How Hong Kong can cement its position as a biotech listing hub

To maintain its growth and quality, Hong Kong’s biotech sector needs more bankers, analysts and lawyers with international expertise

Given the short history of the sector and the technical nature of biotech finance skills, the pool of home-grown talent is small, though growing

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A researcher prepares a sample inside a laboratory at BeiGene Ltd’s research and development centre in Beijing on May 24, 2018. The company made its Hong Kong trading debut in August 2018. Photo: Bloomberg

Bonnie Y. Chan is CEO of the Hong Kong Exchanges and Clearing (HKEX).

Published: 9:15am, 27 May 2021Updated: 9:52am, 27 May 2021

In just three years, Hong Kong has grown into the world’s second-largest listing venue for biotechnology pioneers, attracting Chinese and international companies, international investors, and a broad ecosystem of supporting services and participants.

In 2018, Hong Kong Exchanges and Clearing Limited introduced three new listing chapters to attract innovative companies with weighted voting rights structures, pre-revenue biotech companies, and secondary listings. Chapter 18A, which enabled pre-revenue biotech companies to list, has arguably had the most impact on the DNA of the Hong Kong market.

Chapter 18A has so far attracted 32 companies, raising HK$84 billion and, in the past three years, the sector has seen a compound annual growth rate of 61 per cent in its total market capitalisation. Issuers are increasingly diverse, including biotechnology, pharmaceuticals, medical devices, medical services and digital health.

A supporting ecosystem, including university programmes, government funding and biotech finance professionals, has grown, and developed unique Hong Kong characteristics. Hong Kong is now home to over 250 biotech businesses and the government has designated biotech as one of the city’s key areas of innovation and technology.