Since Shanghai Stock Exchange officially began to receive the application for the science and technology innovation board listing on March 18, it has been focused in the medical industry that would become the first enterprise to be listed at the science and technology innovation board. The question is now unanswered, but CHIPSCREEN BIOSCIENCES has taken the lead.
"The science and technology innovation board now is oriented to encourage innovation-oriented enterprises with independent intellectual property rights, and the enterprises focusing on drug innovation and medical device innovation likely become the first batch of such encouraged ones." Chen Wen, the Senior Vice-President of Hangzhou Tigermed Consulting Co., Ltd said. The science and technology innovation board exerts great influence on the industry. More enterprises will get financial support through the low-cost financing channels to accelerate their innovation.
Going forward to the science and technology innovation board
The science and technology innovation board is a new sector that is independent of the existing main board and adopts a pilot registration system, and it mainly supports the six fields including high-end equipment and medicine. The science and technology innovation board have set up five sets of differentiated listing indexes to allow unprofitable enterprises that meet certain conditions to be listed, and its stock price fluctuation is restricted to 20%.
Research, development and innovation need a large number of funds, so the establishment of the science and technology innovation board creates another path for innovative enterprises that fail to meet the listing requirements of the main board but they need financial support urgently.
"Enterprises can choose American NASDAQ, Hong Kong Exchanges and domestic A-share market for listing. Now the science and technology innovation board is another choice. Enterprises will choose more suitable listing platforms according to own situations." Feng Lan, the Secretary General of China Pharmaceutical Innovation and Research Development Association, said.
On March 18, 2019, the listing review system of Shanghai Stock Exchange officially began to receive the application for the listing at the science and technology innovation board. As of May 16, totally 110 enterprises applied for the listing at the science and technology innovation board, including 15 medical manufacturers, nine special equipment manufacturers and three enterprises engaged in research and experimental development.
"In a sense, these companies are representative in term of medical innovation in China." Feng Lan commented.
Bio-medicine and medical devices are the "hot-spots" for innovation in the field of Chinese medicine. In 2018, totally 48 innovative drugs and 21 innovative medical devices were approved, and rich innovative products promoted the ceaseless expansion of the market. It is the right time to launch the science and technology innovation board as the industry is full of innovation enthusiasm.
"This is an advantageous strategy, so the state should provide more support to innovation and development. It is very good that outstanding enterprises engaged in science and technology innovation can obtain resources and capital through such a platform." Wu Yifang, the President and CEO of Fosun Pharma said at the press conference when 2018 report was released, "If the policy permits, we'll consider applying for the listing in the science and technology innovation board after listing in Hong Kong."
Feng Lan thought that the industry showed its great enthusiasm for the science and technology innovation board, and the enterprises expected that their stocks would be continuously at limit up after having been listed as A-share at that moment. "All enterprises that were listed as A-share experienced the limit up for several times, and the liquidity of their stock was very high, which is likely an important reason who the enterprises are attracted to the science and technology innovation board." She explained.
Cultivation of new development drivers
Some enterprise leaders said in communicating with the reporter that such information cared about by the industry is not clear that how many enterprises would be firstly listed at the science and technology innovation board. Many details were not clear, but enterprises and local governments have shown their ambition for the new sector.
Innovative enterprises get ready to be listed at the science and technology innovation board. "We have the plan to apply to be listed at the science and technology innovation board." A leader of a medical device enterprise told the reporter explicitly.
The local governments also support enterprises with great potential. In the Supportive Policies of Jinan for Accelerating the Development of Modern Financial Industry, issued by Jinan Municipal Government in December 2018, it was mentioned that a one-time subsidy of CNY 6 million would be given to an enterprise that is successfully listed at the science and technology innovation board. At the provincial financial bureau working conference in March 2019, it was decided that the cultivation mechanism of the science and technology innovation board would be established in Hubei Province.
Compared with mature stock market, the science and technology innovation board is new and its supporting policies need to be improved gradually. "The speed and strength of the work on the science and technology innovation board is unprecedented, indicating that the state expects to launch the sector as soon as possible." Feng Lan told the reporter. Enterprises would obtain significant benefits if they are successfully listed at the science and technology innovation board.
Clinical trials are necessary for the development of innovative medical products, and they need a large number of funds. Enterprises would experience great tests in technology, capital and other aspects in this stage. Feng Lan described this stage as an "impassable barrier" on the road to enterprise innovation. She said, "Enterprises can only raise money in other ways before the policies on the science and technology innovation board are promulgated. There is a choice for Hong Kong biotechnology companies to be listed at the science and technology innovation board without profits. If an innovative company can be successfully listed, it will obtain a large number of funds to carry out clinical trials at a faster speed and with higher quality and get more opportunities to purchase other mature products, which will be conducive to accelerating the launching of new drugs and enriching the product lines of enterprises. ”Enterprises can obtain other supports in addition to direct investment and financing. In May this year, Shanghai Pudong Development Bank officially launched the science and technology financial service 2.0, which was mainly for the customers at the science and technology innovation board and provided financial services for technological enterprises. Shanghai Pudong Development Bank launched Little Giant credit products for unlisted technological enterprises that failed to meet the listing requirements of the science and technology innovation board, and the maximum credit loan of CNY 30 million can be granted to an enterprise.
Inquiry resulting in a real company
"The science and technology innovation board makes enterprises develop more freely. Yang Huanfeng, the President of Origincell Science and Technology Group, said a few days ago.
Opinions on setting up the science and technology innovation board and adopting the pilot registration system in Shanghai Stock Exchange
The science and technology innovation board adopts the pilot registration system, and it sets up differentiated listing indexes and has established the market-oriented inquiry, pricing and placing mechanism with institutional investors as the main participants. However, lowering "inflexible indexes" does not mean "relaxing requirements". The registration system will improve the efficiency and specify high requirements for enterprises.
The registration system is accompanied by more comprehensive, deeper and more accurate information disclosure. Shanghai Stock Exchange has inquired 91 applicants as of May 21. According to information publicized by Shanghai Stock Exchange, each enterprise was inquired more than 40 questions on average in the first round, and it was disclosed that 14 questions were inquired in the second of inquiry. Each question includes several points.
Enterprises went through detailed and strict inquiry.
For example, BLOOMAGE Biotechnology Corporation Limited was inquired 49 questions and 16 questions respectively in the two rounds. For a raised investment project, Shanghai Stock Exchange required the enterprise to describe "whether the raised funds will mainly be invested in scientific and technological innovation and specific plan for the key investment of raised funds in scientific and technological innovation" and analyze "the effect of the completion of the raised investment project on main business of the issuer and whether the completion of the raised investment project will improve the technological strength and core competitiveness of the issuer".
"Inquiry results in a real company." Shanghai Stock Exchange explicitly said when it replied to the reporter's question on the reply to the review inquiry of the listing at the science and technology innovation board issued on May 14. The public inquiry review is an important review mechanism of the listing at the science and technology innovation board. If an issuer fails to explain clearly a question, Shanghai Stock Exchange would continue to inquire in detail.
Even if an enterprise is listed successfully, it cannot rest easy as the China Securities Regulatory Commission will strengthen the regulation over the whole IPO process. If an enterprise encounters continuous losses, or its information disclosure or standard operation has major defects, it'll be delisted.
Feng Lan thought that the system with easy listing and strict delisting requirements is conducive to purifying the environment of China's capital market and it is favorable for the long-term development of enterprises. She said, "Enterprises shall disclose real information as required. If they obey the rules, the market will punish them. If they touch the red line of the stock market, they will be delisted. This will always remind enterprises of self-discipline and goodwill maintenance. ”
Source: China Pharmaceutical News