Why one U.S. biotech firm is listing in Hong Kong before Wall Street
Chinese companies for years Alibaba’s And baidu It traveled to the US to list its shares, citing deeper capital markets and higher valuations. Now, an American biotechnology company is planning to do the opposite.
San Diego-based regenerative and genetic drug developer Axiom Biosciences plans to go public in Hong Kong in 2027, followed by a second U.S. listing in 2029. The company says the “otherwise” move will open the door to sophisticated, biotech-focused investors and bring it closer to clinical and commercial partners in Asia.
“Some of the most important science in the world is being produced in the United States, but the way it is funded has not kept pace,” said Remo Moomiaie-Qajar, founder and CEO of Axiom.
Moomiaie-Qajar told CNBC that the Hong Kong exchange’s stricter listing standards compared to the U.S. indicate a mature biotech ecosystem, noting that recent biopharma listings in the city have outperformed those on the Nasdaq.
He said public markets offer an alternative way to raise money as biotech firms face a more challenging fundraising environment. He added that as clinical trials become more expensive as they progress, the pool of venture investors willing and able to write big checks is shrinking, especially for companies that can’t find big backers early on.
Chinese biotech firms have flocked to the city’s stock market amid government pressure and increasing financing needs for innovative drugmakers. Hang Seng Biotechnology Index It has surged more than 75% since the January 2025 low in Hong Kong, outpacing gains of about 40%-50% in the ICE Biotechnology Index and Nasdaq Biotechnology Index, which track U.S.-listed firms, over the same period, according to LSEG data.
“The United States remains the deepest and most institutionalized pool of biotech capital in the world,” said Danny Xiang, co-founder of life science-focused private equity firm Fontus Capital. “This depth is exactly why the most fundable, globally competitive assets are still rising and listing in the U.S.,” he said, and why it is rare for an all-American biotech firm to choose Hong Kong as a primary location.
But what has changed, Xiang said, is Hong Kong’s growing appeal as one of the world’s biggest biotech fundraising hubs, helped by reforms last year that made the IPO process easier. Since 2018, 86 companies listed More than $17.8 billion was raised in the city, according to Hong Kong Exchanges and Clearing.
Global biotech firms are increasingly attracted to the city’s expanding biopharma investor base and proximity to Chinese pharmaceutical partners; This can help speed up clinical trials and reduce costs.
Xiang said local investors still tend to prefer companies with China connections and back assets where they see opportunities to develop, manufacture or sell products with Chinese partners.
HONG KONG, CHINA: Hong Kong has emerged as a major biotech fundraising hub, attracting dozens of Chinese biotech firms to list in the city.
Cheng Xin | Getty Images News | Getty Images
George Wu, a Hong Kong-based partner at law firm DLA Piper, said the Hong Kong biotech sector’s lower valuations relative to the Nasdaq are also attracting more international investors looking for upside potential.
USA is also on this path The strongest run of biotech IPOs over the years with both Parabilis MedicinesKailera Therapeutics, a clinical-stage cancer drug developer, and obesity drug maker Kailera Therapeutics surged nearly 60% in their debuts earlier this year after raising more than $600 million each. SPDR S&P Biotech ETF (xbi) As of Tuesday, it was up 76% in the following year.
Invent and scale
Biotechnology has been a long-term priority for Beijing, which has spent decades funding basic research, reforming pharmaceutical regulations and attracting experienced scientists and executives trained abroad, including in the United States, back to China.
Experts say lower labor and manufacturing costs, a deep pool of science graduates, access to large data sets, targeted uses of artificial intelligence in fields such as drug design, and China’s large population (where many patients are concentrated in large hospitals that can help with clinical trial recruitment) are helping China advance biologics, genomics, and drug development.
But a June survey by the Cure Innovation Index found that despite being a leader in clinical development and supply chains, China still lags behind the United States. quality, commercial reach and cutting-edge power part of biomedical science.
Xiang said that in breakthroughs in basic science and new biology, “the United States is leading from ‘0 to 1,’ while China is increasingly leading from ‘1 to 100,’ meaning rapid, capital-efficient application to reach patients.”
Axiom, together with South Korea-based biopharma company Medinno, is developing a therapy for newborns with severe brain injuries linked to high mortality rates. The therapy has received two US Federal Drug Administration designations for rare pediatric diseases, and a Phase 1 trial involving nine newborns has been completed in South Korea.
Axiom also plans to study the treatment as a possible therapy for adults who have had a stroke.
“Since there are no regenerative treatments for these brain injuries, it is imperative that we complete clinical trials as quickly as possible. And I think Asia is the right place to do this,” Moomiaie-Qajar told CNBC.
China is approaching
A bipartisan U.S. legislative committee in December warned China has begun to outpace the United States in some areas of biopharmaceutical innovation, relying on “advantages gained from non-market practices and brute force economics” — a term used by some in Washington to describe China’s push for state-led leadership in strategic industries.
The commission called for coordinated action across the public and private sectors to maintain and, in some areas, regain U.S. leadership in biotechnology.
On Tuesday, President Donald Trump said generic drugs imported into the United States would face a 100% tariff starting in August 2028, with the rate doubling to 200% a year later.
Moomiaie-Qajar said the company is monitoring geopolitical developments, but the move does not change its intention to list in Hong Kong as it focuses on next-generation specialty products rather than generics and seeks investors who understand the risks and development timelines involved.
Nasdaq and the New York Stock Exchange allow biotech companies to apply for listing before they can generate revenue or begin testing on humans. Hong Kong also allows pre-revenue listings, but at least 12 months of research and development and is a basic product that has passed the concept stage.
“IPOs in the US are generally faster for a qualifying company, and Hong Kong’s review times have also lengthened as applications have increased,” Xiang said.
— CNBC’s Evelyn Cheng contributed to this report.
