Chinese Heart Valve Device Maker Venus Medtech Nabs $308m In HK IPO

Venus Medtech, a Chinese company that produces heart valve replacement devices, has raised HK$2.41 billion ($308 million) in an initial public offering (IPO) on the Hong Kong stock exchange on Tuesday, becoming the latest healthcare company to shore up investors’ confidence in the Asian financial hub.

The Chinese developer of cardiovascular devices priced 78.5 million shares at HK$33 apiece – the high end of the proposed range from HK$29 to HK$33. It received retail orders worth over HK$780 billion ($10 billion) for the IPO, which made it become the largest healthcare listing in the territory in 2019.

The IPO offering came as Hong Kong has suffered from roughly six months of anti-government protests this year, further striking China’s gloomy macroeconomic environment already clouded due to a trade war with the United States.

Since the Hong Kong stock exchange introduced new rules last April to allow listings of pre-profit biotech firms, 15 biotech companies have gathered a total of HK$48.6 billion ($6.21 billion) through IPOs in the city by August 2019, according to official statistics.

Venus Medtech, founded in 2009 and headquartered in Hangzhou, develops trans-catheter heart valve medical devices for the treatment of structural heart diseases in China. The company had a 79.3 per cent market share in the country in terms of device implants last year, according to Frost & Sullivan, cited in the company’s prospectus.

The company counted Asia-focused private equity firm Hillhouse Capital and Singaporean sovereign wealth fund GIC among its cornerstone investors. Initially filed in early August, Venus Medtech reported a loss of 138.2 million yuan ($19.7 million) in the first five months of 2019, compared with a loss of 50.2 million yuan in the same period in 2018.

Proceeds from the IPO will be used to commercialise its VenusA-Valve product, as well as for research and development and general corporate purposes. VenusA-Value, a self-developed product of Venus Medtech, is the first transcatheter aortic valve replacement (TAVR) device approved by China’s National Medical Products Administration and commercialised in the mainland, shows the prospectus.

Goldman Sachs, CICC, Credit Suisse and CMS were joint sponsors for the deal. Shares of Venus Medtech are listed under the stock code “2500.”