Former Pfizer Scientist-Led Startup Zai Lab Taps Banks for $150M IPO

Published: Aug 14, 2017

Former Pfizer Scientist-Led Startup Zai Lab Taps Banks for $150M IPO August 11, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Zai Lab Ltd., headquartered in Beijing, China, is reportedly in discussions with banks to launch a U.S. initial public offering (IPO). The company, founded by former Pfizer senior scientist Samantha Du, focuses on immuno-oncology.

According to inside sources reported by Bloomberg Technology, Zai Lab is working with Citigroup and JPMorgan Chase & Co. raised approximately $150 million in an IPO, targeting a market cap of around $1 billion.

The company has an impressive pipeline, a polyadenosine diphosphate [ADP]-ribose polymerase (PARP)-1 and -2 inhibitor being evaluated in several cancers, including ovarian and breast; ZL-2401 (Omadacycline), an oral and intravenous aminomethylcycline antibiotic, a new class of tetracycline derivatives; ZL-2301 (Brivanib), a dual inhibitor of vascular endothelial growth factor (VEGF) and fibroblast growth factor receptors (FGF) receptors, in late-stage trials for several different cancers; ZL-3101 (FUGAN), a botanical topical product for the treatment of eczema and psoriasis; ZL-2302, a tyrosine kinase inhibitor being evaluated for brain cancers; and ZL-1101, a humanized anti-OX40 antagonist being evaluated in preclinical studies for inflammatory and autoimmune diseases.

Bloomberg Technology notes that “Zai Lab has established its own early-stage drug discovery team focused on immuno-oncology. The company has also licensed experimental medicines from big pharmaceutical companies to populate its immediate pipeline, including a potential treatment for lung cancer from France’s Sanofi and a liver drug candidate from Bristol-Myers Squibb .”

In June, Zai Lab indicated it had raised $30 million in a Series C financing, which followed a $100-million Series B in January. Investors included Advantech Capital and OrbiMed Asia. Since the lab started in 2014, it has brought in other investors such as Kleiner Perkins Caufield & Byers, Sequoia Capital China and Qiming Ventures.

Zai Lab appears to be an example of a trend in China, of entrepreneurs from the U.S. or elsewhere returning to China. They are dubbed “Hai gui” or “sea turtles.” This goes hand-in-hand with China’s efforts to accelerate the regulatory process for new drugs. China is the world’s second-largest drug market. The regulatory reforms have resulted in domestic drugmakers and multinational pharma companies receiving fast-track approvals, which makes startups look even more positive.

Bloomberg records indicates that first-time share sales from Chinese healthcare companies have raised $6.2 billion in the last 12 months. For example, BeiGene Ltd., another Chinese immuno-oncology company, has tripled in value since it started trading in the U.S. last year. Yesterday it announced plans to raise $125 million in a follow-on share sale. And another company, BGI Genomics Co., has grown sevenfold since its Shenzhen launch in July.

Over the last 18 months, the company has announced a number of collaborations, including its deals with Sanofi and Bristol-Myers. In March 2016, it announced a strategic partnership with Boehringer Ingelheim for the German company to provide process optimization and manufacturing services for Zai Lab’s new monoclonal antibody. In September 2016, Zai Lab inked a deal with Tesaro to develop and commercialize niaraparib in China as well as to advance two immuno-oncology programs outside of China.

In October 2016, Zai Lab and GlaxoSmithKline signed a deal to develop and commercialize one Phase II clinical and one preclinical anti-inflammatory assets. In March 2017, Zai and GE Healthcare closed a strategic partnership agreement to build Zai Lab – GE Biotherapeutics Development & Manufacturing/Processing Demonstration Site in Suzhou Biobay, Jiangsu Province.

And most recently, in April 2017, Zai entered into a collaboration with Paratek Pharmaceuticals to develop and commercialize omadacycline for patients in China.

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