HUTCHMED: data will validate ATTC platform

HUTCHMED is steadily making progress with its diversification into biologics, with two ATTC (antibody-targeted therapy conjugate) programmes in the clinic. Preclinical data highlights the translational potential of the ATTC platform, which, if supported by clinical data, should unlock business development deals.  We maintain our view that HUTCHMED is a unique opportunity in biopharma, with a broad pipeline of differentiated oncology/immunology assets, global ambitions supported by large pharma partners, proven commercial execution in China yielding a growing top line, all balanced with shrewd investment. Three HUTCHMED products are available in China, with one launched in the US, Europe, and Japan by partner Takeda. Progress of key pipeline programmes should deliver multiple near-term clinical and regulatory catalysts for new indications, new markets, and new products. Our HUTCHMED valuation is $5.80bn/£4.54bn/HK$45.27bn, or $33.27/ADS and 520p/HK$51.90 per share.

Several important catalysts are anticipated over the next 15 months. Pipeline progress, alongside commercial execution, remains a key valuation driver. The most highly anticipated is the read out of the global Phase III SAFFRON study of savolitinib plus Tagrisso in 2/3L Tagrisso-refractory NSCLC with MET aberration, expected in H226. Subject to positive data, and a successful approval decision ex-China, this could be the second global launch of a HUTCHMED product (with HUTCHMED eligible for milestones and royalties from partner AstraZeneca). Exhibit 1 provides an overview of the status of late-stage pipeline assets.

Exhibit 1: HUTCHMED late-stage pipeline

Source: HUTCHMED  Note: MET-amp = MET amplified; MET-oe = MET overexpressed; LPI = last-patient-in; FPI = first-patient-in; NRDL = National Reimbursement Drug List; ^^ in collaboration with Lilly; * in collaboration with AstraZeneca

The upcoming launches of new products and new indications underpin near- to mid-term China revenue growth, which coupled to continued cost discipline should translate into operating leverage. HUTCHMED’s 2026 Oncology/ Immunology revenue guidance of $330m-$450m covers a range of outcomes spanning organic revenue growth in China and modest growth ex-China through to a scenario that includes upfront payments associated with potential licensing deals. The latter may involve global ex-China development and commercialisation rights to assets such as Syk inhibitor sovleplenib and/or the ATTC pipeline.

Multiple China sNDA/NDAs have been accepted and are under review pending an approval decision: savolitinib in 3L gastric cancer (its first non-lung cancer setting, where the pivotal Phase II results will be presented at ASCO 2026); sovleplenib in 2L immune thrombocytopenia (ITP); and fanregratinib in 2L intrahepatic cholangiocarcinoma (IHCC). A positive sovleplenib approval decision will add momentum to HUTCHMED’s China haematology franchise, following the market withdrawal of Tazverik (tazemetostat) and discontinuation of active clinical trials. Sovleplenib is expected to be the first of three internally developed haematology assets at the core of this franchise, alongside IDH1/2 inhibitor ranosidenib and BTK inhibitor HMPL-760, both of which are enrolling Phase III trials in haematological cancers.

Other 2026 China late-stage pipeline events cover the sNDA filing for sovleplenib in 2L wAIHA (warm antibody autoimmune haemolytic anaemia), expected in H126, and potential data from the China Phase III SANOVO trial of savolitinib in 1L MET overexpressing NSCLC around year-end. The earlier-stage pipeline should also deliver significant news beyond this, as importantly, the first two ATTC (December 2025 Update) drug candidates, ATTC-A251 and ATTC-A580, have begun global Phase I studies, with a third (ATTC-A830) expected to do so later in 2026. HUTCHMED’s strong balance sheet (last reported cash and equivalents of $1.37bn as at end-December 2025) enables accelerated global development of the ATTC global pipeline and allows potential in-licensing and M&A to be explored. Business development is also underway, with large pharma interest in the ATTC platform; deal(s) would give external validation and further expedite development in many solid tumours.

Advancing the ATTC platform at pace

HUTCHMED’s proprietary ATTC (antibody-targeted therapy conjugate) platform is a central element of its broader growth strategy. ATTCs combine the target specificity of a monoclonal antibody (mAb) with a proprietary small molecule targeted therapeutic to overcome the challenges of existing antibody-drug conjugates (ADC). The promise of this dual mechanism approach should prove to be highly attractive to potential partners once it is supported by clinical data, especially if the combination shows expected anti-tumour synergies. Exhibit 2 summarises key features of ATTCs and their advantages over ADCs.

The ATTC platform leverages HUTCHMED’s small molecule inhibitor expertise and extensive knowledge of oncogenic drivers of disease, developed over the past two decades. The first family of ATTC programmes target the PI3K/AKT/mTOR (PAM) pathway and consist of a novel, proprietary, highly selective and potent PI3K/PIKK inhibitor payload HM5041609 (“609”), conjugated to an antibody via a cleavable linker. This PI3K/PIKK inhibitor linker-payload has broad applicability, and thus significant market potential, given the relatively high frequency of PAM aberrations across solid tumours. PAM alterations (eg loss/gain of function mutations) are present in c 50% of solid tumours, but occur with higher frequency in indications such as endometrial, breast, and prostate cancers.

Exhibit 2: Traditional ADCs vs HUTCHMED ATTCs

Source: HUTCHMED  Note: [1] Cancers (Basel) 2023 Feb 15(3) 713

The ATTC pipeline currently includes two clinical stage programmes, with a third asset, HMPL-A830 (undisclosed target), on track to initiate Phase I in H226. HUTCHMED’s aim, supported by its strong balance sheet, is to expand its clinical pipeline to five ATTC candidates by end-2027, and to expedite their development with a simultaneous China and global clinical development strategy.

• HMPL-A251 is a PAM-HER2 ATTC targeting HER2 (human epidermal growth factor receptor 2) signalling via a trastuzumab humanised anti-HER2 IgG1 biosimilar antibody. The PAM pathway is one of the main downstream signalling pathways of HER2, with PAM alterations often associated with treatment resistance, including to trastuzumab. Trastuzumab, first approved as Herceptin (Roche/Genentech) in 1998, is used to treat HER2-positive breast, stomach, and gastro-oesophageal cancers, and is also a component of HER2-directed antibody-drug conjugate Enhertu (AstraZeneca/Daiichi Sankyo, FY25 revenues >$4bn). Preclinical data presented at 2025 AACR-NCI-EORTC (December 2025 Update) confirmed HMPL-A251’s synergistic anti-tumour activity, durable responses, and improved efficacy and safety compared to the equivalent individual anti-HER2 antibody and proprietary PI3K/PIKK inhibitor combination in in vitro and in vivo
• HMPL-A580 is a PAM-EGFR ATTC targeting EGFR (epidermal growth factor receptor) signalling via a humanised anti-EGFR IgG1 antibody. Less detail is disclosed about this asset. Again, the PAM pathway is downstream of EGFR. EGFR is highly expressed in multiple solid tumours, with EGFR gene mutations often resulting in abnormal cell proliferation. Preclinical data presented at AACR 2026 showed robust, dose dependent anti-tumour activity of HMPL-A580 in multiple EGFR-expression models (with greater sensitivity in EGFR high expression, EGFR mutated or PAM altered models), a clear bystander effect, and a stronger and synergistic effect vs inhibition achieved with the antibody and payload alone.

Business development is an important part of HUTCHMED’s ATTC strategy. Future development and/or commercialisation partners are required to address global ex-China markets, but potential licence/collaboration deals could also cover one or more aspects of each ATTC molecule (novel antibodies, linkers, payloads), or broader development and manufacturing. We note that there is scope to explore a wider range of synergistic antibody and small molecule payload combinations that target specific mutations, potentially including difficult to drug targets, with the aim of overcoming drug resistance and improving payload selectivity and tolerability. This could allow longer-term dosing and enable potential novel combinations with immunotherapies or chemotherapeutics that have historically been challenging for ADCs given their toxicity profiles.

Successful development of multiple ATTC candidates, supported by clinical proof of concept for HMPL-A251, should catalyse future collaborations and licensing opportunities giving external validation and further expediting development in many solid tumours. As the lead ATTC programme, clinical data for HMPL-A251 will not only be a key step in defining the potential market opportunity for this asset but also demonstrate proof of concept and de-risk the wider ATTC platform.

ATTC Phase I clinical trial design

Global Phase I/IIa open-label monotherapy studies for HMPL-A251 and HMPL-A580 are currently enrolling at sites in China and the US. The two-part study design includes: (1) Phase I dose escalation to determine the maximum tolerated dose (MTD) and recommended dose for expansion (RDE), and (2) a Phase IIa dose expansion/optimisation to explore early efficacy signals at the RDE in various indications and define a biomarker strategy to guide patient selection. The dose expansion will also determine a recommended dose for Phase II (RP2D) or Phase III (RP3D). Primary outcome measures are safety/tolerability; secondary outcome measures include preliminary anti-tumour activity, PK profile and immunogenicity.

Exhibit 3: Preliminary HMPL-A251 global clinical development strategy

Source: HUTCHMED

The HMPL-A251 Phase Ia/II study (Exhibit 3) will initially recruit cancer patients with HER2+ or HER2-low status (retrospectively determining PAM status) into the Phase Ia dose finding portion. As HUTCHMED intends to pursue a data driven development strategy, potential indications for future development will be guided by clinical data but could include breast, prostate, gastric and ovarian cancers. Current plans are for selected tumour types (three HER2+ and PAM+/-, one HER2-low with PAM+) to be taken into a proof-of-concept study, in which HMPL-A251’s safety and efficacy will be evaluated as monotherapy in ≥2L patients, and potentially in the 1L setting in combination with standard of care chemotherapy in HER2+ tumours. The expectation is that there will be activity in the late stage pre-treated patients; however, moving into the front line setting in combination with chemotherapy would significantly expand the potential HMPL-A251 opportunity.

Valuation

We value HUTCHMED with a sum-of-the-parts methodology, using a risk-adjusted net present value (rNPV) model for the Oncology/Immunology portfolio, an earnings-based multiple for the established Other Ventures commercial platforms, and net cash. Our valuation has been rolled forward in time and reflects updates to our financial model post-FY25 results and pipeline updates that include the incorporation of a placeholder valuation for the ATTC platform now that two ATTC assets are in the clinic, the addition of fanregratinib, and the removal of tazemetostat. Overall, these changes are largely neutral, resulting in a minor c 3% change to our valuation. Our HUTCHMED valuation is now $5.80bn (previously $5.98bn), or $33.27 per ADS; £4.54bn (520p per share); and HK$45.27bn (HK$51.90 per share). Exhibit 4 summarises our valuation, with the contributions of the various Oncology/Immunology assets shown in Exhibit 5.

Exhibit 4: HUTCHMED valuation summary

Source: Trinity Delta   Note: 12.5% discount rate for development stage products and 10% for commercial products; taxation at 20%; FX rates of 1.28 $:£ and 7.8 $:HK$

Exhibit 5: HUTCHMED Oncology/Immunology portfolio valuation summary

Source: Trinity Delta   Note: 12.5% discount rate for development stage products and 10% for commercial products; taxation at 20%; FX rates of 1.28 $:£ and 7.8 $:HK$

The main catalysts over the next 24 months include: (1) potential near-term approvals in China for Orpathys (3L gastric cancer), sovleplenib (2L ITP) and fanregratinib (2L IHCC); (2) data from the global Phase III SAFFRON study (from partner AstraZeneca) during H226 and potential global filings during late-2026; and (3) licensing or collaboration deal(s) for ATTCs (or other pipeline assets). Note that we do not currently ascribe a value to the earlier stage pipeline (which includes ranosidenib), hence these represent upside.

Financials

HUTCHMED reports revenue in two segments: Oncology/Immunology, covering all activities relating to new products including R&D, manufacturing and S&M; and Other Ventures, which includes the consolidated JVs. Consolidated FY25 group revenues were $549m (-13% CER; FY24: $630m) including:

• Oncology/Immunology: $286m (-21% CER; FY24: $363m); and
• Other Ventures: $263m (-1% CER; FY24: $267m).

Oncology/Immunology revenues of $286m were at the lower end of FY25 guidance of $270m-$350m and comprised: (1) product-related revenue of $214m from sales of marketed products in China and the US, -21% CER on FY24 revenue of $272m, which included a $20m commercial milestone from Takeda; (2) Takeda income (upfront and regulatory milestone recognition and R&D services) of $51m (-23% CER; FY24: $67m); and (3) other income (R&D services and licensing income from AstraZeneca and Eli Lilly) of $20m (-21% CER; FY24: $25m).

Increased competition, and more limited off-label use, impacted the China commercial portfolio in H125. Despite these commercial and regulatory headwinds, performance improved in H225 helping in-market product sales grow +5% CER to $525m (FY24: $501m). Growth was largely driven by ex-China geographic expansion/new launches for Fruzaqla (FY25: $366m in-market sales, +26% CER) and indication expansion for China commercial products. Overall, FY25 consolidated revenues from the China commercial portfolio (Elunate, Sulanda, and Orpathys) were down 23% CER to $122.5m (FY24: $159.8m).

Completion of several large late-stage trials and a continued focus on costs reduced overall operating expenses to $588m (FY24: $674m). R&D spend fell to a low point of $148m (FY24: $212m) as investment transitioned from completion of registrational studies to IND-enabling work for ATTC assets. SG&A declined to $103m (FY24: $113m) due to salesforce streamlining and a continued focus on cost control. Net income of $458m (FY24: $38m) included net divestment proceeds of $416m, boosting end-FY25 cash to $1.37bn (end-FY24: $836m).

Our FY26e forecasts have been updated to reflect latest company guidance, and we are also publishing FY27e forecasts (summarised in Exhibit 7). HUTCHMED expects underlying growth momentum to be maintained, guiding to FY26 Oncology/Immunology consolidated revenue of $330m-$450m. Management have elaborated on this range, emphasising their confidence in achieving the lower end through organic growth in China and a conservative baseline growth ex-China, while the upper end assumes potential licensing deals. We continue to highlight that milestone income remains typically lumpy and unpredictable, and that upfront payments from potential deals are likely to be recognised over time. We forecast FY26e Oncology/Immunology consolidated revenues of $344m (+21% on FY25). This, coupled to Other Ventures revenues of $229m, results in FY26e total group revenues of $573m (from $581m previously).

Near-term revenue growth drivers in China are centred on new indications and label expansions for existing products, as well as first approvals. These include: (1) Elunate in combination with sintilimab for 2L endometrial cancer (conditionally approved December 2024, NRDL inclusion from January 2026) and 2L RCC (approved May 2026); (2) Orpathys in combination with Tagrisso for 2L EGFR refractory NSCLC with MET amplification (approved June 2025) and as monotherapy in 3L gastric cancer (under regulatory review); and (3) sovleplenib in 2L ITP and fanregratinib in 2L IHCC (both under regulatory review). Licensing or collaboration deal(s) for ATTCs (or other pipeline assets) represent another potential revenue source.

We have revised our Operating Expense forecasts on the back of management commentary and now expect R&D spend to rise at a faster rate as investment into new and advancing programmes, specifically ATTC, ramps up. R&D is planned to reach a higher level of $250m-300m in future years, although this level will be balanced with HUTCHMED’s revenues to meet sustainable profitability goals. Our forecast FY26e R&D is $181m, rising to $214m in FY27e, with S&M of c $35m in FY26e and $36m in FY27e, and FY26e G&A of $63m (FY27e: $65m). This results in Net Income of $52.3m for FY26e and $54.9m in FY27e, with the key changes to FY26e forecasts summarised in Exhibit 6.

Exhibit 6: Summary of changes to estimates

Source: Trinity Delta

Exhibit 7: Summary of financials

Source: Company, Trinity Delta  Note: Adjusted numbers exclude exceptionals