Hutchison China MediTech

ASCO 2020: savo and suru data drives regulatory progress

Update | 4 June 2020

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Hutchison China MediTech (Chi-Med) presented savolitinib and surufatinib data at the American Society of Clinical Oncology (ASCO) 2020 virtual meeting which highlight recent clinical and regulatory progress. Encouraging, albeit limited, data from the SAVOIR trial has contributed to resumption of development plans for savolitinib in papillary renal cell carcinoma (PRCC). Separately Chi-Med announced that its third NDA submission, the China NDA for savolitinib in non-small cell lung cancer with MET exon 14 skipping mutations (MET ex14m NSCLC) has been accepted for review. The company also announced its intention to start a rolling US NDA submission for surufatinib in neuroendocrine tumours (NET) in late-2020 following a positive pre-NDA meeting with the FDA. Our Chi-Med valuation is £5.08/share or $32.99/ADS.

Year-end: December 31201820192020E2021E
Sales (US$m)214.1204.9210.3274.2
Adj. PBT (US$m)86.7141.1202.6190.3
Net Income (US$m)(71.3)(103.7)(166.5)(151.1)
Earnings per ADS (US$)(0.57)(0.80)(1.22)(1.11)
Cash (US$m)301.1217.2145.9197.0*
Adj. EBITDA (US$m)(69.7)(100.7)(157.1)(133.5)
Source: Trinity Delta Note: Adjusted PBT excludes exceptionals, Cash includes short-term investments, Adjusted EBITDA includes equity in earnings of equity investees. *2021E cash figure includes assumed raise of $250m.
  • Third China NDA filed and accepted for review   The China NDA for savolitinib monotherapy in MET ex14m/del NSCLC was accepted for review in late May; potential China approval in 2021 would be savolitinib’s first approval in any country. Data from 61 efficacy evaluable patients in the China Phase II registration study showed promising anti-tumour activity (49.2% median ORR; 93.4% disease control rate) and acceptable tolerability. Efficacy observations were consistent across subgroups in a poor prognosis study population and should mean savolitinib is competitive vs other approved MET inhibitors (capmatinib and tepotinib).
  • Savolitinib plans in PRCC resurrected  Positive PFS and OS trends (albeit not significant) vs sunitinib and a 27% ORR for savolitnib were seen in the c 60 patients randomised in SAVOIR prior to its termination. This data, and that from the investigator sponsored CALYPSO trial have reinvigorated AstraZeneca and Chi-Med’s plans to resume savolitinib clinical development in PRCC, potentially in H220.
  • Surufatinib gains US momentum   Chi-Med will begin a rolling US NDA submission for surufatinib in NET in late-2020, which will be supported by the existing body of evidence, including SANETep, SANETp, and US Phase Ib/II data which indicate consistent PK and dose exposure data and similar NET treatment paradigms globally. US Phase Ib/II NET data at ASCO showed anti-tumour activity irrespective of prior therapy and a manageable safety profile. Regulatory interactions are pending to determine the registration pathways in Europe and Japan.
  • Valued at £5.08/share or $32.99/ADS ahead of 2020 catalysts   The $110m (net) raised in January coupled with >$300m in available cash resources at end-FY19 provides cash into 2021 and the means for Chi-Med to invest in its pipeline. We continue to value Chi-Med at £3.51bn or $4.56bn using a DCF-based sum-of-the-parts model, ahead of numerous upcoming catalysts this year.

Update

4 June 2020

Price (UK share)
(US ADS)
360p
$22.98
Market Cap
 
£2.49bn
$3.17bn
Enterprise Value
 
£2.25bn
$2.87bn
Shares in issue (shares)
(ADS)
690.6m
138.1m
12-month range
 
249p-478p
$14.74-$30.30
Free float38.5%
Primary exchange
 
AIM
NASDAQ
SectorHealthcare
Company Code
 
HCM.L
HCM
Corporate clientYes

Company description

Hutchison China MediTech is a Hong Kong headquartered biopharma focused on discovering, developing, and commercialising innovative targeted therapeutics and immunotherapies to treat cancer and autoimmune disease. It has a diverse pipeline of first-in-class/best-in-class selective oral tyrosine kinase inhibitors in development for the China and global markets.

Analysts

Franc Gregori
fgregori@trinitydelta.org
+44 (0) 20 3637 5041

Lala Gregorek
lgregorek@trinitydelta.org
+44 (0) 20 3637 5043

Clinical data from ongoing studies of savolitinib and surufatininb presented at the American Society of Clinical Oncology 2020 (ASCO 2020) virtual meeting corroborate the progress that Hutchison China MediTech (Chi-Med) is making from both a development and a regulatory standpoint. Chi-Med’s third NDA submission, the China NDA for savolitinib in non-small cell lung cancer with MET exon 14 skipping mutations (MET ex14m NSCLC) has been accepted for review. This is the first regulatory filing globally for savolitinib; potential first approval and launch in China could occur in 2021. Encouraging SAVOIR data has contributed to resurrection of active clinical development plans for savolitinib in PRCC, although details are as yet undisclosed. Chi-Med has also announced its intention to start a rolling US NDA submission for surufatinib in neuroendocrine tumours (NET) in late-2020 following a positive pre-NDA meeting with the FDA. We discuss the three key ASCO 2020 data presentations in more detail below.

 

Savolitinib: Phase II data in MET ex14m/del NSCLC

 

  • Abstract 9519: Phase II study of savolitinib in patients with pulmonary sarcomatoid carcinoma (PSC) and other types of non-small cell lung cancer (NSCLC) harboring MET exon 14 skipping mutations

Savolitinib is the leading selective MET inhibitor in China. The NDA for savolitinib monotherapy for the treatment of NSCLC with c-Met exon 14 mutation/deletion (MET ex14m/del) was accepted for review by the China NMPA (National Medical Products Administration) in May 2020, thus it has the potential for first approval and launch in China during 2021 in a poor prognosis NSCLC population. MET ex14m/del are genetic alterations that occur in c 3% of NSCLCs, inhibiting degradation of the c-Met receptor and resulting in a persistent oncogenic effect.

This NDA was supported by efficacy data from the c 70-pt single-arm open-China Phase II registration study of savolitinib monotherapy in MET ex14m NSCLC patients who have failed prior systemic therapy or are unable to receive chemotherapy. Interim data was previously presented at the American Academy of Cancer Research and Chinese Society of Clinical Oncology 2019 meetings.

The latest data, presented at ASCO 2020, confirms that savolitinib has promising anti-tumour activity (also in brain metastases, 24.3% of the study population) and acceptable tolerability as monotherapy. Median treatment duration was 6.8 months, with a 14.3% rate of adverse event (AE) related discontinuations.

At the March 31, 2020 cut off, in the 61 efficacy evaluable patients as assessed by the Independent Review Committee, the median ORR (objective response rate) primary endpoint was 49.2%, with a disease control rate of 93.4%. A Partial Response (PR) was seen in 49.2% (30/61) and Stable Disease (SD) in 44.3% (27/61) of efficacy evaluable patients. The baseline characteristics of the study population suggested a poor prognosis group with a large proportion of patients being of advanced age (median 68.7 years), with Stage IV disease (92.9%), and having been previously treated with systemic therapies (60%). In addition, 37.5% of patients had Pulmonary Sarcomatoid Carcinoma (PSC), an aggressive and difficult to treat subtype of NSCLC. As shown in Exhibit 1, efficacy observations were consistent across subgroups.

Exhibit 1: Potent anti-tumour activity and durable response in subgroups
Source: Hutchison China MediTech, ASCO 2020 Note: ORR: objective response rate, DCR: disease control rate, DoR: duration of response, IRC: independent review committee, NR: not reached

Data are not yet mature for several key measures including Duration of Response (median DoR was 9.6 months [95% CI 5.5-not reached, NR], with maturity of 40%); Progression Free Survival (median PFS was 6.9 months [95% CI 4.2-19.3], with maturity of 50%), and Overall Survival (median OS was 14.0 months [95% CI: 9.7–NR], with maturity of 46%). Kaplan-Meier PFS plots are shown in Exhibit 2.

Exhibit 2: Progression-free survival assessed by Independent Review Committee
Source: Hutchison China MediTech, ASCO 2020

Savolitinib is on track to be the first in class in China, however the first two tyrosine kinase inhibitor (TKI) therapies specifically targeting MET ex14m/del NSCLC were approved earlier this year: Merck KGaA’s tepotinib (Tepmetko) in Japan in March 2020, and Novartis/Incyte’s capmatinib (Tabrecta) in the US in May 2020. Differences in patient baseline characteristics between the three registration trials mean than cross trial comparisons are not meaningful (eg c 5% of patients enrolled in the capmatinib GEOMETRY mono-1 study had PSC); however, all met their respective efficacy bar for providing a therapeutic benefit in a patient population with significant unmet need.

Potential China NDA approval of savolitinib monotherapy in MET ex14m/del NSCLC could occur in 2021. Savolitinib launch and commercialisation are the responsibility of global partner AstraZeneca with Chi-Med eligible for a 30% royalty on China sales. Chi-Med estimates incidence of MET ex14m/del NSCLC in China is c 15,000 (c 2-3% of 1L NSCLC), which is clearly a niche opportunity albeit with high unmet need and potential for accelerated approval. There are wider prospects for savolitinib monotherapy in other MET-driven patient populations, eg MET gene amplified NSCLC (with c 15,000-30,000 incidence), but the catalyst for significant revenue generation will come from longer-term use of the savolitinib and osimertinib combination across a broader NSCLC population in China.

AstraZeneca and Chi-Med are evaluating next steps for the global development of savolitinib monotherapy in MET ex14m/del NSCLC. The lead indication for the global market is 2L/3L EGFRm+/MET+ NSCLC where the savolitinib + osimertinib (Tagrisso, AstraZeneca) combination is currently being studied in the single-arm, open-label SAVANNAH Phase II trial in 200 patients who have progressed on prior osimertinib therapy. An interim analysis of the first 50 patients is on track for mid-2020, which is likely to be a prelude to regulatory interactions that should determine whether a larger randomised Phase III study is needed to support NDA filings, or if SAVANNAH alone is sufficient to file for accelerated approval (with a confirmatory post-approval trial). First global launch for this combination could occur in 2022.

Interestingly, AstraZeneca garnered considerable attention at ASCO 2020 with striking disease-free survival data from the EGFRm+ NSCLC Phase III ADAURA trial of osimertinib in the adjuvant setting. The development focus for savolitinib is presently on unresectable NSCLC patients that progress on osimertinib, however, there may be a future opportunity for savolitinib irrespective of residual disease or therapy line given that c-Met amplification is the most common acquired resistance mechanism to osimertinib, seen in 20-30% of osimertinib-refractory NSCLC patients.

Savolitinib: SAVOIR results in MET-driven PRCC

 

  • Abstract 5002: SAVOIR: A phase III study of savolitinib versus sunitinib in patients with MET-driven papillary renal cell carcinoma (PRCC).

The savolitinib development strategy in PRCC has been under review by Chi-Med and AstraZeneca since December 2018, when recruitment into the Phase III SAVOIR study was halted early after c 60 of an intended 180 patients had been enrolled. SAVOIR was a global multi-centre open-label 1:1 randomised controlled trial evaluating efficacy and safety of savolitinib vs sunitinib monotherapies in c-Met driven, locally advanced or metastatic 1L/2L PRCC.

The suspension of the SAVOIR study was due to multiple factors including: data from a retrospective molecular epidemiology study suggesting the likelihood of success was low for savolitinib in the 1L setting to demonstrate superiority vs sunitinib, few patients were using sunitinib in 2L PRCC, and the changing treatment landscape in RCC with approvals of immuno-oncology drugs. Subsequent encouraging findings from CALYPSO, an investigator sponsored all comers Phase II study of savolitinib + durvalumab (AstraZeneca’s PD-L1 Imfinzi), coupled to mature data from the c 60 patients randomised in SAVOIR prior to termination, have reinvigorated plans in PRCC. AstraZeneca and Chi-Med are evaluating and refining their plans to resume clinical development of savolitinib in this indication, potentially in H220.

Despite the small dataset and limited patient follow up (August 19, 2019 data cut off), which mean it is difficult to draw definitive conclusions, the data presented at ASCO 2020 point to encouraging efficacy and safety results demonstrated by savolitinib compared with sunitinib.

The primary endpoint of the original study was PFS as assessed by BICR (blinded independent central review), with OS and ORR as secondary endpoints. Of the 60 randomized patients, 33 were treated with savolitinib and 27 were in the sunitinib arm. Savolitinib median PFS was 7.0 months vs 5.6 months for surufatinib (hazard ratio 0.71, 95% CI 0.37-1.36, p=0.313), which was in the range seen in prior sunitinib studies. Median OS on savolitinib had not been reached at data cut off, compared to 13.2 months in the sunitinib patients (hazard ratio 0.51, 95% CI 0.21-1.17, p=0.110). Exhibit 3 shows the Kaplan Meier plots for PFS and OS. The ORR for savolitinib of 27% (nine responders, none of whom progressed) was higher than the 7% sunitinib ORR and compared favourably with the 18.2% ORR in MET-driven PRCC patients as reported in the savolitinib monotherapy Phase II study.

Exhibit 3: SAVOIR PFS (left) and OS (right) data (cut off August 19, 2019)
Source: Hutchison China MediTech, ASCO 2020

Savolitinib’s safety and tolerability profile was more benign than that of sunitinib, with fewer grade ≥3 adverse events (AEs, in 42% vs 81% of patients) and fewer dose modifications as a result of AEs (in 30% of savolitinib vs 74% of sunitinib patients). It was observed that savolitinib had low incidence of off-target AEs, reflecting its selectivity as MET inhibitor, with the most common AEs being peripheral oedema and liver enzyme elevation, both of which are associated with inhibition of MET. In addition, 36% of patients in the savolitinib arm received post-discontinuation disease-related anti-cancer therapy, vs 19% on sunitinib.

Based on these data, AstraZeneca and Chi-Med are actively evaluating the opportunity to restart clinical work in PRCC for savolitinib monotherapy. Further updates on the development and regulatory strategy are expected in due course.

PRCC remains an attractive opportunity. It represents 10-15% of total RCC incidence and has a poor prognosis with a high proportion (40-70%) of c-Met driven disease (with chromosome 7 polysomy appearing to be a major driver). There is also a lack of approved targeted therapies, with the NCCN guidelines indicating clinical trial participation as the preferred option for non-clear cell RCC. These features raise the potential of accelerated approval. The emergence of acquired resistance to VEGF TKIs/mTOR inhibitors and the synergistic potential means there is also industry enthusiasm for VEGFR TKI/PD-1 combinations in RCC. The first such combinations were approved by the FDA in 2019: axitinib (Inlyta, Pfizer)/pembrolizumab (Keytruda, Merck) and axitinib/avelumab (Bavencio, Pfizer) in 1L advanced RCC.

 

Surufatinib: Efficacy and safety in US NET patients

 

  • Abstract 4610: Efficacy and safety of surufatinib in US patients with neuroendocrine tumors (NET).

The first surufatinib approval worldwide could occur in China in H220; the China NDA in extra-pancreatic neuroendocrine tumours (epNET) was accepted for review in November 2019, with subsequent grant of Priority Review Status. The China NDA for pancreatic neuroendocrine tumours (pNET) is in preparation for submission in mid-2020. Chi-Med is exploring leveraging the robust evidence base generated by the two China Phase III studies (SANETep and SANETp) for global regulatory filings in NETs, and has embarked on regulatory interactions in the US, Europe, and Japan to confirm the clinical development strategy and potential path to registration for surufatinib monotherapy in NET.

The US regulatory strategy is the most advanced. A pre-NDA FDA meeting has indicated that Chi-Med can file a rolling NDA submission, based on China Phase III data and Phase Ib surufatinib data in US epNET and pNET patients, which it intends to initiate in late-2020. Filing acceptance of the NDA is subject to FDA review of the complete application. Surufatinib has also been granted FDA Fast Track Designation in both NET subtypes, and Orphan Drug Designation for pNET.

The US NDA will be supported by data from the two NET cohorts in the ongoing US dose escalation/expansion Phase Ib/II study in advanced solid tumours. To date, this study has shown that surufatinib monotherapy has promising efficacy irrespective of prior lines of therapy, with a manageable safety profile. Updated results were presented at ASCO 2020 (April 21, 2020 cut off) from 32 patients with pre-treated progressive NET (median prior lines of treatment: 3; range 1-8).

The pNET cohort (n=16) was treated for a median of 7.1 months (range 2.0-17.5), and had a disease control rate of 100%, with three Partial Responses (PR, 18.8%) and all remaining patients having Stable Disease (SD, including one unconfirmed PR). The epNET cohort (n=16) had a median treatment duration of 4.9 months (range 1.0-10.2); no epNET patient achieved a confirmed PR (one unconfirmed PR) but all had SD. Surufatinib demonstrated clinical efficacy irrespective of prior lines of therapy, with patients having progressed on up to eight lines of prior therapy including everolimus or sunitinib (Exhibit 4).

Exhibit 4: Waterfall plot of anti-tumour activity and duration of treatment in pNET (above) and epNET (below)
Source: Hutchison China MediTech, ASCO 2020
Exhibit 5: Summary of financials
Source: Company, Trinity Delta Note: Adjusted PBT excludes exceptionals, Cash includes short-term investments, Adjusted EBITDA includes equity in earnings of equity investees. *2021E cash figure includes assumed raise of $250m

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