This article only represents the author's own views.
As local equity markets flounder, Chinese drug companies are heading westwards in their quest for cash. And the preferred destination looks to be Zurich. Shanghai Junshi Biosciences Co. Ltd. (1877.HK; 688180.SH) is the latest biotech to hop on board the European financing express, using a cross-border stock link. The maker of drugs to treat Covid and cancer announced last Monday that it plans to sell up to 68 million Global Depositary Receipts (GDRs) on the SIX Swiss Exchange, aiming for proceeds of around 3.4 billion yuan ($475 million) to replenish its finances and support product development.
The company finds itself strapped for cash after a particularly dire set of earnings. In the first quarter, Junshi’s operating income fell nearly 60% to 255 million yuan and its net loss ballooned 37% to 543 million yuan, bloated by 528 million yuan in R&D costs. Junshi was left with just 4.99 billion yuan of cash in its coffers.