By HUANG Hua
Innovative medicine maker Innovent Biologics is to issue 68 million new shares to raise approximately HK$2.4 billion (2.2 billion yuan, US$300 million). However, this fundraising move has not gained support and has led to dissatisfaction among many investors.
According to Innovent, 60 percent of the funds raised will go on R&D and clinical trials. Another 30 percent will be directed toward Mazdutide, a treatment for diabetes and obesity. The remaining 10 percent will be allocated for other corporate purposes.
Innovent has completed two previous rounds of financing. In 2021, Innovent raised HK$4.7 billion through a share placement. And in 2022, a cooperation with Sanofi raised HK$2.4 billion.
The company currently holds approximately 8.5 billion yuan (US.2 billion) in cash and short-term financial assets. However, the cumulative costs for 2022 have exceeded 6 billion yuan, and despite Innovent’s growing portfolio, the company is still operating at a loss. Without additional financing, the existing assets may not sustain operations.
As the second domestic enterprise in China to receive approval for a PD-1 inhibitor, the company initially did well. However, with a growing number of similar products in the domestic market, profit margins have been squeezed.
Innovent also attempted to expand the reach of its PD-1 inhibitor to international markets but failed. Consequently, the company needs new products in the hopes of creating a new profit driver. As of the end of the first half of this year, Innovent has nine commercialized products. Although the company has not disclosed extensive sales data, indications suggest that overall sales have been underwhelming.
In addition to lackluster sales, Innovent has limits to its in-house R&D capabilities. Most of its commercialized products have been brought to market through licensing agreements. This reliance on external partners has necessitated significant investment and further weakened the company's R&D potential.
