By Bloomberg

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A Chinese biotech firm that soared more than 4,500 per cent in the three months since its Hong Kong debut, has stoked fears of a speculative bubble in China healthcare stocks.
Shares of TransThera Sciences soared as much as 64 per cent to HK$679.50 in Hong Kong trading on Tuesday, after pricing at just HK$13.15 in late June – a more than 50-fold gain that has made it the top performer on the Hang Seng Healthcare Index this year.
TransThera noted the “unusual movements” in its share price in an announcement on Tuesday, while confirming “business operation remained normal”.
The blistering rally highlighted investor appetite for China’s biotech initiatives amid a red-hot Hong Kong equity market, but it also heightened concerns about lofty valuations in a sector still fraught with drug development risks.
In the company’s latest interim report, TransThera posted zero revenue for the period ending June 30.
“4,000 per cent in three months is definitely crazy,” said Haris Khurshid, chief investment officer at Chicago-based Karobaar Capital. “But it says more about sentiment than fundamentals.”
The rally also drew widespread attention in local Chinese media.
Trade publication Pharmaceutical Finance on Tuesday wrote that “a company with only 121 employees and no products, no revenue, no profits” had overtaken industry heavyweights in just over 80 days.
Financial news outlet Cailian noted that TransThera had yet to commercialise any products on the market, with its drugs still in clinical testing.
The biotech company has now overtaken the market value of pharmaceutical giants like Akeso and Innovent Biologics, and was closing in on BeOne Medicines, a Chinese biotech trailblazer dual-listed in the US and Hong Kong.
“Hong Kong’s biotech sector has been starved for a big win and traders are clearly chasing anything that looks like the next breakthrough,” said Khurshid. “These kinds of rallies can reverse just as violently.”