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Since the introduction of chapter 18A of the Listing Rules on Hong Kong Exchanges and Clearing Limited (HKEX) in 2018, Hong Kong has become an important listing venue for biotech companies that do not satisfy the Main Board¡¯s conventional financial eligibility requirements. Fuelled by rapid growth among entities specialising in innovative drugs, medical devices, diagnostics and other biotech sectors, the number of 18A-listed companies has risen steadily and market appetite for innovative biotech continues to grow. Chapter 18A has evolved into a core pillar of Hong Kong¡¯s capital market framework for supporting innovation industries.

Chapter 18A enables biotech companies that fail to satisfy traditional financial eligibility requirements ¨C but that possess strong R&D credentials and valuable core products ¨C to access the public market. Chapter 2.3 of HKEX¡¯s Guide for New Listing Applicants requires 18A applicants to substantiate, among other matters, its core product eligibility, R&D capacity, planned use of proceeds, intellectual property (IP) control, and the involvement of sophisticated investors.

As the 18A pipeline expands, market familiarity with these criteria has matured, and the regulatory review process now centres on whether applicants can articulate a complete, clear and verifiable development narrative that can anchor to their core products.

Suitability and eligibility

By 8 July 2026, 94 companies had listed on the HKEX main board under chapter 18A, according to public records, with 11 new listings between 1 January and 8 July 2026. Excluding companies that have delisted or ceased to carry the ¡°B¡± stock marker after satisfying the applicable main board financial eligibility requirements, about 75 companies have remained active under the chapter 18A regime.

There were about 38 active and publicly identifiable applications from pre-revenue biotech companies under chapter 18A as of 30 June 2026, excluding those filed on a confidential basis. This figure suggests that the 18A route continues to command significant market attention.

As the 18A market continues to develop, the chapter 2.3 eligibility requirements have become central to both listing preparation and regulatory scrutiny. The HKEX looks for applicants to demonstrate 18A suitability by articulating their core products¡¯ characteristics, R&D positioning, regulatory backing and supporting evidence. The priority for applicants is to build a coherent narrative around the core products before filing ¨C one in which R&D positioning, product value, use of funds and technical foundations reinforce one another.

Core product eligibility

Core product eligibility is the cornerstone of the 18A listing route. In practice, the regulatory review looks beyond basic disclosures of clinical trials, R&D stage and regulatory progress, seeking instead evidence that forms and supports a complete and verifiable R&D and regulatory narrative.

Applicants should clearly present their core products¡¯ development journey with R&D timeline, clinical progress, key milestones and regulatory engagement. For products acquired through in-licensing, acquisition or co-development, the regulatory review prioritises whether the applicant has continued to invest materially in R&D of its core product after acquisition and retains substantive influence over the product¡¯s development pathway, clinical advancement and commercialisation strategy.

R&D continuity

18A applicants must demonstrate that they will maintain ongoing R&D activities focusing on their core products.

In assessing the company¡¯s R&D positioning, HKEX considers factors such as shifts in R&D spending, team strengths, clinical progress and third-party R&D engagements.

Companies may adjust allocation of their R&D resources as their core products enter different stages such as registration preparation, manufacturing optimisation or other development phases. Applicants should justify any such shifts by referencing their R&D plan, financials and product progress, and maintain consistency between their business narrative and actual R&D activities.

Use of proceeds

The 18A regime gives pre-revenue biotech companies access to public capital, and the use of proceeds must be structured around supporting the R&D and commercialisation of the core products. Applicants should detail, with reference to the core product development plan, how the funds will finance clinical trials, regulatory filings, indication expansion, overseas registration, post-marketing studies or commercial preparation. If the company holds multiple pipeline assets, it should define the core product¡¯s role within the wider R&D portfolio and show how the proposed use of proceeds fits into its long-term development strategy.

IP control

IP rights are fundamental to the value and the development of a biotech company¡¯s core products.

The regulatory review assesses not just patent ownership, but also whether the applicant truly controls the key technologies essential to the core product¡¯s development.

Applicants should delineate the connection between patents and core products, identify the source of their IP and any external licensing or co-development arrangements, and flag restrictions that may impede R&D or commercialisation of the core product.

Sophisticated investors

The sophisticated investor requirement leverages market judgement to assess an applicant¡¯s R&D and commercial potential. The HKEX examines whether the investors have relevant experience in healthcare or biotech, whether the investment decision process is clearly articulated, whether the connections between related investment entities are fully disclosed, and whether the investment represents genuine market validation.

Applicants should prepare in advance a thorough account of their investors¡¯ backgrounds, investment track record, affiliations, investment timing and shareholding positions, ensuring the record substantiates both the investors¡¯ standing and the market recognition their backing signifies.

Takeaways

As the 18A market develops, the regulatory review process has increasingly centred on the application of chapter 2.3 criteria and the evidence that validates such application. HKEX will seek to satisfy itself first that an applicant has a core product and R&D platform that fit the 18A framework, before examining other aspects of the disclosures.

Stella Yeung and Stephen Luo are partners at Jingtian & Gongcheng