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Announcements & Press Releases, Group | 3 Mar 2022

HUTCHMED Reports 2021 Full Year Results and Provides Business Updates

Oncology/Immunology revenues up 296% to $119.6 million, due to ELUNATE® growth and the 2021 launches of SULANDA® and ORPATHYS®;

Positive SAVANNAH, CALYPSO and VIKTORY studies triggered five registration studies on ORPATHYS® in lung cancer, kidney and gastric cancer during 2021;

Broad late-stage development program – currently enrolling 13 registration studies on 6 assets – with enrollment on the 691 patient FRESCO-2 global Phase III of fruquintinib now complete.

Company to Host Annual Results Call & Webcast Today
at 9 p.m. HKT / 1 p.m. GMT / 8 a.m. EST

 

Hong Kong, Shanghai & Florham Park, NJ Thursday, March 3, 2022: HUTCHMED (China) Limited (“HUTCHMED”) (Nasdaq/AIM:HCM; HKEX:13), the innovative, commercial-stage biopharmaceutical company, today reports its audited financial results for the year ended December 31, 2021 and provides updates on key clinical and commercial developments since the start of 2022.

 

All amounts are expressed in U.S. dollars unless otherwise stated.

 

2021 FULL YEAR Results & Business Updates

“2021 was an exceptional year for HUTCHMED,” said Mr. Simon To, Chairman of HUTCHMED. “Commercial success on ELUNATE® and the launches of SULANDA® and ORPATHYS® contributed to an almost four-fold increase in consolidated oncology/immunology revenues to $119.6 million, with momentum continuing in 2022.

 

ORPATHYS® took a major step forward in 2021 with its first approval and important, and as yet unpublished, data from the SAVANNAH study in combination with TAGRISSO®. We and our partner AstraZeneca[1] initiated four Phase III studies and one Phase II study, with registration potential, for ORPATHYS® during 2021. These actions have triggered $40 million in milestone payments to HUTCHMED since mid-2021. A seventh registration study, a global Phase III in NSCLC[2], the SAFFRON study, is set to initiate in mid-2022.

 

We are rapidly progressing our plan to expand our oncology assets into global markets. Led by our team of over 800-personnel in discovery, development and manufacturing operations, we have an un-equaled fifteen-year track-record of producing highly quality novel oncology/immunology drug candidates.

 

Seven of our assets are now being developed outside China. In addition to the global progress of ORPATHYS®, surufatinib’s U.S. NDA[3] and EU MAA[4] are in the later stages of regulatory review for advanced NETs; enrollment was completed for fruquintinib in a fourteen-country global Phase III study, the FRESCO-2 study, in CRC[5] which reads-out later in 2022; positive and differentiated POC data was presented for amdizalisib and sovleplenib; and our FGFR[6], IDH1/2[7], ERK[8], third generation BTK[9] and CSF-1R[10] inhibitors all made good progress in early development.

 

With a strong track record in bringing innovative drugs to patients through rigorous clinical trials, our seasoned clinical team is now enrolling 13 registration studies for six assets with an additional 5 registration studies set to initiate in 2022. With over $1 billion in cash, and the intention to divest further non-core assets, we anticipate having sufficient runway to see our plans through.

 

Our strategy is to launch a stream of new products in both the China and global markets over the coming years, helping patients with unmet needs and creating value for all our stakeholders.”

 

I. COMMERCIAL OPERATIONS

  • Total revenues increased 56% to $356.1 million in 2021 (2020: $228.0m), driven by commercial progress on our three in-house developed oncology drugs ELUNATE®, SULANDA® and ORPATHYS®;
  • Full year 2021 Oncology/Immunology consolidated revenues of $119.6 million, up 296% (2020: $30.2m), and in line with 2021 guidance of $110-130 million;
  • Continuing expansion of in-house oncology commercial organization in China, which at the end of 2021 numbered about 630 personnel (end 2020: ~390) covering over 2,500 oncology hospitals and over 29,000 oncology physicians;
  • ELUNATE® (fruquintinib in China) in-market sales[11] increased 111% to $71.0 million (2020: $33.7m), reflecting a full year of HUTCHMED management of all on-the-ground medical detailing, promotion and local and regional marketing activities in China;
  • SULANDA® (surufatinib in China) launched for both extra-pancreatic NET and pancreatic NET with in-market sales in 2021 of $11.6 million (2020: nil). An encouraging start in the self-pay market and positioned well for national reimbursement which started in January 2022;
  • ORPATHYS® (savolitinib in China) launched in mid-2021 through AstraZeneca’s extensive oncology commercial organization, with in-market sales of $15.9 million (2020: nil). Rapid initial self-pay uptake due to being the first-in-class selective MET[12] inhibitor in China;
  • Successful management of the NRDL[13] process to expand access to our key products in January 2022. Concluded ELUNATE® NRDL renewal and first time NRDL inclusion of SULANDA®; and
  • U.S. commercial team continued to build for the potential surufatinib U.S. approval in 2022. The team, more than 30 personnel, is fully engaged on all aspects of launch readiness including supply chain, market access, marketing, sales and commercial operations.

 

(Growth vs. Prior Period) In-market Sales* Consolidated Revenue**
2021 Jan-Feb 2022
Unaudited
2021 Jan-Feb 2022
Unaudited
ELUNATE® $71.0m (111%) $21.6m (51%) $53.5m (168%) $13.5m (33%)
SULANDA® $11.6m $6.0m (21%) $11.6m $6.0m (21%)
ORPATHYS® $15.9m $7.4m $11.3m $4.8m
Product Sales $98.5m (192%) $35.0m (81%) $76.4m (282%) $24.3m (61%)
Other R&D[14] Service income $18.2m (77%) $3.7m (80%)
Milestone payments $25.0m $15.0m
Total Oncology/ Immunology $119.6m (296%) $43.0m (151%)
 
* = For ELUNATE® and ORPATHYS®, represents total sales to third parties as provided by Lilly and AstraZeneca, respectively;
** = For ELUNATE
® and ORPATHYS®, represents manufacturing fees, commercial service fees and royalties paid by Lilly and AstraZeneca, respectively, to HUTCHMED, and sales to other third parties invoiced by HUTCHMED; For SULANDA®, represents the Company’s sales of the product to third parties.

 

II. REGULATORY ACHIEVEMENTS

China

  • Received China NMPA[15] NDA approval for ORPATHYS® (savolitinib) as a treatment for patients with MET exon 14 skipping alteration NSCLC in June 2021, making savolitinib the first-in-class selective MET inhibitor in China.
  • Received second China NMPA NDA approval for SULANDA® (surufatinib) in June 2021 as a treatment for patients with advanced pancreatic NET;
  • A $25 million milestone payment was made to us by AstraZeneca in July 2021 upon first sale of ORPATHYS® in China;
  • Received Breakthrough Therapy Designation in China for amdizalisib (HMPL-689) in September 2021 for the treatment of relapsed or refractory follicular lymphoma; and
  • Received Breakthrough Therapy Designation in China for sovleplenib (HMPL-523) in January 2022 for the treatment of ITP[16].

 

United States and Europe

  • Surufatinib U.S. FDA[17] NDA process update:
    • Completed submission of U.S. FDA NDA for surufatinib, which was accepted in June 2021, for the treatment of both pancreatic and extra-pancreatic NET;
    • S. FDA NDA review, as well as the clinical site inspections and pre-approval inspections of our manufacturing facilities, are ongoing, several inspections have been completed with others pending subject to COVID-19 travel restrictions and security requirements for foreign visitors; and
    • The PDUFA[18] goal date is April 30, 2022 and mid- and late-cycle review meetings with the FDA have completed. Timing of completion of the NDA review is subject to FDA scheduling limitations.
  • Surufatinib EMA[19] MAA process update:
    • Fully submitted EMA MAA for surufatinib, which was validated and accepted in July 2021, for the treatment of both pancreatic and non-pancreatic NET; and
    • Completed the 120-day assessment, and now entering the later stages of MAA review.
  • Savolitinib: conducted U.S. FDA EOP2[20] meeting for SAVANNAH study of savolitinib plus TAGRISSO® in EGFR[21] TKI[22] refractory NSCLC.
    • Continued evaluation of SAVANNAH study for potential accelerated approval use; and
    • Completed clinical trial applications in U.S., EU and Japan for the SAFFRON study, a global pivotal Phase III study of savolitinib and TAGRISSO® in patients with NSCLC who have progressed following TAGRISSO® treatment due to MET amplification.

 

III. CLINICAL DEVELOPMENT ACTIVITIES

Savolitinib (ORPATHYS®), a highly selective oral inhibitor of MET being developed broadly across MET-driven patient populations in lung and gastric cancer and renal cell carcinoma

Major clinical milestones for savolitinib in 2021:

  • Initiated SAMETA, a global Phase III pivotal study of the savolitinib plus IMFINZI® combination in MET-driven, unresectable and locally advanced or metastatic PRCC in October 2021 (NCT05043090);
  • Initiated SANOVO, a pivotal Phase III study in China for the savolitinib plus TAGRISSO® combination in treatment naïve patients with EGFR mutant NSCLC with MET aberration in September 2021 (NCT05009836);
  • Initiated SACHI, a pivotal Phase III study in China for the savolitinib plus TAGRISSO® combination in patients with EGFR mutant NSCLC who have progressed following EGFR TKI treatment due to MET amplification in November 2021 (NCT05015608);
  • Initiated Phase II study with potential for registration (NCT04923932) for savolitinib in metastatic gastric cancer with MET amplification in China in mid-2021;
  • Initiated a confirmatory China Phase IIIb post-approval study (NCT04923945) of savolitinib monotherapy in MET exon 14 skipping alteration patients in mid-2021; and
  • A further $15 million milestone payment, to us by AstraZeneca, was triggered in February 2022 upon initiation of start-up activities for SAFFRON.

 

Major savolitinib clinical data presentations in 2021:

  • Presented CALYPSO Phase II study data in MET-driven PRCC patients (NCT02819596) for savolitinib in combination with IMFINZI® at the 2021 ASCO[23] Annual Meeting;
  • Published in The Lancet Respiratory Medicine updated data from the Phase II study in patients with MET exon 14 skipping alteration NSCLC (NCT02897479); and
  • Presented final Phase II data at WCLC[24] 2020 for the TATTON study (NCT02143466) in NSCLC patients with MET amplification who had progressed after prior treatment with EGFR inhibitors.

 

Potential upcoming clinical and regulatory milestones for savolitinib in 2022:

  • Submit for presentation the SAVANNAH Phase II study (NCT03778229) for the savolitinib plus TAGRISSO® combination in NSCLC patients harboring EGFR mutation and MET amplification or overexpression at a scientific conference in the second half of 2022; and
  • Commence enrollment in SAFFRON, a global, pivotal Phase III study for the savolitinib plus TAGRISSO® combination in mid-2022 (NCT05261399).

 

Surufatinib (SULANDA® in China), an oral inhibitor of VEGFR[25], FGFR and CSF-1R designed to inhibit tumor angiogenesis and promote the body’s immune response against tumor cells via tumor associated macrophage regulation; approved and launched in China

Major clinical milestones for surufatinib in 2021:

  • Initiated the SURTORI-01 Phase III trial in NEC[26] patients in China, the first pivotal study combining SULANDA® and TUOYI®, Junshi’s[27] anti-PD-1 antibody, in September 2021 (NCT05015621);
  • Initiated a bridging study in NET patients in Japan in September 2021 (NCT05077384) based on dialogue with the Japanese PMDA[28]; and
  • Initiated an international Phase Ib/II study of surufatinib combined with tislelizumab (NCT04579757), BeiGene’s[29] PD-1[30] antibody, in the U.S. and Europe in March 2021.

 

Major surufatinib clinical data presentations in 2021:

  • Presented NEC cohort data from the China Phase II study of surufatinib plus TUOYI® (NCT04169672) at the 2021 ASCO and ESMO IO[31] 2021 annual meetings;
  • Presented data from the gastric and gastroesophageal junction cancers cohort of the China Phase II study of surufatinib plus TUOYI® (NCT04169672) at the 2021 ASCO and ESMO IO 2021 annual meetings;
  • Presented data from two additional cohorts of the China Phase II study of surufatinib plus TUOYI® (NCT04169672) at the ESMO IO 2021 for esophageal and small cell lung cancer;
  • Presented updated results from U.S. Phase Ib monotherapy NET cohorts (NCT02549937) in heavily pretreated patients with NET at the 2021 ASCO Annual Meeting;
  • Presented a subgroup analysis by Ki-67 and baseline CgA[32] of the Phase III monotherapy study in pancreatic NET (SANET-p) (NCT02589821) at the 2021 ASCO Annual Meeting; and
  • Presented Phase II data for surufatinib monotherapy in BTC[33] patients (NCT02966821) at the 2021 ASCO Annual Meeting in U.S. patients after first-line chemotherapy.

 

Potential upcoming clinical and regulatory milestones for surufatinib in 2022:

  • Submit for presentation data from the Phase Ib/II combination study with tislelizumab at a scientific conference in the second half of 2022;
  • Submit for presentation further Phase II data for the TUOYI® combination study for biliary tract, thyroid cancer, non-small cell lung cancer, endometrial cancer and sarcoma cohorts at a scientific conference in the second half of 2022, and
  • Plan to initiate SURTORI-02, a Phase III study of surufatinib in combination with TUOYI® in esophageal cancer in China in the second half of 2022.

 

Fruquintinib (ELUNATE® in China), a highly selective oral inhibitor of VEGFR 1/2/3 designed to improve kinase selectivity to minimize off-target toxicity and thereby improve tolerability; approved and launched in China

Major clinical milestones for fruquintinib in 2021:

  • Completed enrollment in the FRESCO-2 global Phase III registration study (NCT04322539) in refractory metastatic CRC in late 2021, with 691 patients recruited in 15 months, across 14 countries including U.S., EU, Japan and Australia, ahead of schedule;
  • Initiated registration-intent Phase II study in endometrial cancer for fruquintinib in combination with TYVYT® (NCT03903705) following discussion with the NMPA;
  • Initiated a Phase II study in China and Korea for fruquintinib in combination with tislelizumab (NCT04716634) with advanced or metastatic, unresectable gastric cancer, CRC or NSCLC;
  • Initiated a Phase Ib/II study in the U.S. for fruquintinib in combination with tislelizumab (NCT04577963) in patients with triple negative breast or endometrial cancer and metastatic CRC; and
  • Completed enrollment in four cohorts of the Phase II study of fruquintinib combined with TYVYT® (NCT03903705), in CRC, endometrial cancer, HCC[34] and RCC[35] in China.

 

Major fruquintinib clinical data presentations in 2021:

  • Presented preliminary endometrial cancer, HCC and RCC cohorts data from the Phase Ib/II studies of fruquintinib combined with TYVYT® at CSCO[36] 2021 (NCT03903705);
  • Presented preliminary CRC cohorts data from the Phase Ib/II studies of fruquintinib combined with TYVYT® and of fruquintinib combined with geptanolimab, Genor’s[37] PD-1 antibody, at the 2021 ASCO Annual Meeting (NCT04179084 and NCT03977090, respectively); and
  • Presented Phase Ib U.S. monotherapy data in two different cohorts of patients with refractory metastatic CRC (NCT03251378) at the 2022 ASCO Gastrointestinal Cancers Symposium.

 

Potential upcoming clinical and regulatory milestones for fruquintinib in 2022:

  • Complete enrollment of the FRUTIGA China Phase III registration study (NCT03223376) in advanced gastric cancer in 2022, which is expected to enroll about 700 patients in China;
  • Report outcome of the FRESCO-2 trial (NCT04322539) in the second half of 2022 when the event-driven primary endpoint, OS[38], is reached;
  • If FRESCO-2 is positive, HUTCHMED plans to initiate a simultaneous submission program to apply for fruquintinib marketing authorization with the U.S. FDA, the EMA and the PMDA; and
  • Plan to initiate Phase III studies of fruquintinib plus TYVYT® combination in HCC, RCC and endometrial cancer in China.

 

Amdizalisib (HMPL-689), an investigative and highly selective oral inhibitor of PI3Kδ[39] designed to address the gastrointestinal and hepatotoxicity associated with currently approved and clinical-stage PI3Kδ inhibitors

Major clinical milestones for amdizalisib in 2021:

  • Initiated two Phase II studies with potential for registration in China for the treatment of patients with follicular lymphoma and patients with marginal zone lymphoma in April 2021; and
  • Initiated dose expansion portion of the Phase I/Ib study in the U.S. and Europe (NCT03786926) in the second half of 2021 in multiple types of non-Hodgkin’s lymphoma.

 

Major amdizalisib clinical data presentation in 2021:

  • Presented initial dose expansion data at ESMO in September 2021 at the RP2D[40], in patients with multiple types of non-Hodgkin’s lymphoma in China.

 

Potential upcoming clinical and regulatory milestones for amdizalisib in 2022:

  • Initiate additional Phase II studies with potential for registration intent in China in additional relapsed/refractory non-Hodgkin’s lymphoma indications in the second half of 2022;
  • Initiate studies in combination with other anti-cancer therapies in China in early 2022; and
  • Complete recruitment of patients for Phase II studies with potential for registration intent in China for the treatment of follicular lymphoma and marginal zone lymphoma in late 2022.

 

Sovleplenib (HMPL-523), an investigative and highly selective oral inhibitor of Syk[41], an important component of the B-cell receptor signaling pathway, for the treatment of hematological cancers and immune diseases

Major clinical and regulatory milestones for sovleplenib in 2021:

  • Initiated the ESLIM-01 Phase III pivotal study in ITP (NCT03951623) in China in October 2021; and
  • Initiated dose expansion portion of the international Phase I study in the second half of 2021 in multiple non-Hodgkin’s lymphoma indications.

 

Major sovleplenib clinical data presentations in 2021:

  • Presented initial Phase Ib ITP study (NCT03951623) in China at ASH 2021[42]; and
  • Presented initial data from the dose escalation portion of the international Phase I study (NCT03779113) in lymphoma patients in the U.S. and Europe at ASH 2021.

 

Potential upcoming clinical milestone for sovleplenib in 2022:

  • Complete U.S. IND and initiate Phase I study in the U.S. in patients with ITP.

 

Tazemetostat (TAZVERIK® in the U.S. and Japan), an inhibitor of EZH2 licensed from Epizyme for which HUTCHMED is collaborating to research, develop, manufacture and commercialize in Greater China

 Potential upcoming clinical and regulatory milestones for tazemetostat in 2022:

  • Initiate a bridging study in follicular lymphoma in China for conditional registration based on U.S. approvals;
  • Initiate the China portion of the global SYMPHONY-1 Phase III trial (NCT04224493) of tazemetostat combined with lenalidomide and rituximab in patients with relapsed or refractory follicular lymphoma after at least one prior line of therapy;
  • Initiate Phase II combination studies with other HUTCHMED assets; and
  • Engage with NMPA on potential path for regulatory approval for the treatment of patients with epithelioid sarcoma, a rare disease for which TAZVERIK® has FDA approval.

 

HMPL-453, an investigative and highly selective oral inhibitor of FGFR 1/2/3

  • Initiated combination studies with other anti-cancer therapies, including chemotherapies and/or PD-1 antibodies, in China in January 2022 (NCT05173142).

 

HMPL-306, an investigative and highly selective oral inhibitor of IDH1/2 designed to address resistance to the currently marketed IDH inhibitors

Major clinical and regulatory milestones for HMPL-306 in 2021:

  • Initiated Phase I dose escalation study in China in hematological malignancies;
  • Initiated dose escalation portion of a Phase I study (NCT04764474) in the U.S. and Europe in patients with hematological malignancies with an IDH1 and/or IDH2 mutation in early 2021; and
  • Initiated dose escalation portion of a Phase I study (NCT04762602) in the U.S. and Europe in patients with solid tumors with an IDH1 and/or IDH2 mutation in early 2021.

 

Potential upcoming clinical and regulatory milestones for HMPL-306 in 2022:

  • Submit for presentation data from the dose escalation portion of the Phase I study (NCT04272957) in China at a scientific conference in mid-2022; and
  • Initiate dose expansion portion of the Phase I study in China in mid-2022; and
  • Initiate dose expansion portion of the Phase I studies in the U.S. and Europe in mid-2022.

 

HMPL-295, an investigative and highly selective oral inhibitor of ERK in the MAPK pathway [43] with the potential to address intrinsic or acquired resistance from upstream mechanisms such as RAS-RAF-MEK

  • Initiated Phase I trial (NCT04908046) in patients with advanced solid tumors in China in July 2021.

 

HMPL-760, an investigative, highly selective, third-generation oral inhibitor of BTK with improved potency versus first generation BTK inhibitors against both wild type & C481S mutant enzymes

  • Initiated Phase I trials in China (NCT05190068) and the U.S. (NCT05176691) in patients with advanced hematological malignancies in January 2022.

 

HMPL-653, an investigative, highly selective, and potent CSF-1R inhibitor designed to target CSF-1R driven tumors as a monotherapy or in combinations

  • Initiated Phase I trial in China (NCT05190068) in patients with advanced malignant solid tumors and tenosynovial giant cell tumors in January 2022.

 

HMPL-A83, a differentiated, red blood cell sparing CD47 monoclonal antibody

  • Completed IND submission for HMPL-A83 in China in early 2022.

 

IV. MANUFACTURING

  • Commercial scale-up and launches of SULANDA® and ORPATHYS®, alongside ongoing supply of ELUNATE®;
  • Completed all relevant amdizalisib and sovleplenib manufacturing process studies, in preparation for potential NDA submissions; and
  • Rapid progress in building our new flagship Shanghai manufacturing facility, designed to increase our novel drug product manufacturing capacity by over five-fold. Small molecule and large molecule equipment installation is planned for late 2022, with GMP compliance targeted for late 2023.

 

V. OTHER VENTURES

Other Ventures include our profitable prescription drug marketing and distribution platforms covering about 290 cities and towns in China with around 2,900 mainly manufacturing and commercial personnel.

  • Other Ventures delivered encouraging growth with consolidated revenues up 20% (13% at CER[44]) to $236.5 million (2020: $197.8m). This does not include revenues from our non-consolidated joint venture SHPL[45], which also grew by 20% (12% at CER) to $332.6 million (2020: $276.4m);
  • Consolidated net income attributable to HUTCHMED from our Other Ventures grew by 24% (16% at CER) to $54.4 million (2020: $44.0m), excluding one-time gains; and
  • One-time gains totaled $88.5 million (2020: $28.8m), including $82.9 million (2020: nil) from the divestment of HBYS[46] and $5.6 million (2020: $28.8m) from land compensation, before withholding tax.

 

VI. OTHER CORPORATE DEVELOPMENTS

  • Completed listing on the Main Board of HKEX[47], raising net proceeds of approximately $585 million;
  • Completed divestment of interest in HBYS, a non-core and non-consolidated over-the-counter drug joint venture business for $159.1 million in cash, representing about 22 times HBYS’s adjusted net profit attributable to HUTCHMED equity holders in 2020 with an additional $46.4 million related to declared dividends expected to be collected in 2022;
  • Entered into a collaboration with Epizyme in August 2021 to research, develop, manufacture and commercialize in Greater China its drug TAZVERIK®, an EZH2 inhibitor approved by the U.S. FDA for the treatment of certain patients with epithelioid sarcoma and follicular lymphoma;
  • Changed our group company name/corporate identity to HUTCHMED in April 2021, unifying the names of the majority of our key subsidiaries;
  • Announced a strategic partnership with Inmagene[48] in January 2021 to further develop four novel preclinical drug candidates discovered by HUTCHMED for the potential treatment of multiple immunological diseases; and
  • Arbitral award in favor of Hutchison Sinopharm[49] in connection with the termination of its distribution rights for SEROQUEL® in mainland China by Luye Pharma Hong Kong Ltd. In 2021, the Hong Kong International Arbitration Centre made a final award in favor of Hutchison Sinopharm against Luye Pharma Hong Kong Ltd. in the amount of RMB253.2 million ($39.6 million), plus costs and interest. Payment of the award is expected in 2022.

Potential upcoming corporate developments:

  • Divestment of further non-core operations, we continue to look for opportunities to divest non-core businesses, including SHPL, to better focus on the development and global commercialization of our innovation-driven assets; and
  • Large molecule advancement, we continue to evaluate opportunities which might accelerate our capabilities in the large molecule arena.

 

VII. IMPACT OF COVID-19

COVID-19 did not impact our research, our clinical studies or our commercial activities in any material manner in 2021. Certain regulatory inspections of our manufacturing facilities in China by the U.S. FDA have, however, been postponed due to travel restrictions. We will continue to closely work with regulators and monitor the evolving situation.

 

VIII. SUSTAINABILITY

As an innovative, commercial-stage biopharmaceutical company, HUTCHMED embraces sustainability at the core of how we operate. Over the past two decades, we worked hard to strengthen healthcare systems by providing quality and accessible drugs. As the world is gradually adapting to the changes brought about by COVID-19, the pandemic has highlighted the importance of building sustainability and environmental, social and governance factors into business strategy. HUTCHMED has embarked on our sustainability journey in 2020 by publishing our inaugural ESG report to demonstrate our efforts, and establishing a board level Sustainability Committee in 2021 to support the Board of Directors in fulfilling their responsibilities. We plan to publish our second sustainability report for 2021 at the end of May 2022.

 

Going forward, HUTCHMED will be working with our stakeholders to embrace sustainable business practices and develop a sustainability strategy that will help focus our efforts on areas which are most relevant to our business. Through a materiality assessment exercise for 2021, priority areas include: Business ethics; Drug research-related topics; Drug development; Commercial operations responsibilities; Environmental topics; and Management of our people. Over the course of 2022, we will continue to engage our stakeholders to identify areas for improvement to building a more sustainable and responsible future.

 

FULL YEAR 2021 Financial Results

Cash, Cash Equivalents and Short-Term Investments were $1,011.7 million as of December 31, 2021 compared to $435.2 million as of December 31, 2020.

  • Adjusted Group (non-GAAP[50]) net cash flows excluding financing activities were -$73.5 million (2020: -$78.4m), with the net decrease mainly due to $159.1 million in proceeds from the divestment of HBYS, which offset the increasing Oncology/Immunology R&D spending and lower dividends received from our non-consolidated joint ventures totaling $49.9 million (2020: $86.7m); and
  • Net cash generated from financing activities totaled $650.0 million (2020: $296.4m) mainly resulting from the global offering of shares and listing on the HKEX in June 2021 and a private placement in April 2021 to a fund affiliated with Baring Private Equity Asia.

 

Revenues for the year ended December 31, 2021 were $356.1 million compared to $228.0 million in 2020.

  • Oncology/Immunology consolidated revenues increased 296% (287% at CER) to $119.6 million (2020: $30.2m) resulting from:

ELUNATE® revenues increased 168% to $53.5 million (2020: $20.0m) in manufacturing revenues, promotion and marketing service revenues and royalties, as our in-house sales team increased in-market sales 111% to $71.0 million (2020: $33.7m), as provided by Lilly[51];

SULANDA® sales revenues of $11.6 million since mid-January 2021 launch, initially approved to treat patients with advanced extra-pancreatic (non-pancreatic) NET and subsequently also approved to treat patients with pancreatic NET in June 2021;

ORPATHYS® revenue of $36.3 million since mid-July 2021 launch, which was comprised of a $25.0 million first sale milestone payment and $11.3 million in manufacturing revenues and royalties. AstraZeneca reported $15.9 million in-market sales (2020: nil) of ORPATHYS® in 2021; and

Other R&D service fee revenues of $18.2 million (2020: $10.2m), which were primarily fees from AstraZeneca and Lilly for the management of development activities in China.

  • Other Ventures consolidated revenues increased 20% (13% at CER) to $236.5 million (2020: $197.8m), mainly due to continued sales growth of third-party prescription drug products.

 

Net Expenses for the year ended December 31, 2021 were $550.7 million compared to $353.7 million in 2020.

  • Cost of Revenues were $258.2 million (2020: $188.5m), the majority of which were the cost of third-party prescription drug products marketed through our profitable Other Ventures, as well as full year costs associated with ELUNATE®, including the provision of promotion and marketing services to Lilly which commenced in October 2020, and the costs for SULANDA® and ORPATHYS® which commenced commercial sales in 2021;
  • R&D Expenses were $299.1 million (2020: $174.8m), which increased mainly as a result of an expansion in the active development of eleven novel oncology drug candidates. Our rapidly scaling international clinical and regulatory operations in the U.S. and Europe incurred expenses of $140.1 million (2020: $63.3m), while R&D expenses in China were $159.0 million (2020: $111.5m);
  • SG&A Expenses[52] were $127.1 million (2020: $61.3m), which increased primarily due to higher staff costs and share-based compensation expense to support rapidly expanding operations. This included the build-up of a large-scale national oncology commercial infrastructure in China and commercial launch readiness in the U.S. to support our oncology products; and
  • Other Items generated net income of $133.7 million (2020: $70.9m), which increased primarily due to a one-off gain on the divestment of HBYS attributable to the Group of $82.9 million (comprised of a gain of $121.3 million offset in part by related taxes of $14.4 million and amounts attributable to a non-controlling interest of $24.0 million), offset in part by lower one-time land compensation of $5.6 million (2020: $28.8m) recognized for HBYS.

 

Net Loss attributable to HUTCHMED for the year ended December 31, 2021 was $194.6 million compared to $125.7 million in 2020.

  • As a result, the net loss attributable to HUTCHMED in 2021 was $0.25 per ordinary share / $1.23 per ADS[53], compared to net loss attributable to HUTCHMED of $0.18 per ordinary share / $0.90 per ADS, in 2020.

 

Financial Summary

Condensed Consolidated Balance Sheet Data
(in $’000)

 

As of December 31,

2021   2020
Assets
Cash and cash equivalents and short-term investments 1,011,700 435,176
Accounts receivable 83,580 47,870
Other current assets 116,796 47,694
Property, plant and equipment 41,275 24,170
Investments in equity investees 76,479 139,505
Other non-current assets 42,831 29,703
Total assets   1,372,661   724,118
Liabilities and shareholders’ equity
Accounts payable 41,177 31,612
Other payables, accruals and advance receipts 210,839 121,283
Bank borrowings 26,905 26,861
Other liabilities 54,226 25,413
Total liabilities   333,147   205,169
Company’s shareholders’ equity 986,893 484,116
Non-controlling interests 52,621 34,833
Total liabilities and shareholders’ equity   1,372,661   724,118

 

 

Condensed Consolidated Statement of Operations Data
(in $’000, except share and per share data)

  Year Ended December 31,
  2021   2020
Revenues:      
Oncology/Immunology – Marketed Products 76,429 19,953
Oncology/Immunology – R&D 43,181 10,262
   Oncology/Immunology consolidated revenues 119,610 30,215
Other Ventures 236,518 197,761
       Total revenues 356,128   227,976
Expenses:
Costs of revenues (258,234) (188,519)
Research and development expenses (299,086) (174,776)
Selling and general administrative expenses (127,125) (61,349)
       Total expenses (684,445)   (424,644)

 

Loss from Operations

(328,317)   (196,668)
Gain on divestment of an equity investee 121,310
Other (expense)/income (8,733) 6,934
Loss before income taxes and equity in earnings of equity investees (215,740)   (189,734)
Income tax expense (11,918) (4,829)
Equity in earnings of equity investees, net of tax 60,617 79,046
Net loss (167,041)   (115,517)
Less: Net income attributable to non-controlling interests (27,607) (10,213)
Net loss attributable to HUTCHMED (194,648)   (125,730)

 

Losses per share attributable to HUTCHMED – basic and diluted (US$ per share)

(0.25)   (0.18)
Number of shares used in per share calculation – basic and diluted 792,684,524 697,931,437

 

Losses per ADS attributable to HUTCHMED – basic and diluted (US$ per ADS)

(1.23)   (0.90)
Number of ADSs used in per share calculation – basic and diluted 158,536,905 139,586,287

 

All amounts are expressed in U.S. dollars unless otherwise stated.

 

 

FINANCIAL GUIDANCE

We provide financial guidance for 2022 below reflecting expected revenue growth of ELUNATE®, SULANDA® and ORPATHYS® in China. We intend to update guidance to include ex-China consolidated revenues, upon the occurrence of surufatinib U.S. and EU approval (if granted) and to reflect any developments in the non-core market out-licensing of our products.

 

While we are not providing net cash flow guidance for 2022, we do expect an increase in investment to support global clinical and organizational expansion. To support our cash needs, we continue to engage in active discussions regarding the potential divestment of non-core assets, such as SHPL, as well as evaluate equity capital markets action, such as a potential future listing on the STAR Market of the Shanghai Stock Exchange.

 

 

2021
Actual
2022
Guidance
Oncology/Immunology consolidated revenues $119.6 million $160 – 190 million

 

 

Shareholders and investors should note that:

 

  • we do not provide any guarantee that the statements contained in the financial guidance will materialize or that the financial results contained therein will be achieved or are likely to be achieved; and

 

  • we have in the past revised our financial guidance and reference should be made to any announcements published by us regarding any updates to the financial guidance after the date of publication of this announcement.

 

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 9 p.m. HKT / 1 p.m. GMT / 8 a.m. EST – 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 “19304872#.”

—–

 

FINANCIAL STATEMENTS

HUTCHMED will today file with the U.S. Securities and Exchange Commission its Annual Report on Form 20-F.

 

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 more than 4,600 personnel across all its companies, at the center of which is a team of over 1,500 in oncology/immunology. Since inception it has advanced 12 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.

 

Contacts

Investor Enquiries
Mark Lee, Senior Vice President +852 2121 8200
Annie Cheng, Vice President +1 (973) 567 3786
Media Enquiries
Americas – Brad Miles, Solebury Trout +1 (917) 570 7340 (Mobile)
bmiles@troutgroup.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
Nominated Advisor
Atholl Tweedie / Freddy Crossley, Panmure Gordon (UK) Limited +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 consolidated subsidiaries and joint ventures 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 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,” “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, 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 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, 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.

 

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).

 

——

[1] AstraZeneca = AstraZeneca PLC and its wholly owned subsidiary, AstraZeneca AB (publ).
[2] NSCLC = Non-small cell lung cancer.
[3] NDA = New Drug Application.
[4] MAA = Marketing Authorisation Application.
[5] CRC = Colorectal cancer.
[6] FGFR = Fibroblast growth factor receptor.
[7] IDH = Isocitrate dehydrogenase.
[8] ERK = Extracellular signal-regulated kinase.
[9] BTK = Bruton’s tyrosine kinase.
[10] CSF-1R = Colony stimulating factor-1 receptor.
[11] In-market sales = total sales to third parties provided by Eli Lilly (ELUNATE®), AstraZeneca (ORPATHYS®) and HUTCHMED (SULANDA®).
[12] MET = Mesenchymal epithelial transition receptor.
[13] NRDL = National Reimbursement Drug List.
[14] R&D = Research and development.
[15] NMPA = National Medical Products Administration.
[16] ITP = Immune thrombocytopenia purpura.
[17] FDA = Food and Drug Administration.
[18] PDUFA = Prescription Drug User Fee Act.
[19] EMA = European Medicines Agency.
[20] EOP2 = End of Phase 2.
[21] EGFR = Epidermal growth factor receptor.
[22] TKI = Tyrosine kinase inhibitor.
[23] ASCO = American Society of Clinical Oncology.
[24] WCLC = World Conference on Lung Cancer.
[25] VEGFR = Vascular endothelial growth factor receptor.
[26] NEC = Neuroendocrine carcinoma.
[27] Junshi = Shanghai Junshi Biosciences Co., Ltd.
[28] PMDA = Japanese Pharmaceuticals and Medical Devices Agency.
[29] BeiGene = BeiGene, Ltd.
[30] PD-1 = Programmed Cell Death Protein-1.
[31] ESMO IO = European Society for Medical Oncology Immuno-Oncology Congress.
[32] CgA = Chromogranin A.
[33] BTC = Biliary tract cancer.
[34] HCC = Hepatocellular carcinoma.
[35] RCC = Renal cell cancer.
[36] CSCO = Chinese Society of Clinical Oncology Annual Meeting.
[37] Genor = Genor Biopharma Co. Ltd.
[38] OS = Overall survival.
[39] PI3Kδ = Phosphoinositide 3-kinase delta.
[40] RP2D = Recommended Phase II dose.
[41] Syk = Spleen tyrosine kinase.
[42] ASH 2021 = the 63rd ASH Annual Meeting and Exposition in December 2021.
[43] MAPK pathway = RAS-RAF-MEK-ERK signaling cascade.
[44] 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.
[45] SHPL = Shanghai Hutchison Pharmaceuticals Limited.
[46] HBYS = Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited.
[47] HKEX = The Stock Exchange of Hong Kong Limited.
[48] Inmagene = Inmagene Biopharmaceuticals.
[49] Hutchison Sinopharm = Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Company Limited.
[50] GAAP = Generally Accepted Accounting Principles.
[51] Lilly = Eli Lilly and Company.
[52] SG&A Expenses = selling, general and administrative expenses.
[53] ADS = American depositary share.