HONG KONG (Reuters) - Chinese biotech firm Innovent Biologics is looking to raise up to $422 million in its Hong Kong IPO, three sources said, in what could be the biggest biotech IPO in the financial hub this year.

Innovent, which is backed by mutual fund giant Fidelity and Singapore state investor Temasek, has set an indicative price range of HK$12.5-HK$14.00 ($1.59-$1.79) per share for its initial public offering (IPO), the sources said, giving the company a valuation of about $2 billion.

It is the latest company looking to take advantage of new rules introduced by the Hong Kong stock exchange to woo early-stage drug developers, after Ascletis Pharma 1672.HK, Hua Medicine 2552.HK and Nasdaq-listed BeiGene 6160.HK.

Biotech firms with no profit or revenue are now allowed to go public in Hong Kong as the Chinese territory looks to attract more new-economy companies in its competition for public floats with New York.

However previous biotechs that listed in Hong Kong under the new rules have fared poorly, casting a shadow on the sector, while a market rout last week drove Tencent Music Entertainment to postpone its own IPO.

Maiden applicant Ascletis Pharma is down 55 percent from its IPO price, while BeiGene has dropped 29 percent since its dual-primary listing in Hong Kong.

Innovent managed to secure 10 cornerstone investors including Sequoia Capital, Value Partners, Prime Capital, Cormorant and Capital Group who together committed to buy $245 million in shares, the sources said.

The company did not immediately respond to a request for comment.

The Shanghai- and Suzhou-based firm, which develops products for treating cancer, autoimmune disorders and other diseases, had revenue of 4.4 million yuan ($636,030) in the first half of this year and 18.5 million yuan in 2017 from a license granted to a biopharmaceutical company in China. It had no revenue in 2016.

It has no products approved for commercial sale and has not generated revenue from product sales, according to its draft prospectus.

Innovent plans to use the proceeds from its IPO to fund ongoing and planned clinical trials as well as preparations for registration filings and planned commercial launches of antibody drug sintilimab.

The IPO is expected to price on Oct. 23 and begin trading on Oct. 31.

China Merchant Securities 600999.SS, Goldman Sachs GS.N, JPMorgan JPM.N and Morgan Stanley MS.N are joint sponsors for the deal.