(Yicai) June 25 -- For the first time in more than a year, the Shanghai Stock Exchange will review an application for an initial public offering on its Nasdaq-style board made by an unprofitable startup.

Wuhan-based Healthgen Biotechnology first applied to go public on the Star Market in December 2022. It received its first round of regulatory questions in January 2023, which was later followed by another round. The IPO application will now be reviewed on July 1, the bourse said yesterday.

The announcement comes shortly after Wu Qing, chairman of the China Securities Regulatory Commission, stated at the Lujiazui Forum in Shanghai on June 18 that the Star Market will resume listings of loss-making high-growth technology firms and introduce a new "growth tier" aimed at supporting promising startups.

Since the board’s launch in 2019, 20 unprofitable companies -- all biopharmaceutical innovators -- have gone public using this listing standard. But reviews of this kind were halted in June 2023.

Restarting IPOs for loss-making biotech companies will provide an important financing channel for them and an exit pathway for their investors, according to analysts at China Galaxy Securities. The move is expected to attract a substantial amount of venture capital into the sector, significantly boosting investment activity in the biotech industry.

Healthgen aims to raise CNY3.5 billion (USD488 million) through its IPO, CNY1.6 billion of which will go toward the construction of a production base for recombinant human albumin. The rest will go on new drug development and to supplement working capital.

Founded in 2006, Healthgen mainly researches and develops innovative drugs, according to its prospectus. The firm spent CNY386 million (USD53.8 million) on R&D over the past two calendar years, and had 178 employees at the end of 2024, nearly 70 percent of whom were in R&D.

Editor: Kim Taylor