HK IPO Subscription: Analysis and Application Plan for Insilico IPO

InSilico Medicine is a company focused on AI-driven drug development, with core businesses covering drug discovery and pipeline development, licensing of AI software solutions, and other AI-driven discoveries in non-pharmaceutical fields (such as sustainable materials, agricultural chemistry, etc.). The company relies on its self-developed Pharma.AI platform, integrating generative AI technology for target discovery, molecule generation, clinical trial prediction, and research assistance, and has built multiple AI tools including PandaOmics, Chemistry42, inClinico, and Science42. Its business model includes both internal advancement of candidate drug development and external licensing, as well as providing subscription-based AI software services to pharmaceutical companies and research institutions, achieving dual drivers of technology monetization and research collaboration.

InSilico Medicine's global offering is expected to raise a net amount of approximately HKD 2.026 billion, mainly for five directions: 48% for clinical development of core candidate drugs (such as ISM001-055), 15% for R&D of next-generation generative AI models and talent acquisition, 12% for automated laboratory construction, 20% for early-stage drug discovery, and 5% for working capital; if the over-allotment option is exercised, the total fundraising amount will increase to approximately HKD 2.349 billion.

Offering Information and Lottery Rate

The company is offering 94.6905 million shares globally, with 500 shares per lot; as of the time of writing, the oversubscription is 16.63 times, using Mechanism B for issuance, with 94,690.05 lots each for Group A and Group B, and an estimated 220,000 to 280,000 participants. The lottery rate for one lot is 0.6%, with a full-participation draw.

Historical Investor Information and Sponsors

Before its IPO, InSilico Medicine completed a total of eight rounds of financing, with the Series E round completed on February 25, 2025, at a cost of HKD 20.09 per share, a 16.44% discount to the offering price, and a post-financing valuation of USD 1.331 billion, approximately HKD 10.358 billion. This offering introduces 16 cornerstone investors, subscribing to USD 115 million, approximately HKD 895 million, accounting for 39.29%.

The sponsors are jointly led by Morgan Stanley, CICC, and GF Financing, with Morgan Stanley also acting as the stabilizing agent. For big projects, Morgan Stanley is the go-to choice, and its greenshoe is historically proven strong.

Lock-up arrangements: Existing shareholders have a 6-month lock-up, and cornerstone investors have a 6-month lock-up.

Industry Prospects and Competitive Landscape

Industry Prospects

1. Rapid growth in the global AI pharmaceutical market: Benefiting from breakthroughs in generative AI, big data, and automated lab technologies, the value of AI in target discovery, molecule design, and clinical trial optimization is becoming increasingly prominent, driving rapid industry development.

2. Strengthening policy and capital support: Governments and regulatory agencies (such as the FDA and NMPA) are gradually establishing review pathways adapted to AI drug development, while venture capital and collaborations with large pharmaceutical companies continue to increase, creating a favorable ecosystem for innovative companies.

3. Unmet clinical needs driving innovation: The company's pipeline focuses on high unmet medical needs such as idiopathic pulmonary fibrosis (IPF), oncology, and metabolic diseases, with significant clinical value and commercialization potential.

Competitive Landscape

Diverse competitive players coexist: The company faces multi-dimensional competition from multinational pharmaceutical giants (such as Pfizer and Novartis), specialized AI biotech companies (such as Recursion and Exscientia), traditional CRO/CDMO companies, and academic and government research institutions.

Core Competitive Advantages:

a. The self-developed Pharma.AI platform (including modules such as PandaOmics and Chemistry42) has end-to-end drug discovery capabilities;

b. An "AI + wet lab" closed-loop validation system that rapidly iterates data generation through its own automated labs to feed back into models;

c. A global layout (operations in China, the U.S., the UAE, etc.) and a flexible dual-track business model of "internal R&D + external licensing";

d. An experienced interdisciplinary team (78% of employees are R&D personnel, most with master's or doctoral degrees).

Differentiated product positioning: Candidate drugs such as ISM001-055 (the world's first anti-fibrotic candidate drug discovered by generative AI) have novel mechanisms of action and patent barriers, with the potential to establish first-mover advantages in niche markets.

Financial Status

Revenue: USD 30.147 million in 2022, USD 51.18 million in 2023, USD 85.834 million in 2024, and USD 53.601 million in the last 12 months as of June 30, 2025.

Gross Profit: USD 19.11 million in 2022, USD 38.569 million in 2023, USD 77.577 million in 2024, and USD 44.85 million in the last 12 months as of June 30, 2025.

Annual Loss: USD 221 million in 2022, USD 211 million in 2023, USD 17.429 million in 2024, and USD 28.477 million in the last 12 months as of June 30, 2025.

InSilico Medicine has not yet achieved positive operating cash flow, with a net outflow of USD 36.8 million in the first half of 2025, but the Series E financing increased cash and cash equivalents to USD 212 million, providing strong short-term funding security.

Comprehensive Review

InSilico Medicine is a leading company in the AI-driven drug development industry, with a very strong concept, so much so that before the public offering, a group of big-name investors rushed in to invest. After this offering, many pre-IPO shareholders continue to subscribe through cornerstone investments. Among the cornerstone investors this time are prominent institutions such as Temasek, Tencent, Schroders, and China Taiping, and pre-IPO investors include globally renowned institutions.

Hot sector + star institution endorsement goes without saying. Among the six new stocks, this is the one with the best concept and the most favored by capital, bar none. There's no need to elaborate further here. Just prepare your funds and go all in. If you get InSilico, this year's Hong Kong IPO lottery can be concluded perfectly. However, the total number of public offering lots is only 18,939, with 9,469 lots each for Group A and Group B, so winning the lottery won't be easy.

Subscription Plan:

I will subscribe, prioritizing this stock. Other stocks will be covered in subsequent posts, and the final subscription strategy will be published on the platform.

$INSILICO(03696.HK) 

Disclaimer: Investing involves risks, and participation requires caution. The targets mentioned in this article are only personal operation records and do not constitute investment advice. If losses occur due to such investments, no responsibility will be taken! If this article is helpful to you, please like, share, and forward it to friends in need. Thank you very much!