TIDMHCM
RNS Number : 7545H
Hutchmed (China) Limited
31 July 2023
HUTCHMED Reports 2023 Interim Results and Provides Business
Updates
Strong execution on strategic direction, delivering near-term
value while charting a path for growth, exemplified by global
partnership with Takeda
Revenue grew 164% (173% CER) to US$533 million, with net income
to HUTCHMED of US$169 million (which include US$259 million of the
upfront recognized from Takeda)
Company to Host Interim Results Call & Webcast Today at 8
p.m. HKT / 1 p.m. BST / 8 a.m. EDT
Company to host a Capital Markets Day in Q4 this year
Hong Kong, Shanghai & Florham Park, NJ - Monday, July 31,
2023: HUTCHMED (China) Limited ("HUTCHMED", the "Company" or "we")
(Nasdaq/AIM: HCM; HKEX: 13), the innovative, commercial-stage
biopharmaceutical company, today reports its unaudited financial
results for the six months ended June 30, 2023 and provides updates
on key clinical and commercial developments.
All amounts are expressed in U.S. dollars unless otherwise
stated.
Strategic: clinical, financial, and regulatory progress
demonstrates strong delivery on the strategy
-- Focusing on driving near-term value creation and establishing
a self-sustaining business over the long term, with the goal of
bringing innovative medicines to patients around the world.
-- Significant progress towards bringing medicines to patients
outside China through global partnerships: closed fruquintinib
license agreement with Takeda ([1]) in March, which can potentially
bring in up to $1.13 billion in payments including $400 million
upfront payment received, plus royalties on net sales.
Product & pipeline: fruquintinib advancing to global
launches, with continued progress across portfolio
-- NDA ([2]) for fruquintinib granted priority review by the
U.S. FDA ([3]) , with a PDUFA ([4]) goal date of November 30, 2023
. Takeda preparing for fruquintinib launches worldwide with MAA
([5]) validated by the EMA ([6]) in June and the Japan NDA
submission planned this year. Global regulatory filings supported
by results from FRESCO-2, recently published in The Lancet, and
data from FRESCO.
-- Fruquintinib NDA for second-line gastric cancer accepted in
China , where fruquintinib is available and reimbursed under the
brand name ELUNATE(R) for the treatment of metastatic CRC ([7]) ;
Breakthrough Therapy Designation in endometrial cancer .
-- All three HUTCHMED medicines marketed in China now included in the NRDL ([8]) .
-- Registration study readouts expected in the second half for
two potential new medicines in China , sovleplenib and amdizalisib.
New registration studies initiated for savolitinib in gastric
cancer and HMPL--453 for IHCC ([9]) ; over 15 registration studies
ongoing , across seven drug candidates.
-- Productive discovery research continues , with another novel
drug candidate in clinical development (SHP2 ([10]) inhibitor
HMPL-415).
Financial: HUTCHMED remains on track to become self-sustaining
in 2025
-- Total revenues up 164% (173% at CER ([11]) ) to $532.9
million for the first half of 2023, with Oncology/Immunology
consolidated revenues up 294% (301% at CER) to $359.2 million.
-- Strategy has allowed HUTCHMED to conserve cash and
significantly reduce costs, with a substantial cash balance of $856
.2 million on June 30, 2023 including $400 million received from
Takeda.
-- $258.7 million of the Takeda upfront payment recognized as
revenue in the first half of 2023, resulting in net income of
$168.6 million; we expect to recognize approximately $280 million
of this payment for the full year.
-- R&D ([12]) expenses decreased primarily due to our
portfolio optimization efforts, while the reduction in SG&A
expenses ([13]) was mainly due to decreased administrative expenses
after restructuring our U.S. operations.
2023 Interim Results & Business Updates
Mr Simon To, Executive Chairman of HUTCHMED, said, "The first
half of 2023 has been successful for HUTCHMED. In late 2022, we
announced our pipeline prioritization plan and intention to seek
global partners to bring our medicines to help patients outside of
China. Six months later, this strategy is already delivering
significant results to our operations. We are successfully
navigating the current challenging capital markets, while making
significant progress towards our goal of becoming a
self-sustaining, truly global biopharma company. Crucially, it
means that we are well positioned to reach more patients than ever
with our medicines."
"In March, we closed a licensing deal for fruquintinib with
Takeda and we are confident that they have the commitment,
expertise, and commercial infrastructure to successfully roll out
this innovative medicine to patients across the globe. The FDA
Priority Review PDUFA date for fruquintinib is now set for November
30 this year, reflecting its potential to deliver significant
improvement over currently available treatments."
Dr Weiguo Su, Chief Executive Officer and Chief Scientific
Officer of HUTCHMED, said, "With the sharpening of our goals and
priorities, we now have more resources to advance our assets and
drive near-term value, and we are pleased to report on the
important progress made so far this year. We have over 15
registration/registration-intent studies ongoing with seven drug
candidates. Alongside this, our team has presented data at a number
of leading medical conferences, including AACR ([14]) , ASCO ([15])
, ASCO GI ([16]) , EHA ([17]) and ICML ([18]) , showcasing the
productivity of our world class R&D engine. Furthermore,
commercial performance has remained strong this year, with robust
sales growth of our in-house developed oncology products in China.
All three marketed medicines are now included on the NRDL, in line
with our commitment to patient access. Moreover, our strategy means
we are in a strong financial position as we look to continue
developing our clinical programs. We started the second half of
2023 with $856 million in cash resources, including the $400
million received from Takeda."
"HUTCHMED is now well placed for further successful product
launches and life cycle extensions. In particular, we look forward
to continuing the positive momentum with fruquintinib regulatory
reviews around the world, and readouts from our registration
studies for sovleplenib and amdizalisib later this year. As the
last six months have shown, HUTCHMED clearly has the right
strategy, leadership team, and vision to become a truly global
biopharma, and I am confident that HUTCHMED will continue to
deliver on this potential."
I. COMMERCIAL OPERATIONS
Total revenues increased 164% (173% at CER) to $ 532.9 million
in the first half of 2023 (H1-22: $202.0m), driven by
Oncology/Immunology partnering, its strong commercial progress in
China, and growth in third-party distribution sales.
Oncology/Immunology consolidated revenues were up 294% (301% at
CER) to $359.2 million (H1-22: $91.1m); driven by recognition of
$258.7 million in partnering revenue for the upfront payment from
Takeda, and our strong product sales growth resulting from
in-market sales ([19]) up 16% (25% at CER) to $101.3 million
(H1--22: $87.4m);
-- ELUNATE(R) (fruquintinib) in-market sales in the first half
of 2023 increased 12% (20% at CER) to $56.3 million (H1-22:
$50.4m), reflecting its continued lead in market share;
-- SULANDA(R) (surufatinib) in-market sales in the first half of
2023 increased 66% (79% at CER) to $22.6 million (H1-22: $13.6m),
reflecting the build-up in patients on treatment over 18 months on
the NRDL;
-- ORPATHYS(R) (savolitinib) in-market sales in the first half
of 2023 decreased 5% (increased 2% at CER) to $22.0 million (H1-22:
$23.3m). Sales in the first quarter were impacted by customary
channel fluctuations ahead of its NRDL inclusion on March 1,
subsequently followed by an increase in sales volume, with the
second quarter of 2023 up 84% compared to the second quarter of
2022;
-- R&D services income up 62% (66% at CER) to $20.4 million
(H1-22: $12.6m), now also including fees from our new partner
Takeda for the management of regulatory activities;
-- Takeda upfront payment of $400.0 million received, of which
$250.1 million (62%) attributable to the license was recognized
immediately. The remaining balance will be recognized when ongoing
services and performance obligations are completed. Up to June
2023, we have recognized an aggregate of $258.7 million to revenue
and expect around $280 million by year end; and
-- Successful management of commercial operations to expand
coverage of oncology hospitals and physicians despite challenges of
pandemic-related disruptions around the start of the year.
$'millions In-market Sales* Consolidated Revenues**
--------------- -----------------------------------
H1 2023 H1 2022 %<DELTA> (CER) H1 2023 H1 2022 %<DELTA> (CER)
--------------- --------- ------- -------- ------- ------- ------- -------- -------
Unaudited Unaudited
--------------- ------------------ -------- ------- ---------------- -------- -------
ELUNATE(R) $56.3 $50.4 +12% (+20%) $42.0 $36.0 +16% (+25%)
SULANDA(R) $22.6 $13.6 +66% (+79%) $22.6 $13.6 +66% (+79%)
ORPATHYS(R) $22.0 $23.3 -5% (+2%) $15.1 $13.8 +10% (+17%)
TAZVERIK(R) $0.4 $0.1 +560% (+583%) $0.4 $0.1 +560% (+583%)
--------------- --------- ------- -------- ------- ------- ------- -------- -------
Products
Sales $101.3 $87.4 +16% (+25%) $80.1 $63.5 +26% (+35%)
Other R&D services income $20.4 $12.6 +62% (+66%)
Upfront and milestone income $258.7 $15.0
----------------------------------- -------- ------- ------- ------- -------- -------
Total Oncology/ Immunology $359.2 $91.1 +294% (+301%)
----------------------------------- -------- ------- ------- ------- -------- -------
Other Ventures $173.7 $110.9 +57% (+67%)
----------------------------------- -------- ------- ------- ------- -------- -------
Total revenues $532.9 $202.0 +164% (+173%)
----------------------------------- -------- ------- ------- ------- -------- -------
* = For ELUNATE (R) and ORPATHYS (R) , represents total sales to
third parties as provided by Lilly ([20]) and AstraZeneca, respectively;
and their sales to other third parties as invoiced by HUTCHMED .
** = For ELUNATE (R) , represents manufacturing fees, commercial
service fees and royalties paid by Lilly, to HUTCHMED, and sales
to other third parties invoiced by HUTCHMED; for ORPATHYS (R) represents
manufacturing fees and royalties paid by AstraZeneca and sales to
other third parties invoiced by HUTCHMED; for SULANDA (R) and TAZVERIK(R)
, represents the Company's sales of the products to third parties.
-------------------------------------------------------------------------------------------
II. REGULATORY UPDATES
China
-- NDA accepted in China in second-line gastric cancer for
fruquintinib in combination with paclitaxel in April 2023;
-- Designated Breakthrough Therapy in China for fruquintinib in
combination with sintilimab in July 2023 for the treatment of
advanced endometrial cancer;
-- Consulted with NMPA ([21]) on the registration study plan of
HMPL-453 for IHCC in March 2023 ;
-- Consulted with NMPA on registration study plan of savolitinib
for gastric cancer in March 2023; and
-- Received Macau approvals for tazemetostat and savolitinib in March 2023.
Ex-China
-- Fruquintinib submission to U.S. FDA accepted in May 2023 and
granted Priority Review for previously treated metastatic CRC. The
PDUFA goal date assigned by the FDA is November 30, 2023;
-- Fruquintinib submission to the EMA was validated in June 2023 ;
-- Fruquintinib submission to the Japanese PMDA ([22]) expected to be completed in 2023;
-- Savolitinib, in combination with TAGRISSO(R) , designated a
U.S. FDA Fast Track program in January 2023 for the treatment of
patients with NSCLC ([23]) with MET ([24]) overexpression and/or
amplification, and who have had disease progression during or
following prior TAGRISSO(R) ; and
-- Following dialogue with the PMDA regarding surufatinib, we
have decided not to file a Japanese NDA on the basis of the
clinical trial data available.
III. CLINICAL DEVELOPMENT ACTIVITIES
Savolitinib (ORPATHYS(R) in China) , a highly selective oral
inhibitor of MET being developed broadly across MET-driven patient
populations in lung, gastric and papillary renal cell
carcinomas
-- Aligned with FDA and enrolling the pivotal Phase II study
SAVANNAH for potential accelerated approval of the TAGRISSO(R)
combination for NSCLC MET patients following progression on
TAGRISSO(R) (NCT03778229);
-- Completed enrollment of the confirmatory China Phase IIIb
study in MET exon 14 skipping alteration NSCLC in both first-line
and second-line and above patients (NCT04923945);
-- After consultation with NMPA, initiated the registration
stage of a China Phase II study in second-line gastric cancer
patients with MET amplification (NCT04923932); and
-- Continued enrolling five other registration studies,
including SAFFRON , the global, pivotal Phase III study of the
TAGRISSO(R) combination supporting SAVANNAH (NCT05261399); SACHI ,
a pivotal Phase III study of the TAGRISSO(R) combination in China
for NSCLC patients with MET amplification following progression on
EGFR ([25]) inhibitor treatment (NCT05015608); SANOVO , a pivotal
Phase III study of the TAGRISSO(R) combination in China in
first-line NSCLC patients harboring EGFR mutation and MET
overexpression (NCT05009836); and SAMETA , a global Phase III study
in MET-driven PRCC ([26]) (NCT05043090).
Potential upcoming clinical and regulatory milestones for
savolitinib:
-- Complete enrollment of SAVANNAH pivotal Phase II study in 2023;
-- Complete enrollment of SOUND , a China Phase II study of the
IMFINZI(R) combination in EGFR wild-type NSCLC patients with MET
alterations (NCT05374603) around year end 2023; and
-- Complete recruitment of SACHI, a pivotal Phase III study of
the TAGRISSO (R) combination in China for NSCLC patients with MET
amplification following progression on EGFR inhibitor treatment
(NCT05015608) in mid-2024.
Fruquintinib (ELUNATE(R) in China) , a highly selective oral
inhibitor of VEGFR ([27]) 1/2/3 designed to improve kinase
selectivity to minimize off-target toxicity and thereby improve
tolerability
-- Completed recruitment of the endometrial cancer cohort of a
China Phase II study of fruquintinib in combination with PD-1
([28]) inhibitor sintilimab in July 2023 for potential registration
(NCT03903705);
-- Published in peer-reviewed journal The Lancet positive
results of the global Phase III FRESCO-2 registration trial
(NCT04322539) in previously treated metastatic CRC patients in June
2023; and
-- Updated results from the clear cell RCC ([29]) cohort of a
China Phase II study of fruquintinib in combination with PD-1
inhibitor sintilimab at ASCO 2023, these results led to the Phase
II/III trial (NCT05522231).
Potential upcoming clinical and regulatory milestones for
fruquintinib:
-- Complete NDA submission to the Japanese PMDA in 2023;
-- Submit FRUTIGA results for presentation at a scientific conference (NCT03223376);
-- Consult with NMPA on the results of the ongoing endometrial
cancer sintilimab combination Phase II study, which may lead to NDA
submission in the first half of 2024; and
-- Complete enrollment of China Phase II/III study of
combination with PD-1 inhibitor sintilimab in clear cell RCC
(NCT05522231) around year end 2023.
Surufatinib (SULANDA(R) in China) , an oral inhibitor of VEGFR,
FGFR ([30]) and CSF-1R ([31]) designed to inhibit tumor
angiogenesis and promote immune response against tumor cells via
tumor associated macrophage regulation
-- Reported data from the Phase Ib/II China toripalimab
combination study at the 2023 AACR and ASCO annual meetings
(NCT04169672).
Sovleplenib (HMPL-523) , an investigative and highly selective
oral inhibitor of Syk ([32]) , an important component of the Fc
receptor and B-cell receptor signaling pathway
-- Completed enrollment of a Phase II Proof-of-Concept study in
warm AIHA ([33]) in China (NCT05535933).
Potential upcoming clinical milestones for sovleplenib:
-- Report top-line results from ESLIM-01 China Phase III in
primary ITP ([34]) (NCT03951623) in 2023;
-- Decide whether to proceed into Phase I in ITP in US depending
on the outcome of China Phase III; and
-- Decide whether to proceed into Phase III in warm AIHA in
China or continue dose escalation, depending on the outcome of an
upcoming analysis of a Phase II Proof-of-Concept study in warm
AIHA.
Amdizalisib (HMPL-689) , an investigative and highly selective
oral inhibitor of PI3K ([35]) designed to address the
gastrointestinal and hepatotoxicity associated with currently
approved and clinical-stage PI3K inhibitors
-- Completed recruitment of patients for China registration
Phase II study for the treatment of follicular lymphoma (with
Breakthrough Therapy Designation) in February 2023 (NCT04849351);
and
-- Initiated combination trial with tazemetostat in China in February 2023 (NCT05713110).
Potential upcoming clinical and regulatory milestones for
amdizalisib:
-- Report top-line results from the China registration Phase II
study for the treatment of follicular lymphoma in late 2023.
Tazemetostat (TAZVERIK(R) in Macau and the Hainan Pilot Zone) ,
a first-in-class, oral inhibitor of EZH2 licensed from Ipsen ([36])
subsidiary Epizyme ([37]) in China
-- Approved and launched in the Macau Special Administrative Region in March 2023.
Potential upcoming clinical and regulatory milestones for
tazemetostat:
-- Complete recruitment of a China bridging study in follicular
lymphoma for conditional registration based on U.S. approvals in H2
2023 (NCT05467943).
HMPL-453 , a novel, highly selective and potent inhibitor
targeting FGFR 1, 2 and 3
-- Reported human data for the first time at the 2023 ASCO annual meeting; and
-- After consultation with NMPA, initiated the registration
phase of the ongoing Phase II trial for IHCC patients with FGFR 2
fusion (NCT04353375).
Earlier stage investigational drug candidates
In addition to the seven drug candidates being developed in over
15 registration studies above, HUTCHMED is developing six further
oncology candidates in early-stage clinical trials. These are
HMPL-306 , a highly selective oral inhibitor of IDH1/2 ([38])
designed to address resistance to currently marketed IDH
inhibitors; HMPL-760 , a highly selective, third-generation oral
inhibitor of BTK ([39]) with improved potency versus first
generation BTK inhibitors against both wild type & C481S mutant
enzymes; HMPL-295 , a highly selective oral inhibitor of ERK ([40])
in the MAPK pathway ([41]) with the potential to address intrinsic
or acquired resistance from upstream mechanisms such as
RAS-RAF-MEK; HMPL-653 , an oral, highly selective, and potent
CSF-1R inhibitor designed to target CSF-1R driven tumors as a
monotherapy or in combinations; HMPL-A83 , a differentiated, red
blood cell sparing anti-CD47 antibody; and HMPL-415 , a novel SHP2
allosteric inhibitor that entered clinical trials in July 2023.
Subject to data and consultation with the CDE ([42]) , several
of these earlier stage drug candidates have potential to move into
registration trials in the next 12 months.
IV. COLLABORATION UPDATES
Closed Exclusive Worldwide License to Takeda for Fruquintinib
Outside China
-- Takeda is responsible for development, manufacturing and
commercialization in all indications and territories outside of
mainland China, Hong Kong and Macau; and
-- HUTCHMED is eligible to receive up to $1.13 billion,
including the $400 million upfront received in April 2023, and up
to $730 million in additional potential payments relating to
regulatory, development and commercial sales milestones, as well as
royalties on net sales.
Further clinical progress by Inmagene with two candidates
discovered by HUTCHMED
-- Inmagene initiating a global, Phase II trial in adults with
moderate-to-severe atopic dermatitis with IMG-007 , an anti-OX40
antibody. It was safe and well-tolerated in the completed Phase I
study with no reports of pyrexia or chills, which are common
adverse events of rocatinlimab, another anti-OX40 treatment.
-- Inmagene completed a Phase I study with IMG-004 , a
reversible, non-covalent, highly selective oral BTK inhibitor
designed to target immunological diseases. IMG-004 was safe and
well-tolerated in this single-ascending-dose study, with a long
half-life and sustained pharmacodynamic effects that are well above
others in its class.
V. OTHER VENTURES
Other Ventures include our profitable prescription drug
marketing and distribution platforms
-- Other Ventures consolidated revenues increased by 57% (67% at
CER) to $173.7 million (H1-22: $110.9m);
-- SHPL ([43]) non-consolidated joint venture revenues increased
by 11% (19% at CER) to $235.3 million (H1-22: $212.4m);
-- Consolidated net income attributable to HUTCHMED from our
Other Ventures increased by 5% (12% at CER) to $37.2 million
(H1-22: $35.4m), which was primarily due to the net income
contributed from SHPL of $35.1 million (H1-22: $33.6m); and
-- We are exploring opportunities to monetize the underlying
value of our SHPL joint venture including various divestment and
equity capital market alternatives.
VI. IMPACT OF COVID-19
While restrictive measures related to COVID-19 were gradually
lifted in China starting from December 2022, COV D-19 had some
impact on our research, clinical studies and our commercial
activities in the first months of 2023. Measures were put in place
to reduce the impact and, in the second quarter of 2023, these
activities normalized.
VII. SUSTAINABILITY
At HUTCHMED, we are committed to a progressive journey as we
continue to grow. This includes embedding sustainability into all
aspects of our operations and creating long-term value for our
stakeholders, including our staff, our communities and our
shareholders. In April 2023, we published our 2022 Sustainability
Report alongside our 2022 Annual Report. This year we continue to
make progress in line with the commitments and outcomes outlined in
the report, including achieving satisfactory progress to date
towards the 11 short- to long-term sustainability goals and targets
and following the recommended disclosure framework of the Task
Force on Climate-related Financial Disclosures (TCFD) in line with
the risks assessment. In the second half of 2023, we continue
enhancing our climate risks action by conducting scope 3 emissions
screening, introducing a digital data collection platform, and
further strengthening our sustainability-related disclosures.
Financial Highlights
Foreign exchange impact : The RMB depreciated against the U.S.
dollar on average by approximately 7% during the six months ended
June 30, 2023, which has impacted our consolidated financial
results as highlighted below.
Cash, Cash Equivalents and Short-Term Investments were $856.2
million as of June 30, 2023 compared to $631.0 million as of
December 31, 2022.
-- Adjusted Group (non-GAAP ([44]) ) net cash flows excluding
financing activities in the first half of 2023 were $219.3 million
(H1-22: -$110.9m) mainly due to receipt of a $400 million payment
from Takeda; and
-- Net cash generated from financing activities in the first
half of 2023 totaled $5.8 million mainly due to the proceeds of
bank borrowings (H1-22: net cash used in financing activities of
$74.6m mainly due to the repayment of bank borrowings and purchases
of ADSs ([45]) by a trustee for the settlement of equity
awards).
Revenues for the six months ended June 30, 2023 were $532.9
million compared to $202.0 million in the six months ended June 30,
2022.
-- Oncology/Immunology consolidated revenues increased 294 %
(301% at CER) to $359.2 million (H1--22: $91.1m) resulting
from:
-- ELUNATE(R) revenues increased 16% (25% at CER) to $42.0
million (H1-22: $36.0m) due to continued market share gain,
comprising of manufacturing revenues, promotion and marketing
service revenues and royalties;
-- SULANDA(R) revenues increased 66% (79% at CER) to $22.6
million (H1-22: $13.6m) from our continuing marketing activities,
increasing patient access after inclusion on the NRDL in January
2022 and long duration of treatment;
-- ORPATHYS(R) revenues increased 10% (17% at CER) to $15.1
million (H1-22: $13.8m) after inclusion in the NRDL effective from
March 2023 and comprises of manufacturing revenues and
royalties;
-- TAZVERIK(R) revenues were $0.4 million (H1-22: $0.1m) from
further sales in the Hainan Pilot Zone;
-- Partnering revenue of $258.7 million was the first half
recognized portion of the $400 million upfront payment from Takeda;
and
-- Other R&D services income of $20.4 million (H1-22:
$12.6m), primarily related to fees from AstraZeneca, Lilly and
Takeda for the management of development and regulatory
activities.
-- Other Ventures consolidated revenues increased 57% (67% at
CER) to $173.7 million (H1-22: $110.9m), mainly due to higher sales
of prescription drugs. This excludes 11% (19% at CER) growth in
non-consolidated revenues at SHPL of $235.3 million (H1-22:
$212.4m).
Net Expenses for the six months ended June 30, 2023 were $364.3
million compared to $364.9 million for the six months ended June
30, 2022.
-- Costs of Revenues increased by 52% to $208.3 million (H1-22:
$137.3m), of which cost of revenues from our Other Ventures
increased by 63% to $164.8 million (H1-22: $101.0m) due to the
increasing sales of third-party prescription drug products, and
cost of revenues from Oncology/Immunology increased by 20% to $43.5
million (H1-22: $36.3m) due to the increasing sales of ELUNATE(R) ,
SULANDA(R) and ORPATHYS(R) ;
-- R&D Expenses reduced 20% to $144.6 million (H1-22:
$181.7m), mainly as a result of the strategic prioritization of our
pipeline. Our international clinical and regulatory operations in
the U.S. and Europe incurred expenses of $55.6 million (H1-22:
$83.6m), while R&D expenses in China were $89.0 million
(H1--22: $98.1m);
-- SG&A Expenses were $68.3 million (H1-22: $79.8m), which
decreased primarily due to the restructuring of our U.S.
Oncology/Immunology commercial operations at the end of 2022 while
our China commercial infrastructure was able to support further
revenue growth; and
-- Other Items generated net income of $56.9 million (H1-22:
$33.9m), which increased primarily due to higher interest income
earned after receiving the $400 million Takeda upfront payment in
April 2023 and foreign currency exchange gains.
Net Income attributable to HUTCHMED for the six months ended
June 30, 2023 was $168.6 million (which include $258.7 million of
the upfront payment recognized from Takeda) compared to Net Loss
attributable to HUTCHMED of $162.9 million for the six months ended
June 30, 2022.
-- The net income attributable to HUTCHMED for the six months
ended June 30, 2023 was $0.20 per ordinary share / $1.00 per ADS,
compared to net loss attributable to HUTCHMED of $0.19 per ordinary
share / $0.96 per ADS for the six months ended June 30, 2022.
Financial Summary
Condensed Consolidated Balance Sheets Data
(in $'000)
As of June 30,
2023 As of December 31, 2022
--------------- ------------------------
(Unaudited)
Assets
Cash and cash equivalents and short-term investments 856,168 630,996
Accounts receivable 129,203 97,988
Other current assets 105,114 110,904
Property, plant and equipment 96,829 75,947
Investments in equity investees 37,740 73,777
Other non-current assets 72,443 39,833
--------------- ------------------------
Total assets 1,297,497 1,029,445
=============== ========================
Liabilities and shareholders' equity
Accounts payable 54,575 71,115
Other payables, accruals and advance receipts 227,212 264,621
Deferred revenue 149,440 13,537
Bank borrowings 40,147 18,104
Other liabilities 26,106 25,198
--------------- ------------------------
Total liabilities 497,480 392,575
Company's shareholders' equity 782,039 610,367
Non-controlling interests 17,978 26,503
--------------- ------------------------
Total liabilities and shareholders' equity 1,297,497 1,029,445
=============== ========================
Condensed Consolidated Statements of Operations Data
(Unaudited, in $'000, except share and per share data)
Six Months Ended June
30
------------------------
2023 2022
----------- -----------
Revenues:
Oncology/Immunology - Marketed Products 80,149 63,517
Oncology/Immunology - R&D 279,034 27,552
----------- -----------
Oncology/Immunology consolidated revenues 359,183 91,069
Other Ventures 173,691 110,978
----------- -----------
Total revenues 532,874 202,047
=========== ===========
Operating expenses:
Costs of revenues (208,324) (137,318)
Research and development expenses (144,633) (181,741)
Selling and general administrative expenses (68,263) (79,742)
Total operating expenses (421,220) (398,801)
111,654 (196,754)
Other income/(expense), net 25,434 (3,882)
----------- -----------
Income/(loss) before income taxes and equity
in earnings of equity investees 137,088 (200,636)
Income tax (expense)/benefit (2,730) 4,215
Equity in earnings of equity investees,
net of tax 35,110 33,549
----------- -----------
Net income/(loss) 169,468 (162,872)
Less: Net (income)/loss attributable to
non-controlling interests (917) 11
----------- -----------
Net income/(loss) attributable to HUTCHMED 168,551 (162,861)
=========== ===========
Earnings/(losses) per share attributable to HUTCHMED
(US$ per share)
- basic 0.20 (0.19)
- diluted 0.19 (0.19)
Number of shares used in per share calculation
- basic 846,928,863 849,283,553
- diluted 866,990,610 849,283,553
Earnings/(losses) per ADS attributable to HUTCHMED
(US$ per ADS)
- basic 1.00 (0.96)
- diluted 0.97 (0.96)
Number of ADSs used in per share calculation
- basic 169,385,773 169,856,711
- diluted 173,398,122 169,856,711
FINANCIAL GUIDANCE
Following the closing of the license with Takeda and having
received from them the upfront payment of $400 million, we
currently expect to recognize approximately $280 million in
2023.
We provide financial guidance for Oncology/Immunology
consolidated revenues, reflecting expected revenue growth of our
oncology products in China; R&D services income from our
partners AstraZeneca, Lilly and Takeda; potential milestone
payments on fruquintinib U.S. regulatory approval; and the
above-mentioned recognition of the upfront payment from Takeda. We
believe that we remain on track to meet the 2023 guidance provided
in the announcement of our 2022 full year results on February 28,
2023.
H1 2022 Actual H1 2023 FY 2022 FY 2023 Adjustments vs. Previous Guidance
Actual Actual Guidance
---------------------------------- -------------- -------- -------- ----------- ---------------------------------
Oncology/Immunology consolidated $91.1 $359.2 $163.8 $450 - $550
revenues million million million million Nil
---------------------------------- -------------- -------- -------- ----------- ---------------------------------
Shareholders and investors should note that:
-- we do not provide any guarantee that the statements contained
in the financial guidance will materialize or that the financial
results contained therein will be achieved or are likely to be
achieved; and
-- we have in the past revised our financial guidance and
reference should be made to any announcements published by us
regarding any updates to the financial guidance after the date of
publication of this announcement.
---
Use of Non-GAAP Financial Measures and Reconciliation -
References in this announcement to adjusted Group net cash flows
excluding financing activities and financial measures reported at
CER are based on non-GAAP financial measures. Please see the "Use
of Non-GAAP Financial Measures and Reconciliation" below for
further information relevant to the interpretation of these
financial measures and reconciliations of these financial measures
to the most comparable GAAP measures, respectively.
Conference call and audio webcast presentation scheduled today
at 8 p.m. HKT / 1 p.m. BST / 8 a.m. EDT. After registering,
investors may access a live audio webcast of the call via
HUTCHMED's website at www.hutch-med.com/event/.
Participants who wish to join the call by telephone and ask a
question must register . Upon registration, each participant will
be provided with dial-in numbers and a unique PIN.
HUTCHMED intends to host a Capital Markets Day in the fourth
quarter of this year to further update the market on its progress
following the strategy change, and to showcase the exciting
pipeline of drug candidates.
About HUTCHMED
HUTCHMED (Nasdaq/AIM: HCM; HKEX: 13) is an innovative,
commercial-stage, biopharmaceutical company. It is committed to the
discovery, global development and commercialization of targeted
therapies and immunotherapies for the treatment of cancer and
immunological diseases. It has approximately 5,000 personnel across
all its companies, at the center of which is a team of about 1,800
in oncology/immunology. Since inception, HUTCHMED has focused on
bringing cancer drug candidates from in-house discovery to patients
around the world, with its first three oncology medicines now
approved and marketed in China. For more information, please visit:
www.hutch--med.com or follow us on LinkedIn.
Contacts
Investor Enquiries
Mark Lee, Senior Vice President +852 2121 8200
Annie Cheng, Vice President +1 (973) 306-4490
Media Enquiries
Americas - Brad Miles, Solebury +1 (917) 570 7340 (Mobile) / bmiles@soleburystrat.com
Strategic Communications
Europe - Ben Atwell / Alex +44 20 3727 1030 / +44 7771 913 902
Shaw, FTI Consulting (Mobile) / +44 7779 545 055 (Mobile)
/ HUTCHMED@fticonsulting.com
Asia - Zhou Yi, Brunswick +852 9783 6894 (Mobile) / HUTCHMED@brunswickgroup.com
Nominated Advisor
Atholl Tweedie / Freddy Crossley
/ Daphne Zhang,
Panmure Gordon +44 (20) 7886 2500
References
Unless the context requires otherwise, references in this
announcement to the "Group," the "Company," "HUTCHMED, " "HUTCHMED
Group," "we," "us," and "our," mean HUTCHMED (China) Limited and
its subsidiaries unless otherwise stated or indicated by
context.
Past Performance and Forward-Looking Statements
The performance and results of operations of the Group contained
within this announcement are historical in nature, and past
performance is no guarantee of future results of the Group. This
announcement contains forward-looking statements within the meaning
of the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
be identified by words like "will," "expects, " "anticipates,"
"future," "intends," "plans," "believes," "estimates," "pipeline,"
"could," "potential," "first-in-class," "best-in-class," "designed
to," "objective," "guidance," "pursue," or similar terms, or by
express or implied discussions regarding potential drug candidates,
potential indications for drug candidates or by discussions of
strategy, plans, expectations or intentions. You should not place
undue reliance on these statements. Such forward-looking statements
are based on the current beliefs and expectations of management
regarding future events, and are subject to significant known and
unknown risks and uncertainties. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those set
forth in the forward-looking statements. There can be no guarantee
that any of our drug candidates will be approved for sale in any
market, that any approvals which are
obtained will be obtained at any particular time, or that the
sales of products marketed or otherwise commercialized by HUTCHMED
and/or its collaboration partners (collectively, "HUTCHMED's
Products") will achieve any particular revenue or net income
levels. In particular, management's expectations could be affected
by, among other things: unexpected regulatory actions or delays or
government regulation generally, including, among others, the risk
that HUTCHMED's ADSs could be barred from trading in the United
States as a result of the Holding Foreign Companies Accountable Act
and the rules promulgated thereunder; the uncertainties inherent in
research and development, including the inability to meet our key
study assumptions regarding enrollment rates, timing and
availability of subjects meeting a study's inclusion and exclusion
criteria and funding requirements, changes to clinical protocols,
unexpected adverse events or safety, quality or manufacturing
issues; the inability of a drug candidate to meet the primary or
secondary endpoint of a study; the inability of a drug candidate to
obtain regulatory approval in different jurisdictions or the
utilization, market acceptance and commercial success of HUTCHMED's
Products after obtaining regulatory approval; competing products
and drug candidates that may be superior to, or more cost effective
than, HUTCHMED's Products and drug candidates; the impact of
studies (whether conducted by HUTCHMED or others and whether
mandated or voluntary) or recommendations and guidelines from
governmental authorities and other third parties on the commercial
success of HUTCHMED's Products and drug candidates in development;
the ability of HUTCHMED to manufacture and manage supply chains for
multiple products and drug candidates; the availability and extent
of reimbursement of HUTCHMED's Products from third-party payers,
including private payer healthcare and insurance programs and
government insurance programs; the costs of developing, producing
and selling HUTCHMED's Products; the ability of HUTCHMED to meet
any of its financial projections or guidance and changes to the
assumptions underlying those projections or guidance; global trends
toward health care cost containment, including ongoing pricing
pressures; uncertainties regarding actual or potential legal
proceedings, including, among others, actual or potential product
liability litigation, litigation and investigations regarding sales
and marketing practices, intellectual property disputes, and
government investigations generally; and general economic and
industry conditions, including uncertainties regarding the effects
of the persistently weak economic and financial environment in many
countries, uncertainties regarding future global exchange rates and
uncertainties regarding the impact of COVID-19. For further
discussion of these and other risks, see HUTCHMED's filings with
the U.S. Securities and Exchange Commission, on AIM and on HKEX
([46]) . HUTCHMED is providing the information in this announcement
as of this date and does not undertake any obligation to update any
forward-looking statements as a result of new information, future
events or otherwise.
In addition, this announcement contains statistical data and
estimates that HUTCHMED obtained from industry publications and
reports generated by third-party market research firms. Although
HUTCHMED believes that the publications, reports and surveys are
reliable, HUTCHMED has not independently verified the data and
cannot guarantee the accuracy or completeness of such data. You are
cautioned not to give undue weight to this data. Such data involves
risks and uncertainties and are subject to change based on various
factors, including those discussed above.
Inside Information
This announcement contains inside information for the purposes
of Article 7 of Regulation (E.U.) No 596/2014 (as it forms part of
retained E.U. law as defined in the European Union (Withdrawal) Act
2018).
Ends
OPERATIONS REVIEW
Oncology/Immunology
We discover, develop, manufacture and market targeted therapies
and immunotherapies for the treatment of cancer and immunological
diseases through a fully integrated team of approximately 900
scientists and staff (December 31, 2022: 960), and an in-house
oncology commercial organization of over 900 staff (December 31,
2022: 870).
We have 13 oncology drug candidates in clinical trials in China,
with four also in active clinical development in the U.S. and
Europe. Our three medicines, fruquintinib, surufatinib and
savolitinib, have all been approved and launched in China and the
fourth, tazemetostat, has been approved and launched in Hainan
Pilot Zone and Macau, and submitted for registration in Hong
Kong.
MARKETED PRODUCT SALES
Despite some initial challenges in the first quarter of the year
due to the impact of COVID-19 in China, in-market sales of
HUTCHMED's novel oncology products continued to grow at 16% (25% at
CER) to $101.3 million (H1--22: $87.4m) in the first half of
2023.
Fruquintinib (ELUNATE(R) in China)
ELUNATE(R) is approved for the treatment of third-line
metastatic CRC for which there is an approximate incidence of
105,000 new patients per year in China. We estimate that in the
first half of 2023, approximately 17,000 (H1 2022: approximately
14,000) new patients were treated with ELUNATE(R) in China, despite
some challenges in the first quarter of the year due to the impact
of COVID-19. ELUNATE(R) surpassed regorafenib in prescription
numbers for late-stage CRC at the end of 2021, and that lead grew
to an approximately 47% market share at the end of June 2023. This
resulted in in-market sales of $56.3 million, up 12% (20% at CER)
versus the first half of 2022 ($50.4 million).
Under the terms of our agreement with Lilly, HUTCHMED manages
all on-the-ground medical detailing, promotion and local and
regional marketing activities for ELUNATE(R) in China. We
consolidate as revenues approximately 70-80% of ELUNATE(R)
in-market sales from manufacturing fees, service fees and royalties
paid to us by Lilly. In the first half of 2023, we consolidated
$42.0 million in revenue for ELUNATE(R) , equal to 75% of in-market
sales. Our commercial team continues to be highly active,
celebrating ELUNATE(R) 's fifth year since it was approved and
adding a further 112 (+17%) new hospital pharmacy listings in the
first half of 2023.
ELUNATE(R) continues to be included in the NRDL in 2023.
Negotiations with the China NHSA ([47]) to renew its inclusion
beyond 2023 are expected to take place in the second half of this
year. The new NHSA NRDL price determination scheme was published in
July 2023, indicating medicines that already have reimbursement
coverage will go through a simplified renewal/renegotiation process
with limited further price discount, particularly for products that
have been reimbursed for at least four years, such as ELUNATE(R)
.
Outside of China, fruquintinib will be marketed by our partner
Takeda. In the U.S., commercial preparations are ongoing by Takeda
to be ready for launch once U.S. approval is granted.
Surufatinib (SULANDA(R) in China)
SULANDA(R) was launched in China in 2021 for the treatment of
all advanced NETs ([48]) for which there is an approximate
incidence of 34,000 new patients per year in China. In the first
half of 2023, approximately 12,000 new patients were treated with
SULANDA(R) , compared to the approximately 12,000 new patients in
2022. The two older therapies for advanced NETs approved and NRDL
reimbursed in China, SUTENT(R) and AFINITOR(R) , were approved in
2012 and 2014, respectively. In the first quarter of 2023,
SULANDA(R) had the leading share of the market at approximately
17%, compared to SUTENT and AFINITOR at 13% and 11%,
respectively.
Sales growth in 2022 was strong, being the first year in which
SULANDA(R) had been listed on the NRDL. As a result of our
continued marketing activities, increasing patient access to
SULANDA(R) and its long duration of treatment, total sales in the
first half of 2023 accelerated, growing by 66% (79% at CER) to
$22.6 million (H1-22: $13.6 million). Our commercial team added a
further 103 (+19%) new hospital pharmacy listings in the first half
of 2023.
Savolitinib (ORPATHYS(R) in China)
ORPATHYS(R) is the first-in-class selective MET inhibitor to be
approved in China, launched and marketed by our partner,
AstraZeneca for patients with MET exon 14 skipping alteration
NSCLC. More than a third of the world's lung cancer patients are in
China. Among those with NSCLC globally, approximately 2-3% have
tumors with MET exon 14 skipping alterations.
In 2021, 2022 and the first two months of 2023, ORPATHYS(R) was
sold as a self-pay drug. Following negotiations with the China NHSA
in January 2023, ORPATHYS(R) has been included in the updated NRDL
since March 1, 2023 at a 38% discount relative to the self-pay
price, broadening patient access to this medicine. Sales during the
first half of 2023 were impacted by customary channel fluctuations
following the announcement (in January 2023) and implementation of
the NRDL listing (in March 2023), with increased volume in the
latter part of the first half of 2023. In-market sales for
ORPATHYS(R) fell 5% (increased 2% at CER) in the first half of 2023
to $22.0 million (H1-22: $23.3m) resulting in our consolidation of
$15.1 million (H1-22: $13.8m) in revenues from manufacturing fees
and royalties. Sales in the second quarter of 2023 were
substantially higher than in the second quarter of 2022 before NRDL
listing, increasing 84% by volume.
Market understanding of the need for MET testing has improved
significantly, with approximately half of new advanced/relapsed
NSCLC patients in China being tested. In the National Health
Commission's Treatment Guidelines for Primary Lung Cancer 2022 and
the China Medical Association Oncology Committee Lung Cancer
Group's China Medical Association Guideline for Clinical Diagnosis
and Treatment of Lung Cancer , ORPATHYS(R) was identified as the
only targeted therapy recommended for MET exon 14 patients, while a
similar guideline from CSCO ([49]) also recommended ORPATHYS(R) as
the standard of care for such patients. As MET testing awareness
and access increases, more patients are expected to be prescribed a
selective MET inhibitor.
ORPATHYS(R) is the first selective MET inhibitor on the market
in China, representing the majority MET TKI ([50]) sales. Several
selective MET inhibitors are in development in China, but only one
is currently expected to be eligible to enter NRDL negotiations in
late 2023.
In March 2023, ORPATHYS(R) was approved in the Macau Special
Administrative Region.
Tazemetostat (TAZVERIK(R) in Hainan and Macau, China; the U.S.
and Japan)
In May 2022, tazemetostat was approved by the Health Commission
and Medical Products Administration of Hainan Province to be used
in the Hainan Boao Lecheng International Medical Tourism Pilot Zone
(Hainan Pilot Zone), under the Clinically Urgently Needed Imported
Drugs scheme, for the treatment of certain patients with
epithelioid sarcoma and follicular lymphoma consistent with the
label as approved by the FDA. Launched in 2013 and located in
China, the Hainan Pilot Zone is a destination for international
medical tourism and global hub for scientific innovation, welcoming
83,900 medical tourists in 2020, according to official data.
Tazemetostat was included in the 2022 CSCO guidelines for
epithelioid sarcoma. 10 epithelioid sarcoma patients began
treatment in the first half of 2023 (H1-22: none). Tazemetostat is
included in 2023 CSCO guideline for follicular lymphoma.
In March 2023, tazemetostat was approved in the Macau Special
Administrative Region. A market authorization application has been
under review in Hong Kong since December 2022.
RESEARCH & DEVELOPMENT
Our strategy is aimed at accelerating our path to profitability
and establishing a long-term sustainable business, by prioritizing
late-stage and registrational studies in China and partnering
outside of China. Selected out-licensing opportunity candidates,
particularly outside of China, include sovleplenib, surufatinib and
HMPL-306. HUTCHMED intends to continue to run early phase
development programs for selected drug candidates in U.S., E.U. and
Japan where we believe we can differentiate from a global
perspective.
Below is a summary update of the clinical trial progress of our
investigational drug candidates. For more details about each trial,
please refer to our 2022 Annual Report published in April 2023 and
recent scientific publications.
Savolitinib (ORPATHYS(R) in China)
Savolitinib is an oral, potent, and highly selective oral
inhibitor of MET. In global partnership with AstraZeneca,
savolitinib is being studied in NSCLC, PRCC and gastric cancer
clinical trials with about 2,000 patients to date, both as a
monotherapy and in combinations. AstraZeneca has paid HUTCHMED $85
million of the total $140 million in upfront payments, development
and approvals milestones that are potentially payable under the
relevant license and collaboration agreement.
Savolitinib - Lung cancer:
The table below shows a summary of the clinical studies for
savolitinib in lung cancer patients.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
-------------- ------------------------ ------ ---------------------- ------------------- -----------
Savolitinib SAVANNAH : 2L/3L Global II Registration-intent Ongoing; Data that NCT03778229
+ TAGRISSO(R) EGFRm+ ([51]) ; supported Phase
TAGRISSO(R) refractory; IIIs at WCLC 2022
MET+
-------------- ------------------------ ------ ---------------------- ------------------- -----------
Savolitinib SAFFRON: 2L/3L Global III Ongoing since 2022 NCT05261399
+ TAGRISSO(R) EGFRm+; TAGRISSO(R)
refractory; MET+
-------------- ------------------------ ------ ---------------------- ------------------- -----------
Savolitinib SACHI : 2L EGFR China III Ongoing since 2021 NCT05015608
+ TAGRISSO(R) TKI refractory NSCLC;
MET+
-------------- ------------------------ ------ ---------------------- ------------------- -----------
Savolitinib SANOVO : Naïve China III Ongoing since 2021 NCT05009836
+ TAGRISSO(R) patients with EGFRm
& MET+
-------------- ------------------------ ------ ---------------------- ------------------- -----------
Savolitinib MET exon 14 skipping China II Registration Approved & launched NCT02897479
monotherapy alterations in 2021; Final OS
([52]) analysis
at ELCC 2022
-------------- ------------------------ ------ ---------------------- ------------------- -----------
Savolitinib MET exon 14 skipping China III Confirmatory Fully enrolled in NCT04923945
monotherapy alterations H1 2023
-------------- ------------------------ ------ ---------------------- ------------------- -----------
Savolitinib SOUND : MET-driven, China II Ongoing since 2022 NCT05374603
+ IMFINZI(R) EGFR wild type
-------------- ------------------------ ------ ---------------------- ------------------- -----------
Update on combination therapies in EGFR TKI-resistant NSCLC -
MET-aberration is a major mechanism for acquired resistance to both
first/second-generation EGFR TKIs as well as third-generation EGFR
TKIs like TAGRISSO(R) . Among patients who experience disease
progression post-TAGRISSO(R) treatment, approximately 15-50%
present with MET aberration. The prevalence of MET amplification
and overexpression may differ depending on the sample type,
detection method and assay cut-off used. Savolitinib has been
studied extensively in these patients in the TATTON (NCT02143466)
and SAVANNAH (NCT03778229) studies. The encouraging results led to
the initiation and planning of three Phase III studies: SACHI and
SANOVO were initiated in China in 2021, and the global, pivotal
Phase III SAFFRON study is currently open for enrollment.
The SAVANNAH global Phase II study, in patients who have
progressed following TAGRISSO(R) due to MET amplification or
overexpression, is expected to complete recruitment in the second
half of 2023. In January 2023, the U.S. FDA designated as a Fast
Track development program the investigation of savolitinib for use
in combination with TAGRISSO(R) for the treatment of patients with
locally advanced or metastatic NSCLC whose tumors have MET
overexpression and/or amplification, as detected by an FDA-approved
test, and who have had disease progression during or following
prior TAGRISSO(R) . We continue to evaluate the possibility of
using the SAVANNAH study as the basis for U.S. accelerated
approval.
The SAFFRON study, which will evaluate the efficacy and safety
of savolitinib in combination with TAGRISSO(R) compared to
pemetrexed plus platinum doublet-chemotherapy, has now activated a
majority of the approximately 250 sites in over 20 countries
planned for the study, although enrollment of SAVANNAH is being
prioritized until it is fully enrolled.
Two registrational studies are ongoing in China in EGFR mutated
NSCLC with MET aberrations: the SANOVO study in treatment naïve
patients, and SACHI study in patients whose disease progressed
following treatment with any first-line EGFR TKI. Both trials are
expected to complete enrollment in 2024.
Update on MET altered, EGFR wild type NSCLC in China - The June
2021 monotherapy approval by the NMPA was based on positive results
from a Phase II trial conducted in China in patients with NSCLC
with MET exon 14 skipping alterations (NCT02897479). A confirmatory
study in this patient population fully enrolled in H1 2023
(NCT04923945). Results from the first-line cohort of this study are
accepted for disclosure by WCLC.
Savolitinib - Kidney cancer:
MET is a key genetic driver in papillary RCC , and emerging
evidence suggests that combining immunotherapies with a MET
inhibitor could enhance anti-tumor activity. PRCC is a subtype of
kidney cancer, representing about 15% of patients, with no
treatments approved for patients with tumors that harbor MET-driven
alterations. Savolitinib has been studied in multiple global
studies in PRCC patients, including the SAVOIR monotherapy and
CALYPSO combination therapy global Phase II trials, that both
demonstrated highly encouraging results. These results led to the
initiation of a global Phase III, the SAMETA study, in 2021. Over
140 sites in over 20 countries are enrolling patients.
The table below shows a summary of the clinical study for
savolitinib in kidney cancer patients.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
------------- ------------------------- ------ ----- ------------- -----------
Savolitinib SAMETA : MET-driven, Global III Ongoing since NCT05043090
+ IMFINZI(R) unresectable and locally 2021
advanced or metastatic
PRCC
------------- ------------------------- ------ ----- ------------- -----------
Savolitinib - Gastric cancer:
MET-driven gastric cancer has a very poor prognosis. Multiple
Phase II studies have been conducted in Asia to study savolitinib
in MET-driven gastric cancer, of which approximately 5% of all
gastric cancer patients, demonstrated promising efficacy, including
VIKTORY. The VIKTORY study reported a 50% ORR ([53]) with
savolitinib monotherapy in gastric cancer patients whose tumors
harbor MET amplification.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
----------- ------------------------------ ----- ---------------------- ------------------------- -----------
Savolitinib 2L+ gastric cancer with China II registration-intent 65 patient registration NCT04923932
MET amplification. Two-stage, cohort enrolling
single-arm study since March 2023
----------- ------------------------------ ----- ---------------------- ------------------------- -----------
Preliminary efficacy and safety data from an interim analysis of
20 patients in a Phase II trial of savolitinib monotherapy in
patients with MET-amplified advanced or metastatic gastroesophageal
junction adeno-carcinomas or gastric cancer was reported at AACR
2023, showing promising efficacy in patients with MET-amplified
diseases, particularly in patients with high MET gene copy number.
Confirmed ORR by independent review was 45%, or 50% in the 16
patients with high MET gene copy number. Duration of response rate
at 4-months was 85.7%. The most common grade 3 or above TRAEs (more
than 5%) were decreased platelet count, hypersensitivity, anemia,
neutropenia and abnormal hepatic function. The BID regimen is being
investigated to further evaluate the efficacy and safety of
savolitinib in MET high patients. Following consultation with the
NMPA with this data, a patient registration cohort began enrolling
in March 2023.
Fruquintinib (ELUNATE(R) in China)
Fruquintinib is a novel, selective, oral inhibitor of VEGFR
1/2/3 kinases that was designed to improve kinase selectivity to
minimize off-target toxicity and thereby improve efficacy and
tolerability. Fruquintinib has been studied in clinical trials with
about 5,500 patients to date, both as a monotherapy and in
combination with other agents.
Aside from its first approved indication of third-line CRC (in
China), studies of fruquintinib combined with various checkpoint
inhibitors (including TYVYT(R) and tislelizumab) are underway.
Registration-intent studies combined with chemotherapy (FRUTIGA
study in gastric cancer) or checkpoint inhibitors (TYVYT(R) combo,
in endometrial cancer and RCC) are ongoing in China.
We are partnered with Lilly in China and with Takeda outside of
China. The table below shows a summary of the clinical studies for
fruquintinib.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib FRESCO-2 : metastatic U.S. III U.S. PDUFA date Nov NCT04322539
monotherapy CRC / Europe 30, 2023, EMA MAA
/ Japan validated in Jun
/ Aus. 2023; Japan filing
in 2023; Results
published in The
Lancet; further data
presented at ASCO
GI, JSMO ([54]) &
ASCO 2023
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib CRC; TN ([55]) U.S. I/Ib CRC data at ASCO NCT03251378
monotherapy & HR+ ([56]) /Her2- GI 2022; results
([57]) breast cancer supported the initiation
of the FRESCO-2
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib MSS ([58]) -CRC U.S. Ib/II Ongoing since 2021; NCT04577963
+ tislelizumab Fully enrolled; Follow-up
(PD-1) ongoing; Conference
submission pending
completion of follow-up
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib FRESCO : >= 3L China III Approved & launched NCT02314819
monotherapy CRC; chemotherapy in 2018
refractory
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib FRUTIGA : 2L gastric China III Supplemental NDA NCT03223376
+ paclitaxel cancer accepted by NMPA
in Apr 2023
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib CRC China II Data published in NCT04179084
+ TYVYT(R) European Journal
(PD-1) of Cancer
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib Endometrial cancer China II registration-intent Fully enrolled; if NCT03903705
+ TYVYT(R) positive, NDA filing
(PD-1) H1 2024; Ib data
at CSCO 2021
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib RCC China Ib/II Fully enrolled; Updated NCT03903705
+ TYVYT(R) data at ASCO 2023
(PD-1)
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib RCC China II/III Ongoing since 2022 NCT05522231
+ TYVYT(R)
(PD-1)
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib Gastrointestinal China Ib/II Fully enrolled NCT03903705
+ TYVYT(R) tumors, NSCLC,
(PD-1) cervical cancer
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib CRC Korea Ib/II Fully enrolled NCT04716634
+ tislelizumab / China
(PD-1)
--------------- --------------------- --------- ---------------------- -------------------------- -----------
Fruquintinib - CRC updates:
FRESCO-2 (NCT04322539) - Positive results from this
double-blind, placebo-controlled, global Phase III study in 691
patients with refractory metastatic CRC were presented at ESMO 2022
and subsequently published in The Lancet . The study demonstrated
that treatment with fruquintinib resulted in a statistically
significant and clinically meaningful increase in OS and the key
secondary endpoint of PFS ([59]) compared to treatment with
placebo. The safety profile of fruquintinib in FRESCO-2 was
consistent with previously reported fruquintinib studies.
Further analyses presented at ASCO GI and ASCO 2023 added to the
understanding of fruquintinib efficacy and safety. At ASCO GI,
results showed that health-related quality of life was not
negatively impacted by treatment with fruquintinib.
ASCO presentations showed that in subgroup analyses by prior
lines of therapies up to six or more and by prior treatment with
approved agents, fruquintinib improved OS and PFS for all subgroups
and prior therapies, consistent with those of the overall study
population. A separate study showed that during the study adverse
events of special interest led to low rates of dose reduction
(13.6% for patients who received fruquintinib vs 0.9% for patients
who received placebo) and dose discontinuation (8.3% for patients
who received fruquintinib vs 6.1% for patients who received
placebo).
Outcomes from the Japanese cohort was presented at JSMO 2023.
Fruquintinib treatment led to results for Japanese patients in the
study consistent with the overall study population.
Filing of a rolling submission of an NDA was accepted by the FDA
in May 2023 for priority review, with PDUFA date of November 30,
2023. MAA filing to the EMA was validated in June 2023. NDA filing
to the PMDA is expected to follow in 2023.
China Phase IV (NCT04005066) - Results presented at ASCO 2023
from a prospective, 3,005-patient study to evaluate the safety of
fruquintinib in real-world clinical practice in China are
consistent with the fruquintinib safety profile observed in
existing clinical studies, with no new or significant safety
signals identified.
Fruquintinib - Gastric cancer updates:
FRUTIGA (NCT03223376) - This randomized, double-blind, Phase III
study in China to evaluate fruquintinib combined with paclitaxel
compared with paclitaxel monotherapy, for second-line treatment of
advanced gastric cancer, enrolled approximately 700 patients in
July 2022. Its co-primary endpoints are PFS and OS. The trial met
the PFS endpoint at a statistically and clinically meaningful
level. The OS endpoint was not statistically significant per the
pre-specified statistical plan, although there was an improvement
in median OS. Fruquintinib also demonstrated a statistically
significant improvement in secondary endpoints including ORR, DCR
([60]) and DoR ([61]) . The safety profile of fruquintinib in
FRUTIGA was consistent with previously reported studies. In April
2023, the NDA in China was accepted for review by the NMPA. Full
detailed results are subject to ongoing analysis and are expected
to be disclosed at an upcoming scientific meeting.
Fruquintinib - Combinations with checkpoint inhibitors
updates:
Advanced endometrial cancer registration-intent cohort of
TYVYT(R) combination (NCT03903705) - Platinum-based systemic
chemotherapy is the standard first-line treatment for advanced
endometrial cancer in China. However, patients who progress
following first-line therapy have limited treatment options, and
the prognosis remains poor. Initially presented at CSCO 2021, data
in this endometrial cancer cohort is encouraging.
We agreed with the NMPA to expand this cohort into a single-arm
registrational Phase II study. In July 2023, the cohort fully
enrolled and was granted Breakthrough Therapy Designation.
Favorable results from this trial could lead to a regulatory
approval application to the NMPA in this treatment setting in
2024.
Advanced metastatic clear-cell renal cell carcinoma
(NCT05522231) - In first-line clear-cell RCC, clinical benefits
have been demonstrated for the combination of antiangiogenic
therapy and immunotherapy. However, there is limited evidence on
the benefits of this combination in the second-line setting. Phase
II (NCT03903705) data disclosed at ASCO 2023 showed encouraging
anti-tumor efficacy and durability in these patients. PFS results
from this exploratory study of the fruquintinib and sintilimab
combination in metastatic clear-cell RCC were reported. At data
cut-off on November 30, 2022, median PFS was 15.9 months in 20
previously treated patients. No new safety signals were
observed.
A Phase II/III trial of fruquintinib in combination with
TYVYT(R) as second-line treatment for locally advanced or
metastatic RCC was initiated in October 2022. The study is a
randomized, open-label, active-controlled study to evaluate the
efficacy and safety of fruquintinib in combination with TYVYT(R)
versus axitinib or everolimus monotherapy for the second-line
treatment of advanced RCC. The primary endpoint is PFS.
Approximately 260 patients will be enrolled in the study.
Fruquintinib - Exploratory development:
In China, we support an investigator initiated trial program for
fruquintinib, and there are over 50 of such trials ongoing in
various solid tumor settings. A number of investigator-initiated
trials were presented at ASCO 2023, including initial results of a
Phase II study of fruquintinib in combination with investigator's
choice of chemotherapy in second-line metastatic CRC with
microsatellite stable (MSS) phenotype, as well as fruquintinib
monotherapy for the treatment of biliary tract cancer and soft
tissue sarcoma.
Fruquintinib - Partnership with Takeda:
In January 2023, HUTCHMED entered into an exclusive worldwide
license to develop and commercialize fruquintinib in all
indications and territories outside of mainland China, Hong Kong
and Macau, where it is marketed and will continue to be marketed by
HUTCHMED in partnership with Lilly. Subject to the terms of the
agreement, HUTCHMED will be eligible to receive up to $1.13
billion, including $400 million which was received in April 2023 on
closing of the agreement, and up to $730 million in additional
potential payments relating to regulatory, development and
commercial sales milestones, as well as royalties on net sales.
Surufatinib (SULANDA(R) in China)
Surufatinib is a novel, oral angio-immuno kinase inhibitor that
selectively inhibits the tyrosine kinase activity associated with
VEGFR and FGFR, both shown to be involved in tumor angiogenesis,
and CSF-1R, which plays a key role in regulating tumor-associated
macrophages, promoting the body's immune response against tumor
cells. Surufatinib has been studied in clinical trials with around
1,800 patients to date, both as a monotherapy and in combinations,
and is approved in China. HUTCHMED currently retains all rights to
surufatinib worldwide.
Surufatinib's ability to inhibit angiogenesis, block the
accumulation of tumor associated macrophages and promote
infiltration of effector T cells into tumors could help improve the
anti-tumor activity of PD-1 antibodies. Several combination studies
with PD-1 antibodies have shown promising data. A summary of the
clinical studies of surufatinib is shown in the table below.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
------------------- ----- -------- ------------------
Surufatinib monotherapy NETs Japan Bridging Ongoing since 2021 NCT05077384
----------------------- ------------------- ----- -------- ------------------ -----------
Surufatinib monotherapy SANET-ep : epNET China III Approved; Launched NCT02588170
([62]) in 2021
----------------------- ------------------- ----- -------- ------------------ -----------
Surufatinib monotherapy SANET-p : pNET China III Approved; Launched NCT02589821
([63]) in 2021
----------------------- ------------------- ----- -------- ------------------ -----------
Surufatinib + SURTORI-01 : China III Ongoing since 2021 NCT05015621
TUOYI(R) (PD-1) 2L NEC ([64])
----------------------- ------------------- ----- -------- ------------------ -----------
Surufatinib + NENs ([65]) , China II Fully enrolled; NCT04169672
TUOYI(R) (PD-1) GC, ESCC, SCLC Data at AACR 2023
([66]) , NSCLC, & ASCO 2023
EMC, TC, STS,
BTC
----------------------- ------------------- ----- -------- ------------------ -----------
Surufatinib + SCLC China II Ongoing since 2022 NCT05509699
TUOYI(R) (PD-1)
----------------------- ------------------- ----- -------- ------------------ -----------
Surufatinib - Monotherapy in NET updates:
Ex-China regulatory discussions - Surufatinib received FDA Fast
Track Designations in April 2020 for the treatment of pNETs and
epNETs. Orphan Drug Designation for pNETs was granted in November
2019. While discussions in 2020 suggested that two positive Phase
III studies of surufatinib in patients with pNETs and epNETs in
China, could form the basis to support a U.S. NDA submission, this
was ultimately not accepted. A new multi-regional clinical trial
(MRCT) would be required to move forward with this program in the
U.S., Europe and Japan. Following dialogue with the Japanese PMDA,
we have decided not to file a Japanese NDA on the basis of the
clinical trial data available at this time.
Surufatinib - Combination therapy with checkpoint
inhibitors:
A Phase II China study (NCT04169672) combining surufatinib with
TUOYI(R) enrolled patients in nine solid tumor types, including
NENs, biliary tract cancer, gastric cancer, thyroid cancer, SCLC,
soft tissue sarcoma, endometrial cancer, esophageal cancer and
NSCLC. These have led to the initiation in September 2021 of the
first Phase III trial combining surufatinib with a PD-1 antibody,
the SURTORI-01 study in NEC and a Phase II study in SCLC in
2022.
We reported the results from the advanced thyroid cancer and
endometrial cancer cohorts at ASCO 2023. Amongst efficacy evaluable
radioactive iodine-refractory differentiated thyroid cancer
patients, median PFS was 10.9 months and median OS was not reached
(median follow-up duration was 22.1 months). Amongst efficacy
evaluable endometrial cancer patients, median PFS was 5.4 months
and 12-month OS rate was 71.0% (median follow-up duration was 16.8
months). In both cohorts, the combination showed a tolerable safety
profile. Additionally, results from the NSCLC cohort were presented
at AACR 2023 demonstrating promising anti-tumor activity in
first-line setting for advanced PD-L1 positive NSCLC patients with
manageable toxicity.
Surufatinib - Exploratory development:
In China, we support an investigator-initiated trial program for
surufatinib, with over 80 of such trials in various solid tumor
settings being conducted for both combination and single agent
regimens. These trials explore and answer important medical
questions in addition to our own company-sponsored clinical trials.
A number of investigator initiated trials were presented at ASCO
2023 for surufatinib in combination with other agents, including
with chemotherapy as well as with camrelizumab (an anti-PD-1
antibody) plus different chemotherapy regimens in various solid
types including pancreatic adenocarcinoma and NSCLC.
Hematological Malignancies Candidates
HUTCHMED currently has six investigational drug candidates
targeting hematological malig-nan-cies in clinical development.
Sovleplenib (HMPL-523, targeting Syk), amdizalisib (HMPL-689,
targeting PI3K ), and HMPL--760 (targeting BTK) are being studied
in several trials against B-cell dominant malignancies. In addition
to the three B-cell receptor pathway inhibitors, HUTCHMED is also
develop-ing HMPL-306 (targeting IDH1 and IDH2), tazemetostat (a
methyl-trans-ferase inhibitor of EZH2) and HMPL-A83 (an anti-CD47
monoclonal antibody).
Sovleplenib (HMPL-523)
Sovleplenib is a novel, selective, oral inhibitor targeting Syk,
for the treatment of hematological malignancies and immune
diseases. Syk is a component in Fc receptor and B-cell receptor
signaling pathway. Sovleplenib has been studied in clinical trials
with around 500 patients to date.
In December 2022, we completed recruitment of a Phase III study
in China for primary ITP, for which it has received Breakthrough
Therapy Designation, and presented proof of concept data on both
primary ITP and hematological malignancies at ASH ([67]) 2021.
HUTCHMED currently retains all rights to sovleplenib worldwide. The
table below shows a summary of the clinical studies for
sovleplenib.
Treatment Name, Line, Sites Phase Status/Plan NCT #
Patient Focus
------------ --------------- --------- ------ --------------------------- -----------
Sovleplenib ESLIM-01 : >=2L China III Fully enrolled; Topline NCT05029635
monotherapy ITP results expected in H2
2023; Breakthrough Therapy
Designation
------------ --------------- --------- ------ --------------------------- -----------
Sovleplenib Indolent NHL U.S. I/Ib Ongoing; Prelim. Data NCT03779113
monotherapy ([68]) / Europe at ASH 2021
------------ --------------- --------- ------ --------------------------- -----------
Sovleplenib Warm AIHA China II/III Phase II fully enrolled; NCT05535933
monotherapy Phase III decision in
2023 pending Phase II
results
------------ --------------- --------- ------ --------------------------- -----------
ESLIM-01 (Evaluation of Sovleplenib for immunological
diseases-01, NCT05029635) - In October 2021, we initiated a
randomized, double-blinded, placebo-controlled Phase III trial in
China of sovleplenib in 188 adult patients with primary ITP who
have received at least one prior line of standard therapy. ITP is
an autoimmune disorder that can lead to increased risk of bleeding.
The primary endpoint of the study is the durable response rate. In
January 2022, the NMPA granted Breakthrough Therapy Designation for
this indication. Enrollment was completed in December 2022 and we
expect to release topline results in the second half of 2023.
China Phase II/III in warm AIHA - This is a randomized,
double-blind, placebo-controlled Phase II/III study to evaluate the
efficacy, safety, tolerability, and pharmacokinetics of sovleplenib
in the treatment of warm AIHA. AIHA is the result of destruction of
red blood cells due to the production of antibodies against red
blood cells which bind to antigens on the red blood cell membrane
in autoimmune disorders. If the results of the Phase II stage of
the study indicate sufficiently satisfactory efficacy and safety,
the Phase III stage will be initiated. The first patient was
enrolled in September 2022. The enrollment of Phase II part of the
study was completed in mid-2023, and the results will lead to a
decision on whether to initiate Phase III.
Amdizalisib (HMPL-689)
Amdizalisib is a novel, highly selective oral inhibitor
targeting the isoform PI3K , a key component in the B-cell receptor
signaling pathway. Amdizalisib's pharmacokinetic properties have
been found to be favorable with good oral absorption, moderate
tissue distribution and low clearance in preclinical studies. We
also expect that amdizalisib will have low risk of drug
accumulation and drug-drug interactions, supporting feasibility of
development in combination with other drugs. The first of such
activities is in combination with tazemetostat. Amdizalisib has
been studied in clinical trials with around 400 patients to date.
HUTCHMED currently retains all rights to amdizalisib worldwide. The
table below shows a summary of the clinical studies for
amdizalisib.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
------------ ------------------------ ----- ---------------------- --------------------- -----------
Amdizalisib Indolent NHL, peripheral China Ib Ongoing; Updated NCT03128164
monotherapy T-cell lymphomas data presented at
ICML 2023
------------ ------------------------ ----- ---------------------- --------------------- -----------
Amdizalisib 3L Relapsed/refractory China II registration-intent Fully enrolled; NCT04849351
monotherapy follicular lymphoma Breakthrough Therapy
Designation
------------ ------------------------ ----- ---------------------- --------------------- -----------
Amdizalisib 2L Relapsed/refractory China II registration-intent Ongoing since Apr NCT04849351
monotherapy marginal zone lymphoma 2021
------------ ------------------------ ----- ---------------------- --------------------- -----------
Phase II registration-intent trial (NCT04849351) - In April
2021, we commenced a registration-intent, single-arm, open-label
Phase II trial in China in approximately 100 patients with
relapsed/refractory follicular lymphoma and approximately 80
patients with relapsed/refractory marginal zone lymphoma, two
subtypes of non-Hodgkin's lymphoma. The primary endpoint is ORR.
The trial is being conducted in over 35 sites in China, has fully
enrolled the follicular lymphoma cohort and the marginal zone
lymphoma cohort enrollment is ongoing.
Phase Ib expansion study in relapsed/refractory lymphoma
(NCT03128164) - This is a open--label study to evaluate the safety,
tolerability, pharmacokinetics and preliminary efficacy of
amdizalisib in relapsed and/or refractory non-Hodgkin lymphoma
patients. Updated safety data in all patients at recommended Phase
II dose (RP2D), as well as updated efficacy data from the
follicular lymphoma, marginal zone lymphoma, mantle cell lymphoma
and peripheral T cell lymphoma cohorts were reported at ICML in
June 2023. At median follow-up duration of 22.1 months, median DoR
and PFS were not reached for the 26 efficacy evaluable patients in
the follicular lymphoma cohort. PFS and DoR from the marginal zone
lymphoma cohort were presented for the first time, at median
follow-up duration of 20.3 months. Median DoR was not reached and
median PFS was 26.8 months for the 16 efficacy evaluable patients
in this cohort. Amdizalisib showed an acceptable safety profile and
promising anti-tumor activity in relapsed/refractory lymphoma.
Tazemetostat
In August 2021, we entered into a strategic collaboration with
Epizyme, a subsidiary of Ipsen, to research, develop, manufacture
and commercialize tazemetostat in Greater China, including the
mainland, Hong Kong, Macau and Taiwan. Tazemetostat is an inhibitor
of EZH2 developed by Ipsen that is approved by the U.S. FDA for the
treatment of certain epithelioid sarcoma and follicular lymphoma
patients. It received accelerated approval from the FDA based on
ORR and DoR in January and June 2020 for epithelioid sarcoma and
follicular lymphoma, respectively. Tazemetostat has been studied in
clinical trials with around 1,200 patients to date.
We are developing and plan to seek approval for tazemetostat in
various hematological and solid tumors in China. We are
participating in Ipsen's SYMPHONY-1 (EZH-302) study, leading it in
China. We are generally responsible for funding all clinical trials
of tazemetostat in China, including the portion of global trials
conducted there. Separately, we are conducting a China bridging
study in follicular lymphoma for potential conditional registration
based on its U.S. approvals. We also initiated a Phase II study in
combination with our PI3K inhibitor amdizalisib in patients with
relapsed or refractory lymphoma in February 2023. We are
responsible for the research, manufacturing and commercialization
of tazemetostat in China. Tazemetostat was approved in China Hainan
Pilot Zone in 2022 and the Macau Special Administrative Region in
2023.
The table below shows a summary of the clinical studies for
tazemetostat.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
--------------- ----------------------------- ------- ---------------------- ----------------------- -----------
Tazemetostat Metastatic or locally Hainan, N/A - Hainan Approved; Launched N/A
monotherapy advanced epithelioid Macau Pilot Zone, in 2022 and 2023,
sarcoma; Relapsed/refractory Macau respectively
3L+ follicular lymphoma
--------------- ----------------------------- ------- ---------------------- ----------------------- -----------
Tazemetostat SYMPHONY-1 : 2L follicular Global Ib/III Ongoing; PhIb data NCT04224493
+ lenalidomide lymphoma at ASH 2022; China
+ rituximab portion of global
(R(2)) Ph III started
H2 2022
--------------- ----------------------------- ------- ---------------------- ----------------------- -----------
Tazemetostat Relapsed/refractory China II registration-intent Ongoing since July NCT05467943
monotherapy 3L+ follicular lymphoma (bridging) 2022; EZH2-wildtype
cohort fully enrolled;
EZH2-mutant cohort
enrolling
--------------- ----------------------------- ------- ---------------------- ----------------------- -----------
Tazemetostat Lymphoma sub-types China II Ongoing since Feb NCT05713110
+ amdizalisib 2023
--------------- ----------------------------- ------- ---------------------- ----------------------- -----------
China Phase II combination study in relapsed/refractory
follicular lymphoma (NCT05713110) - This is an open-label, Phase II
study in approximately 140 patients to evaluate the safety,
tolerability and preliminary anti-tumor efficacy of tazemetostat in
combination with amdizalisib in patients with R/R lymphoma. The
first patient was dosed in February 2023.
HMPL-453
HMPL-453 is a novel, selective, oral inhibitor targeting FGFR
1/2/3. Aberrant FGFR signaling is associated with tumor growth,
promotion of angiogenesis, as well as resistance to anti-tumor
therapies. Approximately 10-15% of IHCC patients have tumors
harboring FGFR2 fusion. HUTCHMED currently retains all rights to
HMPL-453 worldwide. The table below shows a summary of the clinical
studies for HMPL-453.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
------------------------- --------------------- ----- ----- ------------------- -----------
HMPL-453 monotherapy 2L Cholangiocarcinoma China II Ongoing since NCT04353375
(IHCC with FGFR 2020; Registration
fusion) cohort enrolling
since March 2023
------------------------- --------------------- ----- ----- ------------------- -----------
HMPL-453 + chemotherapies Multiple China I/II Ongoing since NCT05173142
2022
------------------------- --------------------- ----- ----- ------------------- -----------
HMPL-453 +TUOYI(R) Multiple China I/II Ongoing since NCT05173142
(PD--1) 2022
------------------------- --------------------- ----- ----- ------------------- -----------
China Phase II in IHCC (NCT04353375) - This is an open-label,
single-arm Phase II study to evaluate the efficacy and safety of
HMPL-453 in the treatment of patients with advanced IHCC harboring
FGFR2 fusions/rearrangements after at least one line of systemic
treatment failure or intolerance. Results from 25 patients treated
with two different dosing regimens were presented at the ASCO 2023
annual meeting, supporting the choice of a recommended Phase II
dose. After consultation with the CDE, a monotherapy registration
trial design was agreed, and the first patient was enrolled in
March 2023.
HMPL-306
HMPL-306 is a novel dual-inhibitor of IDH1 and IDH2 enzymes.
IDH1 and IDH2 mutations have been implicated as drivers of certain
hematological malignancies, gliomas and solid tumors, particularly
among acute myeloid leukemia patients. HUTCHMED currently retains
all rights to HMPL-306 worldwide. The table below shows a summary
of the clinical studies for HMPL-306.
Treatment Name, Line, Patient Focus Sites Phase Status/Plan NCT #
------------ --------------------------------------- ----- ----- ----------------------- -----------
HMPL-306 Hematological malignancies China I Ongoing since NCT04272957
monotherapy 2020; RP2D determined;
Dose escalation
data at EHA 2023
------------ --------------------------------------- ----- ----- ----------------------- -----------
HMPL-306 Solid tumors including but U.S. I Ongoing since NCT04762602
monotherapy not limited to gliomas, 2021
chondrosarcomas or cholangiocarcinomas
------------ --------------------------------------- ----- ----- ----------------------- -----------
HMPL-306 Hematological malignancies U.S. I Ongoing since NCT04764474
monotherapy 2021
------------ --------------------------------------- ----- ----- ----------------------- -----------
China Phase I in hematological malignancies (NCT04272957) - This
is a two-phase, open-label Phase I study to evaluate the safety,
pharmacokinetics, pharmacodynamics and efficacy of HMPL--306 in
patients of relapsed or refractory hematological malignancies
harboring IDH1 and/or IDH2 mutations. The dose escalation phase of
the study is completed. The first-in-human dose-escalation phase
data was presented at EHA Annual Meeting in June 2023. Based on the
pharmacodynamic, pharmacokinetic and preliminary clinical findings,
a recommended Phase II dose was nominated for the dose expansion
phase of the study.
HMPL-760
HMPL-760 is an investigational, non-covalent, third-generation
BTK inhibitor. It is a highly potent, selective, and reversible
inhibitor with long target engagement against BTK, including
wild-type and C481S-mutated BTK. China Phase I studies opened in
early 2022 will include relapsed or refractory B-cell non-Hodgkin's
lymphoma or CLL ([69]) patients with or without a prior regimen
containing a BTK inhibitor. HUTCHMED currently retains all rights
to HMPL-760 worldwide.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
-------------------- ------------------- ----- ----- ------------- -----------
HMPL-760 monotherapy CLL, SLL ([70]) China I Ongoing since NCT05190068
, other B-NHL Jan 2022
-------------------- ------------------- ----- ----- ------------- -----------
HMPL-295
HMPL-295 is a novel ERK inhibitor. ERK is a downstream component
of the RAS-RAF-MEK-ERK signaling cascade (MAPK pathway). This is
our first of multiple candidates in discovery targeting the MAPK
pathway, followed by HMPL-415 targeting SHP2. A China Phase I study
was initiated in July 2021 for HMPL-295. HUTCHMED currently retains
all rights to HMPL-295 worldwide.
RAS-MAPK pathway is dysregulated in cancer, in which mutations
or non-genetic events hyper-activate the pathway in up to 50% of
cancers. RAS and RAF predict worse clinical prognosis in a wide
variety of tumor types, mediate resistance to targeted therapies,
and decrease the response to the approved standards of care,
namely, targeted therapy and immunotherapy. ERK inhibition has the
potential to overcome or avoid the intrinsic or acquired resistance
from the inhibition of RAS, RAF and MEK upstream mechanisms.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
-------------------- ------------------- ----- ----- ------------- -----------
HMPL-295 monotherapy Solid tumors China I Ongoing since NCT04908046
2021
-------------------- ------------------- ----- ----- ------------- -----------
HMPL-653
HMPL-653 is a novel, highly selective, and potent CSF-1R
inhibitor designed to target CSF-1R driven tumors as a monotherapy
or in combination with other drugs. We initiated a China Phase I
study in January 2022. HUTCHMED currently retains all rights to
HMPL-653 worldwide.
CSF-1R is usually expressed on the surface of macrophages and
can promote growth and differentiation of macrophages. Studies have
shown that blocking the CSF-1R signaling pathway could effectively
modulate the tumor microenvironment, relieve tumor
immunosuppression, and synergize with other anti-cancer therapies
such as immune checkpoint inhibitors to achieve tumor inhibition.
It has been demonstrated in several clinical studies that CSF-1R
inhibitors could treat tenosynovial giant cell tumors, and treat a
variety of malignancies in combinations. Currently no CSF-1R
inhibitor has been approved in China.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
-------------------- --------------------------- ----- ----- --------------- -----------
HMPL-653 monotherapy Solid tumors & tenosynovial China I Ongoing since NCT05190068
giant cell tumors Jan 2022; 110
expected to be
enrolled
-------------------- --------------------------- ----- ----- --------------- -----------
HMPL-A83
HMPL-A83 is an investigational IgG4-type humanized anti-CD47
monoclonal antibody that exhibits high affinity for CD47. HMPL-A83
blocks CD47 binding to Signal regulatory protein (SIRP)
<ALPHA> and disrupts the "do not eat me" signal that cancer
cells use to shield themselves from the immune system. In
preclinical studies, HMPL --A83 demonstrated a high affinity for
CD47 antigen on tumor cells and strong phagocytosis induction of
multiple tumor cells, as well as weak affinity for red blood cells
and no induction of hemagglutination, implying low risk of anemia,
a potential event of special interest. HMPL-A83 has also
demonstrated strong anti-tumor activity in multiple animal models.
HUTCHMED currently retains all rights to HMPL-A83 worldwide.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
------------ ------------------- ----- ----- ------------------ -----------
HMPL-A83 Advanced malignant China I Ongoing since July NCT05429008
monotherapy neoplasms 2022
------------ ------------------- ----- ----- ------------------ -----------
HMPL-415
HMPL-415 is a novel SHP2 allosteric inhibitor. A China Phase I
study was initiated in July 2023. HUTCHMED currently retains all
rights to HMPL-415 worldwide.
SHP2 is a non-receptor protein tyrosine phosphatase ubiquitously
expressed mainly in the cytoplasm of several tissues. SHP2
modulates diverse cell signaling events that control metabolism,
cell growth, differentiation, cell migration, transcription and
oncogenic transformation. It interacts with diverse molecules in
the cell, and regulates key signaling events including RAS/ERK,
PI3K/AKT, JAK/STAT and PD-1 pathways downstream of several receptor
tyrosine kinases (RTKs) upon stimulation by growth factors and
cytokines. This is the second of multiple candidates to have
emerged from our discovery research that targets this pathway, the
first being HMPL-295. Dysregulation of SHP2 expression or activity
causes many developmental diseases, and hematological and solid
tumors.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
==================== =================== ===== ===== ============= ===========
HMPL-415 monotherapy Solid tumors China I Ongoing since NCT05886374
2023
==================== =================== ===== ===== ============= ===========
Immunology Collaboration with Inmagene
We have a strategic partnership with Inmagene, a clinical
development stage company with a focus on immunological diseases,
to further develop novel preclinical drug candidates we discovered
for the potential treatment of multiple immunological diseases.
Funded by Inmagene, we worked together to move two drug candidates
towards clinical trials. Inmagene advanced the drug candidates
through global clinical development.
Treatment Name, Line, Patient Sites Phase Status/Plan NCT #
Focus
----------------------- ---------------------------- --------- ----- ---------------- -----------
IMG-007 (OX40 antibody) Adults with moderate Global II Open for Pending
to severe atopic dermatitis enrollment
in July 2023
----------------------- ---------------------------- --------- ----- ---------------- -----------
IMG-007 (OX40 antibody) Adult healthy volunteers Australia I Single ascending NCT05353972
dose completed
----------------------- ---------------------------- --------- ----- ---------------- -----------
IMG-004 (BTK inhibitor) Adult healthy volunteers Global I Single ascending NCT05349097
dose completed
----------------------- ---------------------------- --------- ----- ---------------- -----------
IMG-007 in atopic dermatitis - This is a novel antagonistic
monoclonal antibody targeting the OX40 receptor. OX40 is a
costimulatory receptor member of the tumor necrosis factor receptor
(TNFR) superfamily expressed predominantly on activated T cells. A
global, proof-of-concept trial in adult patients with
moderate-to-severe atopic dermatitis is open for enrollment. This
follows a Phase I single ascending dose study in healthy volunteers
that demonstrated that IMG-007, up to 600 mg, was safe and
well-tolerated, with no reports of pyrexia or chills, which were
common adverse events of rocatinlimab, another OX40 antibody
treatment. At projected therapeutic dose levels, IMG-007 also
demonstrated a mean terminal half-life of 31-37 days. The long
half-life combined with a potentially improved safety profile
supports IMG-007's best-in-class potential as an OX40 targeted
therapy.
IMG-004 in immunological diseases - This is a small molecule
inhibitor that binds to BTK in a non-covalent, reversible manner.
Designed specifically for inflammatory and autoimmune diseases that
usually require long-term treatment, IMG-004 is potent, highly
selective and brain permeable. A Phase I single ascending dose
study in healthy volunteers in the U.S., initiated in August 2022,
has recently completed. It showed that IMG--004 was safe and
well-tolerated with a long half-life and sustained pharmacodynamic
effects, supporting further clinical development. Results will be
submitted to an upcoming medical conference.
MANUFACTURING
We continue to use contract manufacturing organizations in China
to produce our clinical and commercial API ([71]) supplies. For
manufacturing drug products, we currently use a combination of
contract manufacturers and our internal manufacturing facility.
We have a drug product facility in Suzhou which manufactures
both clinical and commercial supplies for some of our products. We
have also completed construction of a new drug product facility in
Pudong, Shanghai, which will increase our novel drug product
manufacturing capacity by over five times. The qualification of the
Shanghai facility and its equipment is underway and is expected to
be completed in the second half of 2023. The clinical manufacturing
and technology transfer for some of our commercial products is
expected to start in the next few months. This is in line with our
previously outlined expectations of manufacturing clinical supplies
from the new facility starting in 2023 and commercial supplies
around 2025, after the necessary regulatory filings and
approvals.
We completed technology transfer for the API and drug product of
amdizalisib and sovleplenib into the selected commercial
manufacturing facilities in preparation for potential NDA filings.
Process validation for these products (both API and drug product)
are now complete.
We completed the NDA enabling work related to manufacturing for
the global launch of fruquintinib at the commercial manufacturing
sites. Process validation for API of this product was completed
last year, and process validation for drug product at our Suzhou
facility was completed earlier this year. A second drug product
facility in Switzerland is also planned to be qualified in the
second half of 2023, in anticipation for a potential European
approval.
OTHER VENTURES
Our Other Ventures include drug marketing and distribution
platforms covering about 290 cities and towns in China with over
3,000 mainly manufacturing and commercial personnel. Built over the
past 20 years, it primarily focuses on prescription drugs and
science-based nutrition products through several joint ventures and
subsidiary companies.
In the first six months of 2023, our Other Ventures delivered
encouraging growth with consolidated revenues up 57% (67% at CER)
to $173.7 million (H1-22: $110.9m). Consolidated net income
attributable to HUTCHMED from our Other Ventures increased by 5%
(12% at CER) to $37.2 million (H1-22: $35.4m).
Hutchison Sinopharm ([72]) : Our prescription drugs commercial
services business, which in addition to providing certain
commercial services for our own products, provides services to
third-party pharmaceutical companies in China, grew sales by 68%
(79% at CER) to $166.7 million in the first half of 2023 (H1-22:
$99.3m).
In 2021, the Hong Kong International Arbitration Centre made a
final award in favor of Hutchison Sinopharm against Luye ([73]) in
the amount of RMB253.2 million ($35.4 million), plus costs and
interest (the "Award"), in connection with the termination of
Hutchison Sinopharm's right to distribute SEROQUEL(R) in China. In
June 2022, Luye provided a bank guarantee of up to RMB286.0 million
to cover the Award, pending the outcome of an application by Luye
to the High Court of Hong Kong to set aside the Award. On July 26,
2022, Luye's application to set aside the Award was dismissed by
the High Court with costs awarded in favor of Hutchison Sinopharm.
On June 6, 2023, an appeal hearing filed by Luye was heard by the
Court of Appeal in Hong Kong and judgement is awaited.
SHPL: Our own-brand prescription drugs business, operated
through our non-consolidated joint venture SHPL, grew sales by 11%
(19% at CER) to $235.3 million (H1-22: $212.4m). This sales growth
and favorable product mix led to an increase of 5% (12% at CER) in
net income attributable to HUTCHMED to $35.1 million (H1-22:
$33.6m).
The SHPL operation is large-scale, with a commercial team of
about 2,300 staff managing the medical detailing and marketing of
its products not just in hospitals in provincial capitals and
medium-sized cities, but also in the majority of county-level
hospitals in China. SHPL's Good Manufacturing Practice-certified
factory holds 74 drug product manufacturing licenses and is
operated by about 550 manufacturing staff.
SXBX ([74]) pill : SHPL's main product is SXBX pill, an oral
vasodilator prescription therapy for coronary artery disease. SXBX
pill is the second largest botanical prescription drug in this
indication in China, with a national market share in the first five
months of 2023 of 22.2% (first four months of 2022: 21.5%). Sales
increased by 8% (16% at CER) to $214.5 million in the first half of
2023 (H1-22: $197.9m).
SXBX pill is protected by a formulation patent that expires in
2029, but also retains certain state protection that extends
indefinitely, and is one of less than two dozen proprietary
prescription drugs represented on China's National Essential
Medicines List (NEML). Inclusion on this list means that all
Chinese state-owned health care institutions are required to carry
it. SXBX pill is fully reimbursed in all of China.
We continue to explore divestment and equity capital market
opportunities to monetize our investment in SHPL.
Dividends: Our share of SHPL's profits are passed to the
HUTCHMED Group through dividend payments. In the first six months
of 2023, dividends of $14.6 million (H1-22: $22.7m) were paid from
SHPL to the HUTCHMED Group level with aggregate dividends received
by HUTCHMED since inception of over $300 million.
Weiguo Su
Chief Executive Officer and Chief Scientific Officer
July 31, 2023
USE OF NON-GAAP FINANCIAL MEASURES AND RECONCILIATION
In addition to financial information prepared in accordance with
U.S. GAAP, this announcement also contains certain non-GAAP
financial measures based on management's view of performance
including:
-- Adjusted Group net cash flows excluding financing activities
-- CER
Management uses such measures internally for planning and
forecasting purposes and to measure the HUTCHMED Group's overall
performance. We believe these adjusted financial measures provide
useful and meaningful information to us and investors because they
enhance investors' understanding of the continuing operating
performance of our business and facilitate the comparison of
performance between past and future periods. These adjusted
financial measures are non-GAAP measures and should be considered
in addition to, but not as a substitute for, the information
prepared in accordance with U.S. GAAP. Other companies may define
these measures in different ways.
Adjusted Group net cash flows excluding financing activities: We
exclude deposits in and proceeds from short-term investments for
the period, and exclude the net cash generated from financing
activities for the period to derive our adjusted Group net cash
flows excluding financing activities. We believe the presentation
of adjusted Group net cash flows excluding financing activities
provides useful and meaningful information about the change in our
cash resources excluding those from financing activities which may
present significant period-to-period differences.
CER: We remove the effects of currency movements from
period-to-period comparisons by retranslating the current period's
performance at previous period's foreign currency exchange rates.
Because we have significant operations in China, the RMB to U.S.
dollar exchange rates used for translation may have a significant
effect on our reported results. We believe the presentation at CER
provides useful and meaningful information because it facilitates
period-to-period comparisons of our results and increases the
transparency of our underlying performance.
Reconciliation of GAAP change in net cash generated from/(used
in) operating activities to Adjusted Group net cash flows excluding
financing activities:
$'millions H1 2023 H1 2022
------------------------------------------------------- ------- -------
Net cash generated from/(used in) operating activities 226.4 (89.9)
Net cash (used in)/generated from investing activities (316.0) 259.7
Effect of exchange rate changes on cash and cash
equivalents (6.6) (5.2)
Excludes: Deposits in short-term investments 835.1 578.6
Excludes: Proceeds from short-term investments (519.6) (854.1)
-------------------------------------------------------- ------- -------
Adjusted Group net cash flows excluding financing
activities 219.3 (110.9)
-------------------------------------------------------- ------- -------
Reconciliation of GAAP revenues and net income attributable to
HUTCHMED to CER:
$'millions (except Six Months
%) Ended Change Amount Change %
-------------------------------------------------- ------------- ----------------------- ----------------------
June June
30, 30, Exchange Exchange
2023 2022 Actual CER effect Actual CER effect
-------------------------------------------------- ----- ------ ------ ----- -------- ------ ---- --------
Consolidated revenues 532.9 202.0 330.9 348.9 (18.0) 164% 173% -9%
- Oncology/Immunology* 359.2 91.1 268.1 274.4 (6.3) 294% 301% -7%
* Includes:
- Products Sales 80.1 63.5 16.6 22.4 (5.8) 26% 35% -9%
- ELUNATE(R) 42.0 36.0 6.0 9.1 (3.1) 16% 25% -9%
- SULANDA(R) 22.6 13.6 9.0 10.7 (1.7) 66% 79% -13%
- ORPATHYS(R) 15.1 13.8 1.3 2.3 (1.0) 10% 17% -7%
- TAZVERIK(R) 0.4 0.1 0.3 0.3 - 560% 583% -23%
- Other R&D services
income 20.4 12.6 7.8 8.3 (0.5) 62% 66% -4%
- Other Ventures^ 173.7 110.9 62.8 74.5 (11.7) 57% 67% -10%
^ Includes:
* Hutchison Sinopharm - prescription drugs 166.7 99.3 67.4 78.8 (11.4) 68% 79% -11%
Non-consolidated
joint venture revenues
- SHPL 235.3 212.4 22.9 39.0 (16.1) 11% 19% -8%
* SXBX pill 214.5 197.9 16.6 32.0 (15.4) 8% 16% -8%
Consolidated net
income attributable
to HUTCHMED - Other
Ventures 37.2 35.4 1.8 4.2 (2.4) 5% 12% -7%
* Consolidated entities 2.1 1.8 0.3 0.4 (0.1) 11% 19% -8%
* Equity investees
- SHPL 35.1 33.6 1.5 3.8 (2.3) 5% 12% -7%
GROUP CAPITAL RESOURCES
LIQUIDITY AND CAPITAL RESOURCES
To date, we have taken a multi-source approach to fund our
operations, including through cash flows generated and dividend
payments from our Oncology/Immunology and Other Ventures
operations, service and milestone and upfront payments from our
collaboration partners, bank borrowings, investments from third
parties, proceeds from our listings on various stock exchanges and
follow-on offerings.
Primarily due to a recognition of $258.7 million in partnering
revenue from the upfront payment from Takeda, commercial progress
achieved on our three in-house developed oncology medicines in
China, as well as growth in our third-party distribution sales, we
generated a net income of $168.6 million for the six months ended
June 30, 2023 (H1-22: net loss of $162.9m).
As of June 30, 2023, we had cash and cash equivalents and
short-term investments of $856.2 million and unutilized bank
facilities of $65.3 million. As of June 30, 2023, we had $40.1
million in bank borrowings.
Certain of our subsidiaries and joint ventures, including those
registered as wholly foreign-owned enterprises in China, are
required to set aside at least 10.0% of their after-tax profits to
their general reserves until such reserves reach 50.0% of their
registered capital. In addition, certain of our joint ventures are
required to allocate certain of their after-tax profits as
determined in accordance with related regulations and their
respective articles of association to the reserve funds, upon
approval of the board.
Profit appropriated to the reserve funds for our subsidiaries
and joint ventures incorporated in the PRC was approximately
$127,000 and nil for the six months ended June 30, 2023 and 2022,
respectively. In addition, as a result of PRC regulations
restricting dividend distributions from such reserve funds and from
a company's registered capital, our PRC subsidiaries are restricted
in their ability to transfer a certain amount of their net assets
to us as cash dividends, loans or advances. This restricted portion
amounted to $0.1 million as of June 30, 2023.
In addition, our non-consolidated joint venture, SHPL, held an
aggregate of $43.6 million in cash and cash equivalents and no bank
borrowings as of June 30, 2023. Such cash and cash equivalents are
only accessible by us through dividend payments from the joint
venture. The level of dividends declared by the joint venture is
subject to agreement each year between us and our joint venture
partner based on the profitability and working capital needs of the
joint venture.
CASH FLOW
Six Months Ended June 30,
---------------------------
2023 2022
-------------- -----------
(in $'000)
Cash Flow Data:
Net cash generated from/(used in) operating activities 226,403 (89,859)
Net cash (used in)/generated from investing activities (315,957) 259,706
Net cash generated from/(used in) financing activities 5,830 (74,638)
-------------- -----------
Net (decrease)/increase in cash and cash equivalents (83,724) 95,209
Effect of exchange rate changes (6,558) (5,249)
Cash and cash equivalents at beginning of the period 313,278 377,542
-------------- -----------
Cash and cash equivalents at end of the period 222,996 467,502
============== ===========
Net Cash generated from/(used in) Operating Activities
Net cash used in operating activities was $89.9 million for the
six months ended June 30, 2022, compared to net cash generated from
operating activities of $226.4 million for the six months ended
June 30, 2023. The net change of $316.3 million was primarily
attributable to the net loss attributable to HUTCHMED of $162.9
million for the six months ended June 30, 2022 compared to net
income attributable to HUTCHMED of $168.6 million for the six
months ended June 30, 2023 (which included $258.7 million in
upfront income recognized from Takeda).
Net Cash (used in)/generated from Investing Activities
Net cash generated from investing activities was $259.7 million
for the six months ended June 30, 2022, compared to net cash used
in investing activities of $316.0 million for the six months ended
June 30, 2023. The net change of $575.7 million was primarily
attributable to short-term investments which had net withdrawals of
$275.5 million for the six months ended June 30, 2022 as compared
to net deposits of $315.5 million for the six months ended June 30,
2023. The net change was partially offset by a dividend of $23.9
million received from divestment of a former equity investee during
the six months ended June 30, 2023.
Net Cash generated from/(used in) Financing Activities
Net cash used in financing activities was $74.6 million for the
six months ended June 30, 2022, compared to net cash generated from
financing activities of $5.8 million for the six months ended June
30, 2023. The net change of $80.4 million was mainly attributable
to bank borrowings which had a net repayment of $26.5 million
during the six months ended June 30, 2022 as compared to net
proceeds of $22.9 million during the six months ended June 30,
2023. The net change was also attributable to a decrease in
purchases of ADSs of $39.0 million by a trustee for the settlement
of equity awards of the Company which totaled $48.1 million for the
six months ended June 30, 2022 as compared to $9.1 million for the
six months ended June 30, 2023, partly offset by dividends paid to
non-controlling shareholders of subsidiaries of $9.1 million for
the six months ended June 30, 2023 while there was no such dividend
payment for the six months ended June 30, 2022.
LOAN FACILITIES
In October 2021, our subsidiary entered into a 10-year fixed
asset loan facility agreement with Bank of China Limited for the
provision of a secured credit facility in the amount of RMB754.9
million ($105.5 million) with an annual interest rate at the 5-year
China Loan Prime Rate less 0.8% (which was supplemented in June
2022). This credit facility is guaranteed by another subsidiary of
the Group, and secured by the underlying leasehold land and
buildings, and includes certain financial covenant requirements. As
of June 30, 2023, RMB287.3 million ($40.1 million) was utilized
from the fixed asset loan facility.
In May 2022, our subsidiary entered into a 12-month revolving
loan facility with HSBC in the amount of HK$390.0 million ($50.0
million) with an interest rate at HIBOR ([75]) plus 0.5% per annum.
This revolving facility is guaranteed by us. The revolving loan
facility expired in May 2023.
Our non-consolidated joint venture SHPL had no bank borrowings
outstanding as of June 30, 2023.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
The following table sets forth our contractual obligations as of
June 30, 2023. Our purchase obligations relate to property, plant
and equipment that are contracted for but not yet paid. Our lease
obligations primarily comprise future aggregate minimum lease
payments in respect of various factories, warehouses, offices and
other assets under non-cancellable lease agreements.
Payment Due by Period (in $'000)
-----------------------------------------------------------------
Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years
------ ---------------- --------- --------- -----------------
Bank borrowings 40,147 - 1,596 4,786 33,765
Interest on bank borrowings 9,231 1,365 2,716 2,508 2,642
Purchase obligations 5,039 4,687 352 - -
Lease obligations 11,648 5,325 4,676 1,647 -
------ ---------------- --------- --------- -----------------
66,065 11,377 9,340 8,941 36,407
====== ================ ========= ========= =================
SHPL
The following table sets forth the contractual obligations of
our non-consolidated joint venture SHPL as of June 30, 2023. SHPL's
purchase obligations comprise capital commitments for property,
plant and equipment contracted for but not yet paid. SHPL's lease
obligations primarily comprise future aggregate minimum lease
payments in respect of various offices under non-cancellable lease
agreements.
Payment Due by Period (in $'000)
----------------------------------------------------------------
Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years
----- ---------------- --------- --------- -----------------
Purchase obligations 1,168 1,168 - - -
Lease obligations 1,771 832 939 - -
----- ---------------- --------- --------- -----------------
2,939 2,000 939 - -
===== ================ ========= ========= =================
FOREIGN EXCHANGE RISK
A substantial portion of our revenues and expenses are
denominated in renminbi, and our consolidated financial statements
are presented in U.S. dollars. While we do not believe that we
currently have any significant direct foreign exchange risk and
have not used any derivative financial instruments to hedge our
exposure to such risk, any significant fluctuation in the value of
renminbi may adversely affect our cash flows, results of operations
and financial condition in the future.
The value of the renminbi against the U.S. dollar and other
currencies may fluctuate and is affected by, among other things,
changes in China's political and economic conditions. The
conversion of renminbi into foreign currencies, including U.S.
dollars, has been based on rates set by the PBOC ([76]) . If we
decide to convert renminbi into U.S. dollars for the purpose of
making payments for dividends on our ordinary shares or ADSs or for
other business purposes, appreciation of the U.S. dollar against
the renminbi would have a negative effect on the U.S. dollar
amounts available to us. On the other hand, if we need to convert
U.S. dollars into renminbi for business purposes, e.g. capital
expenditures and working capital, appreciation of the renminbi
against the U.S. dollar would have a negative effect on the
renminbi amounts we would receive from the conversion. In addition,
for certain cash and bank balances deposited with banks in the PRC,
if we decide to convert them into foreign currencies, they are
subject to the rules and regulations of foreign exchange control
promulgated by the PRC government.
CREDIT RISK
Substantially all of our bank deposits are in major financial
institutions, which we believe are of high credit quality. We limit
the amount of credit exposure to any single financial institution.
We make periodic assessments of the recoverability of trade and
other receivables and amounts due from related parties. Our
historical experience in collection of receivables falls within the
recorded allowances, and we believe that we have made adequate
provision for uncollectible receivables.
INTEREST RATE RISK
We have no significant interest-bearing assets except for bank
deposits. Our exposure to changes in interest rates is mainly
attributable to our bank borrowings, which bear interest at
floating interest rates and expose us to cash flow interest rate
risk. We have not used any interest rate swaps to hedge our
exposure to interest rate risk. We have performed sensitivity
analysis for the effects on our results for the period from changes
in interest rates on floating rate borrowings. The sensitivity to
interest rates used is based on the market forecasts available at
the end of the reporting period and under the economic environments
in which we operate, with other variables held constant. According
to the analysis, the impact on our results of a 1.0% interest rate
shift would be nil for the six months ended June 30, 2023 because
the entire interest expenses incurred for the six months ended June
30, 2023 were associated with our outstanding fixed asset loan and
were capitalized when the underlying property, plant and equipment
were under construction.
OFF-BALANCE SHEET ARRANGEMENTS
We did not have during the years presented, and we do not
currently have, any material off-balance sheet arrangements.
CONTINGENT LIABILITIES
Other than as disclosed in note 11 to the interim financial
statements, the Group does not have any other significant
commitments or contingent liabilities.
GEARING RATIO
The gearing ratio of the Group, which was calculated by dividing
total interest-bearing loans by total equity, was 5.0% as of June
30, 2023, an increase from 2.8% as of December 31, 2022. The
increase was primarily attributable to the increase in
interest-bearing loans.
SIGNIFICANT INVESTMENTS HELD
Except for our investment in a non-consolidated joint venture
SHPL with a carrying value of $37.7 million including details below
and those as disclosed in note 7 to the interim financial
statements, we did not hold any other significant investments in
the equity of any other companies as of June 30, 2023.
Place of establishment and Nominal Value of Equity Interest
operations Registered Capital Attributable to the Group Principal activities
--------------------------- --------------------------- -------------------------- --------------------------
(in RMB'000)
PRC 229,000 50% Manufacture and
distribution of
prescription drug
products
Our own-brand prescription drugs business under our Other
Ventures is operated through SHPL. Dividends received from SHPL for
the six months ended June 30, 2023 were $14.6 million.
FUTURE PLANS FOR MATERIAL INVESTMENTS AND CAPITAL ASSETS
Note 11 discloses our capital commitment as of June 30, 2023. We
are building a new drug product facility in Shanghai, China, and
will make additional investments in capital assets accordingly.
MATERIAL ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES, ASSOCIATES
AND JOINT VENTURES
During the six months ended June 30, 2023, we did not have any
other material acquisitions and disposals of subsidiaries,
associates and joint ventures.
PLEDGE OF ASSETS
Our 10-year fixed asset loan facility agreement with Bank of
China Limited is secured by the underlying leasehold land and
buildings. RMB287.3 million ($40.1 million) was utilized from the
fixed asset loan facility as of June 30, 2023.
INFLATION
In recent years, China has not experienced significant
inflation, and thus inflation has not had a material impact on our
results of operations. According to the National Bureau of
Statistics of China, the Consumer Price Index in China increased by
1.5%, 1.8% and flat in 2021, 2022 and the first half of 2023,
respectively. Although we have not been materially affected by
inflation in the past, we can provide no assurance that we will not
be affected in the future by higher rates of inflation in
China.
INTERIM DIVID
The Board does not recommend any interim dividend for the six
months ended June 30, 2023.
OTHER INFORMATION
CORPORATE STRATEGY
The primary objective of the Company is to be a leader in the
discovery, development and commercialization of targeted therapies
and immunotherapies for the treatment of cancer and immunological
diseases. The strategy of the Company is to leverage the highly
specialized expertise of the drug discovery division, the
Oncology/Immunology operations, to develop and expand the drug
candidate portfolio of the Group for the global market, building on
the first-mover advantage in the development and launch of novel
cancer medicines in China, and engaging partners for late-stage
development and commercialization outside China. This strategy is
aligned with the Company's culture of innovation and high
engagement and empowerment with a strong focus on reward and
recognition. The Chairman's Statement and the Operations Review
contain discussions and analyses of the Group's opportunities,
performance and the basis on which the Group generates or preserves
value over the longer term and the basis on which the Group will
execute its strategy for delivering its objectives. The Group also
focuses on sustainability and delivering business solutions to
support the transition to a low-carbon economy.
HUMAN RESOURCES
As at June 30, 2023, the Group employed approximately 1,990
(June 30, 2022: 2,110) full time staff members. Staff costs during
the six months ended June 30, 2023, including directors'
emoluments, totaled $104.0 million (H1-22: $118.9 million).
The Group fully recognizes the importance of high-quality human
resources in sustaining market leadership. Salary and benefits are
kept at competitive levels, while individual performance is
rewarded within the general framework of the salary, bonus and
incentive system of the Group, which is reviewed annually.
Employees are provided with a wide range of benefits that include
medical coverage, provident funds and retirement plans, and
long-service awards. The Group stresses the importance of staff
development and provides training programs on an ongoing basis.
Employees are also encouraged to play an active role in community
care activities.
SUSTAINABILITY
The key sustainability mission of the Group is to create
long-term value for all stakeholders by aligning its sustainability
objectives to the strategic development of its businesses. The
Board of Directors ("the Board") has the overall responsibility to
ensure that sustainability issues are integrated into the strategy
and long-term development of the Group. It provides oversight of
the sustainability performance of the Group through closely
monitoring key sustainability matters and performance indicators,
along with trends, risks, and opportunities that may impact the
business development of the Group. Supported by the Sustainability
Committee, senior management, and the Sustainability Working Group,
the Board oversees the management approach to sustainability
matters and the formulation of sustainability strategies.
A standalone Sustainability Report of the Company for 2022 was
published alongside the 2022 Annual Report in April 2023 and
included further information on the Group's sustainability
initiatives and their performances. It further discussed the
abovementioned sustainability mission and strategies, management
approach, progress, material quantitative data, as well as policies
and key initiatives of the Group. Over the course of 2023, the
Group continues to engage its stakeholders to identify areas for
improvement in these sustainability fronts.
PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES
During the period from January 1, 2023 to June 30, 2023, neither
the Company nor any of its subsidiaries has purchased, sold or
redeemed any of the listed securities of the Company.
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
The Company strives to attain and maintain high standards of
corporate governance best suited to the needs and interests of the
Company and its subsidiaries as it believes that effective
corporate governance framework is fundamental to promoting and
safeguarding interests of shareholders and other stakeholders and
enhancing shareholder value. Accordingly, the Company has adopted
and applied corporate governance principles and practices that
emphasize a quality Board, effective risk management and internal
control systems, stringent disclosure practices, transparency and
accountability as well as effective communication and engagement
with shareholders and other stakeholders. It is, in addition,
committed to continuously enhancing these standards and practices
and inculcating a robust culture of compliance and ethical
governance underlying the business operations and practices across
the Group.
The Company has complied throughout the six months ended June
30, 2023 with all applicable code provisions of the Hong Kong
Corporate Governance Code contained in Appendix 14 of the Rules
Governing the Listing of Securities on HKEX (the "Hong Kong Listing
Rules").
COMPLIANCE WITH THE SHARE DEALINGS CODE FOR SECURITIES
TRANSACTIONS BY DIRECTORS
The Board has adopted the Code on Dealings in Shares which is on
terms no less exacting than the required standard set out in the
Model Code for Securities Transactions by Directors of Listed
Issuers set out in Appendix 10 of the Hong Kong Listing Rules as
the protocol regulating Directors' dealings in securities of the
Company. In response to specific enquiries made, all Directors have
confirmed that they have complied with the required standards set
out in such code regarding their securities transactions throughout
their tenure during the six months ended June 30, 2023.
USE OF NET PROCEEDS
On June 30, 2021, the Company issued 104,000,000 new ordinary
shares for total gross proceeds of approximately $534.7 million
from the listing of the Company's ordinary shares on HKEX.
On July 15, 2021, the over-allotment option was fully exercised
and the Company issued an aggregate of 15,600,000 ordinary shares
for total gross proceeds of approximately $80.2 million.
The intended use of total net proceeds of approximately $585.2
million from the offering and the over-allotment option for the
purposes and in the amounts (adjusted on pro rata basis based on
the actual net proceeds) as disclosed in the prospectus of the
Company dated June 18, 2021 is as below:
Expected
Percentage of Unutilized Net Timeline for
Total Net Approximate Actual Usage up Proceeds as of Utilization of
Use of Proceeds Proceeds Amount to June 30, 2023 June 30, 2023 Proceeds (note)
------------------- ---------------- ---------------- ---------------- --------------- ---------------
(%) ($'millions) ($'millions) ($'millions)
Advance our
late-stage clinical
programs for
savolitinib,
surufatinib,
fruquintinib,
amdizalisib
and sovleplenib
through
registration trials
and potential NDA
submissions 50% 292.7 292.7 - Fully utilized
Support further
proof-of-concept
studies and fund
the continued
expansion of our
product portfolio
in cancer and
immunological
diseases through
internal research,
including the
development
cost of
early-clinical and
preclinical-stage
pipeline drug
candidates 10% 58.5 58.5 - Fully utilized
Further strengthen
our integrated
capabilities across
commercialization,
clinical and
regulatory
and manufacturing 20% 117.1 102.8 14.3 2023
Fund potential
global business
development and
strategic
acquisition
opportunities to
complement
our internal
research and
development
activities and
enhance our current
drug candidate
pipeline 15% 87.8 68.8 19.0 2023
Working capital,
expanding internal
capabilities
globally and in
China and general
corporate
purposes 5% 29.1 29.1 - Fully utilized
---------------- ---------------- ---------------- ---------------
100% 585.2 551.9 33.3
================ ================ ================ ===============
Note: There was no change in the intended use of net proceeds as
previously disclosed, and the Company plans to gradually utilize
the remaining net proceeds in accordance with such intended
purposes depending on actual market conditions and business needs,
which is expected to be substantially utilized by the end of year
2023.
REVIEW OF INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
The interim unaudited condensed consolidated financial
statements of the Group for the six months ended June 30, 2023 have
been reviewed by the auditor of the Company,
PricewaterhouseCoopers, in accordance with Hong Kong Standard on
Review Engagements 2410 - "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Hong Kong Institute of Certified Public Accountants for the Hong
Kong filing. The interim unaudited condensed consolidated financial
statements of the Group for the six months ended June 30, 2023 have
also been reviewed by the Audit Committee of the Company.
IMPORTANT EVENTS AFTER THE REPORTING DATE
Save as disclosed above, no important events affecting the
Company occurred since June 30, 2023 and up to the date of this
announcement.
PUBLICATION OF INTERIM RESULTS AND INTERIM REPORT
This interim results announcement is published on the websites
of HKEX ( www.hkexnews.hk ), the U.S. Securities and Exchange
Commission ( www.sec.gov/edgar ), the London Stock Exchange (
www.londonstockex-change.com ) and the Company ( www.hutch --
med.com ). The interim report of the Group for the six months ended
June 30, 2023 will be published on the websites of HKEX and the
Company, and dispatched to the Company's shareholders in due
course.
INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
HUTCHMED (CHINA) LIMITED
Condensed Consolidated Balance Sheets
(in US$'000, except share data)
June 30, December 31,
Note 2023 2022
------- ------------ -------------
Assets (Unaudited)
Current assets
Cash and cash equivalents 3 222,996 313,278
Short-term investments 3 633,172 317,718
Accounts receivable 4 129,203 97,988
Other receivables, prepayments and deposits 5 29,280 53,216
Amount due from a related party 15(ii) 21,959 998
Inventories 6 53,875 56,690
-------------
Total current assets 1,090,485 839,888
Property, plant and equipment 96,829 75,947
Investments in equity investees 7 37,740 73,777
Amount due from a related party, non-current portion 15(ii) 32,896 -
Other non-current assets 39,547 39,833
------------ -------------
Total assets 1,297,497 1,029,445
============ =============
Liabilities and shareholders' equity
Current liabilities
Accounts payable 8 54,575 71,115
Other payables, accruals and advance receipts 9 227,212 264,621
Deferred revenue 13 52,264 13,347
Other current liabilities 6,812 4,820
Total current liabilities 340,863 353,903
Long-term bank borrowings 10 40,147 18,104
Deferred revenue, non-current portion 13 97,176 190
Other non-current liabilities 19,294 20,378
------------ -------------
Total liabilities 497,480 392,575
Commitments and contingencies 11
Company's shareholders' equity
Ordinary shares; $0.10 par value; 1,500,000,000 shares authorized;
866,161,450 and 864,775,340
shares issued at June 30, 2023 and December 31, 2022 respectively 86,616 86,478
Additional paid-in capital 1,506,280 1,497,273
Accumulated losses (803,057) (971,481)
Accumulated other comprehensive loss (7,800) (1,903)
------------ -------------
Total Company's shareholders' equity 782,039 610,367
Non-controlling interests 17,978 26,503
------------ -------------
Total shareholders' equity 800,017 636,870
------------ -------------
Total liabilities and shareholders' equity 1,297,497 1,029,445
============ =============
The accompanying notes are an integral part of these interim
unaudited condensed consolidated financial statements.
HUTCHMED (CHINA) LIMITED
Condensed Consolidated Statements of Operations
(UNAUDITED, IN US$'000, EXCEPT SHARE AND PER SHARE DATA)
Six Months Ended June 30,
--------------------------
Note 2023 2022
------ ------------ ------------
Revenues
Goods -third parties 209,247 136,932
* related parties 15(i) 4,252 1,638
Services -commercialization-third parties 25,359 21,594
* collaboration research and development -third parties 28,718 12,335
* research and development-related party 15(i) 246 263
Other collaboration revenue
-royalties-third parties 14,982 14,331
* licensing-third parties 250,070 14,954
Total revenues 13 532,874 202,047
------------ ------------
Operating expenses
Costs of goods-third parties (182,380) (115,567)
Costs of goods-related parties (2,536) (1,198)
Costs of services-commercialization -third parties (23,408) (20,553)
Research and development expenses 14 (144,633) (181,741)
Selling expenses (26,423) (22,221)
Administrative expenses (41,840) (57,521)
------------ ------------
Total operating expenses (421,220) (398,801)
------------ ------------
111,654 (196,754)
Other income/(expense), net 25,434 (3,882)
Income/(loss) before income taxes and equity in earnings of equity investees 137,088 (200,636)
Income tax (expense)/benefit 16 (2,730) 4,215
Equity in earnings of equity investees, net of tax 7 35,110 33,549
------------ ------------
Net income/(loss) 169,468 (162,872)
Less: Net (income)/loss attributable to non-controlling interests (917) 11
------------ ------------
Net income/(loss) attributable to the Company 168,551 (162,861)
============ ============
Earnings/(losses) per share attributable to the Company (US$ per share)
-basic 17 0.20 (0.19)
-diluted 17 0.19 (0.19)
Number of shares used in per share calculation
-basic 17 846,928,863 849,283,553
-diluted 17 866,990,610 849,283,553
The accompanying notes are an integral part of these interim
unaudited condensed consolidated financial statements.
HUTCHMED (CHINA) LIMITED
Condensed Consolidated Statements of Comprehensive
Income/(Loss)
(UNAUDITED, in US$'000)
Six Months Ended June 30,
----------------------------
2023 2022
----------- ---------------
Net income/(loss) 169,468 (162, 872 )
Other comprehensive loss
Foreign currency translation loss (6,245) (4,175)
----------- ---------------
Total comprehensive income/(loss) 163,223 (167,047)
Less: Comprehensive (income)/loss attributable to non-controlling interests (573) 496
----------- ---------------
Total comprehensive income/(loss) attributable to the Company 162,650 (166,551)
=========== ===============
The accompanying notes are an integral part of these interim
unaudited condensed consolidated financial statements.
HUTCHMED (CHINA) LIMITED
Condensed Consolidated Statements of Changes in Shareholders'
Equity
(UNAUDITED, in US$'000, except share data in '000)
Accumulated Total
Ordinary Ordinary Additional Other Company's Total
Shares Shares Paid-in Accumulated Comprehensive Shareholders' Non-controlling Shareholders'
Number Value Capital Losses Income/(Loss) Equity Interests Equity
-------- -------- ---------- ----------- ------------- ------------- --------------- -------------
As at January
1, 2022 864,531 86,453 1,505,196 (610,328) 5,572 986,893 52,621 1,039,514
Net loss - - - (162,861) - (162,861) (11) (162,872)
Issuances in
relation to
share
option
exercises 44 4 30 - - 34 - 34
Share-based
compensation
Share options - - 3,732 - - 3,732 9 3,741
Long-term
incentive
plan
("LTIP") - - 23,704 - - 23,704 (13) 23,691
- - 27,436 - - 27,436 (4) 27,432
LTIP-treasury
shares acquired
and held by
Trustee - - (48,084) - - (48,084) - (48,084)
Foreign currency
translation
adjustments - - - - (3,690) (3,690) (485) (4,175)
As at June 30
, 2022 864,575 86,457 1,484,578 (773,189) 1,882 799,728 52,121 851,849
======== ======== ========== =========== ============= ============= =============== =============
As at January (1,
1, 2023 864,775 86,478 1,497,273 (971,481) 903 ) 610,367 26,503 636,870
Net income - - - 168,551 - 168,551 917 169,468
Issuances in
relation to
share
option
exercises 1,386 138 920 - - 1,058 - 1,058
Share-based
compensation
Share options - - 3,236 - - 3,236 3 3,239
LTIP - - 13,844 - - 13,844 (33) 13,811
-------- -------- ---------- ----------- ------------- ------------- --------------- -------------
- - 17,080 - - 17,080 (30) 17,050
LTIP-treasury
shares acquired
and held by
Trustee - - (9,071) - - (9,071) - (9,071)
Dividends
declared
to
non-controlling
shareholders
of subsidiaries - - - - - - (9,068) (9,068)
Transfer between
reserves - - 127 (127) - - - -
Divestment of
an equity
investee - - (49) - 4 (45) - (45)
Foreign currency
translation
adjustments - - - - (5,901) (5,901) (344) (6,245)
-------- -------- ---------- ----------- ------------- ------------- --------------- -------------
As at June 30 1, 506 (7,
, 2023 866,161 86,616 ,280 (803,057) 800 ) 782,039 17,978 800,017
======== ======== ========== =========== ============= ============= =============== =============
The accompanying notes are an integral part of these interim
unaudited condensed consolidated financial statements.
HUTCHMED (CHINA) LIMITED
Condensed Consolidated Statements of Cash Flows
(UNAUDITED, in US$'000)
Six Months Ended June 30,
----------
Note 2023 2022
-------- -------------------------- ----------
Net cash generated from/(used in) operating activities 19 226,403 (89,859)
-------------------------- ----------
Investing activities
Purchases of property, plant and equipment (24,359) (15,754)
Deposits in short-term investments (835,092) (578,602)
Proceeds from short-term investments 519,638 854,062
Dividend received from divestment of Hutchison Whampoa
Guangzhou Baiyunshan Chinese Medicine
Company Limited 23,856 -
Net cash (used in)/ generated from investing activities (315,957) 259,706
-------------------------- ----------
Financing activities
Proceeds from issuances of ordinary shares 1,058 34
Purchases of treasury shares 12(ii) (9,071) (48,084)
Dividends paid to non-controlling shareholders of
subsidiaries 15(iii) (9,068) -
Proceeds from bank borrowings 22,911 418
Repayment of bank borrowings - (26,923)
Payment of issuance costs - (83)
-------------------------- ----------
Net cash generated from/(used in) financing activities 5,830 (74,638)
-------------------------- ----------
Net (decrease)/increase in cash and cash equivalents (83,724) 95,209
Effect of exchange rate changes on cash and cash equivalents (6,558) (5,249)
-------------------------- ----------
(90,282) 89,960
Cash and cash equivalents
Cash and cash equivalents at beginning of period 313,278 377,542
-------------------------- ----------
Cash and cash equivalents at end of period 222,996 467,502
========================== ==========
The accompanying notes are an integral part of these interim
unaudited condensed consolidated financial statements.
HUTCHMED (CHINA) LIMITED
Notes to the interim unaudited condensed Consolidated Financial
Statements
1. Organization and Nature of Business
HUTCHMED (China) Limited (the "Company") and its subsidiaries
(together the "Group") are principally engaged in researching,
developing, manufacturing and marketing pharmaceutical products.
The Group and its equity investee have research and development
facilities and manufacturing plants in the People's Republic of
China (the "PRC") and sell their products mainly in the PRC,
including Hong Kong and Macau. In addition, the Group has
established international operations in the United States of
America (the "U.S.") and Europe.
The Company's ordinary shares are listed on the Main Board of
The Stock Exchange of Hong Kong Limited and the AIM market of the
London Stock Exchange, and its American depositary shares ("ADS")
are traded on the Nasdaq Global Select Market.
Liquidity
As at June 30, 2023, the Group had accumulated losses of
US$803,057,000 primarily due to its spending in drug research and
development activities. The Group regularly monitors current and
expected liquidity requirements to ensure that it maintains
sufficient cash balances and adequate credit facilities to meet its
liquidity requirements in the short and long term. As at June 30,
2023, the Group had cash and cash equivalents of US$222,996,000,
short-term investments of US$633,172,000 and unutilized bank
borrowing facilities of US$65,343,000. Short-term investments
comprised of bank deposits maturing over three months.
Based on the Group's operating plan, the existing cash and cash
equivalents, short-term investments and unutilized bank borrowing
facilities are considered to be sufficient to meet the cash
requirements to fund planned operations and other commitments for
at least the next twelve months from the issuance date of the
interim unaudited condensed consolidated financial statements (the
look-forward period used).
2. Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
The interim unaudited condensed consolidated financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States of America ("U.S. GAAP")
for interim financial information. Accordingly, they do not include
all of the information and footnotes required by U.S. GAAP for
complete financial statements. The interim unaudited condensed
consolidated financial statements have been prepared on the same
basis as the annual audited consolidated financial statements. In
the opinion of management, all adjustments, consisting of normal
recurring adjustments necessary for the fair statement of results
for the periods presented, have been included. The results of
operations of any interim period are not necessarily indicative of
the results of operations for the full year or any other interim
period.
The comparative year-end condensed balance sheet data was
derived from the annual audited consolidated financial statements,
but is condensed to the same degree as the interim condensed
balance sheet data.
The interim unaudited condensed consolidated financial
statements and related disclosures have been prepared with the
presumption that users have read or have access to the annual
audited consolidated financial statements for the preceding fiscal
year.
The preparation of interim unaudited condensed consolidated
financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the interim
unaudited condensed consolidated financial statements and the
reported amounts of revenues and expenses during the reporting
period.
Recent Accounting Pronouncements
Amendments that have been issued by the Financial Accounting
Standards Board or other standards-setting bodies that do not
require adoption until a future date are not expected to have a
material impact on the Group's condensed consolidated financial
statements.
3. Cash and Cash Equivalents and Short-term Investments
June 30, December
31,
2023 2022
--------- ---------
(in US$'000)
Cash and Cash Equivalents
Cash at bank and on hand 71,244 178,326
Bank deposits maturing in three months
or less 151,752 134,952
--------- ---------
222,996 313,278
--------- ---------
Short-term Investments
Bank deposits maturing over three months
(note) 633,172 317,718
--------- ---------
856,168 630,996
========= =========
Note: The maturities for short-term investments ranged from 91
to 187 days and 91 to 99 days for the six months ended June 30,
2023 and the year ended December 31, 2022 respectively.
Certain cash and bank balances denominated in Renminbi ("RMB"),
U.S. dollar ("US$") and UK Pound Sterling ("GBP") were deposited
with banks in the PRC. The conversion of these balances into
foreign currencies is subject to the rules and regulations of
foreign exchange control promulgated by the PRC government.
Cash and cash equivalents and short-term investments were
denominated in the following currencies:
June 30, December
31,
2023 2022
--------- ---------
(in US$'000)
US$ 822,603 533,173
RMB 21,933 79,319
Hong Kong dollar ("HK$") 9,872 16,721
GBP 1,417 1,370
Others 343 413
856,168 630,996
========= =========
4. Accounts Receivable
Accounts receivable from contracts with customers consisted of
the following:
December
June 30, 31,
2023 2022
--------- ---------
(in US$'000)
Accounts receivable-third parties 127,180 94,531
Accounts receivable-related parties (Note
15(ii)) 2,212 3,517
Allowance for credit losses (189) (60)
--------- ---------
Accounts receivable, net 129,203 97,988
========= =========
Substantially all accounts receivable are denominated in RMB,
US$ and HK$ and are due within one year from the end of the
reporting periods. The carrying values of accounts receivable
approximate their fair values due to their short-term
maturities.
An aging analysis for accounts receivable-third parties based on
the relevant invoice dates is as follows:
December
June 30, 31,
2023 2022
--------- ---------
(in US$'000)
Not later than 3 months 109,809 84,007
Between 3 months to 6 months 14,073 7,478
Between 6 months to 1 year 2,088 1,947
Later than 1 year 1,210 1,099
--------- ---------
Accounts receivable-third parties 127,180 94,531
========= =========
Movements on the allowance for credit losses:
2023 2022
------- ------
(in US$'000)
As at January 1 60 20
Increase in allowance for credit losses 150 119
Decrease in allowance due to subsequent
collection (17) (14)
Exchange difference (4) (4)
------- ------
As at June 30 189 121
======= ======
5. Other Receivables, Prepayments and Deposits
Other receivables, prepayments and deposits consisted of the
following:
December
June 30, 31,
2023 2022
--------- ---------
(in US$'000)
Prepayments 12,053 22,329
Value-added tax receivables 7,046 1,491
Interest receivables 5,379 807
Dividend receivables 2,527 26,246
Deposits 1,205 1,214
Others 1,070 1,129
--------- ---------
29,280 53,216
========= =========
No allowance for credit losses has been made for other
receivables, prepayments and deposits for the six months ended June
30, 2023 and year ended December 31, 2022.
6. Inventories
Inventories, net of provision for excess and obsolete
inventories, consisted of the following:
December
June 30, 31,
2023 2022
--------- ---------
(in US$'000)
Raw materials 27,231 27,392
Finished goods 26,644 29,298
--------- ---------
53,875 56,690
========= =========
7. Investments in Equity Investees
Investments in equity investees consisted of the following:
June 30, December 31,
2023 2022
--------- -------------
(in US$'000)
Shanghai Hutchison Pharmaceuticals Limited
("SHPL") 37,740 73,461
Other (note) - 316
--------- -------------
37,740 73,777
========= =============
Note: On April 13, 2023, the Group completed a transaction to
sell its entire investment in a former equity investee to a third
party.
The equity investees are private companies and there are no
quoted market prices available for their shares.
Summarized financial information for the equity investee, SHPL,
is as follows:
(i) Summarized balance sheets
June 30, December 31,
2023 2022
--------- ------------
(in US$'000)
Current assets 228,185 214,267
Non-current assets 74,950 80,062
Current liabilities (163,222) (147,952)
Non-current liabilities (69,791) (4,944)
--------- ------------
Net assets 70,122 141,433
========= ============
(ii) Summarized statements of operations
Six Months Ended June 30,
---------------------------
2023 2022
------------- ------------
(in US$'000)
Revenue 235,271 212,413
============= ============
Gross profit 175,750 165,208
============= ============
Interest income 438 623
============= ============
Finance cost (note (a)) (1,022) -
============= ============
Income before taxation 84,064 78,472
============= ============
Income tax expense (note (b)) (13,840) (11,209)
Net income (note (c)) 70,224 67,263
============= ============
Notes:
(a) On January 31, 2023, SHPL declared dividends of
US$146,974,000. Finance cost is from the accretion of the
US$3,654,000 discount recorded on the dividends payable.
(b) The main entity within SHPL group has been granted the High
and New Technology Enterprise ("HNTE") status (the latest renewal
of this status covered the years from 2020 to 2022). This entity
was eligible to use a preferential income tax rate of 15% for the
year ended December 31, 2022 on this basis. The entity is in the
process of applying to renew the HNTE status for another three
years. Management considers that the renewal of HNTE status will be
granted and the preferential income tax rate of 15% continues to be
applicable for the six months ended June 30, 2023.
(c) Net income is before elimination of unrealized profits on
transactions with the Group. The amounts eliminated were
approximately US$2,000 and US$80,000 for the six months ended June
30, 2023 and 2022 respectively.
(iii) Reconciliation of summarized financial information
Reconciliation of the summarized financial information presented
to the carrying amount of investment in SHPL is as follows:
2023 2022
--------- --------
(in US$'000)
Opening net assets as at January 1 141,433 145,741
Net income 70,224 67,263
Dividends declared (146,974) (45,385)
Discount on dividends payable 3,654 -
Other comprehensive income/(loss) 1,785 (8,544)
---------
Closing net assets as at June 30 70,122 159,075
========= ========
Group's share of net assets 35,061 79,538
Goodwill 2,795 3,000
Elimination of unrealized profits on sales
to SHPL (116) -
--------- --------
Carrying amount of investments as at June
30 37,740 82,538
========= ========
SHPL had the following capital commitments:
June 30, 2023
--------------
(in US$'000)
Property, plant and equipment
Contracted but not provided for 1,168
==============
8. Accounts Payable
June 30, December 31,
2023 2022
--------- -------------
(in US$'000)
Accounts payable 54,575 71,115
========= =============
Substantially all accounts payable are denominated in RMB, EUR
and US$ and due within one year from the end of the reporting
period. The carrying values of accounts payable approximate their
fair values due to their short-term maturities.
An aging analysis based on the relevant invoice dates is as
follows:
June 30, December 31,
2023 2022
--------- -------------
(in US$'000)
Not later than 3 months 48,284 60,553
Between 3 months to 6 months 2,765 7,216
Between 6 months to 1 year 2,346 2,137
Later than 1 year 1,180 1,209
--------- -------------
54,575 71,115
========= =============
9. Other Payables, Accruals and Advance Receipts
Other payables, accruals and advance receipts consisted of the
following:
June 30, December 31,
2023 2022
--------- -------------
(in US$'000)
Accrued research and development expenses 140,158 156,134
Accrued salaries and benefits 27,225 42,442
Accrued capital expenditures 21,429 21,390
Accrued administrative and other general expenses 14,090 14,491
Accrued selling and marketing expenses 10,448 11,564
Deposits 3,172 3,616
Amounts due to related parties (Note 15(ii)) 1,957 2,101
Deferred government grants 689 673
Others 8,044 12,210
--------- -------------
227,212 264,621
========= =============
10. Bank Borrowings
Bank borrowings consisted of the following:
June 30, December 31,
2023 2022
--------- -------------
(in US$'000)
Non-current 40,147 18,104
========= =============
The weighted average interest rate for outstanding bank
borrowings for the six months ended June 30, 2023 and year ended
December 31, 2022 was 3.51% per annum and 1.73% per annum
respectively. The carrying amounts of the Group's outstanding bank
borrowings as at June 30, 2023 and December 31, 2022 were
denominated in RMB.
(i) 1-year revolving loan facility
In May 2022, the Group through its subsidiary, entered into a
1-year revolving loan facility with the bank in the amount of
HK$390,000,000 (US$50,000,000) with an interest rate at Hong Kong
Interbank Offered Rate plus 0.5% per annum. This credit facility
was guaranteed by the Company and expired in May 2023.
(ii) 10--year fixed asset loan facility
In October 2021, a subsidiary entered into a 10-year fixed asset
loan facility agreement with a bank for the provision of a secured
credit facility in the amount of RMB754,880,000 (US$105,490,000)
with an annual interest rate at the 5-year China Loan Prime Rate
less 0.8% (which was supplemented in June 2022) and interest
payments commencing upon completion of the underlying construction
in progress. This credit facility is guaranteed by the immediate
holding company of the subsidiary and secured by the underlying
leasehold land and buildings. As at June 30, 2023 and December 31,
2022, RMB287,287,000 (US$40,147,000) and RMB126,083,000
(US$18,104,000) were utilized from the fixed asset loan facility
respectively, of which RMB4,708,000 (US$658,000) and RMB769,000
(US$110,000) were related to capitalized interest respectively.
The Group's bank borrowings are repayable as from the dates
indicated as follows:
December
June 30, 31,
2023 2022
--------- ---------
(in US$'000)
Between 1 to 3 years 1,596 360
Between 3 to 4 years 2,127 839
Between 4 to 5 years 2,659 1,079
Later than 5 years 33,765 15,826
40,147 18,104
========= =========
As at June 30, 2023, the Group had unutilized bank borrowing
facilities of US$65,343,000.
11. Commitments and Contingencies
The Group had the following capital commitments:
June 30,
2023
-------------
(in US$'000)
Property, plant and equipment
Contracted but not provided for 5,039
=============
The Group does not have any other significant commitments or
contingencies.
12. Share-based Compensation
(i) Share--based Compensation of the Company
The Company conditionally adopted a share option scheme on June
4, 2005 (as amended on March 21, 2007) and such scheme has a term
of 10 years. It expired in 2016 and no further share options can be
granted. Another share option scheme was conditionally adopted on
April 24, 2015 (as amended on April 27, 2020) (the "Hutchmed Share
Option Scheme"). Pursuant to the Hutchmed Share Option Scheme, the
Board of Directors of the Company may, at its discretion, offer any
employees and directors (including Executive and Non-executive
Directors but excluding Independent Non-executive Directors) of the
Company, holding companies of the Company and any of their
subsidiaries or affiliates, and subsidiaries or affiliates of the
Company share options to subscribe for shares of the Company.
As at June 30, 2023, the aggregate number of shares issuable
under the Hutchmed Share Option Scheme was 47,044,598 ordinary
shares and the aggregate number of shares issuable under the prior
share option scheme which expired in 2016 was 211,320 ordinary
shares. The Company will issue new shares to satisfy share option
exercises. Additionally, the number of shares authorized but
unissued was 633,838,550 ordinary shares.
Share options granted are generally subject to a four-year
vesting schedule, depending on the nature and the purpose of the
grant. Share options subject to the four-year vesting schedule, in
general, vest 25% upon the first anniversary of the vesting
commencement date as defined in the grant letter, and 25% every
subsequent year. However, certain share option grants may have a
different vesting schedule as approved by the Board of Directors of
the Company. No outstanding share options will be exercisable or
subject to vesting after the expiry of a maximum of eight to ten
years from the date of grant.
A summary of the Company's share option activity and related
information is as follows:
Weighted average
Weighted average remaining Aggregate intrinsic
Number of share exercise price in contractual life value
options US$ per share (years) (in US$'000)
--------------------- -------------------- -------------------- ---------------------
Outstanding at
January 1, 2022 37,190,590 4.88 7.04 82,377
Granted (note) 7,680,820 2.26
Exercised (244,490) 1.98
Cancelled (3,849,905) 5.19
Expired (1,255,620) 5.66
---------------------
Outstanding at
December 31, 2022 39,521,395 4.34 6.55 11,525
=====================
Granted 1,221,900 2.50
Exercised (1,386,110) 1.92
Cancelled (2,742,340) 4.68
Expired (1,893,370) 5.55
---------------------
Outstanding at June
30, 2023 34,721,475 4.27 6.21 1,541
=====================
Vested and
exercisable at
December 31, 2022 21,113,285 4.57 4.80 6,288
Vested and
exercisable at June
30, 2023 21,976,870 4.58 4.97 591
Note: Includes 861,220 share options (represented by 172,244
ADS) granted to an executive director in May 2022 where the number
of share options exercisable is subject to a performance target
based on a market condition covering the 3-year period from 2022 to
2024 which has been reflected in estimating the grant date fair
value. The grant date fair value of such awards is US$0.24 per
share using the Polynomial model. Vesting of such award will occur
in March 2025 if the performance target based on a market condition
is met.
In estimating the fair value of share options granted, the
following assumptions were used in the Polynomial model for awards
granted in the periods indicated:
Six Months Ended June 30, 2023 Year Ended December 31, 2022
------------------------------- -----------------------------
Weighted average grant date fair value of share
options (in US$ per share) 1.14 0.85
Significant inputs into the valuation model
(weighted average):
Exercise price (in US$ per share) 2.50 2.26
Share price at effective date of grant (in US$
per share) 2.50 2.22
Expected volatility (note (a)) 53.3% 46.7%
Risk-free interest rate (note (b)) 3.69% 2.98%
Contractual life of share options (in years) 10 10
Expected dividend yield (note (c)) 0% 0%
Notes:
(a) The Company calculated its expected volatility with
reference to the historical volatility prior to the issuances of
share options.
(b) The risk-free interest rates reference the U.S. Treasury
yield curves because the Company's ADS are currently listed on the
NASDAQ and denominated in US$.
(c) The Company has not declared or paid any dividends and does
not currently expect to do so prior to the exercise of the granted
share options, and therefore uses an expected dividend yield of
zero in the Polynomial model.
The Company will issue new shares to satisfy share option
exercises. The following table summarizes the Company's share
option exercises:
Six Months Ended June 30,
----------------------------
2023 2022
--------------- -----------
(in US$'000)
Cash received from share option exercises 1,058 34
Total intrinsic value of share option exercises 1,898 57
The Group recognizes compensation expense on a graded vesting
approach over the requisite service period. The following table
presents share-based compensation expense included in the Group's
condensed consolidated statements of operations:
Six Months Ended June 30,
----------------------------
2023 2022
------------- -------------
(in US$'000)
Research and development expenses 1,664 2,795
Selling and administrative expenses 1,522 871
Cost of revenues 53 75
------------- -------------
3,239 3,741
============= =============
As at June 30 2023, the total unrecognized compensation cost was
US$8,107,000, and will be recognized on a graded vesting approach
over the weighted average remaining service period of 2.50
years.
(ii) LTIP
The Company grants awards under the LTIP to participating
directors and employees, giving them a conditional right to receive
ordinary shares of the Company or the equivalent ADS (collectively
the "Awarded Shares") to be purchased by the Trustee up to a cash
amount. Vesting will depend upon continued employment of the award
holder with the Group and will otherwise be at the discretion of
the Board of Directors of the Company. Additionally, some awards
are subject to change based on annual performance targets prior to
their determination date.
LTIP awards prior to the determination date
Performance targets vary by award, and may include targets for
shareholder returns, financings, revenues, net income/(loss) after
taxes and the achievement of clinical and regulatory, business
development and manufacturing milestones. As the extent of
achievement of the performance targets is uncertain prior to the
determination date, a probability based on management's assessment
on the achievement of the performance target has been assigned to
calculate the amount to be recognized as an expense over the
requisite period with a corresponding entry to liability.
LTIP awards after the determination date
Upon the determination date, the Company will pay a determined
monetary amount, up to the maximum cash amount based on the actual
achievement of the performance target specified in the award, to
the Trustee to purchase the Awarded Shares. Any cumulative
compensation expense previously recognized as a liability will be
transferred to additional paid-in capital. Based on the actual
achievement of performance target, the amount previously recorded
in the liability will be adjusted through share-based compensation
expense.
Granted awards in 2022 and 2023 under the LTIP are as
follows:
Maximum cash amount (in US$ Performance target
Grant date millions) Covered financial years determination date
------------------- ------------------------------- ------------------------ --------------------------------
May 23, 2022 60.4 2022 note (a)
September 13, 2022 3.8 2022 note (a)
September 13, 2022 1.7 note (b) note (b)
June 5, 2023 54.9 2023 note (a)
Notes:
(a) The annual performance target determination date is the date
of the announcement of the Group's annual results for the covered
financial year and vesting occurs two business days after the
announcement of the Group's annual results for the financial year
falling two years after the covered financial year to which the
LTIP award relates.
(b) This award does not stipulate performance targets and is
subject to a vesting schedule of 25% on each of the first, second,
third and fourth anniversaries of the date of grant.
The Trustee has been set up solely for the purpose of purchasing
and holding the Awarded Shares during the vesting period on behalf
of the Company using funds provided by the Company. On the
determination date, if any, the Company will determine the cash
amount, based on the actual achievement of each annual performance
target, for the Trustee to purchase the Awarded Shares. The Awarded
Shares will then be held by the Trustee until they are vested.
The Trustee's assets include treasury shares and funds for
additional treasury shares, trustee fees and expenses. The number
of treasury shares (in ordinary share equivalent) held by the
Trustee were as follows:
Number of treasury Cost
shares (in US$'000)
------------------- --------------
As at January 1, 2022 8,139,175 40,014
Purchased 14,028,465 48,084
Vested (2,566,265) (12,034)
As at December 31, 2022 19,601,375 76,064
Purchased 2,725,515 9,071
Vested (4,480,895) (17,267)
------------------- --------------
As at June 30, 2023 17,845,995 67,868
=================== ==============
For the six months ended June 30, 2023 and 2022, US$5,041,000
and US$8,397,000 of the LTIP awards were forfeited respectively
based on the determined or estimated monetary amount as at the
forfeiture date.
The following table presents the share-based compensation
expenses recognized under the LTIP awards:
Six Months Ended June 30,
----------------------------
2023 2022
------------- -------------
(in US$'000)
Research and development expenses 5,700 7,196
Selling and administrative expenses 4,614 4,228
Cost of revenues 237 213
------------- -------------
10,551 11,637
============= =============
Recorded with a corresponding credit to:
Liability 1,303 3,297
Additional paid-in capital 9,248 8,340
------------- -------------
10,551 11,637
============= =============
For the six months ended June 30, 2023 and 2022, US$4,563,000
and US$15,351,000 were reclassified from liability to additional
paid-in capital respectively upon LTIP awards reaching the
determination date. As at June 30, 2023 and December 31, 2022,
US$441,000 and US$3,701,000 were recorded as liabilities
respectively for LTIP awards prior to the determination date.
As at June 30, 2023, the total unrecognized compensation cost
was approximately US$38,153,000, which considers expected
performance targets and the amounts expected to vest, and will be
recognized over the requisite periods.
13. Revenues
The following table presents revenue disaggregated by type:
Six Months Ended June 30, 2023
-----------------------------------------------
Oncology/Immunology Other Ventures Total
-------------------- --------------- --------
(in US$'000)
Goods-Marketed Products 39,808 - 39,808
Goods-Distribution - 173,691 173,691
Services-Commercialization-Marketed
Products 25,359 - 25,359
* Collaboration Research and Development 28,718 - 28,718
* Research and Development 246 - 246
Royalties 14,982 - 14,982
Licensing 250,070 - 250,070
-------------------- --------------- --------
359,183 173,691 532,874
==================== =============== ========
Third parties 358,937 169,439 528,376
Related parties (Note 15(i)) 246 4,252 4,498
-------------------- --------------- --------
359,183 173,691 532,874
==================== =============== ========
Six Months Ended June 30, 2022
-----------------------------------------------
Oncology/Immunology Other Ventures Total
-------------------- --------------- --------
(in US$'000)
Goods-Marketed Products 27,592 - 27,592
Goods-Distribution - 110,978 110,978
Services-Commercialization-Marketed
Products 21,594 - 21,594
* Collaboration Research and Development 12,335 - 12,335
* Research and Development 263 - 263
Royalties 14,331 - 14,331
Licensing 14,954 - 14,954
-------------------- --------------- --------
91,069 110,978 202,047
==================== =============== ========
Third parties 90,806 109,340 200,146
Related parties (Note 15(i)) 263 1,638 1,901
-------------------- --------------- --------
91,069 110,978 202,047
==================== =============== ========
The following table presents liability balances from contracts
with customers:
June 30, December 31,
2023 2022
-------- ------------
(in US$'000)
Deferred revenue
Current-Oncology/Immunology segment (note (a)) 51,232 11,817
Current-Other Ventures segment (note (b)) 1,032 1,530
52,264 13,347
Non-current-Oncology/Immunology segment (note (a)) 97,176 190
-------- ------------
Total deferred revenue (note (c) and (d)) 149,440 13,537
======== ============
Notes:
(a) Oncology/Immunology segment deferred revenue relates to
invoiced amounts for unamortized upfront and milestone payments,
royalties where the customer has not yet completed the in-market
sale and advance consideration received for cost reimbursements
which are attributed to research and development services that have
not yet been rendered as at the reporting date.
(b) Other Ventures segment deferred revenue relates to payments
in advance from customers for goods that have not been transferred
and services that have not been rendered to the customer as at the
reporting date.
(c) Estimated deferred revenue to be recognized over time as
from the date indicated is as follows:
June 30, December 31,
2023 2022
--------- -------------
(in US$'000)
Not later than 1 year 52,264 13,347
Between 1 to 2 years 33,756 150
Between 2 to 3 years 36,355 40
Between 3 to 4 years 20,292 -
Later than 4 years 6,773 -
149,440 13,537
========= =============
(d) As at January 1, 2023, deferred revenue was US$13.5 million,
of which US$8.5 million was recognized during the six months ended
June 30, 2023.
License and collaboration agreement with Takeda
Pharmaceutical
On January 23, 2023, the Group and Takeda Pharmaceuticals
International AG entered into an exclusive out-licensing agreement
(the "Takeda Agreement") to further the global development,
commercialization and manufacturing of Fruquintinib in territories
outside of Mainland China, Hong Kong and Macau (the "Territory").
Under the terms of the Takeda Agreement, the Group is entitled to
receive a series of payments up to US$1.13 billion, including
upfront, regulatory, development and commercial sales milestone
payments, plus royalties on net sales in the Territory. During the
six months ended June 30, 2023, the Group has received $400 million
upfront payment.
The Takeda Agreement has the following material performance
obligations: (1) the licenses for the development and
commercialization of Fruquintinib in the Territory and the
manufacture of Fruquintinib for use in the Territory, (2) services
for research and development of ongoing clinical trials, regulatory
submissions and manufacturing technology transfer and (3)
manufacturing supply.
The transaction price for these performance obligations includes
the upfront payment, service cost reimbursements, milestone
payments and sales-based royalties. Milestone payments were not
included in the transaction price until it becomes probable that a
significant reversal of revenue would not occur, which is generally
when the criteria to receive the milestone are achieved.
Manufacturing sales are variable consideration and were not
included in the transaction price at inception as regulatory
approval had not been achieved.
The allocation of the transaction price to each performance
obligation was based on the relative standalone selling price of
each performance obligation determined at the inception of the
contract. Based on this estimation, proportionate amounts of
transaction price to be allocated to the licenses, and other
performance obligations were 62% and 38% respectively.
Control of the licenses to Fruquintinib was transferred at the
inception date of the agreement and consequently, amounts allocated
to this performance obligation were recognized at inception.
Conversely, services are performed over the term of the Takeda
Agreement and amounts allocated are recognized over time using a
percentage-of-completion method and manufacturing supply is
recognized at a point in time when the control of the goods is
transferred. Royalties are recognized as future sales occur as they
meet the requirements for the sales-usage based royalty
exception.
Revenue recognized under the Takeda Agreement is as follows:
Six Months Ended June 30, 2023
-------------------------------
(in US$'000)
Licensing-from upfront payment 250,070
Services-collaboration research and development-from deferred upfront payment 8,615
Services-collaboration research and development-cost reimbursements 10,372
-------------------------------
269,057
===============================
14. Research and Development Expenses
Research and development expenses are summarized as follows:
Six Months Ended June 30,
----------------------------
2023 2022
------------- -------------
(in US$'000)
Clinical trial related costs 94,909 122,513
Personnel compensation and related costs 45,410 52,738
Other research and development expenses 4,314 6,490
------------- -------------
144,633 181,741
============= =============
The Group has entered into multiple collaborative arrangements
under ASC 808 to evaluate the combination of the Group's drug
compounds with the collaboration partners' drug compounds. For the
six months ended June 30, 2023 and 2022, the Group has incurred
research and development expenses of US$8,067,000 and US$6,818,000
respectively, related to such collaborative arrangements.
15. Significant Transactions with Related Parties and
Non-Controlling Shareholders of Subsidiaries
The Group has the following significant transactions with
related parties and non-controlling shareholders of subsidiaries,
which were carried out in the normal course of business at terms
determined and agreed by the relevant parties:
(i) Transactions with related parties:
Six Months Ended June 30,
---------------------------
2023 2022
-------------
(in US$'000)
Sales to:
Indirect subsidiaries of CK Hutchison Holdings Limited ("CK Hutchison") 1,008 1,638
An equity investee 3,244 -
------------- ------------
4,252 1,638
============= ============
Revenue from research and development services from:
An equity investee 246 263
============= ============
Purchases from:
An equity investee 1,911 2,225
============= ============
Rendering of marketing services from:
Indirect subsidiaries of CK Hutchison 59 77
An equity investee - 62
------------- ------------
59 139
============= ------------
Rendering of management services from:
An indirect subsidiary of CK Hutchison 498 490
============= ============
(ii) Balances with related parties included in:
June 30, December 31,
2023 2022
--------- -------------
(in US$'000)
Accounts receivable-related parties
Indirect subsidiaries of CK Hutchison (note (a)) 773 1,319
An equity investee (note (a)) 1,439 2,198
--------- -------------
2,212 3,517
Amount due from a related party
An equity investee (note (a) and (b)) 21,959 998
========= =============
Amount due from a related party, non-current portion
An equity investee (note (b)) 32,896 -
========= =============
Other payables, accruals and advance receipts
Indirect subsidiaries of CK Hutchison (note (c) and (e)) 1,884 1,953
An equity investee (note (a) and (d)) 73 148
--------- -------------
1,957 2,101
========= =============
Other non-current liabilities
An equity investee (note (d)) 592 755
An indirect subsidiary of CK Hutchison (note (e)) 8,940 8,716
--------- -------------
9,532 9,471
========= =============
Notes:
(a) Balances with related parties are unsecured, repayable on
demand and interest-free. The carrying values of balances with
related parties approximate their fair values due to their
short-term maturities.
(b) As at June 30, 2023, dividends receivable within one year of
US$20,961,000 was included in amount due from a related party.
US$32,896,000 of dividends receivable beyond one year was included
in amount due from a related party, non-current portion.
(c) Amounts due to indirect subsidiaries of CK Hutchison are
unsecured, repayable on demand and interest-bearing if not settled
within one month.
(d) Other deferred income represents amounts recognized from
granting of commercial, promotion and marketing rights.
(e) As at June 30, 2023 and December 31, 2022, a branding
liability payable of US$1,538,000 was included in amounts due to
related parties under other payables, accruals and advance
receipts. As at June 30, 2023 and December 31, 2022, US$8,940,000
and US$8,716,000 of the branding liability payable was included in
other non-current liabilities.
(iii) Transactions with non--controlling shareholders of
subsidiaries:
Six Months Ended June 30,
---------------------------
2023 2022
------------- ------------
(in US$'000)
Sales 35,933 17,705
============= ============
Purchases 3,199 3,442
============= ============
Dividends paid 9,068 -
============= ============
(iv) Balances with non--controlling shareholders of subsidiaries
included in:
December
June 30, 31,
2023 2022
-------- --------
(in US$'000)
Accounts receivable 11,848 11,139
Accounts payable 1,652 2,922
======== ========
16. Income Tax (Expense)/Benefit
Six Months Ended June 30,
----------------------------
2023 2022
------------ --------------
(in US$'000)
Current tax
HK 6 80
PRC 976 1,008
U.S. and others 52 1,694
------------ --------------
Total current tax 1,034 2,782
Deferred income tax expense/(benefit) 1,696 (6,997)
------------ --------------
Income tax expense/(benefit) 2,730 (4,215)
============ ==============
The reconciliation of the Group's reported income tax expense to
the theoretical tax amount that would arise using the tax rates of
the Company against the Group's income/(loss) before income taxes
and equity in earnings of equity investees is as follows:
Six Months Ended June 30,
2023 2022
------------- -------------
(in US$'000)
Income/(loss) before income taxes and equity in earnings of equity investees 137,088 (200,636)
============= =============
Tax calculated at the statutory tax rate of the Company 22,620 (33,105)
Tax effects of:
Different tax rates applicable in different jurisdictions (1,423) 1,771
Tax valuation allowance (2,898) 41,374
Preferential tax rate difference (39) (67)
Preferential tax deduction and credits (17,735) (18,169)
Expenses not deductible for tax purposes 2,829 3,070
Utilization of previously unrecognized tax losses (39) (1)
Withholding tax on undistributed earnings of PRC entities 1,755 1,681
Income not subject to tax (2,478) (611)
Others 138 (158)
Income tax expense/(benefit) 2,730 (4,215)
============= =============
17. Earnings/(Losses) Per Share
(i) Basic earnings/(losses) per share
Basic earnings/(losses) per share is calculated by dividing the
net income/(loss) attributable to the Company by the weighted
average number of outstanding ordinary shares in issue during the
period. Treasury shares held by the Trustee are excluded from the
weighted average number of outstanding ordinary shares in issue for
purposes of calculating basic earnings/(losses) per share.
Six Months Ended June 30,
2023 2022
Weighted average number of outstanding ordinary shares in issue 846,928,863 849,283,553
Net income/(loss) attributable to the Company (US$'000) 168,551 (162,861)
Basic earnings/(losses) per share attributable to the Company (US$ per share) 0.20 (0.19)
(ii) Diluted earnings/(losses) per share
Diluted earnings/(losses) per share is calculated by dividing
net income/(loss) attributable to the Company by the weighted
average number of outstanding ordinary shares in issue and dilutive
ordinary share equivalents outstanding during the period. Dilutive
ordinary share equivalents include shares issuable upon the
exercise or settlement of share options and LTIP awards issued by
the Company using the treasury stock method.
Six Months Ended June 30,
2023 2022
------------
Weighted average number of outstanding ordinary shares in issue 846,928,863 849,283,553
Effect of share options and LTIP awards (note) 20,061,747 -
------------
Weighted average number of outstanding ordinary shares in issue and dilutive ordinary
share
equivalents outstanding 866,990,610 849,283,553
Net income/(loss) attributable to the Company (US$'000) 168,551 (162,861)
Diluted earnings/(losses) per share attributable to the Company (US$ per share) 0.19 (0.19)
Note: For the six months ended June 30, 2022, the share options
and LTIP awards issued by the Company were not included in the
calculation of diluted losses per share because of their
anti-dilutive effect.
18. Segment Reporting
The Group's operating segments are as follows:
(i) Oncology/Immunology: focuses on discovering, developing, and
commercializing targeted therapies and immunotherapies for the
treatment of cancer and immunological diseases. Oncology/Immunology
is further segregated into two core business areas:
(a) R&D: comprises research and development activities
covering drug discovery, development, manufacturing and regulatory
functions as well as administrative activities to support research
and development operations; and
(b) Marketed Products: comprises the sales, marketing,
manufacture and distribution of drugs developed from research and
development activities including out-licensed marketed
products.
(ii) Other Ventures: comprises other commercial businesses which
include the sales, marketing, manufacture and distribution of other
prescription drugs and consumer health products.
The performance of the reportable segments is assessed based on
segment net income/(loss) attributable to the Company.
The segment information is as follows:
Six Months Ended June 30, 2023
Oncology/Immunology
Marketed Other
R&D Products Ventures
--------
U.S.
PRC and Others Subtotal PRC Subtotal PRC Unallocated Total
-------- --------
(in US$'000)
Revenue from
external
customers 9,977 269,057 279,034 80,149 359,183 173,691 - 532,874
-------- --------
Interest
income 438 1 439 - 439 238 15,198 15,875
Interest
expense - - - - - - (224) (224)
Equity in
earnings
of equity
investees,
net of tax - - - - - 35,110 - 35,110
Income tax
(expense)/benefit (86) (7) (93) 107 14 (939) (1,805) (2,730)
Net (loss)/income
attributable
to the Company (83,628) 205,010 121,382 12,971 134,353 37,180 (2,982) 168,551
Depreciation/
amortization (3,263) (250) (3,513) - (3,513) (165) (134) (3,812)
Additions
to non-current
assets (other
than financial
instruments
and deferred
tax assets) 30,296 110 30,406 - 30,406 243 15 30,664
June 30, 2023
Oncology/Immunology
Marketed Other
R&D Products Ventures
U.S.
PRC and Others Subtotal PRC Subtotal PRC Unallocated Total
(in US$'000)
Total assets 152,736 33,995 186,731 64,260 250,991 170,366 876,140 1,297,497
Property,
plant and
equipment 93,840 1,940 95,780 - 95,780 826 223 96,829
Right-of-use
assets 4,887 2,867 7,754 - 7,754 838 600 9,192
Leasehold
land 11,387 - 11,387 - 11,387 - - 11,387
Goodwill - - - - - 3,064 - 3,064
Other intangible
asset - - - - - 52 - 52
Investments
in equity
investees - - - - - 37,740 - 37,740
Six Months Ended June 30, 2022
Oncology/Immunology
Marketed Other
R&D Products Ventures
-------- --------
U.S.
and
PRC Others Subtotal PRC Subtotal PRC Unallocated Total
-------- --------- --------
(in US$'000)
Revenue from
external
customers 27,552 - 27,552 63,517 91,069 110,978 - 202,047
-------- --------- --------
Interest
income 376 - 376 - 376 92 1,514 1,982
Interest
expense - - - - - - (404) (404)
Equity in
earnings
of equity
investees,
net of tax (2) - (2) - (2) 33,551 - 33,549
Income tax
(expense)/benefit (255) 6,912 6,657 (436) 6,221 (317) (1,689) 4,215
Net (loss)/income
attributable
to the Company (92,645) (96,156) (188,801) 9,006 (179,795) 35,423 (18,489) (162,861)
Depreciation/
amortization (3,827) (237) (4,064) - (4,064) (154) (158) (4,376)
Additions
to non-current
assets (other
than financial
instruments
and deferred
tax assets) 8,947 227 9,174 - 9,174 160 13 9,347
December 31, 2022
Oncology/Immunology
Marketed Other
R&D Products Ventures
U.S.
PRC and Others Subtotal PRC Subtotal PRC Unallocated Total
(in US$'000)
Total assets 221,337 30,281 251,618 45,984 297,602 235,500 496,343 1,029,445
Property,
plant and
equipment 72,775 2,103 74,878 - 74,878 735 334 75,947
Right-of-use
assets 3,350 3,167 6,517 - 6,517 1,308 897 8,722
Leasehold
land 11,830 - 11,830 - 11,830 - - 11,830
Goodwill - - - - - 3,137 - 3,137
Other intangible
asset - - - - - 85 - 85
Investments
in equity
investees 316 - 316 - 316 73,461 - 73,777
Revenue from external customers is after elimination of
inter-segment sales. Sales between segments are carried out at
mutually agreed terms. The amounts eliminated attributable to sales
between PRC and U.S. and others under Oncology/Immunology segment
were US$17,303,000 and US$68,015,000 for the six months ended June
30, 2023 and 2022 respectively.
A summary of customers who accounted for over 10% of the Group's
revenue for the six months ended June 30, 2023 and 2022 is as
follows:
Six Months Ended
June 30,
2023 2022
(in US$'000)
Customer A 269,057 -
Customer B (note) 39,034
Customer C (note) 36,282
Note: Customer did not account for over 10% of the Group's
revenue during the six months ended June 30, 2023.
Customer A, B and C are included in Oncology/Immunology.
Unallocated expenses mainly represent corporate expenses which
include corporate administrative costs, corporate employee benefit
expenses and the relevant share-based compensation expenses, net of
interest income. Unallocated assets mainly comprise cash and cash
equivalents and short-term investments.
19. Note to Condensed Consolidated Statements of Cash Flows
Reconciliation of net income/(loss) for the period to net cash
generated from/(used in) operating activities:
Six Months Ended June 30,
2023 2022
(in US$'000)
Net income/(loss) 169,468 (162,872)
Adjustments to reconcile net income/(loss) to net cash generated from/(used in)
operating
activities
Depreciation and amortization 3,812 4,376
Share-based compensation expense-share options 3,239 3,741
Share-based compensation expense-LTIP 10,551 11,637
Equity in earnings of equity investees, net of tax (35,110) (33,549)
Dividend received from SHPL 14,615 22,692
Changes in right-of-use assets (720) 2,221
Fair value losses on warrant - 2,452
Other adjustments (78) 1,665
Changes in working capital
Accounts receivable (31,348) 6,397
Other receivables, prepayments and deposits (2,296) 10,585
Amount due from a related party - 150
Inventories 2,815 (10,362)
Accounts payable (16,540) 9,828
Other payables, accruals and advance receipts (34,188) 39,235
Deferred revenue 142,003 3,120
Others 180 (1,175)
Total changes in working capital 60,626 57,778
Net cash generated from/(used in) operating activities 226,403 (89,859)
20. Litigation
From time to time, the Group may become involved in litigation
relating to claims arising from the ordinary course of business.
The Group believes that there are currently no claims or actions
pending against the Group, the ultimate disposition of which could
have a material adverse effect on the Group's financial position,
results of operations or cash flows. However, litigation is subject
to inherent uncertainties and the Group's view of these matters may
change in the future. When an unfavorable outcome occurs, there
exists the possibility of a material adverse impact on the Group's
financial position, results of operations or cash flows for the
periods in which the unfavorable outcome occurs, and potentially in
future periods.
On May 17, 2019, Luye Pharma Hong Kong Ltd. ("Luye") issued a
notice to the Group purporting to terminate a distribution
agreement that granted the Group exclusive commercial rights to
Seroquel in the PRC for failure to meet a pre-specified target. The
Group disagrees with this assertion and believes that Luye have no
basis for termination. As a result, the Group commenced legal
proceedings in 2019 in order to seek damages. On October 21, 2021
(and a decision on costs and interest in December 2021), the Group
was awarded an amount of RMB253.2 million (equivalent to US$35.4
million) with interest of 5.5% per annum from the date of the award
until payment and recovery of costs of approximately US$2.2 million
(collectively the "Award"). On June 27, 2022, Luye provided the
Group a bank guarantee of up to RMB286.0 million to cover the Award
amounts, pending the outcome of an application by Luye to the High
Court of Hong Kong to set aside the Award. On July 26, 2022, Luye's
application to set aside the Award was dismissed by the High Court
with costs awarded in favor of the Group. On October 7, 2022, Luye
filed a Notice of Appeal to the Court of Appeal regarding the
dismissal and the notice was accepted on November 8, 2022. On June
6, 2023, a Court of Appeal hearing was held and a judgement is
expected but yet to be received. The legal proceedings are ongoing
and as no Award amounts have been received as at the issuance date
of these condensed consolidated financial statements, no Award
amounts have been recognized and no adjustment has been made to
Seroquel-related balances as at June 30, 2023. Such
Seroquel-related balances include accounts receivable, long-term
prepayment, accounts payable and other payables of US$1.1 million,
US$0.3 million, US$0.9 million and US$1.1 million respectively.
21. Subsequent Events
The Group evaluated subsequent events through July 31, 2023,
which is the date when the interim unaudited condensed consolidated
financial statements were issued.
22. Reconciliation between U.S. GAAP and International Financial
Reporting Standards
These interim unaudited condensed consolidated financial
statements are prepared in accordance with U.S. GAAP, which differ
in certain respects from International Financial Reporting
Standards ("IFRS"). The effects of material differences prepared
under U.S. GAAP and IFRS are as follows:
(i) Reconciliation of condensed consolidated statements of operations
Six Months Ended June 30, 2023
IFRS adjustment
Amounts as
reported
under U.S. GAAP Lease amortization (note (a)) Amounts under IFRS
(in US$'000)
Costs of goods-third parties (182,380) 34 (182,346)
Research and development expenses (144,633) 18 (144,615)
Selling expenses (26,423) 23 (26,400)
Administrative expenses (41,840) 80 (41,760)
Total operating expenses (421,220) 155 (421,065)
Other income/(expense), net 25,434 (163) 25,271
Income/(loss) before income taxes and equity
in earnings of equity investees 137,088 (8) 137,080
Equity in earnings of equity investees, net
of tax 35,110 (2) 35,108
Net income/(loss) 169,468 (10) 169,458
Less: Net (income)/loss attributable to
non-controlling interests (917) (8) (925)
Net income/(loss) attributable to the
Company 168,551 (18) 168,533
Six Months Ended June 30, 2022
IFRS adjustment
Amounts as
reported
under U.S. GAAP Lease amortization (note (a)) Amounts under IFRS
(in US$'000)
Costs of goods-third parties (115,567) 22 (115,545)
Research and development expenses (181,741) 14 (181,727)
Selling expenses (22,221) 25 (22,196)
Administrative expenses (57,521) 93 (57,428)
Total operating expenses (398,801) 154 (398,647)
Other income/(expense), net (3,882) (161) (4,043)
Income/(loss) before income taxes and equity
in earnings of equity investees (200,636) (7) (200,643)
Equity in earnings of equity investees, net
of tax 33,549 (9) 33,540
Net income/(loss) (162,872) (16) (162,888)
Less: Net (income)/loss attributable to
non-controlling interests 11 (1) 10
Net income/(loss) attributable to the
Company (162,861) (17) (162,878)
(ii) Reconciliation of condensed consolidated balance sheets
June 30, 2023
IFRS adjustments
Amounts as
reported Lease Issuance Capitalization LTIP
under U.S. amortization costs (note of rights classification Amounts under
GAAP (note (a)) (b)) (note (c)) (note (d)) IFRS
(in US$'000)
Investments in
equity
investees 37,740 (38) - - - 37,702
Other
non-current
assets 39,547 (236) - 15,093 - 54,404
Total assets 1,297,497 (274) - 15,093 - 1,312,316
Other payables,
accruals and
advance
receipts 227,212 - - - (441) 226,771
Total current
liabilities 340,863 - - - (441) 340,422
Total
liabilities 497,480 - - - (441) 497,039
Additional
paid-in capital 1,506,280 - (697) - 441 1,506,024
Accumulated
losses (803,057) (263) 697 16,084 - (786,539)
Accumulated
other
comprehensive
loss (7,800) 13 - (1,016) - (8,803)
Total Company's
shareholders'
equity 782,039 (250) - 15,068 441 797,298
Non-controlling
interests 17,978 (24) - 25 - 17,979
Total
shareholders'
equity 800,017 (274) - 15,093 441 815,277
December 31, 2022
IFRS adjustments
Amounts as
reported Lease Issuance Capitalization LTIP
under U.S. amortization costs (note of rights classification Amounts under
GAAP (note (a)) (b)) (note (c)) (note (d)) IFRS
(in US$'000)
Investments in
equity
investees 73,777 (37) - - - 73,740
Other
non-current
assets 39,833 (233) - 15,370 - 54,970
Total assets 1,029,445 (270) - 15,370 - 1,044,545
Other payables,
accruals and
advance
receipts 264,621 - - - (3,701) 260,920
Total current
liabilities 353,903 - - - (3,701) 350,202
Total
liabilities 392,575 - - - (3,701) 388,874
Additional
paid-in capital 1,497,273 - (697) - 3,701 1,500,277
Accumulated
losses (971,481) (246) 697 16,084 - (954,946)
Accumulated
other
comprehensive
loss (1,903) 8 - (739) - (2,634)
Total Company's
shareholders'
equity 610,367 (238) - 15,345 3,701 629,175
Non-controlling
interests 26,503 (32) - 25 - 26,496
Total
shareholders'
equity 636,870 (270) - 15,370 3,701 655,671
Notes:
(a) Lease amortization
Under U.S. GAAP, for operating leases, the amortization of
right-of-use assets and the interest expense element of lease
liabilities are recorded together as lease expenses, which results
in a straight-line recognition effect in the condensed consolidated
statements of operations.
Under IFRS, all leases are accounted for like finance leases
where right-of-use assets are generally depreciated on a
straight-line basis while lease liabilities are measured under the
effective interest method, which results in higher expenses at the
beginning of the lease term and lower expenses near the end of the
lease term.
(b) Issuance costs
Under U.S. GAAP and IFRS, there are differences in the criteria
for capitalization of issuance costs incurred in the offering of
equity securities.
(c) Capitalization of development and commercial rights
Under U.S. GAAP, the acquired development and commercial rights
do not meet the capitalization criteria as further development is
needed as of the acquisition date and there is no alternative
future use. Such rights are considered as in-process research and
development and were expensed to research and development
expense.
Under IFRS, the acquired development and commercial rights were
capitalized to intangible assets. The recognition criterion is
always assumed to be met as the price already reflects the
probability that future economic benefits will flow to the
Group.
(d) LTIP classification
Under U.S. GAAP, LTIP awards with performance conditions are
classified as liability-settled awards prior to the determination
date as they settle in a variable number of shares based on a
determinable monetary amount, which is determined upon the actual
achievement of performance targets. After the determination date,
the LTIP awards are reclassified as equity-settled awards.
Under IFRS, LTIP awards are classified as equity-settled awards,
both prior to and after the determination date, as they are
ultimately settled in ordinary shares or the equivalent ADS of the
Company instead of cash.
23. Dividends
No dividend has been declared or paid by the Company for the six
months ended June 30, 2023 and 2022.
([1]) Takeda = Takeda Pharmaceuticals International AG.
([2]) NDA = New Drug Application.
([3]) FDA = Food and Drug Administration.
([4]) PDUFA = U.S. Prescription Drug User Fee Act.
([5]) MAA = Marketing Authorization Application.
([6]) EMA = European Medicines Agency.
([7]) CRC = Colorectal cancer.
([8]) NRDL = National Reimbursement Drug List.
([9]) IHCC = Intrahepatic cholangiocarcinoma.
([10]) SHP2 = Src homology-2 domain-containing protein tyrosine
phosphatase-2.
([11]) CER = Constant exchange rate. We also report changes in
performance at CER which is a non-GAAP measure. Please refer to
"Use of Non-GAAP Financial Measures and Reconciliation" below for
further information relevant to the interpretation of these
financial measures and reconciliations of these financial measures
to the most comparable GAAP measures.
([12]) R&D = Research and development.
([13]) SG&A expenses = Selling, general and administrative
expenses.
([14]) AACR = American Association for Cancer Research.
([15]) ASCO = American Society of Clinical Oncology.
([16]) ASCO GI = ASCO (American Society of Clinical Oncology)
Gastrointestinal Cancers Symposium.
([17]) EHA = European Hematology Association.
([18]) ICML = International Conference on Malignant
Lymphoma.
([19]) In-market sales = total sales to third parties provided
by Eli Lilly (ELUNATE(R) ), AstraZeneca (ORPATHYS(R) ) and HUTCHMED
(ELUNATE(R) , SULANDA(R) , ORPATHYS(R) and TAZVERIK(R) ).
([20]) Lilly = Eli Lilly and Company.
([21]) NMPA = National Medical Products Administration.
([22]) PMDA = Pharmaceuticals and Medical Devices Agency.
([23]) NSCLC = Non-small cell lung cancer.
([24]) MET = Mesenchymal epithelial transition factor.
([25]) EGFR = Epidermal growth factor receptor.
([26]) PRCC = Papillary renal cell carcinoma.
([27]) VEGFR = Vascular endothelial growth factor receptor.
([28]) PD-1 = Programmed cell death protein-1.
([29]) RCC = Renal cell carcinoma.
([30]) FGFR = Fibroblast growth factor receptor.
([31]) CSF-1R = Colony-stimulating factor 1 receptor.
([32]) Syk = Spleen tyrosine kinase.
([33]) AIHA = Autoimmune hemolytic anemia.
([34]) ITP = Immune thrombocytopenia purpura.
([35]) PI3K = Phosphoinositide 3-kinase delta.
([36]) Ipsen = Ipsen SA, parent of Epizyme Inc.
([37]) Epizyme = Epizyme Inc., a wholly owned subsidiary of
Ipsen SA.
([38]) IDH = Isocitrate dehydrogenase.
([39]) BTK = Bruton's tyrosine kinase.
([40]) ERK = Extracellular signal-regulated kinase.
([41]) MAPK pathway = RAS-RAF-MEK-ERK signaling cascade.
([42]) CDE = Center for Drug Evaluation.
([43]) SHPL = Shanghai Hutchison Pharmaceuticals Limited.
([44]) GAAP = Generally Accepted Accounting Principles.
([45]) ADS = American depositary share.
([46]) HKEX = The Main Board of The Stock Exchange of Hong Kong
Limited.
([47]) NHSA = China National Healthcare Security
Administration.
([48]) NET = Neuroendocrine tumor.
([49]) CSCO = Chinese Society of Clinical Oncology.
([50]) TKI = Tyrosine kinase inhibitor.
([51]) EGFRm+ = Epidermal growth factor receptor mutated.
([52]) OS = Overall survival.
([53]) ORR = Objective response rate.
([54]) JSMO = Japanese Society of Medical Oncology.
([55]) TN = Triple negative.
([56]) HR+ = Hormone receptor positive.
([57]) Her2- = Human epidermal growth factor receptor 2
negative.
([58]) MSS = Microsatellite stable.
([59]) PFS = Progression free survival.
([60]) DCR = Disease control rate.
([61]) DoR = Duration of response.
([62]) epNET = extra-pancreatic neuroendocrine tumor.
([63]) pNET= pancreatic neuroendocrine tumor.
([64]) NEC = Neuroendocrine carcinoma.
([65]) NEN = Neuroendocrine neoplasms.
([66]) SCLC = Small cell lung cancer.
([67]) ASH = American Society of Hematology.
([68]) NHL = Non-Hodgkin's lymphoma.
([69]) CLL = Chronic lymphocytic leukemia.
([70]) SLL = Small lymphocytic lymphoma.
([71]) API = Active pharmaceutical ingredient.
([72]) Hutchison Sinopharm = Hutchison Whampoa Sinopharm
Pharmaceuticals (Shanghai) Company Limited.
([73]) Luye = Luye Pharma Hong Kong Ltd.
([74]) SXBX = She Xiang Bao Xin.
([75]) HIBOR = Hong Kong Interbank Offered Rate.
([76]) PBOC = People's Bank of China.
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END
IR FLFSIDVILVIV
(END) Dow Jones Newswires
July 31, 2023 07:00 ET (11:00 GMT)
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