HKEX Chapter 18A: How Pre-Revenue China Biotechs IPO in Hong Kong (2026)

The 18A Eligibility Bar

To list under Chapter 18A, a company must clear a defined set of conditions set out in the HKEX Listing Rules and the accompanying Guidance Letter (HKEX-GL92-18). These are the load-bearing requirements a dealmaker should know cold, because they determine whether a counterparty is even capable of taking the listing route.

The single most consequential test is the Core Product hurdle. A Core Product is a regulated product — a drug, biologic, or in defined cases a medical device — that, under applicable law, must be evaluated and approved by a competent authority on the basis of clinical trial data. HKEX's guidance states that the Core Product should generally have completed Phase I and that the relevant regulator should not have objected to commencing Phase II. In practice this means a pure preclinical company cannot use 18A; the asset must already have human safety data and an active regulatory dialogue.

The sophisticated investor requirement is the second pillar. Because HKEX does not vouch for the science, it requires that a credible institutional investor has already put real money in at a meaningful valuation, within a defined window before listing. The roster of who plays that role overlaps heavily with the funds profiled in our analysis of who funds China biotech — names such as OrbiMed, Hillhouse, Qiming, and Lilly Asia Ventures recur as both private backers and cornerstone investors in the same companies' IPOs.

The Track Record: Bust and Recovery

Chapter 18A's history is a clean three-act story: an opening boom, a punishing bust, and a sharp recovery. From the first 18A listing in 2018 through mid-2025, roughly 73 biotech companies had used the pathway, and HKEX counted around 88 companies in total across its two innovation chapters (18A and 18C). The healthcare sector's overall market capitalisation on HKEX has roughly tripled since 2018, with biotech a large contributor to that growth, according to exchange data.

The opening years, 2018 to 2021, were euphoric. Capital was cheap, the biotech bull market was global, and a stream of high-profile names listed under the "-B" marker. Then the cycle turned hard. Rising interest rates, a global biotech selloff, and geopolitical friction shut the window across 2022 and 2023. Many 18A stocks traded far below their IPO prices, new listings dried up, and the pathway looked, for a period, like a relic of the boom.

The recovery in 2024 and especially 2025 has been emphatic. Per KPMG and Deloitte year-end reviews, Hong Kong reclaimed the No. 1 position in the global IPO league table in 2025, with full-year proceeds of roughly HK$286 billion across about 114 listings — more than triple the HK$87.5 billion raised in 2024. Within that, 14 healthcare and biotech firms used the 18A mechanism in 2025, edging past the 12 of 2024 and decisively breaking the drought. The year's largest Hong Kong biotech IPO, AI-drug-discovery firm Insilico Medicine's roughly HK$2.28 billion (about US$292 million) December offering, actually listed not under 18A but under the standard Main Board Rule 8.05 — Insilico had already crossed into revenue, a telling marker of how the AI-drug-discovery wave is maturing into commercial-stage companies.

Two regulatory tailwinds reinforced the rebound. In May 2025, the SFC and HKEX jointly launched the Technology Enterprises Channel (TECH) to streamline the listing process for both 18A biotech and 18C specialist-technology applicants, and a confidential filing option reduced the market-signalling risk of a failed attempt. The net effect is that, going into 2026, 18A biotechs and 18C tech companies are explicitly the focus of HKEX's listing pipeline, with PwC projecting Hong Kong IPO proceeds of HK$320-350 billion for the year. This is the listing-side counterpart to the deal-side story we track in the China out-licensing report 2026.

18A vs Chapter 18C vs STAR Market

A pre-revenue China life-sciences or deep-tech company choosing where to list is effectively choosing among three regimes: HKEX's Chapter 18A, HKEX's newer Chapter 18C, and the Shanghai Stock Exchange's STAR Market (the Science and Technology Innovation Board). They are not interchangeable; each encodes a different theory of how to protect investors when there are no profits to underwrite the listing.

The cleanest way to hold the distinction is by credibility anchor. Chapter 18A borrows credibility from an external drug regulator that has reviewed the Core Product; that is why its market-cap floor can sit as low as HK$1.5 billion. Chapter 18C, launched in March 2023 for non-biotech specialist technology, has no such external regulator to lean on, so HKEX substituted scale and market validation — a far higher floor, originally HK$6 billion for commercial companies and HK$10 billion for pre-commercial ones (temporarily lowered to HK$4 billion and HK$8 billion respectively from September 2024 through August 2027), plus requirements around independent third-party investment. A biotech that does not base its application on a regulated Core Product can, in principle, apply under 18C instead, but the bar is vastly higher.

The STAR Market is a different proposition again. As a mainland board, it offers access to a deep domestic RMB investor pool and a pre-profit listing standard of its own, but commentators note it relies more heavily on discretionary regulatory "window guidance" than Hong Kong's rules-based, consultative 18A process, where applicants can engage HKEX in advance on unusual circumstances. For a company whose investor base, comparables, and eventual cross-border partners are international, Hong Kong's transparency and convertibility usually win; for a company anchored firmly in the domestic market, STAR can make sense. A growing number of large China pharma names now pursue dual A-share and H-share listings to capture both pools.

Lock-Ups and the "-B" Marker

Two post-IPO mechanics matter most to anyone reading a 18A company's share structure: the lock-up regime that governs when insiders can sell, and the lifecycle of the "-B" marker that signals whether the company has graduated to full financial standing.

On lock-ups, the controlling shareholder of a newly listed company is subject to the standard HKEX restriction — broadly, no disposal of shares for the first six months after listing, and no disposal that would cause them to cease being a controlling shareholder for a further six months. Cornerstone investors — the institutions that commit to large allocations ahead of the offering to anchor the book — are typically locked up for six months. Critically for float analysis, shares allocated to cornerstone investors and to existing shareholders are not counted as held by the public for the public-float requirement, so the genuinely free-floating tranche of a 18A IPO can be smaller than the headline deal size implies.

The "-B" marker is the more strategically interesting feature. It is not permanent. Under the Listing Rules, once an 18A company can demonstrate that it satisfies one of the standard Main Board financial eligibility tests under Rule 8.05 — in practice usually the market-capitalisation / revenue test — it can apply to HKEX to remove the suffix. Dropping the "-B" is a public milestone: it tells the market the company has crossed from pre-revenue science project to commercially self-sustaining business.

The graduations of Ascentage Pharma, Everest Medicines and Kelun-Biotech in 2024-2026 are the clearest evidence that 18A is working as designed — not merely as a fundraising door but as a maturation ladder. Each used pre-revenue capital to push assets through approval and into commercial sales, then crossed the financial threshold and shed the marker. For an acquirer or licensing partner, a company that has removed (or is close to removing) its "-B" is signalling de-risked, revenue-bearing status — a materially different negotiating counterpart than a freshly listed, deeply pre-revenue name.

How a Listing Reshapes Deal Leverage

For a cross-border dealmaker, the most important thing about Chapter 18A is not the listing mechanics — it is what a pending or completed listing does to the negotiating table. A 18A IPO is, functionally, a financing alternative to an out-licensing deal, and the existence of that alternative changes everything about how a China biotech behaves in a license-out or M&A discussion.

Consider the founder who, historically, had only one realistic route to fund the next phase of a program: license the asset to a large Western pharma in exchange for an upfront payment and milestones. That structure — explored in depth in our cross-border licensing term-sheet guide — often forced founders to accept thin upfronts because they needed the cash. A credible 18A path removes that gun-to-the-head dynamic. The founder can now say, truthfully, that they can fund the program through the public market and do not need to license at any price. That optionality is leverage.

The leverage runs both ways, and a sophisticated Western buyer should price it in. When evaluating a China asset, the counterparty's listing status is a key input: a deeply pre-revenue private biotech with a short runway is a different negotiation than a 18A-listed company sitting on fresh IPO proceeds, and a company that has just removed its "-B" marker is different again. The right structure — a clean license-out, an option-to-acquire, a co-development partnership, or a NewCo formation that shares upside through equity — depends heavily on where the asset owner sits on this spectrum. This is distinct from the global picture covered in our biotech IPO & funding landscape 2026, which tracks the US and European public markets; the Hong Kong 18A route is its own ecosystem with its own valuation dynamics.

This intersection — the listing market on one side, the licensing and M&A market on the other — is precisely where cross-border advisory adds value. Vision Lifesciences operates as one of the leading cross-border China-West biotech advisory and investment-banking firms, with senior teams in Hong Kong, Shanghai, Zurich and Chicago and one of the deepest China-West deal networks. That footprint means we can read both sides of the table at once: what a 18A listing is worth, what a license-out is worth, and which path — or which sequence of paths — maximizes value for the asset owner and creates a clean, fundable structure for the Western partner. You can read more about the firm and its bench on our about page.