rongsheng biotech in stock

Rongsheng Petrochemical Co., Ltd. engages in the research, development, production, and sale of chemical, oil, and polyester products. It offers gasoline, diesel fuel, kerosene, paraxylene, ethylene glycol, styrene 156, m-xylene, polyethylene, polypropylene, EVA, polycarbonate, ABS, PTA, PIA, filament, bottle flakes, and film. The company also offers olefins and their downstream, aromatics and their downstream, oil products, etc., which are widely used in covering new energy, new materials, organic chemicals, synthetic fibers, synthetic resins, Synthetic rubber, oil products, and other fields. The company was founded in 1995 and is based in Hangzhou, China. Rongsheng Petrochemical Co., Ltd. is a subsidiary of Zhejiang Rongsheng Holding Group Co., Ltd.

SHANGHAI, Oct 30 (Reuters) - China Rongsheng, the country’s largest private shipbuilder, has secured a cash lifeline that could be worth up to HK$3.23 billion dollars and is looking to change its name to reflect its shift into oil exploration.

Shares in heavily indebted Rongsheng, which were suspended on Aug. 29 after the company said it was in the process of restructuring, surged almost 17 percent higher after trading resumed on Thursday. They reversed gains, and were down 3.7 pct by 0217 GMT.

Rongsheng said late on Wednesday it would issue warrants worth HK$510 million to a Cayman Islands-incorporated investment firm wholly owned by private equity investor Wang Ping, which would entitle subscribers to buy up to 1.7 billion new shares at HK$1.60 each.

This would raise about HK$3.23 billion for Rongsheng, it said. A warrant entitles the holder to buy stock from the issuer at a specific price within a time frame.

The price of the new shares is at a 17.65 percent premium to Rongsheng’s closing price of HK$1.36 per share on Aug. 28, when it last previously traded. It said the subscription shares represent 19.36 percent of the firm’s issued share capital.

Rongsheng, which builds Brazilian miner’s Vale mega-iron ore carriers, came close to insolvency last year before clinching an agreement with banks to extend its loans until end-2015.

As one of the Jiangsu region’s largest employers, the firm has received copious support from the government, which is currently helping Rongsheng with its restructuring.

Rongsheng also said it had signed a debt agreement with a syndicate of domestic banks in Anhui province that would extend its debt payments to the end of 2015.

Rongsheng has been one of the most prolific casualties of the global shipping slump. The industry is still trying to shake off a glut of ships ordered before the crisis which has sunk freight rates and caused many shipbuilding orders to be delayed or cancelled. ($1 = 7.7552 Hong Kong dollar) ($1 = 6.1136 Chinese yuan) (Reporting by Brenda Goh; Editing by Miral Fahmy)

Guangdong Grandhope Life Technology Park Co., Ltd. announced that it will receive CNY 75 million in an equity round of funding from existing investor, Grandhope Biotech Co., Ltd on September 2, 2014. The investor will retain 100% stake of the company on closing of the transaction. After the capital increase, company"s registered capital will increase from CNY 10 million to CNY 85 million. The transaction has been approved at directorate meeting of the investor. The transaction still needs to be submitted for the approval of the general shareholders" assembly of the investor.

BofA has added a number of biotechnology stocks — a sector that is hot on Wall Street right now – to its list of top picks for the first quarter. The bank identified the biotech stocks, as well as some medical technology companies, as part of its thematic investing picks, on themes it says are related to a "transforming world." BofA listed the stocks under themes such as ageing, obesity and pandemic. Under the pandemic theme, the bank referred to "disease X" — a term that has surfaced following Covid-19 referring to the next unknown pandemic that could hit the world – adding that there are stock opportunities across vaccines, testing, ventilators and work-from-home practices. The bank added biotech firm BioNTech , as well as medical equipment company ResMed , to its list under this theme. In ageing, BofA highlights the potential of the "silver economy" and says there"s $15 trillion baby boomer spending power in the U.S. alone, with opportunities across health care, aged care, and consumer sectors. The bank added medical technology firm Silk Road Medical , along with biotech firms Cerevel and Denali , to its list of stocks to play this theme. The issue of obesity also presents opportunities across pharmaceutical, healthy eating and wellness, according to BofA. The World Health Organisation puts the number of people worldwide who are overweight or obese at 1.9 billion. One of Bank of America"s new additions under this theme is medical equipment company ResMed . All of the stocks are buy-rated by BofA analysts. A bright spot amid the gloom? Wall Street is optimistic on biotechnology and pharmaceuticals heading into 2023 , even as the overall market appears uncertain amid recession fears. The Nasdaq Biotechnology Index lost 11% for 2022, compared to the Nasdaq which dived 33%, and the S & P 500 which sank nearly 20%. The NYSE Arca Pharmaceutical Index gained nearly 5% for the year. Morgan Stanley views biotechnology as an area full of opportunity heading into this year, while Citi says it"s a "stock-pickers market" in the sector , which is set to outperform even in a recession scenario. "Looking to 2023, we still see room for larger-cap biopharma to benefit broadly (at least early in the year) given the lingering recession concerns and attractive valuation vs. the broader market," Barclays added in a late December note. — CNBC"s Michael Bloom contributed to this report.

These two developments – COVID-19 vaccines and anti-viral drugs – illustrate the importance of the biotech sector to society. After the completion of human genome sequencing by the Human Genome Project in 2003, the biotech sector has attracted investors’ attention with groundbreaking developments like gene therapy, with its potential application to a variety of medical conditions, from different types of cancer to Alzheimer"s disease.

A recent study shows that, under conservative assumptions, an expected total of almost 1.1 million patients will be treated by gene therapy between January 2020 and December 2034. The positive outlook implies that biotech stocks should be outperforming the equity market. As business majors know from their core finance classes, equity prices should embed future cash flow expectations, which in this case should be notably positive.

Surprisingly, stock prices over the past year tell us a completely different story. The biotech stock ETF XBI, for example, reached its peak in January 2021, just a few weeks after recently approved COVID-19 vaccines were administered to seniors and health care workers, but then lost about 40% of its peak market value.

In my recent article with Vijay Govindarajan (Dartmouth College), Hassan Ilyas (Cornell University), Anup Srivastava (University of Calgary) and Luminita Enache (University of Calgary), we argue that, beyond reasons specific to the COVID-19 pandemic, there are structural features of the biotech sector that shed some light on this puzzling underperformance.

Biotech projects such as the development of a new drug entail substantial risks because of the inherent scientific complexity and the necessary regulatory hurdles that must be overcome for the product to be given to human subjects on large scale. This means that biotech projects have risks and payoffs that resemble lotteries: a high probability of failure coupled with a low-probability large reward.

The supply chain of innovation typically starts with individual scientists or entrepreneurs, often affiliated with top-notch laboratories and universities, working on projects that build upon state-of-the-art biotech research and are often funded by government grants. Some of these ideas may be turned into startup firms – of which the most promising would receive equity financing from venture capitalists. Those that pass the first economic milestone may undergo the next stages of financing such as an IPO or acquisition by big pharma firms. Scientific and regulatory complexity means that out of many synthesized molecules, only a few would turn out to be viable products. As financial markets drive this innovation chain, financial frictions impose inefficiencies on the entire process.

Experts propose a variety of plausible explanations for the recent underperformance of the biotech sector. One of them is simply an undesirable spillover from COVID-19-related efforts, meaning that researchers and capital providers simply diverted their attention towards COVID-19-related developments. Relatedly, the FDA’s backlog of trial approvals has increased significantly during the pandemic, imposing bottlenecks to the approval of new treatments for many diseases.

Another explanation lies in the sharp increase in biotech IPOs in 2020 and 2021, including a record number of “pre-clinical” firms. Competition for capital and high IPO valuations may have exacerbated the subsequent underperformance. Disentangling these market forces and ascribing a causal interpretation to the overall phenomenon is a Sisyphean task. Nevertheless, the practical implications of the sector’s underperformance are worth noting.

Our key conclusion is that the underperformance of the biotech sector will likely come with important negative consequences to society. Lower biotech valuations mean that lottery-like payoffs become less attractive from a financial perspective. That means fewer incentives for biotech scientists to turn their research into startup businesses and fewer incentives for capital providers to invest in such early-stage projects. The natural consequence of the break in the innovation chain described above is that less successful products or ideas will be purchased by big pharma and undergo FDA regulatory approval to become viable treatments.

US biotech stock prices declined toward the end of 2021, following a bull run that started in 2020. Investors who had recently rejoiced in positive clinical news from public companies now fled from risk. Small-cap exchange-traded funds (ETFs)1

struggled against ETFs skewed toward mid- to large-cap biotechs. Although the recent downturn has been less severe for businesses with commercial-stage assets, most have been negatively affected.

This cycle is a familiar one for the sector. Over the past decade, biotech stocks have soared far above the S&P 500 a number of times, only to fall back to market level (Exhibit 1). Investors have repeatedly exulted in biotech’s limitless potential, then shunned the stocks after late-stage assets imploded, and finally rushed back in when breakthrough products proved to be game changers. Even including the recent rout, the S&P biotech index has delivered ten-year returns comparable to those of the S&P 500 and higher than those of the S&P pharmaceuticals index.

If history is any guide, it is a question of when, not whether, the biotech public market will become more favorable. In the meantime, emerging companies might better withstand the public market’s headwinds by wisely managing their cash, identifying the best financing options to achieve planned milestones, systematically de-risking assets, and differentiating their portfolios, partnerships, and people.

To analyze the sector’s performance, we identified 393 biotech companies that have gone public since 2013. First, we categorized them by the development stage of their lead asset at the initial public offering (IPO) and today. Then we calculated the median total shareholder returns (TSR) from January 2020 through January 2022 (a period that encompasses bull and bear markets) and the TSR and price changes from October 2021 to January 2022 (a snapshot of the bear market’s steepest declines).

When we analyzed the stock performance of biotech IPOs that made positive clinical and regulatory announcements from 2018 to 2021, we found notable share price increases in 2020 (Exhibit 4). During the first half of that year, share price increases only trended higher for biotechs with COVID-19–related development programs—understandable during a global pandemic. During the second half of 2020, the stock price bump extended to all biotechs with positive announcements, even those with programs unrelated to the pandemic. However, in 2021 investor responses to positive news were increasingly muted, dipping below the pre-2020 baseline. These muted reactions indicate that the risk-off trend held when the clinical and regulatory information was positive. That may create value opportunities for investors.

The biotech IPO boom of 2020 and 2021 saw 158 companies enter the public markets. Sixty-six percent of them had products and platforms in preclinical, or Phase I, development (Exhibit 5). There was a marked uptick in the number of early-stage platform technology companies (as opposed to asset-focused firms). IPO values surpassed those seen in previous years (Exhibit 6). Such parallel trends are noteworthy given the higher risk associated with early-stage development.

This unprecedented wave of IPOs was fueled partly by crossover funds expanding their private investments and by the reemergence of special-purpose acquisition companies (SPACs) as vehicles for biotech financing. The 2020–21 IPO boom, driven by investors encouraged by the bull market and eager to reap the potential rewards from a broad set of new technologies, was not the root cause of the recent downturn. But the resulting glut of newly public companies will face increased competition for follow-on financing.

It’s not all bad news for the biotech sector. The recent downturn was a correction to S&P 500 returns rather than a significant deviation from historical trends. The fundamentals—increasing regulatory clarity and commercial viability for innovative therapies addressing unmet needs—have not changed. Seasoned biotech venture capitalists (VCs) with long investment timelines have significant resources to finance the next wave of cutting-edge innovations, and McKinsey analysis suggests they are doing so. Many large biopharma companies boast strong balance sheets and have publicly expressed their willingness to partner with or acquire companies.

Emerging companies thus have an expanded range of partnerships and, potentially, exit routes. We see two broad sets of priorities that can help biotechs navigate the new environment:

Biotechs that have depressed valuations and face a wary public-equity market are looking hard at cash-burn models and exploring how to secure alternative financing. Some will find it harder to raise enough capital to reach the next value-inflection point and transform their progress into improved valuations. It will be necessary to understand the near- and long-term risks associated with various financing options and to choose those that can build a bridge to future equity offerings. Companies that can articulate a clear, data-driven value proposition—and how the next milestone advances it—will have a competitive advantage. Management should consider the following options:

If there is enough cash on hand to reach planned milestones, it may be wiser to execute existing plans and validate a product or technology before attempting to raise additional public funds. Companies that successfully hit milestones will probably command higher valuations. To mitigate the risk of relying too heavily on future market conditions, biotechs in this category should consider rigorous postmilestone scenario plans and evaluate

Many biotechs that don’t have enough resources to meet milestones and can’t streamline their operations or prioritize their pipelines will need to seek alternative financing and partnership models. Companies with early-stage assets have financing and partnership options different from those of companies with later-stage assets. Early-stage biotechs may choose to access new debt facilities to reach planned milestones. Since debt is not an ideal financing structure for an early-stage company, it may also consider a private placement—especially one with existing investors familiar with the technologies and committed to their long-term success. Biotechs with late-stage clinical candidates have more options, including private placements, royalty deals for existing and future revenue streams, a broad range of debt-financing options, hybrid deals, and external partnerships tailored to specific milestones, such as a launch outside the United States.

The new public-market landscape is notable for its lower valuations and increased competition among IPOs that seek financing. In the current environment, there is a flight to perceived quality and a premium on the clear differentiation of opportunities. Biotech leaders can benefit from pressure-testing their value propositions even more rigorously and identifying clear paths to attractive returns with upside potential. Three areas may warrant a close look:

Portfolios.Early-stage biotechs, particularly developers of platform technologies, may have less time to explore, refine, and optimize their technologies in the current setting. To demonstrate proof of concept, such companies often select indications with well-validated assays and end points, as well as lower levels of biology risk. These indications have become crowded, and many are rare diseases. In some situations, the recruitment requirements for clinical trials exceed the number of patients with the condition being studied. Small and crowded proof-of-concept indications can still be valuable, given a realistic assessment of their feasibility and a quick path to end points. However, to show investors that proof-of-concept indications are gateways to greater value, there should be some focus on fast follow-on indications. Later-stage biotechs with more extensive pipelines have a broader range of financing and partnership options for prioritizing their portfolios. Now may be the right time for capital-constrained biotechs at all stages to make difficult trade-offs.

Partnerships.Capital constraints should spur a reevaluation of partnerships across the value chain, including contract manufacturing organizations (CMOs), contract development and manufacturing organizations (CDMOs), contract research organizations (CROs), and potential commercial partners. Any partnership that expands capabilities, accelerates development timelines, or de-risks assets can create value. Early-stage biotechs with no near-term clinical catalyst may be more open to partnering with larger biopharma companies; investors can perceive deals as validation before an upcoming financing round. This openness should help biopharma companies gain access to cutting-edge technologies at reasonable value.

People. Depressed valuations are leading to downsizing at some biotechs and may lead many biotech employees to reevaluate their situations and consider new opportunities. The pandemic has created intense flux in work models and spurred a migration of talent across society. However, lower valuations could attract new employees by offering a more significant upside potential from stock incentives. Most biotechs know that their ability to attract and retain talent is critical to success, but they must sharpen their focus even more in the current environment. Thoughtful workforce planning can address capacity gaps, achieve milestones, help realize long-term strategies, and convince investors that they are financing a team with the skills to succeed.

The recent US biotech public-market downturn is a normal part of the investor enthusiasm cycle. Biotechs that deliver products to market, demonstrate their value to payers, and consistently outperform expectations can still prosper. This point in the cycle offers opportunities for value investors seeking overlooked technologies and product candidates with high potential.

Before a potential rebound of the public market, biotechs should manage their cash more closely and consider alternative financing and partnership models. Those that ruthlessly prioritize their portfolios and differentiate themselves from peers by retaining exceptional talent will probably navigate depressed valuations and volatile labor markets more successfully.