December 22, 2017 / 12:02 AM / 3 months ago

MOVES-China's Hua Medicine appoints BAML banker as new CFO ahead of listing

HONG KONG, Dec 22 (Reuters) - Chinese drug developer Hua Medicine has appointed George Lin, a veteran Bank of America Merrill Lynch banker as its chief financial officer, as it seeks to go public in the next 12 to 18 months.

Lin, who was most recently the head of Asia-Pacific consumer, retail and healthcare investment banking at the Wall Street bank, will be responsible for corporate finance as well as for helping commercialise and license drugs at the diabetes-focused biopharmaceutical firm.

The IPO plans of Shanghai-based Hua come as investors are beginning to bet big on the potential of Chinese biopharma groups.

The share prices of firms such as Chi-Med, Beigene and Zai Lab have soared on international markets this year, fuelled by hopes for their drugs and recent reforms to Beijing’s regulatory system that should speed up approvals of drugs.

Lin, who has spent the bulk of his career in investment banking, is one of several senior bankers to leave the industry for opportunities in China’s “new economy” companies, which range from biopharma firms to online retailers.

“When you’ve been in investment banking for 18 years, you kind of have a good instinct to tell what company has great potential and is a good fit (for you),” Lin said in an interview with Reuters on Thursday.

Hua plans to list either in the United States or Hong Kong, he added.

“There is no reason to hire someone like me (now) unless they want to go public in the next 12 to 18 months,” he said.

Hua was set up in 2011 by Chinese-born, western-educated Li Chen, who previously ran Swiss group Roche’s Chinese research and development arm. Its development pipeline includes a novel diabetes treatment, which Lin expects to be approved in China by 2019.

The company counts U.S. venture capital firms ARCH Venture Partners and Venrock among its current investors. It plans to raise more than $50 million ahead of its IPO to help cover the costs of advanced clinical trials, Lin said.

China is already the world’s second-largest drugs market after the United States, but has a long way to go to close a huge R&D gap with the West.

China contributes just 4 percent of global drug innovation - as measured by the number of products in development and recent launches - against 50 percent from America, according to an October 2016 report from four Chinese pharmaceutical associations. (Reporting by Julie Zhu; Editing by Jennifer Hughes, Greg Mahlich)

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