Late at night, past 11 o'clock, a pharmaceutical investor sent me a screenshot.
It is not clinical data, nor is it the upfront payment for a license-out deal.
It is an intraday chart of a Hong Kong-listed pharmaceutical company.
The turnover exceeded HK$20 million for the whole day.
"He said, 'When this company was in its last round of private financing, many institutions were clamoring to get in.' 'Now that it's listed, the amount of money traded in a day is still less than what a single fund wanted to invest in it back then.'"
This may be the most absurd scene in Chinese biotech.
On one hand, there is the increasingly long queue for Hong Kong stock exchange IPOs.
As of the end of July 2026, the Hong Kong Stock Exchange had handled a total of 838 IPO applications so far this year. The bell had already rung for 131 listings, while 485 were still being processed, and another 12 had been approved by the listing committee and were waiting to go public.
Biotech is also crowding in through this door.
In 2018, Chapter 18A first opened the door to the Hong Kong stock market for biotech companies that had not yet met traditional financial qualification tests. Eight years on, as of early 2026, more than 80 companies have walked through this door into the secondary market.
The issue is that as more and more companies enter the market, will there be enough money and attention to go around?
On the other hand, there is the harsh reality of a rapid cooldown after listing.
The company finally had a stock code, the founder rang the bell, and investors got their "exit channel". But several months later, everyone suddenly discovered that although the door was open, the road was not as wide as they had imagined.
This is also what Bio New Force wants to tell pharmaceutical companies preparing to list in Hong Kong: if it's not absolutely necessary, it's really not necessary to flock to Hong Kong for a listing at this point in 2026.
The issue is not whether the Hong Kong stock market is good or not, but rather for many biotech companies, "being able to list" and "being worthy of listing" have never been the same thing.
Hong Kong Investors Shun Most Pharmaceutical Stocks
First, let's address a easily misunderstood issue: does the Hong Kong stock market really lack liquidity?
No!
In 2025, the average daily trading volume of the Stock Connect reached HK$121.1 billion, more than doubling from HK$48.2 billion in 2024; by July 2026, the daily average trading volume of the Stock Connect still reached around HK$129.2 billion.
The money did not disappear.
The real issue is that money has become increasingly discerning.
Tencent, Xiaomi, Alibaba, SMIC, and a handful of popular innovative drug companies can trade tens of billions or even hundreds of billions of Hong Kong dollars in a single day.
But look down and see the 18A companies with market capitalizations of tens of billions of Hong Kong dollars, and then look at the Biotechs that have exited the market's focus after being listed for one or two years.
It's as if this is an entirely different Hong Kong stock market.
Some stocks have daily trading volumes of only a few hundred million Hong Kong dollars, while others have volumes of merely tens of millions. Occasionally, a surge of hot money lifts trading volumes, but this can only be sustained for two or three days at most.
What does this mean?
Assuming an institution manages tens of billions of yuan in funds and wants to invest in a pharmaceutical company with a daily trading volume of only 20 million Hong Kong dollars, how much can it afford to buy?
Buying 50 million may take several days to establish a position.
What's even more troublesome is selling.
What if clinical data falls short of expectations, what if major shareholders reduce their holdings, and what if market risk appetite suddenly decreases?
What you'll find is that the real meaning of poor liquidity is not that nobody is buying today, but that when everyone wants to flee, there isn't a big enough exit.
This forms a very vicious cycle:
The smaller the trading volume, the less willing large institutions are to invest.
The larger the institution, the less it is covered by research.
The less research coverage there is, the lower the market attention.
Attention wanes - trading volume continues to decline.
In the end, a company completed its IPO, only to become an isolated island in the capital market.
So today, when discussing Hong Kong-listed pharmaceutical companies, it's no longer enough to just look at how much the Hang Seng Index has risen or how much southbound capital has flowed in.
But where did the money ultimately flow into - how many stocks are there. Daily trading volumes of tens of billions of yuan are in circulation, yet many small and medium-sized pharmaceutical companies still lack their own share of liquidity.
Listing now is like showing our cards to competitors too early, says Nubia founder
The second issue is even more brutal than liquidity.
In the past, many pharmaceutical companies viewed IPOs as a graduation ceremony, having completed their Series A, B, and C financing rounds and reached Phase II clinical trials, ultimately listing on the market.
Flowers, bell-ringing, and photo opportunities, the listing ceremony looks like a perfect full stop. But for unprofitable Biotech, the bell falling often marks just the beginning of public pricing.
After this, the market will translate every development into stock prices. If clinical progress is slower than expected, valuations may be adjusted downward; if the amount of license-out deals is less than expected, the stock price will come under pressure; if the cash balance continues to decrease, investors will worry about the next round of financing; if competitors take the lead, the core pipeline will also need to be revalued.
Even if the company does not have any negative news, if the entire Biotech sector loses favor with investors, the stock price may still be dragged down along with it.
The primary market can spend hours telling a story, but the secondary market only needs to click "Sell".
Huajian Future-B, which was listed on June 23, 2026, is a rather extreme example.
The company's IPO was priced at HK$81.80, with the Hong Kong public offering subscribed at a level of 2,007.60 times, and the chance of getting one lot was as low as 2%.
That sounds pretty hot.
On its first day of listing, Huajian Future opened at HK$81.80 and trended downward throughout the day, eventually closing at HK$35.26, a decline of 56.89% from its issue price, and near the day's lowest point.
The primary market is overcrowded, while the secondary market can't keep up - the subscription multiples are lively, but they haven't translated into post-listing liquidity.
The issue is not necessarily what suddenly changed with the company, but rather that the pricing logic for the same company is completely different between the primary market, the IPO market, and the secondary market for continuous trading, with the transition from IPO to listing taking only a few days.
IPOs can create scarcity, cornerstone investors can lock in shares, and public offerings can see oversubscription of several hundred or even several thousand times.
But after the bell rings, everything ultimately boils down to two questions: how much is your medicine worth, and where is the next buyer?
This is also where pharmaceutical companies that are listing today must rethink their strategies.
If the core product is still two years away from key clinical readouts and the company has enough cash to last two and a half years, why must it accept permanent pricing from the public market today?
Once key data is released after the listing, the valuation may reach 20 billion. However, in order to raise 800 million for the listing, the company may first be valued at 3 billion by the market.
You gain 800 million in cash, but what you may lose is the valuation initiative for the next few years.
IPOs are never free money, the stock code itself is a price.
Drug R&D Takes Five Years, but Hong Kong Stocks Demand Daily Answers
This is the most contradictory aspect of pharmaceutical companies.
After an internet company goes public, it can tell investors every quarter how much its user base has grown, how much its revenue has grown, and how much its profit has grown.
But what about a clinical-stage pharmaceutical company that completes enrollment for a Phase I trial today, then what?
Wait!
Tomorrow will complete the first patient dosing, and then what, just wait again.
Truly transformative clinical data that can change a company's valuation may take 12 months, 18 months, three years, or even five years to emerge.
However, stocks must trade on every opening day.
This is the natural disconnect between the pharmaceutical research and development cycle and the secondary market pricing cycle. Drug development proceeds in years, funds are evaluated on a quarterly basis, and stocks are traded in milliseconds. When a company lacks continuous fundamental catalysts, the market can only look for other variables.
As a result, capital began to trade on expectations, sentiment, the clinical results of similar companies, and eventually, even just the capital itself.
For companies that truly have mature commercialized products, stable cash flows, or will have multiple key data readouts in the next 12 months, this may not be a bad thing, as they have something to continually deliver.
However, for small biotech companies with only one or two core pipelines and the next key inflection point still two years away, going public too early may mean:
A company that should have been patiently conducting experiments was prematurely thrown into a machine that requotes every day.
This may not be beneficial for innovation, and may not even be beneficial for management.
Since the day the company went public, the CEO has had an extra job: explaining the stock price.
Beware of Listing for Listing's Sake
In recent years, investors have heard numerous companies say something similar: "The window is good now, let's get the listing done first."
The statement sounds reasonable at first, but the more you listen to it, the more dangerous it seems.
It assumes a premise that as long as a company can go public, going public in itself is a success.
It's actually not like that at all.
Going public should resolve key issues.
If a company needs 20 billion yuan to complete global clinical trials over the next three years, an IPO can provide sufficient funding all at once, which is certainly worth considering.
If the listing can bring in truly long-term international institutions and improve the shareholder structure, it is also worthwhile.
If a company has already entered the commercialization phase and needs a long-term capital platform to support mergers and acquisitions, it is also reasonable.
But what if a company ends up raising only a few hundred million Hong Kong dollars?
The money is only enough to last for another year.
Meanwhile, the company has started to bear the costs of audits, compliance, investor relations, information disclosure, and maintaining visibility in the capital markets.
More importantly, it lost the right to be "temporarily not priced".
An unlisted company is valued at 20 billion yuan, and even if it doesn't receive funding for a year, its valuation on paper remains 20 billion yuan.
A listed company can be worth 20 billion today and 10 billion tomorrow, but if a clinical trial's data is unfavorable, its value may plummet to just 3 billion the day after tomorrow.
But when it comes time to raise funds again, the problem arises. A market value of 30 billion, with an additional issuance of 10 billion, what does this mean?
Massive dilution.
The company is thus left with no choice but to cut back on fundraising. Yet reduced fundraising means trimming its pipeline, and when the market sees R&D spending decline, it marks the valuation down once again.
This is the most dangerous death spiral.
What many biotech companies should truly fear is not being unable to go public, but rather being unable to secure their next round of funding after going public.
When Should Pharmaceutical Companies List on the Hong Kong Stock Exchange?
The answer is certainly not "don't go".
Hong Kong remains a crucial capital market for Chinese biotech.
18A has changed the financing path for innovative drugs in China, bringing a batch of biotech companies that have yet to generate revenue, are not yet profitable, and whose products have not even been approved for market, into the public capital market on a large scale.
By 2026, Hong Kong has formed a vast ecosystem with hundreds of listed companies in the medical and health sector.
The problem has never been with the Hong Kong stock market itself, but rather with a mindset that has developed over the past few years - as soon as the IPO window opens, companies rush to list; as soon as others start submitting applications, they feel they cannot fall behind.
For Biotech today, going public is no longer a simple question of "whether or not," but a more practical one: are you urgently seeking a lifeline from the market, or have you already gained the ability to secure continuous pricing power in China and even the global capital market?
Some companies should indeed go public.
There is a clear clinical value inflection point in the next 12-18 months, and one IPO financing can just bring the company to that point, so it should go ahead.
Those that already have commercialized revenue or consistently generate cash flow from business development can also go public, as long as they can continuously prove themselves in the secondary market after listing.
Those Biotech companies that truly possess global competitiveness, are capable of attracting international long-term capital, and can obtain global asset pricing have no reason to refuse the open market.
There is another type of company that also must go public, and they may even be more anxious than the previous ones.
They have run out of money.
The cash on hand may only be enough to last a year, and it's impossible to raise the next round of funding in the primary market, while old shareholders are unwilling to continue investing, but clinical trials cannot be halted, employee salaries cannot be stopped, and research and development cannot be stopped.
At this point, Hong Kong IPOs are not just a capital strategy option.
but a matter of survival.
So, telling this type of company to "wait another year" is actually meaningless, as it's not that they don't want to wait, it's that they simply can't afford to.
Even if the valuation is lower, even if the IPO can only raise a few hundred million Hong Kong dollars, even if the market capitalization after listing is only a few tens of billions of Hong Kong dollars, it must first recover this investment.
Surviving first is not wrong, but the truly worrying issues are only just beginning from here.
IPOs may have saved this year, but who will save next year?
The development of an innovative drug from early clinical stages to pivotal clinical trials and ultimately to commercial approval requires not just a single investment of money.
and one sum of money after another.
Today's IPO raised HK$500 million and HK$800 million, which may be enough to extend the cash runway by 18 months. However, 18 months later, if the core pipeline still hasn't produced clinical data sufficient to change the company's valuation, the company will still need to raise funds.
The issue is that by then it's no longer a biotech company in the primary market, it's a stock with a price that fluctuates every day.
Assuming it was valued at HK$8 billion at the time of listing, after one year, half of the IPO funds have been used up, key clinical data has not been released, market enthusiasm has begun to wane, with daily turnover of only a few hundred million Hong Kong dollars, and the market value has plummeted from HK$8 billion to HK$3 billion, what can the company do if it is still short of money?
Refinancing
Raising 10 billion at a market value of 30 billion is a completely different story from raising 10 billion at a market value of 80 billion. The former implies greater equity dilution, and once the market expects the company to continue raising funds, its valuation may continue to come under pressure.
A very dangerous cycle has emerged:
The less money they have, the more they need financing;
The lower the valuation, the higher the cost of financing.
The higher the cost of financing, the more severely existing shareholders are diluted.
The more severe the dilution, the more the market worries about the next financing round.
So, a pharmaceutical company that has to rely on an IPO to survive next year, what will it rely on to survive the year after that?
As IPOs only address cash flow issues at a specific point in time, they do not resolve a company's financing capabilities, nor do they improve the quality of a company's assets.
If an IPO financing can bring a company to a crucial clinical data readout, once the data is released, the company's valuation will be reassessed, and the door to further financing will naturally reopen.
That money would be meaningful.
But if the company does not reach a significant valuation inflection point in the next two to three years, and the funds raised from the IPO are insufficient to support it until that point, then going public may simply transfer the problem from the primary market to the secondary market.
Previously, it was difficult to find venture capital to provide funding, but now it has become difficult to find secondary market investors to provide funding.
The office lights are still on, the clinic is still operating, and there are temporarily a few more billion yuan in the bank account... everything seems to have been resolved, but in reality, the countdown has simply started again.
At midnight, that investor sent me another message.
He said, "Before, we worried the company couldn't go public. Now I'm more worried about it going public."
I stared at that sentence for a while, and suddenly felt that it might perfectly summarize the changes that Chinese biotech is undergoing.
Over the past decade, the industry has been learning one thing: how to finance itself.
How dollar-denominated funds are raised, how renminbi-denominated funds are raised, and how to conduct an initial public offering (IPO).
The company is raising funds round after round, with its valuation increasing level by level.
But today, Chinese biotech companies may need to learn something harder: how to survive after going public.
Because the capital market will not assume a company has crossed the line of life and death simply because it has successfully listed.
IPOs are never the end goal, and for a biotech company that still needs to burn through a lot of cash, it may even mark the beginning of the countdown to the next round of financing.
So, when should pharmaceutical companies go to the Hong Kong stock market?
Perhaps there is ultimately only one criterion:
It's not about whether you can go public today. It's about whether the money you raise today can carry you to the next milestone that truly changes your company's trajectory.
If possible, Hong Kong stocks are still a worthwhile path to take.
If not, that bell-ringing ceremony may only be temporarily drowning out the sound of a cash crunch.
Note:
Upfront payment for a license-out: when a pharmaceutical company licenses part or all of the rights to a certain drug to another company, the payment made by the latter upon signing the agreement.
Biotech: typically refers to companies that focus on biotechnology and innovative drug research and development, often in the stages of drug development and clinical trials, characterized by high research and development investment, long cycles, and high risk.
18A: A listing channel specifically created by the Hong Kong Stock Exchange for biotech companies that have yet to turn a profit, derived from Chapter 18A of the Main Board Listing Rules. After the exchange reformed its listing regime in 2018, biotech companies that fail to meet traditional financial qualification tests were permitted to list in Hong Kong, provided they satisfy certain conditions.