Biotech Firm Huajian Future's IPO Sees Sharp Decline

Huajian Future, a clinical-stage biopharmaceutical company based in Chengdu, experienced a significant market debut on the Hong Kong Stock Exchange, with its shares plummeting 31% on the first day of trading. The company, which focuses on small molecule innovative drugs in areas like autoimmune diseases, metabolic disorders, and oncology, listed under the Chapter 18A regime, a pathway for biotech firms without commercialized products. The offering was underwritten by CITIC Securities.

The initial trading performance contrasted sharply with the pre-listing grey market activity. On the eve of its official listing, Huajian Future saw its shares surge by as much as 95% above its offering price of HK$81.80 in the secondary market. However, this optimism evaporated quickly, with the stock eventually closing below the issue price, signaling investor caution despite a generally robust IPO market for new listings in 2026. The volatile trading session, marked by a nearly 105% intraday swing, saw substantial volume traded at elevated levels, leaving many early entrants with paper losses.

Huajian Future's financial disclosures reveal a company heavily reliant on external funding, with no approved drugs currently on the market and no product revenue. The company's reported revenue for 2024 and 2025, totaling approximately RMB 1.8 million and RMB 12.98 million respectively, was entirely derived from licensing and collaboration agreements with Junshi Biosciences and its affiliate Yunze Chuangyao. These figures represent milestone payments and upfront fees recognized over time, rather than sales from commercialized products.

Despite a reported narrowing of net losses from RMB 202 million in 2024 to RMB 135 million in 2025, a closer examination of the financials indicates an increase in operational burn. The earlier loss was significantly impacted by a non-cash accounting charge related to the fair value of preferred financial instruments. Excluding this item, research and development expenses surged by 47% to RMB 110 million in 2025, while administrative costs more than doubled, partly due to IPO preparation expenses. This escalation in operating expenditures led to a widening of net cash used in operations.

The primary objective of the IPO, which raised approximately HK$1 billion (around USD 128.2 million), is to extend the company's cash runway. As of late April 2026, Huajian Future held approximately RMB 327 million in cash and cash equivalents and financial assets. Management estimates this capital, combined with the IPO proceeds, will provide sufficient funding for over five years, supporting the advancement of its pipeline of small molecule drug candidates. The company's pipeline includes HJ787 (a TYK2 inhibitor for autoimmune conditions), HJ178 (an oral GLP-1/GIP agonist for metabolic disorders), and HJ891 (a KRASG12C inhibitor for oncology), with HJ197 (an FGFR4 inhibitor) being a collaborative product.

The company's journey to the public markets involved eight years and six funding rounds, accumulating approximately RMB 619 million from investors. Early backers have seen substantial returns, with SDIC Shanghai, an investor since the 2017 Series A round at a cost of RMB 8.24 per share, realizing a paper gain of nearly 8.6 times its initial investment. Other notable investors include Legend Capital's affiliate Legend Star. More recent funding rounds, C1 and C2 in late 2023 and mid-2025 respectively, saw valuations largely stagnate, with share prices around RMB 45.

The IPO also featured a strong cornerstone investor base, with six entities committing USD 65 million (approximately HK$509 million), representing 45.7% of the total offering. Key cornerstone investors included Ruiyuan Fund, managed by Chen Guangming, and Kaibo, a private equity platform under Orient Securities, in conjunction with state-backed capital from Xuancheng Economic Development Zone. The company's leadership team, including founder and CEO Dr. Ji Jianxin, a former executive at Di'ao Pharmaceutical Group and a recipient of the Chinese Academy of Sciences' "100 Talents Program," brings significant scientific and industry experience.