Now Is The Right Time For A Hong Kong Biotech Listing

Hong Kong has recently emerged as the number one IPO venue globally, and one of the sectors driving this is biotech. For China-based biotechs looking to float, Hong Kong is a natural destination. But biotechs based anywhere in the world may wish to ride the current wave, as Meng Ding explains.

Since mid-2021, the biotech sector in China, and globally, had been experiencing a ‘funding winter.’ But in June last year, we reported that Hong Kong’s biotech listings were emerging from this downturn, with a combination of listing reforms and an explosion of innovation in the Greater Bay Area and other technology hubs in China leading to the territory’s 18A process becoming popular again for life sciences. Investor interest surged still further in late 2024 and into 2025, with several biotech companies that had previously suspended IPO plans in Hong Kong moving to reactivate their listings. In the biotech sector, we saw at least 10 Hong Kong listings in the first half of 2025 alone.

Then, in June this year, Hong Kong stunned many market commentators by emerging as the number one IPO venue globally by funds raised, outperforming the NASDAQ, New York, India, and Shanghai indexes. The Hang Seng Index (HSI) is now among the top performing indexes globally, having risen by more than 20% over the first half of the year, with average daily turnover growing 82% year-on-year to HK$240.2 billion (US$30.5 billion) in H1 2025. This renewed activity has been underpinned by structural support from both the Hong Kong and central P.R.C. governments.

In the biotech sector specifically, Hong Kong has now overtaken other exchanges in terms of the volume of IPOs. This is partly due to the fact that Hong Kong is viewed as the most viable venue for P.R.C.-based biotechs due to challenges within the domestic Chinese stock market and geopolitical constraints surrounding U.S. listings. New initiatives at the regulatory level have helped speed up the listing process for biotechs, particularly the May 2025 joint launch by the HSI and the Securities and Futures Commission of the Technology Enterprises Channel, which provided further support for specialist technology and biotech companies listings.

The U.S. still remains the destination of choice for global biotech companies looking to float, however, Greater China and Singapore have emerged as one of the dominant sources of innovative biotech companies. This industry upswing is in part due to returning capital from both domestic and international sources into Chinese biotech and pharmaceutical ventures, but it is also partly attributable to increasing global perception of the strength of Chinese technology. What has been dubbed the ‘DeepSeek moment,’ in which the Chinese large language model demonstrably outperformed Western competitors, was pivotal in elevating both international recognition of the global credibility of Chinese innovation in AI, biotech and other hard-techs, and in boosting the confidence of Chinese early-stage companies.

While for a China-based company, listing in Hong Kong is a natural choice, biotech companies from jurisdictions outside China are also considering Hong Kong IPOs. They would be well-advised to ride the wave before it plateaus. Hong Kong is gaining momentum as a listing venue, but this window of opportunity is, of course, unlikely to remain open indefinitely.

The only hard requirement under Hong Kong’s Chapter 18A for listing is that at least one core product should have passed at least Phase 1 clinical trials. This means that, from a substantive qualification point of view, it is feasible for most international biotech companies that are seriously undertaking R&D in new drug or device development to qualify under 18A for a Hong Kong listing.

In addition, out-licensing and cross-border business development are gaining traction among both listed and unlisted China-based biotech companies. Such business development strategies offer attractive options for U.S. and European multinationals to form partnerships with early-stage China-based biotech companies to monetize R&D. Due to asymmetric cost structures between China and the West, these licensing agreements are generally viewed as mutually beneficial and strategically efficient.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.