By Dave Sebastian


A unit of Chinese contract drugmaker Wuxi Biologics closed its order book a day early for its initial public offering and is likely to price the deal at the top of its marketed range, people familiar with the matter said, a rare instance of hot demand in a choppy year for listings in Hong Kong.

Wuxi XDC Cayman is set to raise the equivalent of about US$470 million if it prices the IPO at the top end of its marketed price range, at 20.60 Hong Kong dollars (US$2.64) a share, the people said. The Wuxi, China-based company does research, development and manufacturing with a focus on antibody-drug conjugate, a type of medicine for cancer treatment.

The company launched its IPO on Tuesday and was set to close its books Friday. It chose to stop taking orders late Thursday afternoon due to high demand, which include orders from long-term investors, the people added.

Wuxi XDC Cayman is selling a total of 178.4 million shares in the IPO. It expects to list its shares next Friday.

The spinoff IPO secured commitments from some global investors, including Invesco, Qatar's sovereign-wealth fund and HongShan, the investment firm formerly known as Sequoia Capital China, according to Wuxi XDC's listing document. At the top end of the range, those cornerstone investors agreed to buy almost 58% of the deal and keep the shares for at least six months.

Wuxi XDC said it plans to use some of its IPO proceeds to build facilities in Singapore and expand its capacity in China. The company didn't respond to a request for comment.

Many companies planning share sales in Hong Kong are holding back, waiting for the stock market to improve. The Hang Seng Index has fallen 11% this year, hurt by China's sputtering economic recovery and its tensions with the U.S. Foreign investors have cut their exposure to Chinese stocks.

Wuxi XDC's deal is a late-year boost to investment-banking fees, especially for the roster of mostly U.S. banks handling the IPO. The global slump in deals from Chinese companies means investment banks' fees from those transactions are set to be at their lowest in a decade. Banks working on the Wuxi XDC deal are receiving a commission of 2.7% of the deal size, amounting to roughly $12.7 million at the top end of the range.

Leading the offering are Morgan Stanley, Goldman Sachs and JPMorgan Chase. Citigroup is also a bookrunner, as are Chinese firms China International Capital and Huatai Securities.


--Rebecca Feng contributed to this article.


Write to Dave Sebastian at dave.sebastian@wsj.com


(END) Dow Jones Newswires

11-09-23 0606ET