U.S. biotech startups may IPO in Hong Kong

Hong Kong this week unveiled new stock exchange rules that will allow listings of unprofitable biotech companies, plus dual-class share structures.

Bottom line: The revised regs, which go into effect shortly, could attract some highly-valued U.S. biotech startups.

Conventional wisdom is that the new rules will act as a magnet for many Chinese companies that otherwise would list in the U.S., thus improving the odds of "holding onto" the next Alibaba.

More interesting is an argument we're hearing from stateside biotech investors, who believe many U.S.-based biotech "unicorns" will look east as a way to maintain their high valuations. Their idea is that there will be an initial deluge of Asia-based money because of the new diversification opportunity, and that could result in artificially high multiples. Sure it's cynical, but that doesn't make it wrong.