The biotech enjoyed a standout Hong Kong share debut after hailing its novel anti-bacterial drug, now undergoing late-stage clinical tests, as a potential gamechanger

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Key Takeaways:

• The TenNor Therapeutics IPO was oversubscribed more than 9,000 times and surged 179% in its first trading session
• The company remains firmly in the red, with cumulative losses exceeding 490 million yuan over the past three years

A Chinese biotech specializing in anti-bacterial drugs has pulled off a stellar market debut, as investors bet on the firm's potentially powerful new therapy to combat stomach ulcers and gastric cancers.

The Hang Seng Healthcare Index fell more than 2% last week, but investors nevertheless flocked to newly listed shares in TenNor Therapeutics (Suzhou) Ltd.(6872.HK), which achieved the strongest first-day performance of any firm that has listed so far under Hong Kong's special rules for pre-profit biotechs.

The company's stock opened more than 98% higher and finished with a gain of 179% in the May 22 debut after an IPO marked by strong investor demand.

The offering of nearly 8.86 million shares was priced at HK$75.70 per share, with a lot size of 50, implying an entry threshold of about HK$3,823. The Hong Kong portion was oversubscribed by around 9,000 times, while the international placement achieved a subscription rate of 9.24 times. After expenses, the IPO is projected to raise net proceeds of about HK$598 million ($76 million), with CITIC Securities and ABCI Capital as joint sponsors.

Founded in 2013, TenNor Therapeutics is a clinical-stage biotech that is coming close to launching commercial products. While much of China's innovative drug sector has crowded into oncology, TenNor has focused on anti-infective therapies through its multi-target conjugate technology. Its most keenly watched product is rifasutenizol (TNP-2198), a treatment for the infections that can lead to stomach ulcers and gastric cancers. The drug is the world's only novel molecular candidate targeting the infectious agent, known as helicobacter pylori, to be developed since the bacterium was identified, the company said.

The bacterium is closely associated with multiple upper gastrointestinal diseases and is considered a leading cause of gastric cancer. According to a study cited in the prospectus, around 621 million people in China and 4.08 billion people globally were infected with the bacterium in 2024. The standard treatment is a four-part therapy including two types of antibiotics, a proton pump inhibitor to reduce stomach acid and a bismuth-based drug to inhibit the infection. Broad-spectrum antibiotics such as clarithromycin and metronidazole are widely used but rising resistance to those drugs is leading to treatment failures and relapses.

The company's candidate drug, rifasutenizol, is designed to create a bonded mechanism combining rifamycin and nitroimidazole pharmacophores. The anti-bacterial drug would replace bismuth and clarithromycin to form a new triple therapy. Clinical studies have indicated it succeeds in clearing the infection at lower dosage rates than the conventional treatment, and with less risk of resistance. According to the prospectus, the product is expected to gain approval by the end of 2026 and carries significant market potential. Beyond the flagship product, TenNor is also working on investigational drugs targeting acute bacterial skin infections and infections associated with joint replacements.

Big bets on drug potential

TenNor Therapeutics has yet to commercialize any products and listed under Hong Kong's Chapter 18A rules for companies lacking a revenue stream. The drug developer recorded annual net losses of 192 million yuan ($28 million), 146 million yuan and 153 million yuan from 2023 through 2025, driven by high R&D outlays amounting to 108 million yuan, 69.84 million yuan and 71.87 million yuan. By the end of last year, TenNor held cash and cash equivalents of 184 million yuan.

TenNor's market appeal stems from its scientific credentials and strong capital backing, as well as from its promising pipeline. Its technological roots trace back to Cumbre, an infectious diseases biotech that was co-founded by award-winning biochemist Steven McKnight and celebrated Harvard microbiologist Rich Losick. TenNor founder Ma Zhenkun previously served as R&D head at Cumbre. TenNor brought the two prominent scientists on board as scientific advisors and secured a solid R&D basis during its Series A financing by allowing Cumbre to exchange core patented technologies and commercial agreements for preferred shares.

Before its IPO, TenNor raised more than 700 million yuan in seven funding rounds. Its investor roster includes prominent healthcare-focused funders such as Northern Light Venture Capital, GSR Ventures, New Horizon Capital and Suzhou GTJA. Pharmaceutical giant WuXi AppTec also participated through its affiliated funds. Wang Xiaodong, co-founder of BeiGene and a member of China's National Academy of Sciences, serves as a scientific advisor and holds a personal 0.19% stake in TenNor.

TenNor's IPO was also backed by prominent institutional investors. Five cornerstone investors, including AMR Action Fund, Hua Yuan International and Orient Asset Management (Hong Kong) collectively subscribed for around $29.8 million worth of shares. TenNor currently commands a market capitalization of about HK$10.3 billion, compared with HK$1.7 billion for Dawnrays Pharmaceutical (2348.HK), a profitable company focused on cephalosporin antibiotics. The gap suggests investors are assigning a hefty premium to the pioneer status of TenNor's flagship drug. The longer term valuation will depend on the approval timeline for rifasutenizol, and how quicky the drug can penetrate the market and deliver on its promise.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.