Innovent Biologics (1801) Terminates Share Subscription Deal with Lostrancos

🗝️ Key Points

• Innovent Biologics (1801, Financial) has announced the termination of its share subscription agreement between its subsidiary Fortvita and Lostrancos.
• The biopharmaceutical company reiterated its commitment to international expansion, with Fortvita playing a Significant role in its global ambitions.
• Innovent Biologics remains focused on its strategic goals and supports the sustainable development of its international business.

Innovent Biologics (1801, Financial) has announced the termination of its share subscription agreement between its subsidiary Fortvita and Lostrancos. The biopharmaceutical company reiterated its commitment to international expansion, with Fortvita playing a significant role in its global ambitions. Innovent Biologics remains focused on its strategic goals and supports the sustainable development of its international business. The company believes that ending the proposed subscription is fair and aligns with the best interests of the company and its shareholders.

Innovent Biologics, founded in 2011, specializes in developing, manufacturing, and selling innovative drugs for major diseases such as oncology, autoimmune, metabolic, and ophthalmology disorders. It was listed on the Hong Kong Stock Exchange in October 2018.

Previously, on October 25, Innovent Biologics announced that Lostrancos had agreed to subscribe to a portion of Fortvita’s shares for $20.5 million. Post-transaction, Innovent Biologics’ stake in Fortvita would have diluted to 79.61%, while Lostrancos would hold 20.39%. Lostrancos is a company directly owned by Innovent Biologics’ management, with founder, Chairman, and CEO Dr. Dechao Yu as its sole director, holding an 82.93% stake.

The announcement Negatively affected Innovent Biologics’ stock price, which closed at HKD 38.7 per share on October 28, a 12.54% drop, reducing its market value by HKD 9 billion. The downturn continued on October 29, with shares closing at HKD 37.15, a decline of 4.01%, bringing the total market value loss to over HKD 11.5 billion within two days.

Investors have mixed sentiments about the transaction, with some viewing it as undervaluing a valuable subsidiary, while others interpret it as a move to strengthen international business. During a recent business update conference, Innovent Biologics explained that Fortvita’s assets are still in the early stages, reflecting high-risk factors and current valuations.

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