BEIJING • China Resources Pharmaceutical Group raised US$1.8 billion (S$2.5 billion) after pricing its Hong Kong initial public offering below the midpoint of a marketed range, according to people familiar with the matter.

The nation's second-largest drugmaker priced its sale of 1.543 billion shares at HK$9.10 (S$1.64) apiece, they added.

The state-backed group offered the shares at HK$8.45 to HK$10.15 each, according to terms for the deal obtained by Bloomberg last week.

China Resources Pharmaceutical is completing the biggest drugmaker IPO globally since 2013, when Zoetis priced a US$2.6 billion offering in the US, according to data compiled by Bloomberg.

Demand for medicines in China is rising as its population ages and the incidence of cancer, heart disease and diabetes increases.

That trend is helping to boost the businesses of local and international pharmaceutical companies in China, but they also face challenges as the government seeks to curb drug prices and manage healthcare expenses.

Backed by the state-owned conglomerate China Resources Holdings, China Resources Pharmaceutical is one of the largest drug distributors in China.

It manufactures Western pharmaceuticals, traditional Chinese medicine preparations and health supplements.

Eight cornerstone investors agreed to buy about US$916 million of stock in the China Resources Pharmaceutical offering, according to last week's deal terms.

Among them, Guangdong Hengjian Investment Holding, owned by the government of the southern Chinese province, will invest US$340 million, the terms show.

Reckitt Benckiser Group, the maker of Durex condoms, agreed to purchase US$50 million of shares, while Fujifilm committed HK$820 million.

Such stock buyers agree to keep their holdings for six months in return for early, guaranteed allocation.

BLOOMBERG