SSE STAR Market Forum | Helping China's Capital Market Supply Side Reform, Promoting China's Pharmaceutical Industry Transformation and Upgrading

On the afternoon of September 22, 2019, the SSE STAR Market Forum of 2019 China BioMed Innovation and Investment Conference (2019 CBIIC) hosted by the China Pharmaceutical Innovation and Research Development Association (PhIRDA) was successfully held. The SSE STAR Market Forum was a newly-set session, themed on the latest hotspots of the capital market. It consisted of four keynote speeches and two panels and invited policy makers to interpret the SSE STAR Market, and representatives of the primary and secondary markets to discuss and share the impact and opportunities of SSE STAR on the pharmaceutical innovation industry, the valuation of the innovative enterprises of the SSE STAR, and the future development trend of the SSE STAR Market.

The SSE STAR Market Forum was moderated by Dr. Kevin Li, Managing Partner of LYZZ Capital.

Moderator: Dr. Kevin Li, Managing Partner of LYZZ Capital

Zhu Jiwei, Head of Regional Service of Offering & Listing Center of SSE, introduced the system and operation of the SSE STAR Market. He pointed out that technology innovation was the driving force for China's economic transformation and technology. Innovation cannot be separated from the support of the capital market. As an important measure for the reform of the supply side of China's capital market, the establishment of the SSE STAR Market is to overcome the shortcomings of China's capital market and fit to the principles of marketization, legalization, more transparent information disclosure and overall coordination. The independent IP rights, complete R&D system, leading position, corresponding R&D achievements, ability to turn the results into business performance and national position are the six premise to list in SSE STAR Market. SSE STAR Market and the main board are complementary - the main board focuses on the pillar of Chinese economy, while the SSE STAR Market favors enterprises with strong scientific and technology innovation ability that adopts registration-based IPO system rather than the approval-based system, which is fairly different from the main board and the GEM. In the SSE STAR Market, the distribution, listing, pricing, trading, continuous supervision, withdraw and other aspects have been differentially designed, emphasizing marketization and transparency throughout the process.

Mr. Zhu Jiwei, Head of Regional Service of Offering & Listing Center of Shanghai Stock Exchange, introduced the rules and operation of SSE STAR Market

Dr. Lu Xianping, Chairman of Shenzhen Chipscreen Biosciences Co., Ltd., shared his experience of listing in the SSE STAR Market. He first thanked and affirmed the country's major initiatives in the current economic adjustment process, especially the decision made under the Sino-US trade friction, and the vision of launching SSE STAR Market. He believed that the initiative would promote the development of innovative enterprises with core technologies and facilitate the rapid development of strategic emerging industries. Then, he introduced the key points that should be paid attention to when applying for listed enterprises, that is, possessing the characteristics of science technology and insisting on truthfulness, transparency and facts over forms. At the end of the speech, Dr. Lu shared with participants his original intention of returning to China to create the Chipscreen Biosciences 18 years ago – basing on the patients' needs, focusing on the original innovation, and staying true to the original asperation, and continuing to promote and lead the industry's sustainable development.

Dr. Lu Xianping, Chairman of Shenzhen Chipscreen Biosciences Co., Ltd. shared his experience of listing on the SSE STAR Market

Pu Songtao, Co-Head & Executive Director of Investment Banking of Healthcare and Life Science Group of Essence Securities, gave a keynote speech named 'How can one Innovative Pharmaceutical Company be a STAR'. He first introduced the basic situation and characteristics of the pharmaceutical enterprises that had been applied for the SSE STAR Market listing, and reviewed the scope and requirement of the five sets of the listing rules of the SSE STAR Market, focused on the scientific and technological ability, professional team, commercialization of the innovative pharmaceutical enterprises, compliance, and internal finance control. Through the cases of innovative pharmaceutical companies, he thoroughly analyzed how an innovative pharmaceutical company could finally achieve successful listing on the SSE STAR Market. Finally, he suggested that innovative pharmaceutical companies interested in listing on the SSE STAR Market should plan and select professional agency in advance to lay the foundation for the successful listing.

Mr. Pu Songtao, Co-Head & Executive Director of Investment Banking, Healthcare and Life Science Group of Essence Securities, introduced the precautions for the listing on the SSE STAR Market.

Li Qiushi, Managing Partner of GTJA Investment Group, gave a keynote speech titled 'The Exploration of the Transformation of Listed Biopharmaceutical Innovation Companies'. According to Mr. Li, in recent years, China's new drug review has accelerated and regulatory policies have been in line with international standards; CRO is flourishing with increasingly improved R&D capabilities and conditions; experienced teams and R&D talents come back to China, which makes talents and information in line with the world; SSE STAR and Chinese Hong Kong stocks opens up channels for innovative biopharmaceutical; R&D funding and scientific research capabilities have been greatly enhanced, and cross-border asset restructuring, joint venture or license-in/out innovation products are growing in more rapid pace. China's medical industry has entered a new turning point where the pharmaceutical industry is shifting gears, and biotech companies will see explosive growth. The SSE STAR Market will cultivate another 'Amgen' of biomedical industry version in China. In the future, the China's pharmaceutical industry will also form a pattern of equal emphasis on Biotech and Big pharma. To achieve a perfect transformation, Chinese pharmaceutical companies have three options: build their own R&D systems in advance; introduce or takeover innovative products; create a horizontal strategy in the industrial chain/depend on business merger, to build a solid 'moat'.

Mr. Li Qiushi, Managing Partner of GTJA Investment Group, introduced the innovative transformation path of pharmaceutical companies

Two panels were held right after the keynote speeches. The first panel was moderated by Tian Jiaqiang, Pharmaceutical Chief Analyst of CITIC Securities. The panel was centered on the 'Valuation of Innovative Pharmaceutical Companies in the SSE STAR Market'. The panelists agreed that the valuation criteria for the innovative pharmaceutical companies were mainly based on the market. The SSE STAR Market will review whether the historical financial data provided by the company is true. Any public accepted market price is reasonable. In addition, a mature team is also a soft indicator affecting the value of the company. Not all scientists can make entrepreneurs or good manager. 

From left to right:
Moderator: Tian Jiaqiang, Pharmaceutical Chief Analyst of CITIC Securities; Panelists: Lu Xiaobo, Partner of Sequoia Capital China;
Eric Zhang, Managing Partner of LYZZ Capital;
Kevin Chen, Founding Partner of Biotrack Capital;
Tang Zhehui, Partner of Ernst & Young Hua Ming LLP

The second panel discussion was chaired by Zheng Wei, Pharmaceutical Chief Analyst of Tianfeng Securities. The panelists discussed the topic 'How will the SSE STAR Market Become the Next Nasdaq'. The panelists agreed that at present the SSE STAR Market was not as mature and stable as Nasdaq, but still full of potential. In the future, the medical and healthcare industry will become the most important territory in SSE STAR Market, and it will certainly cultivate China's own world-class pharmaceutical giant.

From left to right:
Moderator: Zheng Wei, Pharmaceutical Chief Analyst of Tianfeng Securities, Panelists: Lu Xianping, Chairman of Chipscreen Biosciences;
Xu Jiaxi, Assistant Head of Research Institute, Chief Healthcare Analyst of Industrial Securities;
Jon Zhang, Executive Director of Investment Banking of Healthcare and Life Science Group of CITIC Securities;
Kevin Huang, Managing Partner, Jiangsu Province, KPMG

SSE STAR Market Forum

CBIIC Participants exchanging business cards with roadshow speakers