• China's VC-backed Zai Lab files for US IPO
  • Aug. 19,2017



    Zai Lab, a Chinese drug developer backed by several venture capital investors, has filed for a US IPO. The company has yet to indicate how many shares it plans to sell or at what price.

    Zai Lab was set up in 2013 by Samantha Du, who began her career in the early 1990s as a member of Pfizer's R&D department. She subsequently co-founded Hutchison China MediTech and led its R&D subsidiary Hutchison MediPharma, building up a pipeline of oncology and auto-immune treatments. After China MediTech listed in 2006, Du spent two years as head of China healthcare at Sequoia Capital.

    Zai Lab’s strategy is to license pre-clinical findings from Western countries and then develop drugs in China, leveraging the comparatively low operating costs. In 2014, it obtained a license from Sanofi for two novel compounds with a view to using them to treat chronic respiratory diseases. Since then the company has entered into similar agreements with Bristol-Myers Squibb, UCB, Hanmi Pharm, Tesaro, GlaxoSmithKline, and Paratek Pharmaceuticals.

    In total, the company has raised $164.5 million in equity financing from investors including global and China-based healthcare funds. Qiming Venture Partners led Zai Lab’s Series A round in 2014, committing half of the $30 million round. KPCB, Sequoia, TF Capital, and domestic player CRO TigerMed were the other backers.

    A Series B round worth $100 million followed in January of last year. It was led by Advantech Capital with participation from Qiming, Sequoia, TF, and OrbiMed. In June this year, OrbiMed led a $30 million Series C round for the company.

    Qiming currently owns a 25.3% stake in the company, while an investment vehicle named Maxway Investment has 16.6%. Sequoia and KPCB hold 9.6% and 9.3% interests, respectively.  

    The company has yet to post revenue. Its net loss widened to $37.5 million in 2016 from $18 million in 2015. It plans to use the IPO net proceeds to develop cancer drugs licensed from Tesaro – which has already received marketing approval from US Food and Drug Administration – for late-stage clinical trials in China.

    J.P. Morgan, Citigroup, and Leerink Partners have been named underwriters for the public offering.


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