Hillhouse invests US$1b in Beigene's share sale

[BEIJING] Shares in Chinese biotechnology company Beigene jumped the most in eight months after Hillhouse Capital invested about US$1 billion in the largest equity financing ever by a biotech company.

The Asian private equity firm's stake in Beigene increased to about 12.7 per cent, according to a regulatory filing Tuesday confirming an earlier report by Bloomberg News.

Hillhouse acted as the anchor investor for the US$2.1 billion direct offering of 145.8 million ordinary shares to fund drug research and market its treatments in the US and China. 

Beigene's Hong Kong shares surged as much as 18 per cent on Wednesday, their largest advance since November. They closed nearly 8 per cent higher, outpacing the Hang Seng index which remained essentially flat.

Representatives for Hillhouse and Beigene declined to comment.

Other buyers in the share sale include existing shareholders such as investment firm Baker Bros Advisors and American drugmaker Amgen, which last year had purchased a 20.5 per cent stake in Beigene for US$2.7 billion to jointly develop cancer therapies.

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The share sale follows the Beijing-based company's blood cancer therapy becoming the first Chinese cancer drug to receive approval from the US Food and Drug Administration last November. The approval positioned Beigene as one of the most promising Chinese biotech companies taking on the world's biggest pharmaceutical firms in medical innovation and scientific research.

BLOOMBERG