Oncology/Immunology revenues up 113% to $91.1 million, due to ELUNATE®, SULANDA® and ORPATHYS® growth
First presentation of SAVANNAH data showing 52% response rate and 9.6 month duration of response in 2L+ post-TAGRISSO® NSCLC1 patients with high MET2 levels and no prior chemotherapy
Initiated six new trials thus far in 2022 with a further six starting, including with five new drug candidates
FRESCO-2 Phase III, our first global multi-regional clinical trial, on track to read out in August 2022
Company to Host Interim Results Call & Webcast Today at 8 p.m. HKT / 1 p.m. BST / 8 a.m. EDT
Hong Kong, Shanghai & Florham Park, NJ — Monday, August 1, 2022: HUTCHMED (China) Limited (“HUTCHMED”, the “Company” or “we”) (Nasdaq/AIM:HCM; HKEX:13), the innovative, commercial-stage biopharmaceutical company, today reports its unaudited financial results and provides updates on key clinical and commercial developments for the six months ended June 30, 2022.
All amounts are expressed in U.S. dollars unless otherwise stated.
“HUTCHMED has continued to make good progress in the last six months,” said Mr Simon To, Chairman of HUTCHMED.
“We have driven revenue growth in our innovative portfolio of marketed drugs. With ELUNATE® for CRC3 and following last year’s successful launches of ORPATHYS® for MET-driven NSCLC and SULANDA® for epNETs4 and pNETs5, this will be the first full year of product sales from three novel, in-house discovered oncology products in China, with strong sales momentum. We have also significantly expanded our in-house commercial team to drive growth. On top of this, in June we announced that TAZVERIK® was approved for use in the Hainan Pilot Zone, bringing the clinical benefits of a fourth product to patients in China.”
“Our experienced clinical team has also made progress in the first half of this year. We have initiated a number of key early-stage trials and our later-stage pipeline of on-going studies are also moving at a steady pace, with promising new data from the SAVANNAH study of savolitinib combined with osimertinib being presented in more detail in August. We believe that the achievement of these milestones demonstrates the depth and potential of our R&D6 pipeline, which is the core of our business and the foundation for our growth in the years ahead.”
“HUTCHMED continues to be well-financed, which positions us well to continue delivering on our strategic objectives. We are a global biopharmaceutical company developing high quality, novel oncology and immunology drug candidates for patients across the world and under the leadership of Dr Weiguo Su, our new Chief Executive Officer, I have great hope for the future.”
Dr Weiguo Su said, “In HUTCHMED, I see a company with exciting science and a first-in-class or differentiated, best-in-class pipeline of clinical-stage candidates, each with substantial prospects for additional indications and combinations, which is exceptional, particularly in the China biopharma industry.”
“After driving our innovation as Head of Research and Chief Scientific Officer for the last 16 years, I was delighted to become the Chief Executive Officer earlier this year and am very excited about the next chapter of our growth.”
“There are several reasons which underline the opportunity in our future. These include our expected ongoing growth of ORPATHYS®, SULANDA® and ELUNATE® revenues in China, and FRESCO-2, our first global, multi-regional clinical trial, which is due to read out later this month. While receiving a Complete Response Letter for surufatinib from the U.S. FDA7 earlier this year and our decision today to withdraw the EMA8 MAA9 are a disappointment, it has no impact on our global development strategy. We will continue to leverage our solid balance sheet, strong commercial capability with extensive China coverage that generates cash, pipeline of innovative products and world-class people, as we work towards our goal of being a leading global biopharmaceutical company.”
|$’millions||In-market Sales*||Consolidated Revenues**|
|H1 2022||H1 2021||% Change||H1 2022||H1 2021||% Change|
|Other R&D services income||$12.6||$5.1||149%|
* = For ELUNATE® and ORPATHYS®, represents total sales to third parties as provided by Lilly12 and AstraZeneca, respectively;
Major milestones and data presentations for savolitinib in 2022:
Potential upcoming clinical and regulatory milestones for savolitinib:
Major milestones and data presentations for fruquintinib in 2022:
Potential upcoming clinical and regulatory milestones for fruquintinib:
Major data presentation for surufatinib in 2022:
Potential upcoming clinical and regulatory milestones for surufatinib:
Potential upcoming clinical and regulatory milestones for amdizalisib:
Potential upcoming clinical milestones for sovleplenib:
Major milestones and data presentations for tazemetostat in 2022:
Potential upcoming clinical and regulatory milestones for tazemetostat:
Potential upcoming clinical and regulatory milestones for HMPL-306:
COVID-19 had some impact on our research, clinical studies and our commercial activities in the first half of 2022, particularly with respect to hospital lockdowns, travel restrictions, and shipping difficulties. Sites in Shanghai were particularly impacted during April and May. Measures were put in place to minimize the impact of such restrictions to the extent possible, including online patient follow-up and the retention of core research teams on-site to maintain critical activities, with business returning to normal in June. We will continue to closely monitor the evolving situation.
The Group is committed to the long-term sustainability of its businesses and the communities in which we conduct business. In the first half of 2022, we published 2021 Sustainability Report of HUTCHMED, detailing our environmental, social and governance performance of HUTCHMED during 2021, including our sustainability governance, stakeholder engagement and materiality analysis, business ethics, environmental performance, research and development, responsible commercialization, and human capital management.
Five new sustainability-related policies and statements – Sustainability Policy, Environmental Policy, Health and Safety Policy, Human Rights Policy and Modern Slavery and Human Trafficking Statement – were published along with the 2021 Sustainability Report, serving to demonstrate our commitment in sustainability, enriched and more transparent disclosures, as well as acting as an important gateway to communicate with our stakeholders in all sustainability matters.
In the second half of 2022, we will continue our efforts in facilitating discussions regarding relevant sustainability issues and opportunities, including climate-related issues, and actively looking to set our own sustainability targets and goals.
The Holding Foreign Companies Accountable Act, or the Act, was signed into law in December 2020. It provides that if the U.S. Securities and Exchange Commission (SEC) determines that a U.S.-listed company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the Public Company Accounting Oversight Board (PCAOB) for three consecutive years beginning in 2021, the SEC shall prohibit such company’s shares or ADSs40 from being traded on a national securities exchange or in the over-the-counter trading market in the U.S.
As had been expected, following its adoption of implementing rules pursuant to the Act, the SEC named over 150 companies, including HUTCHMED, to its conclusive list of issuers identified under these rules. Under the current terms of the Act, the Company’s ADSs will be delisted from the Nasdaq Stock Market in early 2024, unless the Act is amended to exclude the Company or the PCAOB is able to conduct a full inspection of the Company’s auditor during the required timeframe. In addition, legislation is being considered in the U.S. to shorten the number of non-inspection years from three years to two. In the case that such legislation becomes law, it will reduce the time period before our ADSs could be delisted from the Nasdaq Stock Market and prohibited from over-the-counter trading in the U.S. from 2024 to 2023.
This has had no impact on the Company’s business operations. We continue to monitor market developments and evaluate all strategic options, with the appropriate counsel and guidance.
The Company’s ADSs, each of which represents five ordinary shares, continue to trade uninterrupted on the Nasdaq Global Select Market. Its ordinary shares are also admitted for trading in London on the AIM market, and are primary listed on HKEX41. The shares listed on HKEX and AIM are fully fungible with the shares represented by the Company’s ADSs.
ELUNATE® revenues increased 21% to $36.0 million (H1-21: $29.8m) in manufacturing revenues, promotion and marketing service revenues and royalties, as our in-house sales team increased in-market sales 26% to $50.4 million (H1-21: $40.1m), as provided by Lilly;
SULANDA® revenues increased 69% to $13.6 million (H1-21: $8.0m), after inclusion on the NRDL starting in January 2022;
ORPATHYS® revenues of $13.8 million (H1-21: nil), in manufacturing revenues and royalties. AstraZeneca reported $23.3 million in-market sales (H1-21: nil) of ORPATHYS® in first half of 2022;
TAZVERIK® revenues of $0.1 million following its successful launch in Hainan in June 2022;
Milestone payment of $15.0 million (H1-21: nil), to us by AstraZeneca, was triggered in February 2022 upon initiation of start-up activities for SAFFRON; and
Other R&D services income of $12.6 million (H1-21: $5.1m), which were primarily fees from AstraZeneca and Lilly for the management of development activities in China.
Condensed Consolidated Balance Sheets Data
|As of June 30,||As of December 31,|
|Cash and cash equivalents and short-term investments||826,200||1,011,700|
|Other current assets||118,959||116,796|
|Property, plant and equipment||44,059||41,275|
|Investments in equity investees||82,999||76,479|
|Other non-current assets||45,038||42,831|
|Liabilities and shareholders’ equity|
|Other payables, accruals and advance receipts||233,606||210,839|
|Company’s shareholders’ equity||799,728||986,893|
|Total liabilities and shareholders’ equity||1,194,333||1,372,661|
Condensed Consolidated Statements of Operations Data
(Unaudited, in $’000, except share and per share data)
|Six Months Ended June 30,|
|Oncology/Immunology – Marketed Products||63,517||37,795|
|Oncology/Immunology – R&D||27,552||5,056|
|Oncology/Immunology consolidated revenues||91,069||42,851|
|Costs of revenues||(137,318)||(123,249)|
|Research and development expenses||(181,741)||(123,050)|
|Selling and general administrative expenses||(79,742)||(54,797)|
|Total operating expenses||(398,801)||(301,096)|
|Other (expense)/income, net||(3,882)||3,287|
|Loss before income taxes and equity in earnings of equity investees||(200,636)||(140,447)|
|Income tax benefit/(expense)||4,215||(1,859)|
|Equity in earnings of equity investees, net of tax||33,549||42,966|
|Less: Net loss/(income) attributable to non-controlling interests||11||(3,057)|
|Net loss attributable to HUTCHMED||(162,861)||(102,397)|
Losses per share attributable to HUTCHMED – basic and diluted
|Number of shares used in per share calculation – basic and diluted||849,283,553||729,239,181|
Losses per ADS attributable to HUTCHMED – basic and diluted
|Number of ADSs used in per share calculation – basic and diluted||169,856,711||145,847,836|
We provide financial guidance for 2022 below reflecting expected revenue growth of ELUNATE®, SULANDA® and ORPATHYS® in China. We believe that we remain on track to meet the 2022 guidance for Oncology/Immunology revenues provided in the announcement of our 2021 full year results on March 3, 2022.
|Adjustments vs. Previous Guidance|
|Oncology/Immunology consolidated revenues||$91.1 million||$160 – 190 million||nil|
Shareholders and investors should note that:
Use of Non-GAAP Financial Measures and Reconciliation – References in this announcement to adjusted Group net cash flows excluding financing activities and financial measures reported at CER 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.
Conference call and audio webcast presentation scheduled today at 8 p.m. HKT / 1 p.m. BST / 8 a.m. EDT – Investors may participate in the call as follows: +852 3027 6500 (Hong Kong) / +44 20 3194 0569 (U.K.) / +1 646 722 4977 (U.S.), or access a live audio webcast of the call via HUTCHMED’s website at www.hutch-med.com/event/.
Additional dial-in numbers are also available at HUTCHMED’s website. Please use participant access code “55793362#.”
HUTCHMED (Nasdaq/AIM:HCM; HKEX:13) is an innovative, commercial-stage, biopharmaceutical company. It is committed to the discovery, global development and commercialization of targeted therapies and immunotherapies for the treatment of cancer and immunological diseases. It has more than 4,900 personnel across all its companies, at the center of which is a team of about 1,800 in oncology/immunology. Since inception it has advanced 13 cancer drug candidates from in-house discovery into clinical studies around the world, with its first three oncology drugs now approved and marketed in China. For more information, please visit: www.hutch‑med.com or follow us on LinkedIn.
|Mark Lee, Senior Vice President||+852 2121 8200|
|Annie Cheng, Vice President||+1 (973) 567 3786|
|Americas – Brad Miles,
|+1 (917) 570 7340 (Mobile)
|Europe – Ben Atwell / Alex Shaw,
|+44 20 3727 1030 /
+44 7771 913 902 (Mobile) /
+44 7779 545 055 (Mobile)
|Asia – Zhou Yi,
|+852 9783 6894 (Mobile)
|Atholl Tweedie / Freddy Crossley,
Panmure Gordon (UK) Limited
|+44 (20) 7886 2500|
Unless the context requires otherwise, references in this announcement to the “Group,” the “Company,” “HUTCHMED,” “HUTCHMED Group,” “we,” “us,” and “our,” mean HUTCHMED (China) 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,” “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, that any approvals which are obtained will be obtained at any particular time, or that the sales of products marketed or otherwise commercialized by HUTCHMED and/or its collaboration partners (collectively, “HUTCHMED’s Products”) 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, including, among others, the risk that HUTCHMED’s ADSs could be barred from trading in the United States as a result of the Holding Foreign Companies Accountable Act and the rules promulgated thereunder; 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 the utilization, market acceptance and commercial success of HUTCHMED’s Products after obtaining regulatory approval; competing drugs and product candidates that may be superior to, or more cost effective than HUTCHMED’s Products and drug candidates; the impact of studies (whether conducted by HUTCHMED or others and whether mandated or voluntary) or recommendations and guidelines from governmental authorities and other third parties on the commercial success of HUTCHMED’s Products and candidates in development; the ability of HUTCHMED to manufacture and manage supply chains for multiple products and product candidates; the availability and extent of reimbursement of HUTCHMED’s Products from third-party payers, including private payer healthcare and insurance programs and government insurance programs; coverage and reimbursement determinations by such payers and new policies and procedures adopted by such payers; the costs of developing, producing and selling HUTCHMED’s Products; the ability of HUTCHMED to meet any of its financial projections or guidance and changes to the assumptions underlying those projections or guidance; 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, uncertainties regarding future global exchange rates and uncertainties regarding the impact of the COVID-19 pandemic. For further discussion of these and other risks, see HUTCHMED’s filings with the U.S. Securities and Exchange Commission, on AIM and on HKEX. HUTCHMED 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 HUTCHMED obtained from industry publications and reports generated by third-party market research firms. Although HUTCHMED believes that the publications, reports and surveys are reliable, HUTCHMED 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.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (as it forms part of retained EU law as defined in the European Union (Withdrawal) Act 2018).
REFERENCES AND ABBREVIATIONS
1 NSCLC = Non-small cell lung cancer.
2 MET = Mesenchymal epithelial transition factor.
3 CRC = Colorectal cancer.
4 epNET = extra-pancreatic neuroendocrine tumor.
5 pNET= pancreatic neuroendocrine tumor.
6 R&D = Research and development.
7 FDA = Food and Drug Administration.
8 EMA = European Medicines Agency.
9 MAA = Marketing Authorization Application.
10 In-market sales = total sales to third parties provided by Eli Lilly (ELUNATE®), AstraZeneca (ORPATHYS®) and HUTCHMED (SULANDA® and TAZVERIK®).
11 NRDL = National Reimbursement Drug List.
12 Lilly = Eli Lilly and Company.
13 ITP = Immune thrombocytopenia purpura.
14 NMPA = National Medical Products Administration.
15 NDA = New Drug Application.
16 EU = European Union.
17 EGFR = Epidermal growth factor receptor.
18 WCLC = World Conference on Lung Cancer.
19 DoR = Duration of response.
20 PFS = Progression-free survival.
21 OS = Overall survival.
22 ELCC = European Lung Cancer Congress.
23 VEGFR = Vascular endothelial growth factor receptor.
24 ASCO GI = ASCO (American Society of Clinical Oncology) Gastrointestinal Cancers Symposium.
25 PMDA = Pharmaceuticals and Medical Devices Agency.
26 FGFR = Fibroblast growth factor receptor.
27 CSF-1R = Colony-stimulating factor 1 receptor.
28 ASCO = American Society of Clinical Oncology.
29 PI3Kδ = Phosphoinositide 3-kinase delta.
30 Syk = Spleen tyrosine kinase.
31 AIHA = autoimmune hemolytic anemia.
32 Epizyme = Epizyme Inc.
33 IDH = Isocitrate dehydrogenase.
34 BTK = Bruton’s tyrosine kinase.
35 MAPK pathway = RAS-RAF-MEK-ERK signaling cascade.
36 IND = Investigational New Drug (application).
37 We also report changes in performance at constant exchange rate (“CER”) which is a non-GAAP measure. Please refer to “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.
38 SHPL = Shanghai Hutchison Pharmaceuticals Limited.
39 HBYS = Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited.
40 ADS = American depositary share.
41 HKEX = The Main Board of The Stock Exchange of Hong Kong Limited.
42 GAAP = Generally Accepted Accounting Principles.
43 SG&A Expenses = selling, general and administrative expenses.