London: Friday, July 27, 2018: Hutchison China MediTech Limited (“Chi-Med”) (AIM/Nasdaq: HCM) today announces its unaudited financial results for the six months ended June 30, 2018 and updates shareholders on key clinical programs.
The points below are selected financial data for the six months ended June 30, 2018. For more details, please refer to “Financial Review”, “Operations Review” and “Unaudited Condensed Consolidated Financial Statements” below.
Overall Group
Innovation Platform: increased investment in Research and Development (“R&D”) driven by initiation of new trials and ongoing enrollment in existing Phase III programs
Commercial Platform: strong net income growth amid shift in revenue model and over-the-counter (“OTC”) logistics divestment
The points below summarize some of the pipeline development highlights so far this year. For more details, please refer to “Operations Review – Innovation Platform” below.
Fruquintinib – Highly selective tyrosine kinase inhibitor (“TKI”) of vascular endothelial growth factor receptor (“VEGFR”) 1/2/3:
Savolitinib – Highly selective TKI of mesenchymal epithelial transition factor (“c-MET”) – Global Phase III studies underway or in planning:
Sulfatinib – Unique angio-immuno kinase inhibitor of VEGFR, fibroblast growth factor receptor (“FGFR”) 1, and colony stimulating factor-1 receptor (“CSF-1R”):
Further progress in early/proof-of-concept clinical trials, including:
Expansion of U.S. and international operations, and recruitment of key personnel:
Key potential pipeline milestones anticipated in the next 6-12 months
The points below summarize some of the operational and financial highlights of our Commercial Platform in the first half of 2018. For more details, please refer to “Operations Review — Commercial Platform” below.
Scaled, high-performance drug marketing and distribution platform covering ~300 cites/towns in China with approximately 3,400 sales personnel. Targeting multiple indications with many household-name brands:
Simon To, Chairman of Chi-Med, said: “Chi-Med continues to deliver on its clear strategy of developing its broad pipeline and cultivating and growing its capabilities in global drug discovery and development, while maintaining an over a decade-and-a-half long track record of earnings growth in its Commercial Platform.
During the first half of 2018, we have focused on navigating the China NDA process for fruquintinib, which we believe is now nearing completion. We are optimistic that we will see fruquintinib approved and launched by year end. We also look forward, around year end, to reporting the top-line results for the pivotal Phase III, the FALUCA study, of fruquintinib in third-line NSCLC in China.
Our collaboration with AstraZeneca continues to gather momentum, and we are currently enrolling registration studies in both kidney and lung cancer indications for savolitinib monotherapy. We are also in the process of planning and preparing to initiate multiple additional studies in lung and gastric cancers, which we believe may ultimately serve as registration studies.
Our un-partnered assets have also made good progress, with sulfatinib in two Phase III studies in China that could produce readout next year in NETs. In addition, we have worked with key opinion leaders and the regulatory authorities in China to agree on a Phase III pathway for epitinib and aim to initiate a pivotal study around year end. On our Syk, phosphoinositide 3-kinase delta (“PI3Kδ”) and FGFR compounds, all of which are in proof-of-concept, we have made meaningful progress in enrollment thereby acquiring a preliminary understanding of efficacy and safety for each compound. We expect to present some of these data at scientific conferences over the next twelve months.
We are now looking closely into multiple opportunities to combine our highly selective TKIs with both PD-1 and PD-L1 immunotherapy agents and will strive to make progress during the second half of 2018, via collaboration, in this very high potential arena.
We have expanded our U.S./ex-Asia operations, including our office in New Jersey, and continue to recruit seasoned talent to manage the progress of our unpartnered compounds through proof-of-concept, registration trials, and market launch in territories outside of Asia.
Chi-Med has a clear and ambitious aim to bring three of our drugs through approval over the next approximately three years. We believe we are adequately structured and resourced to support this aim. In the longer term, we intend to continue to emerge as a world-class innovator based in China, bringing our assets to both the China and global markets. We have confidence in our ability to achieve these aims.”
Use of Non-GAAP Financial Measures – References in this announcement to adjusted R&D expenses, adjusted consolidated net income attributable to Chi-Med from our Commercial Platform, adjusted consolidated operating profit from our Commercial Platform, adjusted consolidated net income attributable to Chi-Med from our Prescription Drugs business and adjusted revenue of HBYS and non-consolidated joint ventures are based on non-GAAP financial measures. Please see the “Use of Non-GAAP Financial Measures and Reconciliation” below for further information relevant to the interpretation of these financial measures and reconciliations of these financial measures to the most comparable GAAP measures, respectively.
Our updated guidance for 2018, compared to the most recent guidance in our full year results announcement for the year ended December 31, 2017 dated March 12, 2018, includes a $20 million increase in expected full year Innovation Platform R&D expense to $130-140 million. This increase reflects a rise in clinical trial spending as well as broadening of organizational scale and new middle management share-based incentive grants. These costs are all driven by the heightened competitive environment in China biotech, resulting from the step-change increase interest and investment in the sector over the past two years. We make no other changes to the full year 2018 financial guidance as detailed below:
| Group Level: | 2018 Previous Guidance | 2018 Current Guidance | Adjustment |
| Consolidated revenue | $155-175m | $155-175m | None |
| Admin., interest & tax | $(16)-(18)m | $(16)-(18)m | None |
| Net loss [1] | $(19)-(52)m | $(39)-(72)m | $(20)m increase |
| Innovation Platform: | |||
| Consolidated revenue | $40-50m | $40-50m | None |
| Adjusted (non-GAAP) R&D expenses |
$(110)-(120)m | $(130)-(140)m | $(20)m increase |
| Net loss [1] | $(60)-(80)m | $(80)-(100)m | $(20)m increase |
| Commercial Platform: | |||
| Sales (consolidated) | $115-125m | $115-125m | None |
| Sales of non-consolidated JVs [2] |
$460-480m | $460-480m | None |
| Net income on an as adjusted (non-GAAP) basis excl. one-time gains [1] |
$41-43m | $41-43m | None |
| One-time gains [1] | $0-20m [3] | $0-20m [3] | None |
| Net income [1] | $41-63m | $41-63m | None |
Notes: [1] Attributable to Chi-Med; [2] Joint ventures; [3] One-time property compensation, timing of which is dependent on Guangzhou government policy.
Chi-Med is an innovative 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: 1). For more information, please visit: www.chi-med.com.
Mark Lee, Senior Vice President,
Corporate Finance & Development
+852 2121 8200
Anthony Carlisle, Citigate Dewe Rogerson
+44 7973 611 888 (Mobile)
anthony.carlisle@cdrconsultancy.co.uk
Brad Miles, Solebury Trout
+1 (917) 570 7340 (Mobile)
bmiles@troutgroup.com
Susan Duffy, Solebury Trout
+1 (917) 499 8887 (Mobile)
sduffy@troutgroup.com
Xuan Yang, Solebury Trout
+1 (415) 971 9412 (Mobile)
xyang@troutgroup.com
David Dible, Citigate Dewe Rogerson
+44 7967 566 919 (Mobile)
david.dible@citigatedewerogerson.com
Richard Gray / Andrew Potts
+44 (20) 7886 2500
Unless the context requires otherwise, references in this announcement to the “Group,” the “Company,” “Chi-Med,” “Chi-Med Group,” “we,” “us,” and “our,” mean Hutchison China MediTech Limited and its consolidated subsidiaries and joint ventures unless otherwise stated or indicated by context.
The performance and results of operations of the Group contained within this announcement are historical in nature, and past performance is no guarantee of future results of the Group. 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 or net income 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 Chi-Med obtained from industry publications and reports generated by third-party market research firms. Although Chi-Med believes that the publications, reports and surveys are reliable, Chi-Med has not independently verified the data and cannot guarantee the accuracy or completeness of such data. You are cautioned not to give undue weight to this 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.
Ends
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London: Monday, July 23, 2018: Hutchison China MediTech Limited (“Chi-Med”) (AIM/Nasdaq: HCM) has initiated a Phase Ib/II proof-of-concept study of sulfatinib in pancreatic neuroendocrine tumors (“NET”) patients and in biliary tract cancer (“BTC”) patients in the U.S.. Sulfatinib is an oral small molecule angio-immuno kinase inhibitor that can simultaneously block tumor angiogenesis and immune evasion. This study follows several trials that are underway in China, including two Phase III studies in pancreatic and non-pancreatic NET that commenced after positive results from a Phase II study, and a Phase II study in BTC patients. In addition, a Phase I dose escalation part of this study in the U.S. was recently completed.
This proof-of-concept study is a multi-center, single-arm, open-label study to evaluate the efficacy and safety of sulfatinib as a monotherapy in (a) patients with advanced BTC that have progressed on standard first-line chemotherapy, and (b) in patients with advanced pancreatic NET. The primary and secondary endpoints include progression-free survival (“PFS”) rate, objective response rate (“ORR”), disease control rate (“DCR”), duration of response (“DoR”), time to response, overall survival (“OS”), safety and tolerability. Additional details of the study may be found at clinicaltrials.gov, using identifier NCT02549937.
Sulfatinib is a novel, oral angio-immuno kinase inhibitor that selectively inhibits the tyrosine kinase activity associated with vascular endothelial growth factor receptor (“VEGFR”), fibroblast growth factor receptor (“FGFR”) and colony stimulating factor-1 receptor (“CSF-1R”), three key tyrosine kinase receptors involved in tumor angiogenesis and immune evasion. Inhibition of the VEGFR signaling pathway can act to stop angiogenesis, the growth of the vasculature around the tumor, and thereby starve the tumor of the nutrients and oxygen it needs to grow rapidly. Aberrant activation of the FGFR signaling pathway, which can be increased by anti-VEGFR therapy treatment, is shown to be associated with cancer progression by promoting tumor growth, angiogenesis and formation of the myeloid derived suppressor cells. Inhibition of the CSF-1R signaling pathway blocks the activation of tumor-associated macrophages, which are involved in suppressing immune responses against tumors. Its unique angio-immuno kinase profile supports sulfatinib as a potentially attractive candidate for exploration of possible combinations with checkpoint inhibitors against various cancers.
Sulfatinib is the first oncology candidate that we have taken through proof-of-concept in China and subsequently started clinical development in the U.S. We are currently conducting studies in six target patient populations on sulfatinib and retain all rights to sulfatinib worldwide.
Sulfatinib is currently in development as a single agent for patients with NET, thyroid cancer and BTC in China.
Pancreatic NET: In March 2016, we initiated the SANET-p study, which is a randomized, double-blind, placebo-controlled, multi-center, Phase III pivotal registration trial to treat about 190 patients with low- or intermediate-grade, advanced pancreatic NET in China. The primary endpoint is PFS, with secondary endpoints including ORR, DCR, DoR, time to response, OS, safety and tolerability. Additional details of the SANET-p study may be found at clinicaltrials.gov, using identifier NCT02589821. We expect to complete enrollment in 2019 and present top-line results thereafter.
Extra-pancreatic NET: The SANET-ep study, which was initiated in December 2015, is similar to the SANET-p study and is targeted at treating about 270 patients with advanced extra-pancreatic NET in China. Additional details of the SANET-ep study may be found at clinicaltrials.gov, using identifier NCT02588170. We expect to complete enrollment in 2019 and present top-line results thereafter.
Thyroid cancer: In March 2016, we initiated Phase II in two target patient populations in China to evaluate the efficacy and safety of sulfatinib in patients with advanced medullary thyroid cancer and iodine-refractory differentiated thyroid cancer. Additional details of this study may be found at clinicaltrials.gov, using identifier NCT02614495.
BTC: In January 2017, we began a Phase II study in patients with BTC (also known as cholangiocarcinoma), a heterogeneous group of rare malignancies arising from the biliary tract epithelia. Gemzar is the currently approved first-line therapy for biliary tract cancer patients, with a total of approximately 18,000 new patients per year in the U.S. according to the National Cancer Institute, but median survival is less than 12 months for patients with unresectable or metastatic disease at diagnosis. As a result, we see a major unmet medical need for patients who have progressed when being treated with Gemzar, and sulfatinib may offer a new targeted treatment option in this tumor type. Additional details of this study may be found at clinicaltrials.gov, using identifier NCT02966821.
Chi‑Med is an innovative 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: 1). For more information, please visit: www.chi‑med.com.
This press release 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, including its expectations for the clinical development of sulfatinib, plans to initiate clinical studies for sulfatinib, its expectations as to whether such studies would meet their primary or secondary endpoints, and its expectations as to the timing of the completion and the release of results from such studies. Forward-looking statements involve risks and uncertainties. Such risks and uncertainties include, among other things, assumptions regarding enrollment rates, timing and availability of subjects meeting a study’s inclusion and exclusion criteria, changes to clinical protocols or regulatory requirements, unexpected adverse events or safety issues, the ability of drug candidate sulfatinib to meet the primary or secondary endpoint of a study, to obtain regulatory approval in different jurisdictions, to gain commercial acceptance after obtaining regulatory approval, the potential market of sulfatinib for a targeted indication and the sufficiency of funding. 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 press release, whether as a result of new information, future events or circumstances or otherwise.
Mark Lee, Senior Vice President,
Corporate Finance & Development
+852 2121 8200
Anthony Carlisle, Citigate Dewe Rogerson
+44 7973 611 888 (Mobile)
anthony.carlisle@cdrconsultancy.co.uk
Brad Miles, Solebury Trout
+1 (917) 570 7340 (Mobile)
bmiles@troutgroup.com
Susan Duffy, Solebury Trout
+1 (917) 499 8887 (Mobile)
sduffy@troutgroup.com
Xuan Yang, Solebury Trout
+1 (415) 971 9412 (Mobile)
xyang@troutgroup.com
David Dible, Citigate Dewe Rogerson
+44 7967 566 919 (Mobile)
david.dible@citigatedewerogerson.com
Richard Gray / Andrew Potts
+44 (20) 7886 2500