(Yicai) May 15 -- Hillhouse Group has sold HKD2.08 billion (USD266 million) worth of BeiGene’s Hong Kong-listed shares, capitalizing further on a substantial rally in the biopharmaceutical giant’s stock price this year. Soon after the sale, the Chinese private equity giant showed up as a cornerstone investor in drugmaker Hengrui Pharmaceuticals’ upcoming secondary listing in Hong Kong, Yicai learned.

Hillhouse’s HHLR Fund and its affiliated entities offloaded 16 million of BeiGene’s shares traded outside the Chinese mainland at a price of HKD130 (USD16.65) apiece, raising HKD2.08 billion, Yicai learned.

After the sale, Hillhouse’s stake in BeiGene was diluted to 4.89 percent, with a holding of 68.5 million shares, from 6.03 percent, BeiGene said yesterday. This means that Hillhouse, which used to be the third-largest shareholder in the Beijing-based firm, now holds less than 5 percent equity and is no longer considered a major stakeholder.

Hillhouse has cashed in repeatedly on a strong rebound in BeiGene’s stock price on the mainland, Hong Kong and US bourses since the start of the year, driven by its strong financial performance. The US stock price surged more than 30 percent in value at one point, and Beijing-based Hillhouse has trimmed its US holdings in BeiGene several times.

Since the latest sale, BeiGene has emerged as a cornerstone investor in Hengrui Pharma’s upcoming secondary listing in Hong Kong together with Singaporean sovereign wealth fund GIC, US investment management firm Invesco and Swiss banking giant UBS’ unit UBS Global Asset Management.

Hengrui Pharma said today that it plans to issue 225 million shares priced at between HKD41.45 (USD5.30) and HKD44.05 each. If the over-allotment and size adjustment options are fully exercised, up to 297 million shares could be issued. This would raise HKD13.08 billion (USD1.7 billion), making it the largest Hong Kong IPO by a pharma firm in the past five years.

Hengrui Pharma’s Hong Kong offering will close on May 20, and the final pricing is expected to be set by May 22. At the upper price limit of HKD44.05 (USD5.64), the new shares are being offered at a 19.3 percent discount from the Lianyungang-based firm’s average share price on the mainland in the last 10 days.

Editor: Kim Taylor