HUTCHMED

R&D day highlights prospects for key late-stage products

Lighthouse | 11 July 2024

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  • HUTCHMED’s recent R&D event focused on the supportive clinical data and attractive commercial opportunity for three of its most advanced, albeit somewhat under the radar, pipeline candidates. With a potential approval decision for the first asset around year-end, these programmes are a central element in HUTCHMED’s strategy to transition from an emerging growth company into a sustainably profitable biopharma from FY25 onwards. HUTCHMED currently has three launched products in China (Elunate, Orpathys, Sulanda), and one in the US (Fruzaqla) with advanced plans for its near-term European launch, which collectively are guided to generate consolidated FY24 Oncology/Immunology revenues of $300-400m.
  • Syk inhibitor sovleplenib (see our detailed June 2024 Update) is potentially HUTCHMED’s first auto-immune disease product. The China NDA in ≥2L ITP (immune thrombocytopenia) has been filed, accepted, and granted Priority Review, with an approval decision expected in late-2024. Recapping detailed data from the China Phase III ESLIM-01 study (presented at EHA 2024), confirmed its efficacy (48% durable response rate), tolerability, and positive impact on quality-of-life measures, including in heavily pre-treated patients. The Phase II/III ESLIM-02 China registration trial in second indication wAIHA (warm antibody autoimmune hemolytic anemia) is underway, as is an international Phase I ITP study ahead of securing an ex-China global partner.
  • Surufatinib, a VEGFR/FGFR1/CSF-1R inhibitor, approved as Sulanda in China for advanced NETs (neuroendocrine tumours) has now captured 21% market share. PDAC (pancreatic ductal adenocarcinoma) was selected as the follow-on indication on the back of encouraging early results from an investigator-sponsored study in combination with a PD-1 inhibitor and chemotherapy (presented at ASCO GI 2023) and the limited efficacy of available treatment options. A China Phase II/III in treatment-naïve PDAC has been initiated.
  • HMPL-306, a novel dual IDH1/2 inhibitor, is the first of HUTCHMED’s third wave of assets to embark on a Phase III registrational trial, the RAPHAEL study in relapsed/refractory IDH1/2 mutated AML (acute myeloid leukaemia), following supportive Phase I results. AML is the lead indication given the unmet need (c 25% of patients fail to achieve remission), limited therapy options, and the fact that IDH1/2 mutations affect c 15-25% of AML patients. To date, no IDH1/2 dual inhibitor for AML is approved globally.

Trinity Delta view: The depth of HUTCHMED’s innovative pipeline is becoming increasingly apparent as clinical data disclosures are made. Management focus on developing potential first-in-class or best-in-class therapies that address sizable markets where there are either limited or inadequate treatment options should bring benefits to patients and payors, and to investors. The profile of the three assets highlighted at the R&D event provide greater confidence in the mid-term prospects for HUTCHMED as it continues on its path to profitability, supported by the growing traction of currently marketed oncology products, with further new launches (products and/or indications) expected. We value HUTCHMED at $6.10bn/£5.09bn/HK$47.61bn, or $35.03/ADS and 584p/HK$54.64 per share.

Lighthouse

11 July 2024

Price (US ADS)
(UK share)
(SEHK share)
US$16.65
270.0p
HK$28.15
Market Cap
 
US$2.91bn
£2.35bn
HK$24.53bn
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

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