When Zhengye Biotechnology Holding Ltd. (ZYBT.US) completed a slightly upsized Nasdaq IPO last week by selling 1.5 million shares for $4 each, it seemed like that might be the end of its listing story. The $4 price was already at the bottom of its previously announced range, indicating tepid demand, even though the offer size was up slightly from its original plan filed last June to sell 1.25 million shares.
But a week after the Jan. 7 trading debut, Zhengye announced that its underwriter had fully exercised its option to purchase an additional 225,000 shares, adding $900,000 to the offering’s gross proceeds and indicating demand might be stronger-than-expected. Still, the total proceeds seem quite small for a company worth just over $200 million, hinting a secondary share sale could be in the offing. Investors certainly seem to like the company enough, with its shares up 8.5% from the IPO price after their first trading week.
Known as Zybio in its home China market, Zhengye is the country’s 10th largest veterinary vaccine producer by revenue, though it attains that distinction with just 0.3% of the market, according to independent research in its prospectus. But it’s also a best-in-class of sorts by becoming the first Chinese animal health company to list in the U.S. Out of 11 Chinese vaccine companies, it was also the fastest growing in 2022 with 21.4% revenue growth.