(Yicai Global) March 8 -- Shares in Junshi Biosciences plunged after the Chinese biopharmaceutical firm said that it plans to raise at most CNY4 billion (USD633 million) through a heavily discounted new share sale to fund further cancer drug development.

Junshi’s share price [SHA: 688180] slumped 14.3 percent in Shanghai to CNY67.50 (USD10.68) as of 3 p.m. China time, giving it a market valuation of CNY61.5 billion (USD9.7 billion). Its Hong Kong-listed shares [HKG: 1877] were trading down 12.17 percent at HKD46.90 (USD6).

Junshi will issue a maximum of 70 million new shares at a price of around CNY57 (USD9) each, a 15.6 percent discount on its latest trading price on the mainland, the Shanghai-based company said yesterday.

CNY3.7 billion (USD586 million) of the proceeds will go towards first-in-class drug research and development and CNY300 million (USD47.5 million) will be used to build a new headquarters and R&D base in Shanghai, it said.

Set up in 2012, Junshi has 45 experimental drugs in development, including several ongoing clinical trials both in China and abroad. Its drug Toripalimab JS001, which can be used to treat skin cancer and cancer of the urinary tract, has been approved to go to market in China.

Junshi’s net losses more than halved last year from the year before to CNY739 million (USD117 million), and revenue surged two-and-a-half times to CNY4 billion, according to the company's latest financial report.

Editor: Kim Taylor