Strong execution on strategic direction, delivering near-term value while charting a path for growth, exemplified by global partnership with Takeda
Revenue grew 164% (173% CER) to US$533 million, with net income to HUTCHMED of US$169 million (which include US$259 million of the upfront recognized from Takeda)
Company to Host Interim Results Call & Webcast Today at 8 p.m. HKT / 1 p.m. BST / 8 a.m. EDT
Company to host a Capital Markets Day in Q4 this year
Hong Kong, Shanghai & Florham Park, NJ — Monday, July 31, 2023: 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 for the six months ended June 30, 2023 and provides updates on key clinical and commercial developments.
All amounts are expressed in U.S. dollars unless otherwise stated.
Mr Simon To, Executive Chairman of HUTCHMED, said, “The first half of 2023 has been successful for HUTCHMED. In late 2022, we announced our pipeline prioritization plan and intention to seek global partners to bring our medicines to help patients outside of China. Six months later, this strategy is already delivering significant results to our operations. We are successfully navigating the current challenging capital markets, while making significant progress towards our goal of becoming a self-sustaining, truly global biopharma company. Crucially, it means that we are well positioned to reach more patients than ever with our medicines.”
“In March, we closed a licensing deal for fruquintinib with Takeda and we are confident that they have the commitment, expertise, and commercial infrastructure to successfully roll out this innovative medicine to patients across the globe. The FDA Priority Review PDUFA date for fruquintinib is now set for November 30 this year, reflecting its potential to deliver significant improvement over currently available treatments.”
Dr Weiguo Su, Chief Executive Officer and Chief Scientific Officer of HUTCHMED, said, “With the sharpening of our goals and priorities, we now have more resources to advance our assets and drive near-term value, and we are pleased to report on the important progress made so far this year. We have over 15 registration/registration-intent studies ongoing with seven drug candidates. Alongside this, our team has presented data at a number of leading medical conferences, including AACR, ASCO, ASCO GI, EHA and ICML, showcasing the productivity of our world class R&D engine. Furthermore, commercial performance has remained strong this year, with robust sales growth of our in-house developed oncology products in China. All three marketed medicines are now included on the NRDL, in line with our commitment to patient access. Moreover, our strategy means we are in a strong financial position as we look to continue developing our clinical programs. We started the second half of 2023 with $856 million in cash resources, including the $400 million received from Takeda.”
“HUTCHMED is now well placed for further successful product launches and life cycle extensions. In particular, we look forward to continuing the positive momentum with fruquintinib regulatory reviews around the world, and readouts from our registration studies for sovleplenib and amdizalisib later this year. As the last six months have shown, HUTCHMED clearly has the right strategy, leadership team, and vision to become a truly global biopharma, and I am confident that HUTCHMED will continue to deliver on this potential.”
Total revenues increased 164% (173% at CER) to $532.9 million in the first half of 2023 (H1-22: $202.0m), driven by Oncology/Immunology partnering, its strong commercial progress in China, and growth in third-party distribution sales.
Oncology/Immunology consolidated revenues were up 294% (301% at CER) to $359.2 million (H1-22: $91.1m); driven by recognition of $258.7 million in partnering revenue for the upfront payment from Takeda, and our strong product sales growth resulting from in-market sales up 16% (25% at CER) to $101.3 million (H1‑22: $87.4m);
In addition to the seven drug candidates being developed in over 15 registration studies above, HUTCHMED is developing six further oncology candidates in early-stage clinical trials. These are HMPL-306, a highly selective oral inhibitor of IDH1/2 designed to address resistance to currently marketed IDH inhibitors; HMPL-760, a highly selective, third-generation oral inhibitor of BTK with improved potency versus first generation BTK inhibitors against both wild type & C481S mutant enzymes; HMPL-295, a highly selective oral inhibitor of ERK in the MAPK pathway with the potential to address intrinsic or acquired resistance from upstream mechanisms such as RAS-RAF-MEK; HMPL-653, an oral, highly selective, and potent CSF-1R inhibitor designed to target CSF-1R driven tumors as a monotherapy or in combinations; HMPL-A83, a differentiated, red blood cell sparing anti-CD47 antibody; and HMPL-415, a novel SHP2 allosteric inhibitor that entered clinical trials in July 2023.
Subject to data and consultation with the CDE, several of these earlier stage drug candidates have potential to move into registration trials in the next 12 months.
While restrictive measures related to COVID-19 were gradually lifted in China starting from December 2022, COVID-19 had some impact on our research, clinical studies and our commercial activities in the first months of 2023. Measures were put in place to reduce the impact and, in the second quarter of 2023, these activities normalized.
At HUTCHMED, we are committed to a progressive journey as we continue to grow. This includes embedding sustainability into all aspects of our operations and creating long-term value for our stakeholders, including our staff, our communities and our shareholders. In April 2023, we published our 2022 Sustainability Report alongside our 2022 Annual Report. This year we continue to make progress in line with the commitments and outcomes outlined in the report, including achieving satisfactory progress to date towards the 11 short- to long-term sustainability goals and targets and following the recommended disclosure framework of the Task Force on Climate-related Financial Disclosures (TCFD) in line with the risks assessment. In the second half of 2023, we continue enhancing our climate risks action by conducting scope 3 emissions screening, introducing a digital data collection platform, and further strengthening our sustainability-related disclosures.
Foreign exchange impact: The RMB depreciated against the U.S. dollar on average by approximately 7% during the six months ended June 30, 2023, which has impacted our consolidated financial results as highlighted below.
Following the closing of the license with Takeda and having received from them the upfront payment of $400 million, we currently expect to recognize approximately $280 million in 2023.
We provide financial guidance for Oncology/Immunology consolidated revenues, reflecting expected revenue growth of our oncology products in China; R&D services income from our partners AstraZeneca, Lilly and Takeda; potential milestone payments on fruquintinib U.S. regulatory approval; and the above-mentioned recognition of the upfront payment from Takeda. We believe that we remain on track to meet the 2023 guidance provided in the announcement of our 2022 full year results on February 28, 2023.
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. After registering, investors may access a live audio webcast of the call via HUTCHMED’s website at www.hutch-med.com/event/.
Participants who wish to join the call by telephone and ask a question must register. Upon registration, each participant will be provided with dial-in numbers and a unique PIN.
HUTCHMED intends to host a Capital Markets Day in the fourth quarter of this year to further update the market on its progress following the strategy change, and to showcase the exciting pipeline of drug candidates.
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 approximately 5,000 personnel across all its companies, at the center of which is a team of about 1,800 in oncology/immunology. Since inception, HUTCHMED has focused on bringing cancer drug candidates from in-house discovery to patients around the world, with its first three oncology medicines 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) 306-4490|
|Americas – Brad Miles, Solebury Strategic Communications||+1 (917) 570 7340 (Mobile) / email@example.com|
|Europe – Ben Atwell / Alex Shaw, FTI Consulting||+44 20 3727 1030 / +44 7771 913 902 (Mobile) / +44 7779 545 055 (Mobile) / HUTCHMED@fticonsulting.com|
|Asia – Zhou Yi, Brunswick||+852 9783 6894 (Mobile) / HUTCHMED@brunswickgroup.com|
|Atholl Tweedie / Freddy Crossley / Daphne Zhang,
|+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 subsidiaries 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 products and drug 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 drug candidates in development; the ability of HUTCHMED to manufacture and manage supply chains for multiple products and drug 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; 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 COVID-19. 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 (E.U.) No 596/2014 (as it forms part of retained E.U. law as defined in the European Union (Withdrawal) Act 2018).
 Takeda = Takeda Pharmaceuticals International AG.
 NDA = New Drug Application.
 FDA = Food and Drug Administration.
 PDUFA = U.S. Prescription Drug User Fee Act.
 MAA = Marketing Authorization Application.
 EMA = European Medicines Agency.
 CRC = Colorectal cancer.
 NRDL = National Reimbursement Drug List.
 IHCC = Intrahepatic cholangiocarcinoma.
 SHP2 = Src homology-2 domain-containing protein tyrosine phosphatase-2.
 CER = Constant exchange rate. We also report changes in performance at 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.
 R&D = Research and development.
 SG&A expenses = Selling, general and administrative expenses.
 AACR = American Association for Cancer Research.
 ASCO = American Society of Clinical Oncology.
 ASCO GI = ASCO (American Society of Clinical Oncology) Gastrointestinal Cancers Symposium.
 EHA = European Hematology Association.
 ICML = International Conference on Malignant Lymphoma.
 In-market sales = total sales to third parties provided by Eli Lilly (ELUNATE®), AstraZeneca (ORPATHYS®) and HUTCHMED (ELUNATE®, SULANDA®, ORPATHYS® and TAZVERIK®).
 Lilly = Eli Lilly and Company.
 NMPA = National Medical Products Administration.
 PMDA = Pharmaceuticals and Medical Devices Agency.
 NSCLC = Non-small cell lung cancer.
 MET = Mesenchymal epithelial transition factor.
 EGFR = Epidermal growth factor receptor.
 PRCC = Papillary renal cell carcinoma.
 VEGFR = Vascular endothelial growth factor receptor.
 PD-1 = Programmed cell death protein-1.
 RCC = Renal cell carcinoma.
 FGFR = Fibroblast growth factor receptor.
 CSF-1R = Colony-stimulating factor 1 receptor.
 Syk = Spleen tyrosine kinase.
 AIHA = Autoimmune hemolytic anemia.
 ITP = Immune thrombocytopenia purpura.
 PI3Kδ = Phosphoinositide 3-kinase delta.
 Ipsen = Ipsen SA, parent of Epizyme Inc.
 Epizyme = Epizyme Inc., a wholly owned subsidiary of Ipsen SA.
 IDH = Isocitrate dehydrogenase.
 BTK = Bruton’s tyrosine kinase.
 ERK = Extracellular signal-regulated kinase.
 MAPK pathway = RAS-RAF-MEK-ERK signaling cascade.
 CDE = Center for Drug Evaluation.
 SHPL = Shanghai Hutchison Pharmaceuticals Limited.
 GAAP = Generally Accepted Accounting Principles.
 ADS = American depositary share.
[xlvi] HKEX = The Main Board of The Stock Exchange of Hong Kong Limited.