Beyond the IPO
Post-Listing Performance, Follow-on Financing, and the ‘B’ Marker Removal

An IPO is not the finish line — it is the starting gun. For biotech companies listed under Chapter 18A, the real test begins after the listing ceremony. How does the market value them over time? Can they raise additional capital to fund their pipelines? And when do they finally shed the “B” marker that signals their pre-revenue status?

This article examines the post-listing lifecycle of Hong Kong biotech companies — from stock price performance and follow-on financing rounds to the rigorous financial tests required to remove the “B” marker. For investors, analysts, and corporate decision-makers, understanding these dynamics is essential for assessing long-term value and growth prospects.

1. Stock Performance: A Tale of Two Extremes

Of the 82 biotech companies that listed under Chapter 18A between 2018 and 2025 (excluding the company that delisted in October 2025), 27 companies saw their share price close above their IPO offer price on December 31, 2025. That means roughly one in three 18A-listed companies ended the year in positive territory relative to their listing price.

The average price change across all 82 companies from their IPO to December 31, 2025 was a positive 13.28%. However, this average masks a wide dispersion. While some companies delivered spectacular returns — with gains exceeding 700% — others languished below their offer price, reflecting the differentiated outcomes of drug development, commercialisation success, and market perception.

What differentiates the winners from the laggards? The data suggests that successful clinical milestones and commercialisation breakthroughs are the primary drivers. Companies that have advanced their pipelines, received regulatory approvals, or established profitable licensing deals have been rewarded by the market. Those that have faced clinical setbacks or delayed timelines have been penalised.

2. Follow-on Financing: The Capital Lifeline

One of the primary purposes of going public is to create a platform for future capital raising. For biotech companies, which often require years of additional R&D spending before reaching profitability, the ability to tap the public market repeatedly is critical.

As of December 31, 2025, 71 of the 82 companies had been listed on HKEX for more than six months — meaning they were no longer subject to the post-IPO lock-up restrictions that prevent new share issuances within the first half-year. Of these 71 companies, 33 companies conducted at least one follow-on equity financing round in 2025.

This proportion — nearly half of eligible companies — underscores the ongoing capital needs of the biotech sector. However, follow-on financing is not always easy. Market conditions, investor appetite, and the company’s own clinical progress all influence the ability to raise additional funds at acceptable valuations.

Historical data shows that the number of follow-on transactions has fluctuated with market conditions. In 2021, 14 companies conducted follow-on financing; in 2022, that number fell to 9; by 2025, with the market recovery, the number surged to 33. This cyclicality reinforces the importance of timing and strategic capital management.

3. The ‘B’ Marker: What It Means and How to Lose It

When a company lists under Chapter 18A, its stock ticker is appended with a “B” marker — a visible signal to investors that the company is pre-revenue and pre-profit. This marker serves as a warning label, reminding investors that the company has not yet generated revenue from its core products and may be higher risk.

However, the “B” is not permanent. Once a company begins generating revenue and satisfies one of three financial tests set out in Listing Rule 8.05, it can apply to HKEX to remove the “B” marker. This is a significant milestone — it signals that the company has transitioned from a development-stage enterprise to a revenue-generating, financially sustainable business.

The Three Financial Tests

Test	Requirements
Profit Test	Profit of at least HK$35 million in the most recent financial year, and HK$45 million in the preceding two financial years combined.
Market Cap / Revenue / Cash Flow Test	Market cap ≥ HK$2 billion; revenue ≥ HK$500 million in the most recent year; and positive operating cash flow ≥ HK$100 million for the preceding three financial years.
Market Cap / Revenue Test	Market cap ≥ HK$4 billion and revenue ≥ HK$500 million in the most recent year.

These tests are deliberately stringent. They ensure that only companies with genuine commercial traction — not just promise — can shed their pre-revenue designation.

4. The Journey to Removing the ‘B’

Since the introduction of Chapter 18A, a growing number of companies have successfully navigated the path to “B” removal. As of December 31, 2025, a cumulative total of 12 companies had successfully applied to HKEX to remove the “B” marker.

In 2025, only two companies successfully completed the “B” removal process: 归创通桥 (Zhengye Biotech) and 云顶新耀 (Cloud Top Pharma). This number is lower than some previous years, reflecting the stringent nature of the tests and the broader market environment.

Time to ‘B’ Removal: A Measure of Commercialisation Speed

The time taken from listing to “B” removal varies significantly. Some companies have achieved it in less than 3 years, while others have taken 5 years or more. The average time to “B” removal for the 12 companies is approximately 3.5 to 4 years post-IPO.

The variation reflects differences in business models, therapeutic areas, and regulatory pathways. Companies developing drugs for rare diseases with fast-track regulatory pathways may reach commercialisation sooner than those pursuing chronic conditions with larger, longer trials. Companies that licensed-in more mature assets may also achieve revenue faster than those developing wholly novel molecules from scratch.

5. Implications for Investors and Companies

For investors, the post-IPO data offers several practical insights:

• Stock performance is highly variable: A “B” marker does not mean automatic underperformance — some companies with the marker have delivered spectacular gains.
• Follow-on financing is a positive signal: Companies that can raise additional capital from the public market are generally those with credible pipelines and strong investor support.
• “B” removal is a major milestone: It signals commercial maturity and often unlocks broader institutional investment (since many funds have mandates that restrict pre-revenue investments).
• Time to “B” removal matters: Faster removal suggests better execution and faster commercialisation — which can justify valuation premiums.

For companies considering or preparing for a Hong Kong IPO, the post-IPO journey should be carefully planned. The listing is not the end — it is the beginning of a new phase of accountability, transparency, and capital discipline. Companies should have a clear roadmap for commercialisation milestones, capital raising strategy, and eventual “B” removal.

For professional services firms and due diligence teams, understanding the post-IPO landscape is essential when evaluating investment opportunities or advising clients. A company’s ability to perform post-IPO, raise follow-on capital, and shed its “B” marker are all key indicators of management quality and business viability.

Access to verified, official company information is the foundation of effective due diligence. Whether you are evaluating an investment, conducting a compliance review, or advising on a cross-border transaction, having reliable data about a company’s registration status, credit history, legal risk profile, and corporate governance is essential. Services that provide official enterprise credit reports and professional due diligence reports can help bridge the information gap.

6. Conclusion

The journey of a Hong Kong-listed biotech company does not end on listing day. The post-IPO years are a crucible — testing whether the company can deliver on its clinical promises, manage its capital wisely, and ultimately transition from a pre-revenue developer to a revenue-generating commercial enterprise.

The data shows that while some companies have delivered outstanding returns and successfully removed their “B” markers, others have struggled. The differentiation is sharp, and the market is unforgiving of missed milestones. For investors, this means opportunity — but also risk. For companies, it means that the work of building value is never finished.

As the 18A ecosystem continues to mature, with more companies approaching commercialisation and “B” removal, the Hong Kong biotech market is evolving from a funding destination into a fully-fledged value discovery and trading platform for Chinese biotech innovation. Those who understand this lifecycle will be best positioned to navigate its opportunities and challenges.