Hong Kong, Shanghai & Florham Park, NJ — Wednesday, July 31, 2024: HUTCHMED (China) Limited (“HUTCHMED”, the “Company” or “we”) (Nasdaq/AIM:HCM; HKEX:13) today reports its financial results for the six months ended June 30, 2024 and provides updates on key clinical and commercial developments.
HUTCHMED to host results webcasts today at 8:00 a.m. EDT / 1:00 p.m. BST / 8:00 p.m. HKT in English, and at 8:30 a.m. HKT in Chinese (Putonghua) on Thursday, August 1, 2024. After registration, investors may access the live webcast via HUTCHMED’s website at www.hutch-med.com/event.
All amounts are expressed in US dollars unless otherwise stated.
Continued revenue momentum with substantial cash balance to support growth
Globalization of fruquintinib continues, broader pipeline makes strong progress
Dr Dan Eldar, Non-executive Chairman of HUTCHMED, said, “HUTCHMED has delivered strong performance in the first half of this year. The team has made significant progress implementing our strategy in discovering and developing novel, effective medicines; conducting clinical trials in our home market and in the global markets; and rapidly advancing regulatory and commercial goals. I am very pleased with the ongoing success of our partnership with Takeda and with the growing ability of the Company to provide health benefits to patients overseas. We have grown our revenues from the US during this period and we expect to see revenue growth from many other countries in the coming months. We are also capitalizing on our proven track record of bringing new medicines and additional indications for our marketed medicines to China, with several potential NDA approvals for the next few years.”
“I would like to take this opportunity to express my appreciation to Mr Simon To, my predecessor, who has recently retired. Mr To has stood at the cradle of HUTCHMED and has made a very significant contribution to grow the Company and turn it into a global innovative player, discovering, developing and commercializing therapies for the treatment of cancer and immunological diseases, improving the quality of life of patients around the world. I look forward to guiding the Company along its next phase of growth, which is full of potential and promise.”
Dr Weiguo Su, Chief Executive Officer and Chief Scientific Officer of HUTCHMED, said, “The HUTCHMED team has been working tirelessly to continue the outstanding clinical and regulatory momentum that we have had in recent years, whilst importantly driving the commercial success of our approved products. I would like to extend my thanks to everyone for their hard work and commitment. Our oncology product revenue has grown 59% compared to the first half of 2023 and we are progressing a more focused R&D pipeline that has considerable potential for value creation. This year we initiated three key late-stage studies across our pipeline and are excited to be running over a dozen such studies that could support future drug approvals.”
“The partnership strategy that we adopted for globalizing our medicines is allowing us to simultaneously fuel our in-house R&D engine, drive sales in our home market, and bring our medicines to patients in new geographies. Takeda’s impressive initial sales of FRUZAQLA® demonstrates both the quality of our medicines and their potential across the globe and our strategy of working with partners outside of our home market.”
“We expect to advance our registration trials in the second half of the year. Around year end, we anticipate the potential approval of sovleplenib in China and potential NDA filing of savolitinib in the US. We will continue to progress towards becoming a self-sustaining biopharma business.”
Oncology in-market sales were up 140% (145% at CER) to $243.3 million (H1-23: $101.3m), which led to strong growth in consolidated oncology product revenue of 59% (64% at CER) to $127.8 million (H1-23: $80.1m), and mainly comprised of the following:
Oncology/Immunology consolidated revenue comprised of consolidated oncology product revenue, which included product revenue, commercial service fees and royalties, as well as R&D income from our collaboration partners, mainly as follows:
As a result, total Oncology/Immunology consolidated revenue was $168.7 million (H1-23: $359.2m). Including Other Ventures revenue, total revenue was $305.7 million (H1-23: $532.9m).
China
Ex-China
Savolitinib (ORPATHYS® in China), a highly selective oral inhibitor of MET[23]
Potential upcoming clinical and regulatory milestones for savolitinib:
Fruquintinib (ELUNATE® in China, FRUZAQLA® outside of China), a highly selective oral inhibitor of VEGFR[27] 1/2/3 designed to have enhanced selectivity that limits off-target kinase activity
Potential upcoming clinical and regulatory milestones for fruquintinib:
Sovleplenib (HMPL-523), an investigative and highly selective oral inhibitor of Syk, an important component of the Fc receptor and B-cell receptor signaling pathways
Potential upcoming clinical milestones for sovleplenib:
Surufatinib (SULANDA® in China), an oral inhibitor of VEGFR, FGFR[40] and CSF-1R[41] designed to inhibit tumor angiogenesis and promote immune response against tumor cells via tumor associated macrophage regulation
Tazemetostat (TAZVERIK® in Hainan, Macau and Hong Kong), a first-in-class, oral inhibitor of EZH2
HMPL-453, a novel, highly selective and potent inhibitor targeting FGFR 1, 2 and 3
HMPL-306, an investigative and highly selective oral dual-inhibitor of IDH1 and IDH2 enzymes, which have been implicated as drivers of certain hematological malignancies, gliomas and solid tumors
Other early-stage investigational drug candidates
Further clinical progress by Inmagene[46] with two candidates discovered by HUTCHMED
HUTCHMED is committed to progressively embedding sustainability into all aspects of our operations and creating long-term value for our stakeholders. In April 2024, we published our 2023 Sustainability Report, which highlighted progress made in our 11 goals and targets; our enhanced climate actions including Scope 3 emissions screening and measurement and engaging with suppliers; our enhanced data quality; our strengthened alignment of our five most relevant and material sustainability pillars; and our enhanced disclosure and sector specific disclosure standards ahead of requirement.
Wider recognition of HUTCHMED’s efforts have been reflected in steady improvements in major local and international sustainability ratings including from Hang Seng, ISS, MSCI, S&P Global, Sustainalytics and Wind. Recently, HUTCHMED scored 49 for S&P Global ESG[48] Ratings, significantly higher than the industry average of 31. HUTCHMED also received the Best ESG(E) at the Hong Kong Investor Relations Association’s 10th Investor Relations Awards, two awards at Bloomberg Businessweek’s ESG Leading Enterprises event, five awards from Metro Finance’s GBA ESG Achievement Awards, and was listed amongst the Top 20 Chinese Pharmaceutical Listed Companies in ESG Competitiveness by Healthcare Executive.
In 2024, we continue our efforts on the above areas and further strengthening our climate action by conducting a more comprehensive climate risk assessment to quantify the impact of climate risks in our major operations; incorporate sustainability into our corporate culture; and considering future goals and targets.
Foreign exchange impact: The RMB depreciated against the US dollar on average by approximately 4% during the first half of 2024, which has impacted our consolidated financial results as highlighted below.
We reiterate full year 2024 guidance for Oncology/Immunology consolidated revenue is $300 million to $400 million, driven by 30% to 50% growth target in oncology marketed product revenue. HUTCHMED’s work in 2024 and beyond will be supported by its strong balance sheet. The Company is thus well placed to deliver against its target to become a self-sustaining business and its goal to bring its innovative medicines to patients globally through its own sales network in China markets and through partners worldwide.
Shareholders and investors should note that:
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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” for further information relevant to the interpretation of these financial measures and reconciliations of these financial measures to the most comparable GAAP measures, respectively.
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About HUTCHMED
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 it has focused on bringing cancer drug candidates from in-house discovery to patients around the world, with its first three oncology medicines marketed in China, the first of which is also marketed in the US. For more information, please visit: www.hutch‑med.com or follow us on LinkedIn.
Contacts
Investor Enquiries |
+852 2121 8200 / ir@hutch-med.com |
Media Enquiries |
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Ben Atwell / Alex Shaw, FTI Consulting | +44 20 3727 1030 / +44 7771 913 902 (Mobile) / +44 7779 545 055 (Mobile) / HUTCHMED@fticonsulting.com |
Zhou Yi, Brunswick | +852 9783 6894 (Mobile) / HUTCHMED@brunswickgroup.com |
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Nominated Advisor |
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Atholl Tweedie / Freddy Crossley / Rupert Dearden, Panmure Liberum | +44 (20) 7886 2500 |
References
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.
Past Performance and Forward-Looking Statements
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 US 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 have been obtained will continue to remain valid and effective in the future, 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; discovery, development and/or commercialization of 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 pandemics and disease outbreaks. For further discussion of these and other risks, see HUTCHMED’s filings with the US Securities and Exchange Commission, on AIM and on HKEX[53]. 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.
Inside Information
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).
Medical Information
This announcement contains information about products that may not be available in all countries, or may be available under different trademarks, for different indications, in different dosages, or in different strengths. Nothing contained herein should be considered a solicitation, promotion or advertisement for any prescription drugs including the ones under development.
[1] 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.
[2] In-market sales = total sales to third parties provided by Eli Lilly (ELUNATE®), Takeda (FRUZAQLA®), AstraZeneca (ORPATHYS®) and
HUTCHMED (ELUNATE®, SULANDA®, ORPATHYS® and TAZVERIK®).
[3] R&D = Research and development.
[4] Takeda = Takeda Pharmaceuticals International AG, a subsidiary of Takeda Pharmaceutical Company Limited.
[5] ITP = immune thrombocytopenia purpura.
[6] NDA = New Drug Application.
[7] NSCLC = Non-small cell lung cancer.
[8] METex14 = MET exon 14 skipping alterations.
[9] AIHA = Autoimmune hemolytic anemia.
[10] AML = Acute myeloid leukemia.
[11] PDAC = Pancreatic ductal adenocarcinoma.
[12] Syk = Spleen tyrosine kinase.
[13] EZH2 = Enhancer of zeste homolog 2.
[14] IDH = Isocitrate dehydrogenase.
[15] BTK = Bruton’s tyrosine kinase.
[16] CRC = Colorectal cancer.
[17] NRDL = China National Reimbursement Drug List.
[18] Lilly = Eli Lilly and Company.
[19] sNDA = Supplemental New Drug Application.
[20] NMPA = China National Medical Products Administration.
[21] R/R = Relapsed and/or refractory.
[22] EMA = European Medicines Agency.
[23] MET = Mesenchymal epithelial transition factor.
[24] AACR = American Association for Cancer Research Annual Meeting.
[25] EGFR = Epidermal growth factor receptor.
[26] FDA = Food and Drug Administration.
[27] VEGFR = Vascular endothelial growth factor receptor.
[28] pMMR = Proficient mismatch repair.
[29] ASCO = American Society of Clinical Oncology Annual Meeting.
[30] ASCO GI = ASCO Gastrointestinal Cancers Symposium.
[31] CEA = Carcinoembryonic antigen.
[32] PFS = Progression free survival.
[33] ORR = Objective response rate.
[34] DCR = Disease control rate.
[35] OS = Overall survival.
[36] PMDA = Pharmaceuticals and Medical Devices Agency.
[37] RCC = Renal cell carcinoma.
[38] EHA = European Hematology Association.
[39] TPO/TPO-RA = Thrombopoietin and/or thrombopoietin receptor agonists.
[40] FGFR = Fibroblast growth factor receptor.
[41] CSF-1R = Colony-stimulating factor 1 receptor.
[42] PD-1 = Programmed cell death protein-1.
[43] IHCC = Intrahepatic cholangiocarcinoma.
[44] ERK = Extracellular signal-regulated kinase.
[45] ADC = Antibody-drug conjugate.
[46] Inmagene = Inmagene Biopharmaceuticals.
[47] SHPL = Shanghai Hutchison Pharmaceuticals Limited.
[48] ESG = Environmental, Social and Governance.
[49] GAAP = Generally Accepted Accounting Principles.
[50] Hainan Pilot Zone = Hainan Boao Lecheng International Medical Tourism Pilot Zone.
[51] S&A= Selling and administrative expenses.
[52] ADS = American depositary share.
[53] HKEX = The Main Board of The Stock Exchange of Hong Kong Limited.