Hutchison China MediTech

ESMO 2019: surufatinib epNET PFS benefit confirmed

Update | 3 October 2019

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The China Phase III SANET-ep surufatinib study in extra-pancreatic neuroendocrine tumours (epNET) was terminated early, in June 2019, having already met its primary endpoint of progression-free survival (PFS) at the planned interim analysis. Detailed data at the 2019 European Society for Medical Oncology (ESMO) meeting disclosed the magnitude of effect: investigator assessed PFS of 9.2 months for surufatinib vs 3.8 months for placebo (hazard ratio = 0.334, p<0.0001), as well as the encouraging broad utility across epNET subtypes. The totality of the SANET-ep data supports a potential Q419 China NDA filing for surufatinib and, subject to regulatory approval, Chi-Med could launch its first wholly owned oncology drug c 12 months later, in late 2020.

Year-end: December 31201720182019E2020E
Sales (US$m)241.2214.1183.1206.9
Adj. PBT (US$m)(53.5)(86.7)(172.1)(191.1)
Net Income (US$m)(23.0)(71.3)(135.9)(153.9)
Earnings per ADS (US$)(0.22)(0.57)(1.05)(1.18)
Cash (US$m)358.3301.0179.3271.0*
Adj. EBITDA (US$m)(17.2)(69.7)(128.8)(146.9)
Source: Trinity Delta Note: Adjusted PBT excludes exceptionals, Cash includes short-term investments, Adjusted EBITDA includes equity in earnings of equity investees. *2020E cash figure includes assumed raise of $250m.
  • Encouraging broad utility across epNET  The SANET-ep data presented showed a statistically significant difference in investigator assessed PFS vs placebo at the pre-specified interim analysis, with all subgroups favouring surufatinib and all secondary endpoints consistent with a treatment benefit. Sensitivity analyses also confirmed the statistical robustness of the primary analysis. Surufatinib was generally well tolerated, with a manageable safety profile that was consistent with prior data.
  • Promising indications from early Global data The US Phase Ib/II in solid tumours confirmed a 300mg QD surufatinib dose (consistent with China trials) as the MTD and recommended dose for the Global Phase II. Dose expansion in a heavily pre-treated population (≤8 lines of prior therapy) is ongoing: data from 25 evaluable patients from the first 2 cohorts (pancreatic NET, pNET; biliary tract cancer, BTC) showed 2 confirmed partial responses in pNET. All pNET patients had prior everolimus.
  • Next steps for surufatinib  In Q419, China NDA filing (epNET), progression of the Shanghai Junshi global PD-1 collaboration into dose expansion, and a potential FDA end-of-Phase II meeting are expected. Interim analysis of the China SANET-p Phase III in pNET is expected in H120, and US/Europe registration study initiation is also targeted for H120. Interim analysis of the China Phase IIb/III BTC trial is anticipated in mid-2020; and the first China launch, in epNET, is possible late-2020.
  • Valuation maintained at £5.93/share and $38.55/ADS  We employ a DCF-based SOTP that includes a clinical pipeline rNPV. We expect multiple clinical, regulatory, and commercial catalysts to unlock further value over the next year, especially as major shareholder CK Hutchison has now completed the planned reduction in its holding to 49.9%, allowing deconsolidation of Chi-Med from its accounts, and removing an important stock overhang.


3 October 2019

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Company description

Hutchison China MediTech is a Hong Kong headquartered biopharma with an established Commercial Platform in China, and a diverse pipeline of first-in-class/best-in-class selective oral tyrosine kinase inhibitors (Innovation Platform). Its pipeline, discovered in-house, is in development for the China and global oncology markets.


Franc Gregori
+44 (0) 20 3637 5041

Mick Cooper PhD
+44 (0) 20 3637 5042

Lala Gregorek
+44 (0) 20 3637 5043

Our June 2019 Update note provided an overview of surufatinib, neuroendocrine tumours (NET), the clinical data to date, and Chi-Med’s development plans. Presentation of SANET-ep data at ESMO builds upon this and confirms that surufatinib is on track to become the first of Chi-Med’s unpartnered oncology drugs to reach the market in China.

Positive read out of the pivotal SANET-ep trial in advanced extra-pancreatic NET (epNET) supports a potential China NDA filing in Q419, which, if approval occurs in a similar timeframe to fruquintinib, could lead to surufatinib launch in late-2020 through Chi-Med’s own China Oncology commercial infrastructure.

The potential China opportunity in NET could be significant, as illustrated in Exhibit 1. Important features of this market include the:

  • Limited treatment options: treatment protocols are standard despite the heterogeneity of the disease. NET is an umbrella term for tumours originating from the endocrine and nervous systems, commonly from the digestive and respiratory tracts;
  • High prevalence vs incidence: NETs are typically slow growing, associated with a long duration of survival, and with patients treated for longer; and
  • Diagnostic improvements: more treatment options coupled with improved diagnosis could increase recognition of NETs and raise current incidence.
Exhibit 1: The China NET opportunity
Source: Hutchison China MediTech Note: [1] current estimated prevalence to incidence ratio in China at 4.4, lower than US 7.4 ratio due to lower access to treatment options; [2] NRDL pricing references calculations assume FX rate of RMB 6.74/US$

NET is the first of many opportunities for surufatinib. The China and Global surufatinib development programme is focused on indications with high unmet need and with potential for a rapid path to market given the relative rarity of the cancer types targeted and limited treatment options.

Newsflow from the current development pipeline includes:

  • Q419: Progression of the Shanghai Junshi global PD-1 collaboration, with completion of dose escalation of the surufatinib and Tuoyi combinaton, and initiation of the dose expansion stage in mutliple tumour types.
  • Q419: Potential end-of-Phase II meeting with FDA.
  • H120: Interim analysis of the China Phase III SANET-p registration trial in pancreatic NET (pNET).
  • Mid-2020: Initiation of the surufatinib US/Europe registration study.
  • Mid-2020: Interim analysis of the 300-pt China Phase IIb/III registration study in biliary tract cancer (BTC) based on the first 80 patients.

SANET-ep: surufatinib PFS benefit confirmed

The SANET-ep study (Exhibit 2) was stopped early for efficacy at a planned interim analysis following the IDMC (Independent Data Monitoring Committee) determination that the mPFS (median progression free survival) primary endpoint had been met. The study originally targeted the enrolment of 273 patients but included an interim analysis at 127 PFS events (c 70% of the planned PFS events for the final analysis), with early termination for superiority permitted if p<0.015.

Exhibit 2: SANET-ep Phase III study design
Source: Hutchison China MediTech, ESMO 2019

The SANET-ep primary analysis is illustrated in Exhibit 3, where surufatinib showed a statistically significant 5.4 months benefit to mPFS vs placebo. mPFS was 9.2 months on surufatinib vs 3.8 months for placebo (HR 0.334, p<0.0001). Subgroup analyses (Exhibit 4) indicated that all subgroups favoured surufatinib.

As a comparison, the single-arm Phase II China NET trial reported mPFS of 13.4 months for the epNET population (n=40), a result which reflects differences in patient baseline characteristics between the two trials (SANET-ep had a higher proportion of G2 patients with aggressive disease).

Exhibit 3: SANET-ep primary analysis (investigator assessed PFS)
Source: Hutchison China MediTech, ESMO 2019
Exhibit 4: Subgroup analysis of investigator assessed PFS
Source: Hutchison China MediTech, ESMO 2019 Note: Tumour origin A: jejunum, duodenum, thymus, cecum; B: lung, stomach, liver, appendix, colon, rectum; C: others or unknown origin. ULN: upper limit normal; SSA: somatostatin analogues; CgA: chromogranin A

PFS sensitivity analysis was carried out retrospectively in parallel by a blinded independent image review committee (BIIRC). There were some discrepancies in tumour image analysis between the investigators and BIIRC assessments (likely to be influenced by prior loco-regional therapies and/or liver lesion CT/MRI characteristics); however, the sensitivity analyses were supportive of the primary PFS analysis (Exhibit 5). Secondary endpoints were also consistent with a treatment benefit with surufatinib.

Exhibit 5: SANET-ep supportive analyses
Source: ESMO 2019 Note: ORR = overall response rate; DCR = disease control rate; BIIRC = blinded independent image review committee

From a safety perspective, surufatinib was generally well tolerated, with a safety profile consistent with prior data. Proteinuria and hypertension were the most frequent ≥Grade 3 adverse events but were manageable. The drug exposure safety analysis indicated that patients on surufatinib had median exposure of 217 days (c seven months) vs 146 days (c five months) for placebo patients, with a relative dose intensity of 86.42%.

Preliminary US Phase Ib/II surufatinib data

In addition to SANET-ep data, early findings from the US Phase Ib/II solid tumour study of surufatinib (Exhibit 6) were presented at ESMO, providing supportive evidence for the global applicability of the programme. The dose escalation phase of the study confirmed a maximum tolerated dose and recommended Phase II dose of 300mg QD surufatinib, which is consistent with the dosing of the China trials. Dose expansion is ongoing, although preliminary data from the pNET and BTC cohorts were presented. Data from 25 evaluable patients showed two confirmed partial responses (and two unconfirmed partial responses) in pNET patients.

Exhibit 6: Surufatinib US Phase Ib/II study design
Source: Hutchison China MediTech Note: * Soft tissue sarcoma (STS) cohort planned to open as a future cohort in Q419

A key takeaway from this study and the surufatinib data generated to date, is that it has shown anti-tumour activity in heavily pre-treated patients and across multiple tumour types. The US Phase Ib/II enrolled patients which had progressed on up to eight lines of prior therapy, and all of whom had progressed on everolimus (Afinitor, Novartis). Exhibit 7 illustrates the duration of treatment in the pNET cohort, highlighting both the number and diversity in the prior lines of therapy experienced.

Exhibit 7: US Phase Ib – pNET duration of treatment
Source: Hutchison China MediTech, ESMO 2019 Note: afib = aflibercept; atez = atezolizumab; bev = bevacizumab; cap = capecitabine; eve = everolimus; sun = sunitinib; tem = temozolomide

Everolimus is approved for the treatment of adults with non-functional NETs of gastrointestinal or lung origin, with unresectable, locally advanced, or metastatic disease, and currently has the broadest clinical evidence base across NETs by site of origin (Exhibit 7). Chi-Med, through its SANET-ep and SANET-p pivotal trials – and planned US/European registration trials – is seeking to rival this with surufatinib, to potentially offer a subsequent treatment option for NET patients who progress on everolimus.

Exhibit 8: Evidence landscape for advanced NETs by site
Source: James Yao, ESMO 2019 (Rinke et al. J ClinOncol. 2009. Caplin et al. NEJM 2014. Strosberg et al. NEJM 2017. Raymond et al. NEJM 2011. Yao et al. J ClinOncol. 2008. Yao et al. NEJM 2011. Yao et al. Lancet. 2016. Xu et al. ESMO2019)


Exhibit 9: Summary of financials
Source: Company, Trinity Delta  Note: Adjusted numbers exclude exceptionals. Historic and forecast EPS are adjusted for one-to-ten ordinary share split, with new ADS ratio of 1:5 shares. Our estimate of $250m proceeds from the proposed equity raise are shown as short-term debt in FY20e, until transaction size, structure, and terms are confirmed.




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