China wants to bring biotechs back to its NASDAQ-like stock market

China’s Star Market (often compared to the US’s NASDAQ) plans to revive IPO access for unprofitable biotech firms through a new "growth tier," signaling a potential return of halted listings.

Backstory: Since late 2023, China’s securities regulator tightened IPO rules, halting listings for unprofitable drug companies. Biotechs have since looked abroad, particularly to Hong Kong, for financing.

In detail: This week, China Securities Regulatory Commission’s chairman announced that the Shanghai Stock Exchange’s Star Market will soon introduce a “growth tier” to support early-stage science and tech enterprises. This will revive the fifth listing standard, which allows unprofitable biopharma and medtech firms to go public.

Why it matters: Reinstating this pathway could curb the exodus of Chinese biotechs to Hong Kong and align with China’s long-term strategy to build a globally competitive pharmaceutical sector.

Go deeper:

• Genrix Biopharmaceutical was the last biotech to list under this route in June 2023.

• At least 15 Chinese biopharma firms filed for IPOs in Hong Kong in 2024 alone.

• China’s innovative drug market tripled between 2015 and 2024 to CNY71.6 billion (USD10 billion), with domestic drugs now making up nearly 28% of the market.