On February 23, 2018, the Stock Exchange of Hong Kong Limited (HKEX) published its consultation conclusions regarding a new chapter of its listing rules to facilitate the listings of pre-revenue biotech companies in Hong Kong, heralding a new era for the Hong Kong capital markets.

In formulating the new Chapter 18A of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (Listing Rules), the HKEX and the Securities and Futures Commission (SFC) made the policy decision to permit only pre-revenue companies that are at a relatively advanced stage of development to list, seeking to insulate investors from the significant risks associated with biotech companies still at a pre-clinical trial stage of development. In the three years since the consultation conclusions were published, 28 companies listing pursuant to the new Chapter 18A of the Listing Rules have raised almost US$10 billion in new capital, and as of December 31, 2020, the share prices of those companies had increased by an average of 67.1% — evidence that the HKEX’s initiative has yielded positive results for companies, investors and other stakeholders.