F-1: Ascentage Pharma Eyes Nasdaq Listing with Proposed IPO

Ascentage Pharma, a global biopharmaceutical company, has filed for an initial public offering (IPO) in the United States to list its American depositary shares (ADSs) on the Nasdaq Global Market.

Summary

• Ascentage Pharma, a global biopharmaceutical company focused on hematological malignancies, has filed for a U.S. IPO.
• The company's ordinary shares are currently listed on the HKEx under the stock code 6855.
• The IPO aims to list American Depositary Shares (ADSs) on the Nasdaq Global Market under the symbol AAPG.
• Ascentage's lead assets include olverembatinib, a tyrosine kinase inhibitor approved in China for certain CML patients, and lisaftoclax, a Bcl-2 inhibitor in development for various hematological malignancies.
• The company is conducting registrational Phase 3 trials for both olverembatinib and lisaftoclax.
• Ascentage has a collaboration agreement with Takeda, granting them an exclusive option to license olverembatinib, potentially yielding up to US$1.2 billion in milestone payments plus royalties.
• The company acknowledges risks associated with operating in the PRC, including regulatory changes and potential delisting under the Holding Foreign Companies Accountable Act (HFCAA).
• For the nine months ended September 30, 2024, Ascentage generated revenue of RMB876.8 million (US$124.9 million) and a loss of RMB160.0 million (US$22.8 million).
• The company plans to use the IPO proceeds to fund the research and development of olverembatinib and lisaftoclax, as well as other product candidates.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While it highlights the company's potential and progress, it also acknowledges significant risks and financial challenges.

Positives

• Olverembatinib is already approved and generating revenue in China.
• Lisaftoclax has potential as a backbone molecule for combination therapies.
• The company has a robust pipeline and collaborations with major pharmaceutical companies.
• The company has a global manufacturing facility in Suzhou, China.

Negatives

• The company has a history of net losses and expects to incur substantial losses in the future.
• Clinical data obtained in China may not be accepted by the FDA or other foreign regulators.
• The company faces risks associated with regulatory approvals of offshore offerings, anti-monopoly regulatory actions, oversight on cybersecurity and data privacy, as well as the ability of the PCAOB to inspect our auditor.

Risks

• The company's holding company structure involves unique risks to investors, and investors may never hold direct equity interests in the operating companies.
• The PRC government has significant authority to exert influence on the ability of a company with operations in the PRC to conduct its business.
• The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.
• The dual listing of our ordinary shares and the ADSs may adversely affect the liquidity and value of the ADSs and ordinary shares.
• We have identified a material weakness in our internal control over financial reporting and may identify additional material weaknesses in the future.

Future Outlook

The company expects to continue to incur substantial and increasing losses for the foreseeable future as it continues its development of, and seek regulatory approvals for, its drug candidates, and commercialize such drug candidates, if approved.

Management Comments

• The company believes that olverembatinib, with its real-world patient data in China, where it is approved, has the potential to be a global therapy for CML.
• The company believes that lisaftoclax, with its short half-life and potential for patient-friendly ramp-up schedule, can serve as a backbone molecule for combination therapies for many hematological malignancies, including and beyond CLL/SLL.

Industry Context

The company operates in the competitive biopharmaceutical industry, focusing on hematological malignancies, which is expected to exceed US$166 billion in aggregate market size by 2035.

Comparison to Industry Standards

• The document mentions competitors such as AbbVie, Astex, Boehringer Ingelheim, Fulcrum, Kartos, Novartis, Oric and Takeda.
• Ascentage is the only company in the world with active clinical programs targeting all three known classes of key apoptosis regulators, according to the F&S Report.
• The NDA for lisaftoclax is the second NDA filed in the world for a Bcl-2 inhibitor and the first in China for a Bcl-2 inhibitor for the treatment of patients with CLL/SLL that are resistant or intolerant to BTK inhibitors, according to the F&S Report.

Related Party Transactions

• In December 2016, pursuant to an agreement between Ascentage Jiangsu and Dr. Zhai, our Chief Medical Officer, and Ms. Ren, we acquired all equity interests in Healthquest Pharma.
• Dr. Yang, Dr. Wang, Dr. Guo and Dr. Zhai are parties to the Concert Party Confirmation Deed, and may be deemed to share voting power over the ordinary shares beneficially owned by parties to the Concert Party Confirmation Deed.

Stakeholder Impact

• Investors in Ascentage Pharmas equity securities are investing in equity securities of a Cayman Islands exempted company rather than equity securities of our subsidiaries that have substantive business operations in China or the United States.
• The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.

Next Steps

• Complete ongoing registrational trials to pursue FDA and other international approval of olverembatinib.
• Launch in China in 2025, if approved, and pursue regulatory approval of lisaftoclax in multiple countries.
• Progress other clinical stage assets.
• Continue building our operations strategically for global markets.
• Opportunistically pursue strategic partnerships and collaborations to maximize the potential of our portfolio.

Key Dates

Keywords

Olverembatinib, Lisaftoclax, Ascentage Pharma, Clinical trials, IPO, Nasdaq, CML, ALL, AML, MDS, Bcl-2 inhibitor, TKI, China, FDA, HFCAA