Hutchison China MediTech

Impressive data means SANET-ep trial stopped early

Lighthouse | 14 June 2019

Share this note

  • Chi-Med has announced that the China Phase III SANET-ep study of surufatinib in advanced extra-pancreatic neuroendocrine tumours (NET) has been terminated early as it has already met its primary endpoint of progression free survival (PFS) at the planned interim stage analysis.
  • The Independent Data Monitoring Committee (IDMC) determined that the trial has already met the pre-defined primary endpoint and so the study result is viewed as achieved. Full data will be presented at a future scientific conference.
  • Chi-Med intends to schedule a pre-NDA (New Drug Application) with the NMPA (China National Medical Products Administration) to discuss the process for the NDA submission. As a precedent, the fruquintinib NDA was submitted within 4 months following pivotal top line data and then it took about 15 months for approval to be granted.
  • The earlier nature of SANET-ep data suggests some extra time may be needed to prepare the NDA submission. However, given that surufatinib will be manufactured at the same GMP certified facility as fruquintinib, we might expect a more rapid CMC review as a number of components are already validated. Consequently, we suspect that the 15 month post-NDA approval timeline may be shorter.
  • Clearly, the impressive outcome of the SANET-ep trial means that our forecast timelines for approval and marketing will be accelerated. We will review our model, and valuation, but a rough assessment suggests a benefit of c 12 months compared to our previous expectations.

Trinity Delta view: The encouraging result of SANET-ep suggest that surufatinib (previously known as HMPL-012 or sulfatinib) will be the first approved and marketed product where Chi-Med holds worldwide rights. Our base case scenario was that the trial would run to completion (enrolment completing by year-end and top line data in mid-2020), hence our current Chi-Med valuation of $4.742bn ($35.57/ADS) or £3.648bn (£5.47/share) will be reviewed following this positive outcome. We also highlight that we anticipate additional clinical, regulatory, and commercial catalysts during 2019 and 2020 that will unlock further value.  

Lighthouse

14 June 2019

Price (US ADS)
(UK share)
$27.04
418p
Market Cap
 
$3.61bn
£2.79bn
ExchangesNASDAQ
AIM London
SectorHealthcare
Company CodesHCM
HCM.L
Corporate clientYes

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.

Analysts

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

Mick Cooper PhD
mcooper@trinitydelta.org
+44 (0) 20 3637 5042

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

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 publically 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 2019 Trinity Delta Research Limited. All rights reserved.