(Yicai Global) March 11 -- China’s I-Mab Biopharma said it is not a variable interest entity-structured company, amid concerns of a tightening clampdown by US authorities on Chinese firms. 

“As a clinical-stage biotech firm with a global pipeline and an expanding global presence, I-Mab has always and will continue to adhere to the highest governance, filing and transparency standards as a US-listed company,” it told Yicai Global today.

Nonetheless, Shanghai-based I-Mab [NASDAQ: IMAB] is pursuing two other listings, which could mitigate the risk of being delisted in the US.

Founder and Chairman Zang Jingwu told Yicai Global earlier this year that the firm was accelerating plans for a dual listing on the Hong Kong Stock Exchange’s main board and Shanghai’s Nasdaq-like Star Market.

“The dual listing will add more flexible trading options outside the Nasdaq market for the company’s existing investors, and will also provide the firm with a new financing platform to attract a broader and diverse investor base,” Zang said.

He recently told Yicai Global that investors at home and abroad remain very bullish on the investment potential of Chinese biotech firms. But regulatory challenges and investors’ concerns have been reflected in a 60 percent drop in I-Mab’s share price since the start of this year.

The Holding Foreign Companies Accountable Act was passed by the US Congress in 2020. It requires that foreign issuers that fail to meet the Public Company Accounting Oversight Board’s requirements for three consecutive years should be removed from US bourses.

The VIE structure model has become a key target for US regulators, and at least 220 of the more than 280 Chinese stocks listed in New York have VIE structures.

“Our team is working proactively to mitigate any potential risks by evaluating and implementing additional business processes and optimizing our financial structure to ensure that we continue to meet the requirements of the HFCAA,” I-Mab added today.

Editor: Tom Litting