HUTCHMED

Events, Circulars & Forms

Hutchmed
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Lotte New York Palace Hotel, New York, NY

JW Marriott, Beijing, China

Macquarie Office, London

Hong Kong

Content of Interim Report 2016

Highlights
Chairman’s Statement
Financial Review
Operations Review
Condensed consolidated Balance Sheets
Condensed consolidated Statements of Operations
Condensed consolidated Statements Of Comprehensive (Loss)/Income
Condensed consolidated Statements of Changes in Shareholders’ Equity
Condensed consolidated Statements Of Cash Flows
Notes to Unaudited Condensed Consolidated Financial Statements
Information For Shareholders

London: Tuesday, August 9, 2016: Hutchison China MediTech Limited (“Chi-Med”) (AIM/Nasdaq: HCM) has received notification that the spouse of Mr Christopher Nash, Independent Non-executive Director, has purchased 3,120 and 42 ordinary shares of US$1.00 each in Chi-Med (the “Ordinary Shares”) at a price of GBP19.00 and GBP18.99 per share respectively on August 4, 2016.

Following the above transaction, the combined holding of Mr Nash and his spouse is 39,596 Ordinary Shares, representing approximately 0.065% of the current issued share capital of Chi-Med.

The notification set out below is provided in accordance with the requirements of the EU Market Abuse Regulation.

Details of the person discharging managerial responsibilities/person closely associated

Name

Ms Rebecca Pynt

Reason for the notification

Position/status

Spouse of Mr Christopher Nash, an Independent Non-executive Director of Chi-Med

Initial notification/
Amendment

Initial notification

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

Name

Hutchison China MediTech Limited

LEI

N/A

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

Description of the financial instrument, type of instrument

Identification code

Ordinary Shares of US$1.00 each

DI ISIN: KYG4672N1016

ADS ISIN: US44842L1035

Nature of the transaction

Acquisition of 3,120 and 42 Ordinary Shares on August 4, 2016 at a price of GBP19.00 and GBP18.99 respectively

Price(s) and volume(s)

Price(s)	Volume(s)
GBP19.00	3,120
GBP18.99	42

Aggregated information
– Aggregated volume
– Price

N/A

Date of the transaction

2016-08-04

Place of the transaction

London Stock Exchange (XLON)

NOTES TO EDITORS

About Chi-Med

Chi-Med is an innovative China-based biopharmaceutical company which researches, develops, manufactures and sells pharmaceuticals and healthcare products. Its Innovation Platform, Hutchison MediPharma Limited, focuses on discovering and developing innovative therapeutics in oncology and autoimmune diseases for the global market. Its Commercial Platform manufactures, markets, and distributes prescription drugs and consumer health products in China.

Chi-Med is majority owned by the multinational conglomerate CK Hutchison Holdings Limited (SEHK: 0001). For more information, please visit: www.chi-med.com.

Contacts

Investor Enquiries
Christian Hogg, CEO	+852 2121 8200

International Media Enquiries
Anthony Carlisle, Citigate Dewe Rogerson	+44 7973 611 888 (Mobile)	anthony.carlisle@cdrconsultancy.co.uk

U.S. Based Media Enquiries
Brad Miles, BMC Communications	+1 (917) 570 7340 (Mobile)	bmiles@bmccommunications.com

Susan Duffy, BMC Communications	+1 (917) 499 8887 (Mobile)	sduffy@bmccommunications.com

Investor Relations
Brian Korb, The Trout Group	+1 (917) 653 5122 (Mobile)	bkorb@troutgroup.com

David Dible,Citigate Dewe Rogerson	+44 7967 566 919 (Mobile)	david.dible@citigatedr.co.uk

Panmure Gordon (UK) Limited
Richard Gray / Andrew Potts	+44 (20) 7886 2500

London: Tuesday, August 2, 2016: Hutchison China MediTech Limited (“Chi-Med”) (AIM/Nasdaq: HCM) today announces with effect from August 1, 2016, Dr Dan Eldar has been appointed as a Non-Executive Director of Chi-Med in place of Mr Salbaing who has tendered his resignation to spend more time on his existing responsibilities within the CK Hutchison Holdings Group.

Dr Eldar (formerly Perlmutter), aged 63, has more than 35 years of experience as a senior executive, leading global operations in telecommunications, water, biotech and healthcare. He is an executive director of Hutchison Water Israel Ltd which focuses on large scale projects including desalination, wastewater treatment and water reuse. He is also an independent non-executive director of Leumi Card, a subsidiary of Bank Leumi Le-Israel B.M., one of Israel’s leading credit card companies. Further, he is also a director of Aqua Blue Water Management Services Ltd, Hutchison Biofilm Medical Solutions Holdings Limited, Hutchison Biofilm Medical Solutions Inc., Hutchison Biofilm Medical Solutions Limited, Hutchison Biofilm Solutions Limited, Hutchison Water General Partner Ltd, Hutchison Water Israel E.P.C. Ltd, TACount Exact Ltd and Yissumim Advanced Management Application Ltd. Dr Eldar was previously a director of WeFindTech Ltd. and Gryphonel Ltd within the past five years.

Dr Eldar holds a Doctor of Philosophy degree in Government from Harvard University, Master of Arts degree in Government from Harvard University, Master of Arts degree in Political Science and Public Administration from Hebrew University of Jerusalem and a Bachelor of Arts degree in Political Science from Hebrew University of Jerusalem.

He does not have any shareholdings in Chi-Med. Save for the information disclosed above, there is no other information in relation to Dr Eldar required to be disclosed pursuant to Rule 17 and Schedule 2(g) of the AIM Rules for Companies.

Mr Christian Hogg, Chief Executive Officer of Chi-Med said “We thank Mr Salbaing for his invaluable contributions during his tenure and welcome Dr Eldar to the Board whose experience in the global high tech and biotech industries will be important to Chi-Med.”

NOTES TO EDITORS

About Chi-Med

Chi-Med is majority owned by the multinational conglomerate CK Hutchison Holdings Limited (SEHK: 0001). For more information, please visit: www.chi-med.com.

Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Chi-Med’s current expectations regarding future events. Forward-looking statements involve risks and uncertainties. Such risks and uncertainties include, among other things, the risk that current or future appointees to Chi-Med’s board of directors are not effective in their respective positions, the difficulty in locating and recruiting suitable candidates for its board of directors and the management difficulties which may arise from changes in Chi-Med’s board of directors. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. For further discussion of these and other risks, see Chi-Med’s filings with the U.S. Securities and Exchange Commission and on AIM. Chi-Med undertakes no obligation to update or revise the information contained in this announcement, whether as a result of new information, future events or circumstances or otherwise.

CONTACTS

Investor Inquiries
Christian Hogg, CEO	+852 2121 8200

International Media Inquiries
Anthony Carlisle, Citigate Dewe Rogerson	+44 7973 611 888 (Mobile) anthony.carlisle@cdrconsultancy.co.uk

U.S. Based Media Inquiries
Brad Miles, BMC Communications	+1 (917) 570 7340 (Mobile) bmiles@bmccommunications.com
Susan Duffy, BMC Communications	+1 (917) 499 8887 (Mobile) sduffy@bmccommunications.com

Investor Relations
Brian Korb, The Trout Group	+1 (917) 653 5122 (mobile) bkorb@troutgroup.com
David Dible, Citigate Dewe Rogerson	+44 7967 566 919 (Mobile) david.dible@citigatedr.co.uk

Panmure Gordon (UK) Limited
Richard Gray / Andrew Potts	+44 (20) 7886 2500

Group revenue up 27% to $104.5 million (H1 2015: $82.5m) and net income attributable to Chi‑Med of $0.5 million (H1 2015: $15.9m), reflecting a sharp increase in clinical investment.

Innovation Platform – Seven drug candidates in 25 clinical trials (H1 2015: 17) including four pivotal Phase III studies (H1 2015: 1). Planning to publish proof-of-concept or pivotal trial data on four drug candidates at scientific meetings through Q1 2017.

Commercial Platform – Total consolidated sales up 48% to $82.3 million (H1 2015: $55.6m); Total sales of non-consolidated joint ventures up 9% to $249.6 million (H1 2015: $229.8m); Total net income attributable to Chi-Med from our Commercial Platform up 12% to $22.1 million (H1 2015: $19.8m). Significant property-related payment expected to come in H2 2016.

Completed Nasdaq listing, raising net proceeds of $95.9 million. Available cash resources of $197.5 million at Group level as of June 30, 2016, which includes cash and cash equivalents, short-term investments and unutilized bank facilities.

Post-period Event: Amendment of collaboration with AstraZeneca AB (publ) (“AstraZeneca”) – Chi-Med investing $50 million, mainly over three years, to accelerate savolitinib global development in return for 5% point increase in tiered royalty range.

UK Analysts Meeting and Webcast Scheduled Today at 9:00 a.m. BST U.S. Conference Call Scheduled Today at 9:00 a.m. EDT

London: Tuesday, August 2, 2016: Chi-Med (AIM/NASDAQ: HCM), the China-based biopharmaceutical company focused on discovering and developing targeted therapies for oncology and immunological diseases for the global market, today announces its unaudited financial results for the six months ended June 30, 2016.

Simon To, Chairman of Chi-Med, said: “Chi-Med has once again made very considerable progress at both the operating and strategic levels.

All aspects of our Innovation Platform’s risk-balanced, innovative drug pipeline have moved forward, including progress in aligning with U.S. and European regulatory authorities in end-of-Phase II meetings on savolitinib and completing enrollment of our first Phase III study on fruquintinib. We have also made great progress in the clinic on sulfatinib, epitinib, HMPL-523, HMPL-689 and theliatinib, all of which are also potential global first-in-class or best-in-class drug candidates.

Once again, our Commercial Platform has generated increased cash flows helping fund our Innovation Platform activities as well as providing a first-class marketing and distribution channel in China for our drug candidates, if they are approved. Our partnerships with major global pharmaceutical companies, created when the global scope of our drug candidates began to emerge, continue to allow us to broaden development plans and represent important global marketing and distribution resources. In the first half, we completed our Nasdaq listing, which broadened our exposure to U.S. specialist investors and strengthened our cash position.

The progress of our drug pipeline and strong cash position, resulting from our increased commercial profits and recent Nasdaq listing, have enabled us to renegotiate our collaboration agreement with AstraZeneca to take a greater share in the potential long-term economic value of savolitinib in return for increasing our investment in savolitinib’s development. We believe this benefits both Chi-Med and AstraZeneca as it allows us to accelerate and broaden savolitinib’s late-stage development in multiple oncology indications.

Our pragmatic approach to finance and risk management has enabled us to build our drug pipeline over a dozen years. We now have multiple shots at success with four pivotal studies underway today, and three more likely to initiate by H1 2017, on a diversified group of drug candidates. The results of these pivotal studies will emerge during 2017-2019, and we believe that if they prove successful, substantial benefits can be created for patients and shareholders alike. Consequently, we view the future with great confidence.”

FINANCIAL HIGHLIGHTS:

Our consolidated financial results are reported under U.S. generally accepted accounting principles (“U.S. GAAP”) and in U.S. dollar currency unless otherwise stated. We also conduct our business through three non-consolidated joint ventures, which are accounted for under the equity accounting method as non-consolidated entities in our consolidated financial statements. Within this announcement, we refer to certain financial results reported by such non-consolidated joint ventures, which are based on figures reported in their respective consolidated financial statements prepared pursuant to International Financial Reporting Standards (as issued by the International Accounting Standards Board). Unless otherwise indicated, references to “subsidiaries” refer to our consolidated subsidiaries and joint ventures (excluding non-consolidated joint ventures).

Group Results

Consolidated revenue up 27% to $104.5 million (H1 2015: $82.5m).
Net income attributable to Chi-Med of $0.5 million (H1 2015: $15.9m).
Strengthened cash position: Available cash resources of $197.5 million as of June 30, 2016 (December 31, 2015: $38.8m) at the Chi-Med Group level, including cash and cash equivalents, short-term investments and unutilized banking facilities. Increase in cash primarily reflects $95.9 million net proceeds of our March 2016 Nasdaq listing.

Innovation Platform – a broad, risk-balanced, global oncology/immunology pipeline.

Consolidated revenue of $22.3 million (H1 2015: $26.9m) and net loss attributable to Chi-Med of $13.7 million (H1 2015: net income $2.0m) driven by $36.0 million (H1 2015: $24.9m) spending mainly for 25 clinical trials, four of which are pivotal Phase III studies on fruquintinib and sulfatinib, as well as the continued expansion of our scientific team, which now includes over 310 scientists and staff.
Amendment yesterday to our collaboration with AstraZeneca under which Chi-Med has agreed to provide up to $50 million for the joint-development costs of savolitinib in return for a 5 percentage point increase in the tiered royalty rates payable on savolitinib sales across all indications in all markets outside of China.

Commercial Platform – a deeply established, cash-generative, pharmaceutical business in China – a commercialization framework for our Innovation Platform candidate drugs.

Total consolidated sales up 48% to $82.3 million (H1 2015: $55.6m) mainly resulting from solid progress on Seroquel^®.
Total sales of non-consolidated joint ventures up 9% to $249.6 million (H1 2015: $229.8m) due primarily to continued expansion of coronary artery disease prescription drug business.
Total net income attributable to Chi-Med from our Commercial Platform up 12% to $22.1 million (H1 2015: $19.8m).
Solid performance despite the weakening of the Chinese renminbi (“RMB”) over the last year which reduced both our top- and bottom-line growth rates, during the first half of 2016, by -6% in U.S. dollar terms.
Expect to receive about $70 million second installment of the total approximately $114 million land compensation and subsidies from the Shanghai government, leading to an estimated one-time gain to the Chi-Med Group of over $35 million in Q4 2016.

2016 FINANCIAL GUIDANCE: We provide full year 2016 financial guidance, as detailed below:

Group Level:

Consolidated revenue: $190-205 million
Administrative, interest and income tax expenses: $16-18 million
Net income attributable to Chi-Med: $0-5 million

Innovation Platform:

Consolidated revenue: $35-40 million
Research & development expenses: $80-85 million

Commercial Platform:

Sales (consolidated): $155-165 million
Sales of non-consolidated joint ventures: $430-440 million
One-time gain associated with property-related payments: $35-37 million
Net income attributable to Chi-Med: $63-66 million

KEY H1 2016 OPERATIONAL HIGHLIGHTS:

Innovation Platform: Multiple opportunities for success: four pivotal Phase III studies underway and three more fully funded and expected to begin by H1 2017. Each is expected to read-out over the next three years.

Savolitinib: Potential global first-in-class mesenchymal epithelial transition factor (“c-Met”) inhibitor currently in 12 main clinical studies worldwide in multiple tumor types including kidney, lung and gastric cancers as a monotherapy and in combination with other targeted and immunotherapy agents:

Kidney cancer:
a. Completed end-of-Phase II meetings with U.S. Food & Drug Administration (“FDA”) and European Medicines Agency (“EMA”); alignment on plans for global savolitinib monotherapy Phase III study in c-Met-driven papillary renal cell carcinoma (“PRCC”) patients.
b.Initiated global Phase Ib dose finding study of savolitinib in combination with anti-programmed death-1 receptor ligand (“PD-L1”) antibody, durvalumab, in clear cell renal cell carcinoma (“ccRCC”) patients.
Non-small cell lung cancer (“NSCLC”):
a. Initiated global Phase IIb study of savolitinib in combination with Tagrisso^® (osimertinib) in second-line NSCLC patients with epidermal growth factor receptor (“EGFR”) mutations who have failed first-line EGFR tyrosine kinase inhibitor (“TKI”) therapy and harbor c-Met gene amplification. This triggered a $10 million milestone from AstraZeneca to Chi-Med in June 2016.
b. Initiated or continued four further Phase Ib/II studies in first-, second- and third-line NSCLC patients, including (i) as a monotherapy in NSCLC patients with c-Met mutations that result in Exon 14 skipping; (ii) as a monotherapy in pulmonary sarcomatoid carcinoma (“PSC”) patients with mutations that result in Exon 14 skipping; (iii) as a combination therapy with Iressa^® (gefitinib) in NSCLC patients with EGFR mutations and who have failed first-line EGFR TKI therapy; and (iv) as a combination therapy with Tagrisso^® in third-line NSCLC patients who have failed Tagrisso^®
Gastric Cancer:
a. Proof-of-concept studies of savolitinib as a monotherapy in gastric cancer patients with c-Met gene amplification are ongoing in South Korea and China; promising response data, was published by Dr. Jeeyun Lee of Samsung Medical Center in April 2016 at the American Association of Cancer Research meeting.
b. A Phase Ib dose finding study of savolitinib in combination with Taxotere^® (docetaxel) in gastric cancer patients with c-Met over-expression is ongoing in South Korea.

Fruquintinib: Potential global best-in-class selective inhibitor of vascular endothelial growth factor receptor 1/2/3 (“VEGFR”):

Colorectal cancer (third-line or above): Completed enrollment of a Phase III study, named FRESCO, to test fruquintinib as a monotherapy among third-line metastatic colorectal cancer patients in China; top-line Phase III data expected to be reported in early 2017; plan to submit the China NDA, subject to positive FRESCO outcome, by mid-2017;
NSCLC (third-line): Began enrolling a Phase III study, named FALUCA, to test fruquintinib in third-line NSCLC patients in China, in late 2015 – now over 30 clinical centers are operational; expect to complete enrollment in H1 2017; top-line Phase III data expected to be reported in late 2017; plan to submit China NDA, subject to positive FALUCA outcome, during H1 2018.
Gastric cancer (second-line): Completed dose finding stage of fruquintinib Phase Ib study in combination with Taxol^® (paclitaxel). Continue to enroll patients in Phase Ib expansion stage.
NSCLC (first-line): Planning underway to start Phase Ib dose finding study of fruquintinib in combination with Iressa^® in first-line EGFR-mutant NSCLC patients in China in late 2016.
Production facility in Suzhou, China, operational and ready to support fruquintinib’s potential commercial launch.

Sulfatinib: Selective inhibitor of VEGFR/fibroblast growth factor receptor 1 (“FGFR1”) with strong efficacy in neuroendocrine tumors (“NET”) – enrolling two pivotal Phase III studies:

NET (first-line):
a. Completed enrollment of a Phase II study of sulfatinib in 81 broad-spectrum NET patients in China; median Progression Free Survival (“PFS”) not yet reached; now enrolling two Phase III studies, named SANET-p (in pancreatic NET patients) and SANET-ep (in extra-pancreatic NET patients), with primary endpoint median PFS; Phase III top-line data expected in 2018.
b. Initiated U.S. Phase I dose confirmation study in Caucasian patients – currently in 200mg cohort and closing in on China 300mg Phase III dose; expected to complete in H2 2016.
Thyroid cancer: Initiated Phase II proof-of-concept study in patients with locally advanced or metastatic radioactive iodine-refractory differentiated thyroid cancer or medullary thyroid cancer in China.
Biliary tract cancer: Planning underway to start a Phase II study in China in late 2016.

HMPL-523: Potential global first-in-class spleen tyrosine kinase (“Syk”) inhibitor – major potential in immunology and oncology:

Hematological cancer: Granted China FDA Phase I to Phase III clinical trial application clearance in H1 2016 – target to start China Phase I dose escalation in patients with hematologic malignancies in H2 2016; Australia Phase I dose escalation currently in second dose cohort (200mg) and expected to complete in H1 2017; U.S. hematological malignancy Investigational New Drug (“IND”) application submitted in June 2016.
Immunology: Australia Phase I study completed with no evidence of the hypertension/gastrointestinal toxicities encountered by the first-generation Syk inhibitor (fostamatinib); U.S. immunology IND application submitted in H1 2016 – U.S. FDA feedback received, now preparing to submit additional data; planning global rheumatoid arthritis Phase II study for 2017.

Epitinib: Highly differentiated inhibitor of the EGFR designed for optimal blood-brain barrier penetration:

NSCLC with brain metastasis: Phase Ib study in NSCLC patients with brain metastasis ongoing; granted China FDA Phase II/III clinical trial application clearance granted in July 2016; target to initiate pivotal registration study in H1 2017.
Glioblastoma: Planning underway to start a Phase II study in glioblastoma, a primary brain cancer with EGFR gene amplification, in early 2017.

HMPL-689: Potential global best-in-class, highly selective phosphoinositide 3-kinase delta (“PI3Kδ”) inhibitor, which is over five times more potent than Zydelig^® (idelalisib):
Hematological cancer: Initiated Phase I study in healthy volunteers in Australia in H1 2016, now in fifth cohort and expected to complete Phase I dose escalation in H2 2016; plan to start Phase I dose escalation in patients with hematologic malignancies in Australia in H1 2017.
Theliatinib: EGFR inhibitor, over five times more potent than Tarceva^® (erlotinib), with potential in patients with solid tumors presenting EGFR gene amplification:
Esophageal cancer/Head and Neck: Phase I dose escalation study ongoing in China; target to start Phase Ib proof-of-concept studies by the end of 2016.

Commercial Platform: Continued strong growth in cash flow and profit – representing a solid and stable financial base that underpins a significant portion of Chi-Med’s current market value.

Prescription Drugs business performing very well – consolidated sales up 49% to $67.6 million (H1 2015: $45.4m); and total sales of non-consolidated Prescription Drugs joint venture up 22% to $18 million (H1 2015: $103.9m).
1. She Xiang Bao Xin (“SXBX”) pill – our most important commercial product, is a prescription vasodilator proprietary to our joint venture: Accounted for approximately 12% of China’s over $1.5 billion botanical coronary artery disease prescription drug market, full patent protection through 2029; H1 2016 sales up 16% to $110.1 million (H1 2015: $94.9m); SXBX pill represents 87% of the sales of SHPL, our joint venture, which contributed 91% of our $16.3 million (H1 2015: $12.1m) consolidated Prescription Drugs operating profit in H1 2016.
2. Seroquel^® – prescription antipsychotic under exclusive commercial license from AstraZeneca within China: Accounted for approximately 5% of China’s antipsychotic prescription drug and 46% of the generic quetiapine market; Seroquel^® is the only extended release (“XR”) quetiapine formulation approved in China; H1 2016 sales up 282% to $17.2 million (H1 2015: $4.5m); 2016 is the first full year of Seroquel^® commercialization under Chi-Med.
Substantially completed move to new factory in Shanghai, almost tripling the manufacturing capacity of our Prescription Drugs joint venture. Triggering about $114 million total cash compensation and subsidies for the surrender of its land-use rights for its old factory site.
Consumer Health business stable despite over-the-counter (“OTC”) drug capacity constraints – consolidated sales up 44% to $14.6 million (H1 2015: $10.1m); and total sales of non-consolidated Consumer Health joint venture down 2% to $17 million (H1 2015: $125.9m). Sales in our OTC drug joint venture were down marginally due to tight manufacturing capacity resulting from the move to new factory in Bozhou, Anhui province; despite this, our OTC drug joint venture’s portfolio of mature, market leading products, contributed 99% of our $8.6 million (H1 2015: $10.1m) consolidated Consumer Health operating profit in H1 2016.

EXPECTED MAJOR NEAR-TERM CATALYSTS: We target to publish data on four drug candidates in five Phase Ib-III studies before the end of Q1 2017, including:

Savolitinib Phase II data in PRCC patients;
Epitinib Phase Ib data in NSCLC patients with brain metastasis;
Fruquintinib Phase II data in third-line NSCLC patients;
Sulfatinib Phase II data in pancreatic and extra-pancreatic NET patients; and
Fruquintinib Phase III top-line data in third-line or above colorectal cancer

We target to initiate pivotal registration trials on two further drug candidates before the end of H1 2017, including:

Savolitinib Phase III in c-Met-driven PRCC patients;
Epitinib Phase II/III in first-line patients with EGFR-mutant NSCLC patients with brain metastasis; and
Savolitinib Phase III in combination with Tagrisso^® in second-line NSCLC (T790M-/c-Met+)

POST PERIOD EVENT: Amendment of Co-Development Agreement with AstraZeneca on Savolitinib global development plan:

In order to accelerate savolitinib’s global development, as announced yesterday, Chi-Med and AstraZeneca agreed to amend the 2011 global licensing, co-development and commercialization agreement regarding savolitinib. Under the amendment, Chi-Med will contribute up to $50 million, spread primarily over three years, to the joint-development costs of the global pivotal Phase III study in c-Met-driven PRCC. Subject to approval in the PRCC indication, Chi-Med will receive a 5 percentage point increase in the global (excluding China) tiered royalty rate payable on savolitinib sales across all indications, thereby increasing the tiered royalty to 14% to 18%. After total aggregate sales of savolitinib have reached $5 billion, the royalty will step down over a two year period, to an ongoing royalty rate of 10.5% to 14.5%. All other provisions of the 2011 Agreement will remain unchanged.

Conference Call and Webcast Information:

An analyst presentation and webcast will be held today at 9:00 a.m. BST (4:00 p.m. HKT) at Citigate Dewe Rogerson, Third Floor, 3 London Wall Buildings, London, EC2M 5SY. Investors may participate in the call or access a live video webcast of the call via the Company’s website at www.chi-med.com/investors/event-information/. A conference call for U.S. investors will also be held today at 9:00 a.m. EDT. To participate in the US call, please dial +1-212-999-6659. For all dial-in numbers please use conference ID “Chi-Med”.

Enquiries

Investor Inquiries
Christian Hogg, CEO	+852 2121 8200

International Media Inquiries
Anthony Carlisle, Citigate Dewe Rogerson	+44 7973 611 888 (Mobile) anthony.carlisle@cdrconsultancy.co.uk

U.S. Based Media Inquiries
Brad Miles, BMC Communications	+1 (917) 570 7340 (Mobile) bmiles@bmccommunications.com
Susan Duffy, BMC Communications	+1 (917) 499 8887 (Mobile) sduffy@bmccommunications.com

Investor Relations
Brian Korb, The Trout Group	+1 (917) 653 5122 (mobile) bkorb@troutgroup.com
David Dible, Citigate Dewe Rogerson	+44 7967 566 919 (Mobile) david.dible@citigatedr.co.uk

Panmure Gordon (UK) Limited
Richard Gray / Andrew Potts	+44 (20) 7886 2500

About Chi-Med

Chi-Med is majority owned by the multinational conglomerate CK Hutchison Holdings Limited (“CK Hutchison”) (SEHK: 0001). For more information, please visit: www.chi-med.com.

References

Unless the context requires otherwise, references in this announcement to the “Group,” the “Company,” “Chi-Med,” “Chi-Med Group,” “we,” “us” and “our” refer to Chi-Med and its consolidated subsidiaries and joint ventures unless otherwise stated or indicated by context.

Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words like “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “pipeline,” “could,” “potential,” “believe,” “first-in-class,” “best-in-class,” “designed to,” “objective,” “guidance,” “pursue,” or similar terms, or by express or implied discussions regarding potential drug candidates, potential indications for drug candidates or by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these statements. Such forward-looking statements are based on the current beliefs and expectations of management regarding future events, and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. There can be no guarantee that any of our drug candidates will be approved for sale in any market, or that any approvals which are obtained will be obtained at any particular time, or that any such drug candidates will achieve any particular revenue levels. In particular, management’s expectations could be affected by, among other things: unexpected regulatory actions or delays or government regulation generally; the uncertainties inherent in research and development, including the inability to meet our key study assumptions regarding enrollment rates, timing and availability of subjects meeting a study’s inclusion and exclusion criteria and funding requirements, changes to clinical protocols, unexpected adverse events or safety, quality or manufacturing issues; the inability of a drug candidate to meet the primary or secondary endpoint of a study; the inability of a drug candidate to obtain regulatory approval in different jurisdictions or gain commercial acceptance after obtaining regulatory approval; global trends toward health care cost containment, including ongoing pricing pressures; uncertainties regarding actual or potential legal proceedings, including, among others, actual or potential product liability litigation, litigation and investigations regarding sales and marketing practices, intellectual property disputes, and government investigations generally; and general economic and industry conditions, including uncertainties regarding the effects of the persistently weak economic and financial environment in many countries and uncertainties regarding future global exchange rates. For further discussion of these and other risks, see Chi-Med’s filings with the U.S. Securities and Exchange Commission and on AIM. Chi-Med is providing the information in this announcement as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.

In addition, this announcement contains statistical data and estimates that we obtained from industry publications and reports generated by third-party market research firms, including Frost & Sullivan, an independent market research firm, and publicly available data. All patient population, market size and market share estimates are based on Frost & Sullivan research, unless otherwise noted. Although we believe that the publications, reports and surveys are reliable, we have not independently verified the data. Such data involves risks and uncertainties and are subject to change based on various factors, including those discussed above.

Inside Information
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

(For additional information, please see the attached PDFs)

Ends

Announcement released: 7am BST

» See announcement here

Webcast presentation & conf call: 9am BST (4pm HKT)

» click here for a video of the webcast (available for six months)

» To participate in the call, please dial +44-(0)844-581-9089 (UK), +1-212-999-6659 (US), +852-5808-3370 (HK)

– Alternatively, choose a local number from this list

US conference call: 9am EDT (2pm BST)

» Same dial-in numbers as the Webcast presentation above. Passcode is “Chi-Med”

First global pivotal Phase III in c-Met-driven papillary renal cell carcinoma (“PRCC”) to be initiated in the near future

London: Monday, August 1, 2016: Chi-Med and AstraZeneca today announced an amendment (the “Amendment”) to the 2011 global licensing, co-development, and commercialisation agreement (the “2011 Agreement”) regarding savolitinib. Based on data from multiple Phase I/II studies, savolitinib has shown early clinical benefit as a highly selective c-Met inhibitor in a number of cancers.

As a consequence, savolitinib’s global development plan now covers multiple c-Met-driven solid tumor indications including non-small cell lung cancer (“NSCLC”), kidney, gastric and colorectal cancers. For a detailed summary of all current savolitinib clinical trials, please click here.

Chi-Med and AstraZeneca have agreed to the amendment in order to accelerate savolitinib’s global development and increase Chi-Med’s participation in the programme. The Amendment provides that Chi-Med will contribute up to $50 million, spread primarily over three years, to the joint development costs of the global pivotal Phase III study in c-Met-driven PRCC. Subject to approval in the PRCC indication, Chi-Med will receive a 5 percentage point increase in the global excluding China) tiered royalty rate payable on savolitinib sales across all indications. All other provisions of the 2011 Agreement will remain unchanged.

Final results from savolitinib’s recently completed open-label global PRCC Phase II study (NCT02127710) will be presented at an upcoming scientific meeting. Chi-Med and AstraZeneca have now agreed to proceed to Phase III.

The global Phase III trial of savolitinib will be the first pivotal study conducted in c-Met-driven PRCC, a rare histological subtype of renal cell carcinoma (“RCC”) that is associated with alterations in the c-Met gene (e.g. mutations, amplifications, and/or chromosomal changes). Currently, available RCC therapies have demonstrated only modest benefit in PRCC and there are no therapies specifically approved for the treatment of c-Met-driven PRCC. Ongoing interactions with health authorities will determine the final design of the global pivotal Phase III trial, and its initiation will be aligned with availability of a companion diagnostic for c-Met-driven PRCC. The PRCC Phase III companion diagnostic platform will be largely similar for other indications such as NSCLC and gastric cancer.

AstraZeneca is also continuing to lead the development of savolitinib in other c-Met-driven types of cancer. Most notably, a Phase II expansion of the ongoing TATTON trial (NCT02143466) to evaluate savolitinib in epidermal growth factor receptor (“EGFR”) mutant NSCLC patients has been initiated. This trial is a single-arm global Phase II study of savolitinib in combination with Tagrisso (osimertinib) in advanced NSCLC patients who have developed resistance to approved EGFR tyrosine kinase inhibitors. The Phase II expansion was initiated following early data from the TATTON study.

Susan Galbraith, Senior Vice President, Head of Oncology, Innovative Medicines and Early Development, AstraZeneca, said: “The accelerated development of savolitinib in RCC and NSCLC reflects our ongoing commitment to deliver world-class medicines to patients with limited treatment options. We are pleased to be building on our established collaboration with Chi-Med, as this reinforces our enterprise leadership approach to drug development.”

Christian Hogg, Chief Executive Officer of Chi-Med, said: “Bringing savolitinib to a global launch in multiple areas of unmet medical need is our very clear focus. We believe that savolitinib has the potential to become the first approved therapy in kidney cancer in a molecularly selected patient population, as well as in multiple c-Met-driven lung and gastrointestinal tract cancers. As we enter a period where pivotal trials in multiple indications are close at hand, we are now happy to take on a small minority of the investment in order to help accelerate development while increasing our share in the long-term economic value of savolitinib.”

NOTES TO EDITORS

About savolitinib, a uniquely selective c-Met inhibitor

Savolitinib is a potential global first-in-class inhibitor of c-Met (also known as mesenchymal epithelial transition factor) receptor tyrosine kinase, an enzyme which has been shown to function abnormally in many types of solid tumors. It was developed as a potent and highly selective oral inhibitor specifically designed to address issues observed in the clinic with first-generation c-Met inhibitors, including renal toxicity.

Market potential and unmet medical need in c-Met-driven PRCC patients

Worldwide, about 366,000 new patients are diagnosed with kidney cancer annually, and the total market for kidney cancer treatments is expected to reach $4.5 billion in 2020, according to Frost & Sullivan. RCC accounts for approximately 80-85% of kidney cancer and has several histological sub-types with different genetic and biochemical characteristics. Among these histologic variants of RCC, clear cell RCC (“ccRCC”) is the most common, accounting for 75-80% of RCC.

PRCC is the most common of the non-clear cell renal carcinomas accounting for 10-15% of RCC. The proportion of PRCC patients whose tumors are c-Met-driven has historically been estimated at 40-70%. In the largest study to date, presented at the annual meeting of the American Association for Cancer Research 2014, analysis of 220 frozen tumor samples catalogued in the French RCC Network indicated that 55-60% of PRCC patients showed gains in Chromosome 7 (i.e. c-Met amplification).

The biology and molecular characteristics of PRCC are different from those of ccRCC. This results in significantly worse prognosis and treatment outcomes for patients with PRCC when compared to patients with ccRCC. Highlighting the unmet need is the fact that, although there are several drugs approved for use in RCC (the latest being approved in April 2016), these approvals were generally on the basis of studies conducted with a preponderance of ccRCC patients. The need for different agents and more specific data tailored to the PRCC disease setting has been identified as a critical gap in the care of these patients.

Savolitinib clinical development in PRCC

Australia Phase I Study – A Phase I dose escalation study in a range of tumor types demonstrated the clinical activity and safety profile of savolitinib 600mg once-daily, with a confirmed partial response observed at an early point in the study in a patient with c-Met-driven PRCC. In total, confirmed partial responses were observed in 3/8 (38%) PRCC patients, all of whom harbored c-Met-driven disease, and durations of response were approximately 10-37 months (ongoing). Phase I safety data (n=33) reported that the most common Grade 3 or 4 events included fatigue (9%), dysphonia (hoarseness) (6%), peripheral edema (6%) and headache (3%). Based on these Phase I findings, which were reported at the American Society of Clinical Oncology annual meeting in 2014 (click here), AstraZeneca and Chi-Med agreed to proceed with a global Phase II study in PRCC.

Global Phase II Study – The global open-label single arm Phase II study of savolitinib in patients with locally advanced or metastatic PRCC was initiated in May 2014, reaching a total of 22 clinical centers in the U.S., Canada, UK, and Spain, and completing enrollment of 109 PRCC patients in October 2015. This Phase II study is the largest prospective clinical study ever conducted in PRCC. The primary objective of the study is to assess the anti-tumor activity of savolitinib in patients with PRCC, with secondary assessment objectives including median Progression Free Survival, duration of response, safety and tolerability, and pharmacokinetics and pharmacodynamics. Importantly, tumor samples from each patient were concurrently subjected to molecular analysis to determine c-Met status in order to better understand the relationship between c-Met aberration and clinical outcome. The results of the Phase II study will be presented at an upcoming scientific meeting.

Companion diagnostic development

The savolitinib c-Met-driven PRCC pivotal Phase III study will be the first molecularly selected trial in RCC. The molecular analysis of each patient in the PRCC Phase II study has provided an understanding of the biomarker and selection criteria needed to identify PRCC patients most likely to benefit from treatment with savolitinib. AstraZeneca and Foundation Medicine, Inc. (Nasdaq: FMI) have an agreement to develop companion diagnostic assays to facilitate personalized medicine in oncology by identifying patients most likely to benefit from novel targeted therapies, including savolitinib. The companion diagnostic assays assess multiple cancer-related genes as well as classes of genomic alterations, and are being developed in parallel with the clinical development of savolitinib as part of a coordinated regulatory strategy. The PRCC Phase III companion diagnostic platform will be largely similar for other indications such as NSCLC and gastric cancer.

Overview of AstraZeneca collaboration

Under the 2011 Agreement, we granted to AstraZeneca co-exclusive, worldwide rights to manufacture and commercialize savolitinib for all diagnostic, prophylactic and therapeutic uses. AstraZeneca paid $20 million upon execution and agreed to pay royalties and additional amounts upon the achievement of development and sales milestones. As of June 30, 2016 we had received a further $20 million in milestone payments. We may potentially receive future clinical development and first sales milestones of up to $100 million for clinical development and initial sales of savolitinib, plus significant further milestone payments based on sales. AstraZeneca also reimburses us for certain development costs. Additionally, AstraZeneca is obligated to pay us a fixed royalty of 30% annually on all sales made of any product in China and tiered royalties from 9% to 13% annually on all sales made of any product outside of China. Under the Amendment, Chi-Med will contribute up to $50 million, spread primarily over three years, to the joint development costs of the global pivotal Phase III study in c-Met-driven PRCC. Subject to approval in the PRCC indication, Chi-Med will receive a 5 percentage point increase in the global (excluding China) tiered royalty rate payable on savolitinib sales across all indications, thereby increasing the tiered royalty to 14% to 18%. After total aggregate sales of savolitinib have reached $5 billion, the royalty will step down over a two year period, to an ongoing royalty rate of 10.5% to 14.5%. All other provisions of the 2011 Agreement will remain unchanged.

About Chi-Med

Chi-Med is an innovative biopharmaceutical company which researches, develops, manufactures and sells pharmaceuticals and healthcare-related consumer products. Its Innovation Platform, Hutchison MediPharma Limited, focuses on discovering and developing innovative therapeutics in oncology and autoimmune diseases for the global market. Its Commercial Platform manufactures, markets, and distributes prescription drugs and consumer health products in China.

Chi-Med is majority owned by the multinational conglomerate CK Hutchison Holdings Limited (SEHK: 0001). For more information, please visit: www.chi-med.com.

About AstraZeneca in Oncology

AstraZeneca has a deep-rooted heritage in Oncology and offers a quickly growing portfolio of new medicines that has the potential to transform patients’ lives and the Company’s future. With at least 6 new medicines to be launched between 2014 and 2020 and a broad pipeline of small molecules and biologics in development, we are committed to advance New Oncology as one of AstraZeneca’s six Growth Platforms focused on lung, ovarian, breast and blood cancers. In addition to our core capabilities, we actively pursue innovative partnerships and investments that accelerate the delivery of our strategy, as illustrated by our investment in Acerta Pharma in haematology.

By harnessing the power of four scientific platforms – immuno-oncology, the genetic drivers of cancer and resistance, DNA damage response and antibody drug conjugates – and by championing the development of personalized combinations, AstraZeneca has the vision to redefine cancer treatment and one day eliminate cancer as a cause of death.

About AstraZeneca

AstraZeneca is a global, science-led biopharmaceutical company that focuses on the discovery, development and commercialisation of prescription medicines, primarily for the treatment of diseases in three therapy areas – Respiratory and Autoimmunity, Cardiovascular and Metabolic Diseases, and Oncology. The company is also active in inflammation, infection and neuroscience through numerous collaborations. AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide. For more information please visit: www.astrazeneca.com

Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words such as “will,” “plans,” “expects,” “long-term,” “priorities,” “pipeline,” “could,” “accelerate,” “potential,” “believe,” “first-in-class,” “designed to,” “objective,” “guidance,” “pursue,” or similar terms, or by express or implied discussions regarding potential drug candidates, potential indications for drug candidates, or regarding potential future revenues from any such drug candidates; potential shareholder returns; or regarding any potential financial or other impact on Chi-Med of our acceleration of the savolitinib global development program; or regarding any potential financial or other impact on Chi-Med of the amendment to the co-development agreement with AstraZeneca; or by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these statements. Such forward-looking statements are based on the current beliefs and expectations of management regarding future events, and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. There can be no guarantee that any of our drug candidates will be approved for sale in any market, or that any approvals which are obtained will be obtained at any particular time, or that any such drug candidates will achieve any particular revenue levels. In particular, management’s expectations could be affected by, among other things: unexpected regulatory actions or delays or government regulation generally; the uncertainties inherent in research and development, including the inability to meet our key study assumptions regarding enrollment rates, timing and availability of subjects meeting a study’s inclusion and exclusion criteria and funding requirements, changes to clinical protocols, unexpected adverse events or safety, quality or manufacturing issues; the inability of a drug candidate to meet the primary or secondary endpoint of a study; the inability of a drug candidate to obtain regulatory approval in different jurisdictions or gain commercial acceptance after obtaining regulatory approval;global trends toward health care cost containment, including ongoing pricing pressures; uncertainties regarding actual or potential legal proceedings, including, among others, actual or potential product liability litigation, litigation and investigations regarding sales and marketing practices, intellectual property disputes, and government investigations generally; and general economic and industry conditions, including uncertainties regarding the effects of the persistently weak economic and financial environment in many countries and uncertainties regarding future global exchange rates. For further discussion of these and other risks, see Chi-Med’s filings with the U.S. Securities and Exchange Commission and on AIM. Chi-Med is providing the information in this announcement as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.

Inside Information

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

CONTACTS

Chi-Med

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AstraZeneca


Anthonia Aboyeji, Global Communications Director Corporate Affairs	+44 (7884) 731627 anthonia.aboyeji@astrazeneca.com


Hugues Joublin, Global Head of Oncology, Corporate Affairs	+1 (862) 812 7980 hugues.joublin@astrazeneca.com