Hutchison China MediTech

ESMO 2020: SANET-p delivers further positive suru data

Update | 22 September 2020

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Data from China Phase III SANET-p study of surufatinib in pancreatic neuroendocrine tumours (pNET) was presented at the European Society of Medical Oncology (ESMO) 2020 virtual meeting. SANET-p was terminated early (January 2020) having already met its progression-free survival (PFS) primary endpoint at the planned interim analysis. At ESMO this was revealed to be an investigator assessed PFS of 10.9 months for surufatinib vs 3.7 months for placebo (hazard ratio = 0.49, p=0.0011). The China NDA for pNET, surufatinib’s second indication, has been accepted for review with a 2021 approval decision anticipated. First China approval, in extra-pancreatic NET (epNET), is expected this year. Surufatinib will be Hutchison China MediTech’s (Chi-Med’s) first unpartnered oncology drug launch in China, and likely also in the US as NDA filing should start by end-2020. Our valuation is £5.87/share or $38.17/ADS.

Year-end: December 31201820192020E2021E
Sales (US$m)214.1204.9214.8318.7
Adj. PBT (US$m)(86.7)(141.1)(202.6)(188.3)
Net Income (US$m)(71.3)(103.7)(132.9)(141.3)
Earnings per ADS (US$)(0.57)(0.80)(1.00)(1.02)
Cash (US$m)301.1217.2279.7217.0*
Adj. EBITDA (US$m)(69.7)(100.7)(121.7)(125.2)
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 $100m from assumed warrant exercise.
  • Back of the NET for surufatinib   Two China NDAs for surufatinib have been filed and accepted. The approval decision for the first indication, epNET, is imminent, and assuming it is positive, surufatinib will be launched by Chi-Med’s dedicated China Oncology commercial team. We expect it to be positioned as an effective treatment option for NET irrespective of tumour origin given that broad utility has been demonstrated in both Phase III NET trials. Results of the two pivotal trials were recently published in The Lancet Oncology (SANET-ep; SANET-p).
  • SANET-p ESMO data corroborates earlier findings   SANET-p showed a statistically significant and clinically meaningful difference in investigator assessed PFS vs placebo (10.9 months vs 3.7 months) in a pNET patient population with heavy tumour burden (>80% Grade 2 disease; >90% liver mets). The objective response rate (ORR) was 19.2% in the surufatinib group vs 1.9% for placebo, with a disease control rate (DCR) of 80.8% vs 6.6%. Safety was consistent with observations in prior clinical studies, including SANET-ep (October 2019 Update).
  • Global momentum also building   Chi-Med will begin a rolling NDA submission with the FDA for surufatinib in NETs in late-2020, supported by China Phase III and US bridging data. This should be followed by an MAA filing with the EMA in 2021. FDA acceptance of the NDA is subject to review of the complete application, although planning for a potential late-2021 US launch is underway.
  • £5.87/share or $38.17/ADS valuation   We value Chi-Med using a DCF-based sum-of-the-parts model that includes a clinical pipeline rNPV. China approval of the surufatinib NDA(s) and initiation of NDA and MAA submissions would prompt us to upgrade our valuation. We anticipate multiple other clinical, regulatory, and commercial catalysts that will unlock further value in the coming 12 months.


22 September 2020

Price (UK share)
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Enterprise Value
Shares in issue (shares)
12-month range
Free float53.2%
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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.


Lala Gregorek
+44 (0) 20 3637 5043

Franc Gregori
+44 (0) 20 3637 5041

Exhibit 1: 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 receipt of $100m in new funds from warrant exercise


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