HUTCHMED

First steps towards fruquintinib availability in the US

Lighthouse | 19 December 2022

Share this note

  • Start of the rolling new drug application (NDA) for fruquintinib for the treatment of ≥3L refractory metastatic colorectal cancer (mCRC) has been initiated in the US. A rolling submission is possible as fruquintinib was granted Fast Track designation by the FDA in June 2020. This enables HUTCHMED to submit sections of the NDA as they are completed, with the review clock usually starting once the entire application has been filed. HUTCHMED expects to complete the NDA filing during H123. Regulatory submissions to the European EMA and the PMDA in Japan will follow completion of the US filing.
  • Depending on the US review time, this could allow for an FDA decision during H223e if a six-month Priority Review is granted, through to H124e under a 10-month Standard Review. Our forecasts conservatively assume first US fruquintinib sales in 2024e allowing for a Standard Review.
  • The regulatory filing will be supported by data from the pivotal FRESCO-2 study, where fruquintinib demonstrated a 2.6 month overall survival benefit and reduced the risk of death by 34% (Hazard Ratio of 0.66, p<0.001) vs placebo in this heavily pre-treated and refractory population (outlined in our September 2022 Update). The FRESCO-2 trial size and scope (691 patients, >150 sites, 14 countries) was designed to meet FDA requirements for a multi-regional clinical trial. The dossier will also include similarly positive data from the China FRESCO trial, plus the US Phase Ib bridging study.
  • Fruquintinib (Elunate) has been marketed in China for 3L mCRC since 2018 and is one of three commercial products in China that are collectively expected to deliver China revenue of $160-190m in FY22. The China partner is Eli Lilly, but global rights are currently unencumbered. Under the recent strategy review, outlined in our November 2022 Lighthouse, the ex-China commercial opportunity is now primarily focused on partnerships. Given mCRC alone represents a blockbuster opportunity, we believe fruquintinib is a natural candidate for ex-China commercial partnership(s).

Trinity Delta view: Initiation of the rolling regulatory filing for fruquintinib has started as expected, potentially allowing for approval in the US for mCRC in H124e, which could come sooner if Priority Review is granted. A positive decision for fruquintinib would represent the first HUTCHMED asset to receive an ex-China approval. Under the new financially disciplined strategy, which is focused on accelerating the path to profitability, ex-China commercialisation will be primarily achieved through partnerships. The positive FRESCO-2 data and physician commentary suggest potential broad uptake of fruquintinib in advanced mCRC given the survival benefits, lack of off-target toxicity and manageable adverse events. Hence, given the potential in mCRC alone, fruquintinib represents a natural candidate for partnering, in our view. Our HUTCHMED valuation is currently $5.51bn ($31.89 per ADS), £4.6bn and HK$43.1bn (531p or HK$49.83 per share); we intend to revisit our forecasts once further details on the broader strategy, and on specific assets like fruquintinib, become available.

Lighthouse

19 December 2022

Price (US ADS)
(UK share)
(SEHK share)
US$13.77
238p
HK$22.30
Market Cap
 
US$2.38bn
£2.06bn
HK$19.28bn
ExchangesNASDAQ
AIM London
SEHK
SectorHealthcare
Company CodesHCM
HCM.L
0013.HK
Corporate clientYes

Company description

HUTCHMED is a Hong Kong headquartered biopharma focused on discovering, developing and commercializing innovative targeted therapeutics and immunotherapies to treat cancer and autoimmune diseases. It has a diverse pipeline of first-in-class/best-in-class selective oral TKIs in development for the China and global markets.

Analysts

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

Philippa Gardner
pgardner@trinitydelta.org
+44 (0) 20 3637 5042

Disclaimer

Trinity Delta Research Limited (“TDRL”; firm reference number: 725161), which trades as Trinity Delta, is an appointed representative of Equity Development Limited (“ED”). The contents of this report, which has been prepared by and is the sole responsibility of TDRL, have been reviewed, but not independently verified, by ED which is authorised and regulated by the FCA, and whose reference number is 185325.

ED is acting for TDRL and not for any other person and will not be responsible for providing the protections provided to clients of TDRL nor for advising any other person in connection with the contents of this report and, except to the extent required by applicable law, including the rules of the FCA, owes no duty of care to any other such person. No reliance may be placed on ED for advice or recommendations with respect to the contents of this report and, to the extent it may do so under applicable law, ED makes no representation or warranty to the persons reading this report with regards to the information contained in it.

In the preparation of this report TDRL has used publicly available sources and taken reasonable efforts to ensure that the facts stated herein are clear, fair and not misleading, but make no guarantee or warranty as to the accuracy or completeness of the information or opinions contained herein, nor to provide updates should fresh information become available or opinions change.

Any person who is not a relevant person under section of Section 21(2) of the Financial Services & Markets Act 2000 of the United Kingdom should not act or rely on this document or any of its contents. Research on its client companies produced by TDRL is normally commissioned and paid for by those companies themselves (‘issuer financed research’) and as such is not deemed to be independent, as defined by the FCA, but is ‘objective’ in that the authors are stating their own opinions. The report should be considered a marketing communication for purposes of the FCA rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. TDRL does not hold any positions in any of the companies mentioned in the report, although directors, employees or consultants of TDRL may hold positions in the companies mentioned. TDRL does impose restrictions on personal dealings. TDRL might also provide services to companies mentioned or solicit business from them.

This report is being provided to relevant persons to provide background information about the subject matter of the note. This document does not constitute, nor form part of, and should not be construed as, any offer for sale or purchase of (or solicitation of, or invitation to make any offer to buy or sell) any Securities (which may rise and fall in value). Nor shall it, or any part of it, form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The information that we provide is not intended to be, and should not in any manner whatsoever be, construed as personalised advice. Self-certification by investors can be completed free of charge at www.fisma.org. TDRL, its affiliates, officers, directors and employees, and ED will not be liable for any loss or damage arising from any use of this document, to the maximum extent that the law permits.

Copyright 2022 Trinity Delta Research Limited. All rights reserved.