionaire Eduardo Saverin’s B Capital.

Other investors in the round include U.S. private equity giant Warburg Pincus, as well as the venture capital arm of oil giant Saudi Aramco and Pavilion Capital, a unit of Singapore state-owned investment fund Temasek.

Previous investors in the company include Chinese pharma billionaire Li Ge’s WuXi, Sequoia Capital China, Hillhouse, Baidu Ventures and Lilly Asia Ventures, the venture capital firm spun off from Eli Lilly & Co. Insilico Medicine says it uses generative AI technology to speed up and reduce the cost of discovering novel drugs that target mainly rare diseases.

The company is currently focusing on a drug candidate that could treat idiopathic pulmonary fibrosis, a rare lung disease.

It’s also working on dozens of other potential medicines for Covid-19 and cancer, among others.

MORE FOR YOU. Insilico Medicine saw its revenue jump more than six times to $30.1 million in 2022 from the previous year, according to the filing.

The company generates revenue from research and development collaborations with pharmaceutical companies and subscription fees for its generative AI platforms.

Some of the pharma companies Insilico Medicine has teamed up with include Chinese billionaire Guangchang Guo’s Fosun International and U.S. behemoth Pfizer.

Insilicon reported its net loss widened to $221 million last year from $130.5 million the year before.

Insilico Medicine’s listing application comes as Hong Kong is slowly recovering from a fall-off in IPOs.

The Asian financial center has struggled to reclaim its crown as the world’s largest IPO venue since 2020 amid strict Covid restrictions and Beijing’s crackdown on the private sector.

Analysts recently said Hong Kong could regain its momentum in the second half of 2023 following border reopenings and the city’s introduction of new listing rules to attract pre-revenue tech companies.

PwC estimated that Hong Kong will see around 100 new listings raising a total of up to HK$170 billion in 2023.

Deloitte said the city could record 110 new listings raising about HK$230 billion this year.

Among the companies that has recently filed for an IPO is Lalatech, the Hong Kong-based logistics and delivery giant controlled by Chow Shing Yuk, a rare startup billionaire in the city.

Others include Chinese biotech companies, such as Adicon Clinical Laboratories, a laboratory chain backed by U.S. private equity giant Carlyle Group.

Insilico Medicine was founded in 2014 in the U.S. by Alex Zhavoronkov, a Canadian-Latvian scientist who graduated from the Johns Hopkins University with a master’s degree in biotechnology.

The company set up its headquarters in Hong Kong in 2019, and now operates a robotics lab in Suzhou, along with offices in Abu Dhabi, Montreal, Shanghai and Taipei.

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