Hong Kong stock ADC star plans to return to A-shares! Lost over 2 billion yuan in just half a year, Duality Biologics has a heavy burden on its shoulders

Less than a year after listing on the Hong Kong Stock Exchange, Duality Biologics is already planning a return to the A-share market.

Recently, Duality Biologics announced that its board of directors has resolved to issue ordinary shares to be listed and traded in RMB on the Shanghai Stock Exchange's STAR Market. The proposed RMB share issuance is subject to and conditional upon (among other things) market conditions, further approval by the board, approval by shareholders at the company's general meeting, and approval from the necessary regulatory authorities.

If the process goes smoothly, Duality Biologics is expected to become another pharmaceutical company in the medical field to achieve a dual capital platform layout of "A+H".

It is worth noting that in the Hong Kong stock market's pharmaceutical sector, Duality Biologics has demonstrated strong capital attraction momentum.

In April this year, Duality Biologics officially listed on the main board of the Hong Kong Stock Exchange, raising a total of approximately $243 million, making it one of the largest IPOs in the Hong Kong stock market's 18A sector in the past four years. Additionally, over the past six months, the company's stock price has surged from HK$94.6 per share at the time of issuance to a peak of HK$563.5 per share, an increase of 495.67%.

Now, Duality Biologics' plan to list on the STAR Market clearly reflects its desire to further expand its financing channels. So, how large is the funding gap? And what questions will the investment market raise?

Amid Tight Capital Conditions, Is the A-Share Market Warming Up?

According to recent financial reports, Duality Biologics' rate of losses has already exceeded its revenue.

From 2022 to 2024, the company reported revenues of RMB 1.6 million, RMB 1.787 billion, and RMB 1.941 billion, respectively, while net profits attributable to the parent company were -RMB 387 million, -RMB 358 million, and -RMB 1.050 billion, respectively, with cumulative losses nearing RMB 1.8 billion.

In the first half of this year, the company reported total revenue of RMB 1.229 billion, a year-on-year increase of 22.91%, while losses during the period reached RMB 2.074 billion, nearly double the loss in 2024, compared to only RMB 293 million in the same period last year.

Behind these challenges, Duality Biologics remains an innovative pharmaceutical company in the clinical stage, with no products on the market and lacking commercial components.

Specifically, in recent years, the company's revenue has mainly come from external collaborations centered on antibody-drug conjugate (ADC) assets, rather than product sales.

The interim report mentioned that, to date, Duality Biologics has entered into multiple out-licensing and collaboration agreements with several globally leading companies, including BioNTech, BeiGene, Adcendo, GSK, and Avenzo, involving a total transaction value exceeding $6 billion. As of June 30 this year, revenue from licensing and collaboration agreements reached RMB 1.227 billion.

At the same time, the company's 13 ADC candidate drugs are still in clinical development or preclinical stages. On this basis, the company's R&D expenses, administrative expenses, and other costs are growing rapidly, resulting in a prolonged "cash-burning" cycle.

Additionally, debt is also a heavy burden. At the end of 2024, Duality Biologics' total liabilities reached RMB 4.112 billion, a sharp increase of 46% from the beginning of the year, and its debt-to-asset ratio climbed to 196.7%. As of the end of June 2025, Duality Biologics' cash and cash equivalents were only close to RMB 3 billion. Coupled with the difficulty of generating stable income from innovative drug business development (BD), the company's financial anxiety is evident, making the launch of a dual "A+H" listing indeed somewhat necessary.

It is worth mentioning that Duality Biologics' return to the A-share market coincides with a recovery cycle in the sector.

According to Wind data, in the first half of this year, the Shanghai, Shenzhen, and Beijing stock exchanges accepted a total of 177 new applications, far exceeding the total for last year. Although pharmaceutical companies accounted for a small proportion, they have likely also weathered the most difficult application cycle.

Previously, CSRC Chairman Wu Qing stated at the opening ceremony of the 2025 Lujiazui Forum that the STAR Market will establish a "Sci-Tech Innovation Growth Layer" and restart the fifth set of listing standards for unprofitable companies. At the same time, the third set of standards will be officially implemented on the ChiNext board to support high-quality unprofitable innovative companies to go public. Against this backdrop, the market expects the number and fundraising amount of A-share IPOs in the pharmaceutical industry in 2025 to surpass those of 2024.

From this perspective, Duality Biologics' launch of a STAR Market listing seems well-timed. But at the same time, market scrutiny has arrived.

Commercialization Is About to Begin, but Confidence in Outperformance Is Lacking?

In the Hong Kong stock market's pharmaceutical sector, Duality Biologics' stock price once surged, reflecting the investment market's positive expectations.

First, from an industry perspective, ADC is currently a hot track in the innovative drug field and continues to gain momentum.

According to Frost & Sullivan data, the global ADC market size will grow rapidly from $2 billion in 2018 to $10.4 billion in 2023, with a compound annual growth rate of 38.6%; it is expected to reach $115.1 billion by 2032. Among them, the U.S. and China are the largest and fastest-growing ADC markets.

Currently, Duality Biologics is also a core player in the global ADC field.

In terms of R&D, the company has built four leading ADC technology platforms: the Immunotoxin Antibody Conjugate Platform (DITAC), the Innovative Bispecific Antibody Conjugate Platform (DIBAC), the Immune Modulating Antibody Conjugate Platform (DIMAC), and the Unique Payload Antibody Conjugate Platform (DUPAC), providing a foundation for continuous innovation (such as a diversified pipeline layout) and value creation (such as ongoing BD deals).

However, these may not be what the investment market most wants to see; the key expectation lies in the commercialization breakthrough of innovative pharmaceutical companies.

Admittedly, BD is currently an important source of income for many innovative pharmaceutical companies, but this model is highly susceptible to collaboration progress, external market conditions, and other factors, making income periodic and uncertain. The core mission of innovative pharmaceutical companies is still to bring R&D results out of the laboratory and open up commercial space.

So, when will Duality Biologics' innovative pipeline enter the true monetization stage? And can it achieve commercialization leadership?

It is reported that among Duality Biologics' core pipeline products, the HER2 ADC candidate drug DB-1303/BNT323 covers indications such as endometrial cancer and breast cancer, with broad application prospects, and its overall development progress is also the fastest.

In September this year, Duality Biologics announced that, based on an assessment by the Independent Data Monitoring Committee (IDMC), compared to the control group, DB-1303/BNT323 for the treatment of HER2-positive unresectable or metastatic breast cancer patients who have previously received trastuzumab and taxane therapy has met the primary endpoint of progression-free survival (PFS) as assessed by blinded independent central review (BICR) in the Phase III clinical trial, and has successfully outperformed Roche's T-DM1 (trastuzumab emtansine, Kadcyla®) in a head-to-head comparison. This is also Duality Biologics' first successful Phase III clinical study.

Accordingly, the company plans to communicate with the Center for Drug Evaluation (CDE) of the National Medical Products Administration (NMPA) regarding the submission of a Biologics License Application (BLA) for DB-1303/BNT323. Additionally, in January this year, Duality Biologics entered into a collaboration agreement appointing 3SBio as its commercialization partner in mainland China, Hong Kong, and Macau to promote DB-1303/BNT323 for various indications.

However, commercialization challenges for this product are also emerging.

PharmaGO data shows that HER2 is a leading target in ADC development, with five HER2 ADC drugs already approved for marketing in China, including Daiichi Sankyo/AstraZeneca's trastuzumab deruxtecan (Enhertu®), Roche's trastuzumab emtansine, RemeGen's disitamab vedotin, Hengrui's SHR-A1811, and Kelun-Biotech's SKB264.

In this context, Duality Biologics' late-mover advantage will depend on whether its product can demonstrate superiority in efficacy, safety, and other aspects. Returning to the Phase III clinical trial mentioned earlier, a major point of contention is whether DB-1303/BNT323's leading edge is truly outstanding.

It is reported that the benchmark for DB-1303/BNT323, trastuzumab emtansine, was approved by the U.S. FDA in 2013 and is already an older drug in the HER2 ADC field. In contrast, AstraZeneca's trastuzumab deruxtecan is more advanced and more prominent, making it an unavoidable competitor for next-generation HER2 ADC drugs. However, Duality Biologics has not directly benchmarked against this product, which has also raised some market doubts.

Nevertheless, R&D innovation is Duality Biologics' long-term strategy, and there are expected to be many highlights in its future product development.

Source: Pharma Research