Insilico

Prospectus Date: December 18, 2025

Insilico’s Hong Kong IPO: AI Drug Discovery Leader Targets Major Expansion in Landmark Offering

IPO Snapshot: Key Terms and Highlights

Insilico (Stock Code: 3696) is launching its IPO on the Main Board of the Hong Kong Stock Exchange. The offering positions Insilico as a global leader in generative AI-powered drug discovery, targeting a fast-growing market with a multibillion-dollar opportunity.

• IPO Symbol: 3696
• Offer Price: HK\$24.05 per share
• Total Offer Size: 94,690,500 shares (including 9,469,500 Hong Kong Offer Shares and 85,221,000 International Offer Shares)
• Post-IPO Outstanding Shares: 557,418,500 (assuming over-allotment option not exercised)
• Expected Market Capitalization: HK\$13,406 million
• Offer Period: December 18–23, 2025
• Listing Date: December 30, 2025

Placement Breakdown: Public, Institutional, and Cornerstone Allocations

Insilico’s IPO structure is designed for broad participation:

• Hong Kong Public Offering: 9,469,500 shares (approx. 10% of the Global Offering)
• International Offering: 85,221,000 shares (approx. 90% of the Global Offering)
• Cornerstone Investors: Includes Eli Lilly and Company, subscribing for shares worth US\$5,000,000 at the offer price
• Pre-IPO Equity Incentive Plans: Outstanding options and RSUs amount to a potential dilution of 6.64% post-listing (no further grants after listing)
• Lock-up: Pre-IPO investors and major shareholders are subject to a six-month lock-up post-listing

Use of Proceeds: Growth-Driven Expansion

Insilico will deploy IPO proceeds to fuel robust growth:

• Research & Development: Funding pre-clinical and clinical R&D for ISM001-055 and other drug candidates
• Automated Labs: Expansion and development of automated laboratory infrastructure
• Generative AI Platform: Enhancement of Pharma.AI platform capabilities
• Working Capital & Corporate Purposes: General operations and strategic initiatives

Approximately 65% of pre-IPO investment proceeds have already been utilized in these areas, underlining a clear commitment to innovation and pipeline advancement [[213]].

Deal Structure and Syndicate: Top-Tier Underwriters and Sponsors

Investment Banking Syndicate:

• Joint Sponsors: Morgan Stanley, CICC, GF Securities
• Overall Coordinators, Joint Global Coordinators, Joint Bookrunners, Joint Lead Managers: Morgan Stanley, CICC, GF Securities, BNP Paribas
• Joint Global Coordinator, Joint Bookrunner, Joint Lead Manager: SINOLINK(HK)
• Joint Bookrunner, Joint Lead Manager: BOCI

Over-allotment (Greenshoe) Option: Up to 15% of the initial offer size available through the International Underwriters, with a stock borrowing arrangement in place [[457]].

Underwriting Fees and Expenses: Aggregate estimated at HK\$251.5 million; joint sponsors receive US\$1,200,000 for their role [[447], [666]].

Book Quality: The presence of renowned investment banks and cornerstone investors (Eli Lilly and Company) signals likely strong book quality and potential for solid first-day performance, as inferred from syndicate composition and allocation structure [[627]].

Company Overview: AI-Powered Drug Discovery Pioneer

Insilico is a global AI-driven drug discovery and development company, founded in 2014. The company leverages its proprietary Pharma.AI generative platform, comprising Biology42, Chemistry42, Medicine42, and Science42, to accelerate new target discovery, molecule generation, clinical trial optimization, and scientific documentation [[50]].

• Business Model: Project-based; revenue primarily from out-licensing and collaboration arrangements
• Key Products: More than 20 clinical or IND-enabling stage assets generated, with 3 assets out-licensed to international pharmaceutical and healthcare firms (max contract value: US\$2.1 billion; upfront up to US\$110 million; milestone payments up to US\$1.9 billion)
• Pipeline: 14 new preclinical candidates nominated, 9 IND approvals, 1 advanced Phase II asset under self-development [[10], [212]]
• Geographies: Global operations; clinical trials in New Zealand and China
• Revenue Streams: Out-licensing, strategic collaborations

Industry Overview: Generative AI in Life Sciences

The generative AI market is one of the fastest-growing segments in global artificial intelligence. AI applications span pharmaceuticals, nutrition, agriculture, smart laboratories, and energy solutions. Insilico operates at the intersection of cutting-edge AI and drug discovery, targeting significant market growth [[149]].

Financial Health: Multi-Year Performance and Capital Structure

Working Capital: Directors and joint sponsors confirm sufficiency for at least 12 months post-listing [[31]].
Debt Levels: The company reports net tangible liabilities, reflecting investment in R&D and business expansion; proceeds are earmarked for growth rather than deleveraging.

Market Position and Competitive Advantages

• Reputable and global leader in AI drug discovery
• Generative AI platform (Pharma.AI) cited as unique competitive advantage
• Three assets out-licensed to major pharmaceutical companies
• Strong pipeline development and strategic partnerships
• Single largest shareholder (voting rights): Dr. Alex Zhavoronkov, Ph.D.

Management Team

• Dr. Alex Zhavoronkov, Ph.D.: Founder, CEO, and largest voting shareholder (10.08% pre-offer, 8.37% post-offer)
• Board and Senior Management: Details and experience disclosed in the prospectus, with over 100 grantees under equity incentive plans [[33], [632]]

Trends, Timing & Macro Environment

IPO Timing: Offer period December 18–23, 2025; Listing Date December 30, 2025.
Sector Trends: Rapid acceleration of AI adoption in life sciences and pharmaceuticals.
Recent Developments: Completion of Phase IIa trial for lead asset, multiple licensing deals, and significant pipeline growth.
Macro Environment: The company references the strong growth outlook for generative AI in pharmaceuticals, with official industry reports supporting sector expansion [[149]].
Favorable Conditions: The combination of industry momentum, robust R&D pipeline, and anchor investor support suggests a positive environment for Insilico’s IPO.

Risk Factors: Quantified Exposures and Material Risks

• Business and Industry Risks: Project-based revenue model means no guaranteed or clear future revenue visibility.
• Regulatory Risks: Extensive government regulation exposure across jurisdictions.
• Financial Risks: Profitability impacted by deal closure/milestone achievement timing and fair value changes in financial liabilities, especially convertible redeemable preferred shares [[31], [69]].
• Intellectual Property Risks: Potential exposure to patent, data, and technology risks.
• Global Offering Risks: Listing subject to termination on multiple grounds, including regulatory, legal, and market events [[440]].
• Lock-up and Dilution Risks: 6.64% post-listing potential dilution from outstanding options and RSUs; six-month lock-up for major pre-IPO investors [[647]].

Growth Strategy: Expansion and Innovation

• Accelerate AI-driven drug candidate generation and clinical development
• Expand global footprint and automated laboratory capabilities
• Enhance Pharma.AI platform for broader applications
• Continue strategic collaborations and out-licensing to major pharmaceutical partners

Growth plans are funded by IPO proceeds, with a focus on R&D, infrastructure, and AI platform scaling [[213]].

Ownership and Lock-ups: Pre- and Post-IPO Structure

• Pre-IPO Shareholders: Series A–E investors, company founders, major institutions
• Post-IPO Largest Shareholder: Dr. Alex Zhavoronkov, Ph.D.
• Pre-IPO Investors: Locked up for six months post listing; all cornerstone investors also subject to six-month lock-up [[213], [379]]
• Equity Incentive Plans: Pre-IPO plans account for up to 6.64% dilution; no further grants post-IPO; Post-IPO RSU and Share Option Schemes in place but no grants yet [[648], [665]]

Listing Outlook: First-Day Prospects and Investor Takeaways

Based on the disclosed facts:

• Strong book quality, blue-chip anchor investors, and top-tier underwriters support a positive first-day trading outlook.
• Robust demand from both public and institutional investors is expected due to Insilico’s unique positioning in generative AI drug discovery, multi-billion dollar partnerships, and rapid sector growth.
• With a disciplined use of proceeds for R&D and platform expansion, and no indication of pre-listing disposals by early shareholders, the offering appears growth-driven and attractive for long-term investors.
• Estimated first-day trading range is likely to show strength at or above the offer price (HK\$24.05), supported by cornerstone participation and syndicate quality.

Prospectus Access

Obtain the full prospectus at www.hkexnews.hk or insilico.com

How to Apply: Investor Access Channels

• Application Channels: HK eIPO White Form service (www.hkeipo.hk) for physical share certificates; HKSCC EIPO channel via brokers/custodians
• Application Window: December 18, 2025 (9:00 a.m. HK time) to December 23, 2025 (12:00 noon HK time)
• Eligibility: Applicants 18+ years old with a Hong Kong address (for eIPO White Form)

Application steps: Use designated platform, complete payment, and follow instructions as per prospectus requirements [[462]].