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InnoCare (诺诚健华) Pre-IPO - Thoughts on valuation

InnoCare Pharma Limited is a clinical-stage biopharmaceutical company with a focus on small molecule inhibitors for BTK, and FGFRs. The company will start pre-marketing for a USD 200 million IPO for its Hong Kong listing soon.

In our previous note, we discussed the background of its key drug candidates under clinical trials, including orelabrutinib (ICP-022, BTK), ICP-192 (pan-FGFR), and ICP-105 (FGFR4). We think orelabrutinib is promising in terms of both efficacy and safety profile, compared to its reference drug ibrutinib, but competition will be intense for the indication. The BTK inhibitor hasn’t achieved success outside lymphoma indications as illustrated in a few failed cases. Therefore the results from clinical trials for autoimmune indications are still uncertain and have not been de-risked. Meanwhile, ICP-192 and ICP-105 are still years from commercial launches. In addition, the success of FGFR4 inhibitors in liver cancer has not been well tested.

In this note, we will take a close look at the company’s valuation. We value the company’s assets at USD 730 million, of which nearly 40% is its cash position.