In a notable strategic pivot, Axiom Biosciences, a San Diego-based developer of regenerative and genetic medicines, is set to defy the traditional path of U.S. biotech companies by planning its initial public offering in Hong Kong in 2027. This move, followed by a projected secondary listing in the United States in 2029, signals a growing recognition of Asia’s burgeoning capital markets and strategic importance in the life sciences sector. The company’s founder and CEO, Remo Moomiaie-Qajar, articulated this “contrarian” approach as a means to tap into a sophisticated, biotech-focused investor base and foster closer ties with clinical and commercial partners across Asia.
“While some of the most crucial scientific advancements are originating in the United States, the funding mechanisms have not evolved in tandem,” Moomiaie-Qajar stated. He highlighted that Hong Kong’s listing requirements, which are more stringent than those in the U.S., indicate a mature biotech ecosystem. Furthermore, he noted that recent biopharmaceutical listings in Hong Kong have demonstrated superior performance compared to those on the Nasdaq.
The current fundraising landscape for biotech firms has become increasingly challenging. As clinical trials advance and incur escalating costs, the pool of venture capital investors willing and able to commit significant capital dwindles, particularly for companies that did not secure early-stage major backing. Public markets, therefore, present a vital alternative avenue for capital infusion.
This trend aligns with a broader movement of Chinese biotech firms flocking to Hong Kong’s stock exchange, spurred by government initiatives and the escalating financing needs of innovative drug developers. Data from LSEG reveals that the Hang Seng Biotech Index in Hong Kong has surged by over 75% since January 2025. This performance significantly outpaces the approximate 40%-50% gains observed in the ICE Biotechnology Index and the Nasdaq Biotechnology Index, which track U.S.-listed companies during the same period.
Danny Xiang, founding partner at Fontus Capital, a private equity firm specializing in life sciences, acknowledged that the U.S. remains the preeminent and most institutionalized hub for biotech capital globally. He stated, “That depth is precisely why the most fundable, globally competitive assets still raise and list in the U.S. — and why it is rare for a purely American biotech firm to select Hong Kong as its primary venue.”
However, Xiang pointed out that Hong Kong’s appeal has been amplified by its emergence as a major global biotech fundraising center, boasting over 70 listings in the sector. Recent reforms, implemented last year, have further streamlined its IPO process, making it more attractive to international companies. The city’s expanding biopharmaceutical investor base and its geographical proximity to Chinese pharmaceutical partners are key draws, potentially accelerating clinical trials and reducing development costs.
Despite these advantages, Xiang cautioned that local investors often exhibit a preference for companies with a discernible China connection, favoring assets where co-development, manufacturing, or sales opportunities with Chinese partners are evident.
George Wu, a Hong Kong-based partner at the law firm DLA Piper, suggested that the relatively lower valuations in Hong Kong’s biotech sector compared to the Nasdaq also appeal to international investors seeking greater upside potential.
Meanwhile, the U.S. market is experiencing a robust resurgence in biotech IPOs. Earlier this year, both Parabilis Medicines, a clinical-stage cancer drug developer, and Kailera Therapeutics, an obesity-drug maker, saw their debuts surge by approximately 60% after raising over $600 million each. The SPDR S&P Biotech ETF (XBI) also rallied significantly, gaining 76% over the trailing year as of Tuesday.
Inventing vs. Scaling
Biotechnology has been a long-standing strategic priority for Beijing. Over decades, the government has invested heavily in basic research, reformed drug regulatory frameworks, and actively recruited experienced scientists and executives trained abroad, particularly from the U.S., back to China.
Experts cite several factors contributing to China’s advancement in biologics, genomics, and drug development. These include lower labor and manufacturing costs, a substantial pool of science graduates, access to extensive datasets, targeted applications of artificial intelligence in areas like drug design, and China’s vast population, which facilitates clinical trial recruitment through large patient populations concentrated in major hospitals.
However, a June survey by the Cure Innovation Index indicated that while China leads in clinical development and supply chains, it still lags behind the U.S. in the quality, commercial reach, and cutting-edge strength of its biomedical science.
“The U.S. leads in ‘0-to-1’ innovation, focusing on breakthroughs in foundational science and novel biology,” Xiang explained, “whereas China increasingly excels in ‘1-to-100’ implementation, characterized by rapid, capital-efficient scaling to reach patients.”
Axiom is currently co-developing a therapy with South Korea-based biopharmaceutical firm Medinno. This treatment targets newborns suffering from severe brain injuries associated with high mortality rates. The therapy has received two U.S. Food and Drug Administration designations for rare pediatric diseases, and a Phase 1 trial involving nine newborns in South Korea has been successfully completed. Axiom also intends to investigate the treatment’s potential for adult stroke patients.
“Given the absence of regenerative therapies for these brain injuries, it is imperative that we expedite our clinical trials. I believe Asia is the optimal location for this endeavor,” Moomiaie-Qajar conveyed to CNBC.
China Closing In
In December, a bipartisan U.S. legislative commission issued a warning that China was beginning to surpass the U.S. in certain areas of biopharmaceutical innovation. The commission attributed this to “advantages gained from non-market practices and brute force economics”—a phrase used by some in Washington to describe China’s state-led drive for global leadership in strategic industries. The commission urged coordinated public and private sector actions to maintain, and in some areas reclaim, U.S. leadership in biotechnology.
In recent years, Washington has taken action against prominent Chinese biotech firms. The Commerce Department has imposed export restrictions on several entities associated with the genomics giant BGI Group. Furthermore, the Pentagon recently added WuXi AppTec, a pharmaceutical company, to its list of firms allegedly linked to the Chinese military. WuXi AppTec subsequently filed a lawsuit against the Department of Defense, seeking to overturn what it termed an erroneous designation.
While exchanges like the Nasdaq and the New York Stock Exchange permit biotech firms to apply for listing before generating revenue or commencing human testing, Hong Kong mandates at least 12 months of research and development, with a core product beyond the conceptual stage.
“A U.S. IPO is generally faster for a company that qualifies, and Hong Kong’s review times have extended due to a backlog of applications,” Xiang observed.
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