BeiGene shares tank after short-seller's accusations of dubious salesBusiness | 6 Sep 2019 1:16 pm
Shares of mainland biologics developer, BeiGene (6160), dropped by 8.14 percent to HK$78.40 during the morning trading session after short-seller J Capital Research said the company may be faking 60 percent of its sales.
JCAP stated that the company is faking sales to persuade investors that it can develop a successful sales platform in China for pharmaceuticals.
It suspects that the management may also be skimming research and development and capital budgets.
It found that BeiGene has invested over US$154 million (HK$1.2 billion) in revenues since the fourth quarter of 2017, when it took over sales of Celgene drugs in China, representing an overstatement of 133 percent.
Also, BeiGene owns three manufacturing facilities and has paid US$25 million toward a fourth despite having no drugs to manufacture.
The institution also said top management has sold or registered to sell US$322 million of stock, among which the founder accounted for US$189 million, and this indicates that BeiGene executives keep telling investors they have a once-in-a-lifetime opportunity to invest another round of capital in a native Chinese biotech company, said JCAP.
BeiGene had its secondary listing in Hong Kong stock market on July last year after debuting in NASDAQ in 2016.