Chinese biopharmaceutical company Everest Medicines (HKEX:1952) announced on Friday that it has made a strategic equity investment in I-Mab (Nasdaq Global:IMAB), a US-based biotech company.

I-Mab has announced an underwritten offering of 33,333,334 American Depositary Shares (ADSs) representing 76,666,668 ordinary shares at an offering price of USD1.95 per ADS, for total gross proceeds of approximately USD65m. Everest will subscribe for 15,846,154 ADSs for an aggregate consideration of USD30.9m. Upon completion, Everest will hold an aggregate of 15,846,154 ADSs and 6,078,571 ordinary shares, representing approximately 16.1% of the total issued share capital of I-Mab, including 6,078,571 ordinary shares already held by Everest.

As all the applicable percentage ratios of the subscription are less than 5%, the transaction is not subject to the announcement or shareholders' approval requirements under Chapter 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The investment in I-Mab shares is expected to be booked as 'investments' under non-current assets on Everest's balance sheet. Changes from 'mark-to-market' are expected to be reflected in fair value through other comprehensive income in the statement of changes in equity, and the investment has no impact on Everest's P/L statement and will not appear as an operating expense.