HUTCHMED Reports 2021 Interim Results and Provides Business Updates
ELUNATE in-market sales rose 186%, reflecting impact of in-house sales force
Received 1 approval in China for ORPATHYS and 2 approval in China for SULANDA
U.S. and E.U. applications for surufatinib both accepted
Raised $615m gross proceeds from additional listing on HKEX
Company to Host Interim Results Call & Webcast Today at 8 p.m. HKT / 1 p.m. BST / 8 a.m. EDT
HUTCHMED (China) Limited ("HUTCHMED") (Nasdaq/AIM:HCM; HKEX:13), the innovative, commercial-stage biopharmaceutical company, today reports its unaudited financial results for the six months ended June 30, 2021 and provides updates on key clinical and commercial developments since the start of the year.
All amounts are expressed in U.S. dollar currency unless otherwise stated.
2021 INTERIM RESULTS & BUSINESS UPDATES
"HUTCHMED's progress has been truly exceptional," said Mr. Simon To, Chairman of HUTCHMED. "Our novel drug discovery and development engine keeps powering ahead. Not only have we secured our third and fourth oncology drug NDA approvals in China, but also our first U.S. FDA and EMA applications for market approval have been accepted."
"Ten registrational studies are set to start this year on our five lead global assets. These are based on exciting data from proof-of-concept studies of both monotherapies and immunotherapy/TKI combinations. In addition, our early-stage portfolio is also progressing with our IDH1/2, ERK and third generation BTK inhibitors all starting development this year."
"In parallel, our commercial oncology operations are rapidly progressing."
"In China, our oncology team is now about 540 people on the ground marketing ELUNATE and SULANDA, recording in-market sales of $48.1 million in the first half of 2021. In the U.S., our oncology commercial team is building to support potential launches of surufatinib in 2022 and fruquintinib in 2023. On ORPATHYS, our partner AstraZeneca will leverage its great commercial capabilities in lung cancer to market this important first-in-class drug."
"On the corporate-level we took several important steps during the first half to support our global plans. We changed our name to HUTCHMED, consolidating several legacy group and operating names into a single ubiquitous global corporate identity. We also built a balance of about $1.2 billion in cash and resources through our homecoming IPO on HKEX as well as through divestment of our non-core OTC drug business."
"Over the next three years, we will continue to rapidly build our global R&D and commercial organizations, supporting the anticipated global launches of our oncology drugs."
I. COMMERCIAL OPERATIONS
II. REGULATORY ACHIEVEMENTS
United States & Europe
III. CLINICAL DEVELOPMENT ACTIVITIES
Surufatinib (SULANDA in China), a small molecule inhibitor of VEGFR, FGFR and CSF-1R designed to inhibit tumor angiogenesis and promote the body's immune response against tumor cells via tumor associated macrophage regulation; approved and launched in China
Potential upcoming clinical and regulatory milestones for surufatinib:
Fruquintinib (ELUNATE in China), a highly selective small molecule inhibitor of VEGFR 1/2/3 designed to improve kinase selectivity to minimize off-target toxicity and thereby improve tolerability; approved and launched in China
Potential upcoming clinical and regulatory milestones for fruquintinib:
Savolitinib (ORPATHYS), a highly selective small molecule inhibitor of MET being developed broadly across MET-driven patient populations in lung and gastric cancer and renal cell carcinoma
Potential upcoming clinical and regulatory milestones for savolitinib:
HMPL-689, an investigative and highly selective small molecule inhibitor of PI3Kδ designed to address the gastrointestinal and hepatotoxicity associated with currently approved and clinical-stage PI3Kδ inhibitors
Potential upcoming clinical and regulatory milestones for HMPL-689:
HMPL-523, an investigative and highly selective small molecule inhibitor of Syk, an important component of the B-cell receptor signaling pathway, for the treatment of hematological cancers and immune disease
Potential upcoming clinical and regulatory milestones for HMPL-523:
HMPL-453, an investigative and highly selective small molecule inhibitor of FGFR 1/2/3
Potential upcoming clinical and regulatory milestones for HMPL-453:
HMPL-306, an investigative and highly selective small molecule inhibitor of IDH1/2 designed to address resistance to the currently marketed IDH inhibitors
Potential upcoming clinical and regulatory milestones for HMPL-306:
HMPL-295, an investigative and highly selective small molecule inhibitor of ERK in the MAPK pathway with the potential to address intrinsic or acquired resistance from upstream mechanisms such as RAS-RAF-MEK
HMPL-760, an investigative, highly selective, third-generation small molecule inhibitor of BTK with improved potency versus first generation BTK inhibitors against both wild type & C481S mutant enzymes
Potential upcoming clinical and regulatory milestones for HMPL-760:
Discovery, our in-house scientific team has been responsible for the discovery of all eleven of our clinical drug candidates including our three approved oncology drugs ELUNATE, SULANDA and ORPATHYS
Potential upcoming discovery milestones:
V. OTHER CORPORATE DEVELOPMENTS
VI. IMPACT OF COVID-19
COVID-19 has not impacted our clinical studies in any material manner to date in 2021. We will continue to closely monitor the evolving situation.
INTERIM 2021 FINANCIAL RESULTS
Cash, Cash Equivalents and Short-Term Investments were $950.4 million as of June 30, 2021 compared to $435.2 million as of December 31, 2020.
Revenues for the six months ended June 30, 2021 were $157.4 million compared to $106.8 million in the six months ended June 30, 2020.
ELUNATErevenues increased 244% to $29.8 million (H1-20: $8.6m) in manufacturing revenues, promotion and marketing service revenues and royalties, as our in-house sales team increased in-market sales 186% to $40.1 million (H1-20: $14.0m), as provided by Lilly;
SULANDA sales revenues of $8.0 million since mid-January launch, initially to treat patients with advanced extra-pancreatic (non-pancreatic) NET, then also to treat patients with pancreatic NET in June 2021; and
R&D service fee revenues of $5.1 million (H1-20: $7.8m) primarily from AstraZeneca and Lilly.
ORPATHYS $25 million payment and fixed royalty of 30% on all China sales from AstraZeneca not included, as the milestone payment was recently triggered by its first sales in China in July 2021. AstraZeneca has launched ORPATHYS across China through its extensive, market-leading oncology commercial organization.
Net Expenses for the six months ended June 30, 2021 were $259.8 million compared to $156.5 million in the six months ended June 30, 2020.
Net Loss attributable to HUTCHMED for the six months ended June 30, 2021 was $102.4 million compared to $49.7 million in the six months ended June 30, 2020.
Condensed Consolidated Balance Sheet Data
As of June 30, As of December 31, 2021 2020 (Unaudited) Assets Cash and cash equivalents and short-term investments 950,448 435,176 Accounts receivable 58,878 47,870 Other current assets 81,848 47,694 Property, plant and equipment 29,168 24,170 Investments in equity investees 118,316 139,505 Other non-current assets 34,231 29,703 Total assets 1,272,889 724,118 Liabilities and shareholders' equity Accounts payable 28,513 31,612 Other payables, accruals and advance receipts 181,610 120,882 Bank borrowings 26,883 26,861 Other liabilities 22,188 25,814 Total liabilities 259,194 205,169 Total Company's shareholders' equity 984,795 484,116 Non-controlling interests 28,900 34,833 Total liabilities and shareholders' equity 1,272,889 724,118
Condensed Consolidated Statement of Operations Data
(Unaudited, in $'000, except share and per share data)
Six Months Ended June 30, 2021 2020 Revenues: Oncology/Immunology - Marketed Products 37,795 8,645 Oncology/Immunology - R&D 5,056 7,747 Oncology/Immunology consolidated revenues 42,851 16,392 Other Ventures 114,511 90,373 Total revenues 157,362 106,765 Expenses: Costs of revenues (123,249 ) (83,572 ) Research and development expenses (123,050 ) (73,974 ) Selling and general administrative expenses (54,797 ) (27,384 ) Total expenses (301,096 ) (184,930 ) Loss from Operations (143,734 ) (78,165 ) Other income 3,287 1,585 Loss before income taxes and equity in earnings of equity investees (140,447 ) (76,580 ) Income tax expense (1,859 ) (2,032 ) Equity in earnings of equity investees, net of tax 42,966 30,366 Net loss (99,340 ) (48,246 ) Less: Net income attributable to non-controlling interests (3,057 ) (1,448 ) Net loss attributable to HUTCHMED (102,397 ) (49,694 ) Losses per share attributable to HUTCHMED - basic and diluted (0.14 ) (0.07 ) Number of shares used in per share calculation - basic and diluted 729,239,181 685,285,841 Losses per ADS attributable to HUTCHMED - basic and diluted (0.70 ) (0.35 ) Number of ADSs used in per share calculation - basic and diluted 145,847,836 137,057,168
All amounts are expressed in U.S. dollar currency unless otherwise stated.
During the first half of 2021, we performed as expected with commercial progress on ELUNATE, SULANDA and now ORPATHYS. While results are encouraging, we leave guidance unchanged.
H1 2021 2021 Current Adjustments vs. Actual Guidance Previous Guidance Oncology/Immunology consolidated revenues $42.9 million $110 - 130 million nil
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 - Investors may participate in the call as follows: +852 3027 6500 (Hong Kong) / +44 20 3194 0569 (U.K.) / +1 646 722 4977 (U.S.), or access a live audio webcast of the call via HUTCHMED's website at www.hutch-med.com/event/.
Additional dial-in numbers are also available at HUTCHMED's website. Please use participant access code "45675713#."
HUTCHMED (Nasdaq/AIM:HCM; HKEX:13) is an innovative, commercial-stage, biopharmaceutical company. It is committed to the discovery and global development & commercialization of targeted therapies and immunotherapies for the treatment of cancer and immunological diseases. A dedicated organization of over 1,300 personnel. has advanced eleven cancer drug candidates from in-house discovery into clinical studies around the world, with its first three oncology drugs now approved and launched. For more information, please visit: www.hutch-med.com or follow us on LinkedIn.
Investor Enquiries Mark Lee, Senior Vice President +852 2121 8200 Annie Cheng, Vice President +1 (973) 567 3786 Media Enquiries Americas - Brad Miles, Solebury Trout +1 (917) 570 7340 (Mobile) email@example.com Europe - Ben Atwell / Alex Shaw, FTI Consulting +44 20 3727 1030 / +44 7771 913 902 (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, Panmure Gordon (UK) Limited +44 (20) 7886 2500
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 consolidated subsidiaries and joint ventures 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," "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, or that any approvals which are obtained will be obtained at any particular time, or that any such drug candidates 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; 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 gain commercial acceptance after obtaining regulatory approval; 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 the COVID-19 pandemic. 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. 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.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (as it forms part of retained EU law as defined in the European Union (Withdrawal) Act 2018).
REFERENCES AND ABBREVIATIONS 1 ELUNATE(R) In-market sales = total sales to third parties provided by Eli Lilly. 2 Gross proceeds of $534.7 million raised through the sale of new ordinary shares on June 30, 2021, and additional gross proceeds of $80.2 million raised via the sale of additional new ordinary shares from the full exercise of the over-allotment option on July 15, 2021. 3 HKEX = The Stock Exchange of Hong Kong Limited. 4 NDA = New Drug Application. 5 FDA = Food and Drug Administration. 6 EMA = European Medicines Agency. 7 TKI = Tyrosine kinase inhibitor. 8 IDH = Isocitrate dehydrogenase. 9 ERK = Extracellular signal-regulated kinase. 10 BTK = Bruton's tyrosine kinase. 11 In-market sales = total sales to third parties provided by Eli Lilly (ELUNATE(R)) and HUTCHMED (SULANDA(R)). 12 AstraZeneca = AstraZeneca PLC and its wholly owned subsidiary, AstraZeneca AB (publ). 13 IPO = Initial public offering. 14 OTC = Over the counter. 15 R&D = Research and development. 16 NET = Neuroendocrine tumors. 17 NMPA = National Medical Products Administration. 18 MET = Mesenchymal epithelial transition receptor. 19 NSCLC = Non-small cell lung cancer. 20 PDUFA = Prescription Drug User Fee Act. 21 MAA = Marketing Authorisation Application. 22 VEGFR = Vascular endothelial growth factor receptor. 23 FGFR = Fibroblast growth factor receptor. 24 CSF-1R = Colony stimulating factor-1 receptor. 25 BeiGene = BeiGene, Ltd. 26 PD-1 = Programmed Cell Death Protein-1. 27 NEC = Neuroendocrine carcinoma. 28 Junshi = Shanghai Junshi Biosciences Co., Ltd. 29 ASCO = American Society of Clinical Oncology. 30 CgA = Chromogranin A. 31 PFS = Progression-free survival. 32 BTC = Biliary tract cancer. 33 Innovent = Innovent Biologics, Inc. 34 CRC = Colorectal cancer. 35 HCC = Hepatocellular carcinoma. 36 RCC = Renal cell cancer. 37 Genor = Genor Biopharma Co. Ltd. 38 PD-L1 = Programmed death-ligand 1. 39 PRCC = Papillary renal cell carcinoma. 40 WCLC = World Conference on Lung Cancer. 41 EGFR = Epidermal growth factor receptor. 42 PI3Kδ = Phosphoinositide 3-kinase delta. 43 RP2D = Recommended Phase II dose. 44 Syk = Spleen tyrosine kinase. 45 ITP = Immune thrombocytopenia purpura. 46 CDE = Center for Drug Evaluation. 47 AIHA = Autoimmune hemolytic anemia. 48 IND = Investigational New Drug application. 49 MAPK pathway = RAS-RAF-MEK-ERK signaling cascade. 50 119,600,000 new ordinary shares represented by 104,000,000 new ordinary shares issued on June 30, 2021 (raising net proceeds of $508 million) and additional 15,600,000 new ordinary shares from the full exercise of the over-allotment option on July 15, 2021 (raising net proceeds of $77 million). 51 HBYS = Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited. 52 GL Capital = GL Mountrose Investment Two Limited, a company controlled and managed by GL Capital Group. 53 HBYS' adjusted net profit attributable to HUTCHMED equity holders (after 20% non-controlling interest) in 2020 of $7.7 million is a non-GAAP measure which is 40% of HBYS' 2020 net profit of $91.3 million less $72.0 million gain on land compensation, net of tax. 54 Inmagene = Inmagene Biopharmaceuticals. 55 GAAP = Generally Accepted Accounting Principles. 56 BPEA = Baring Private Equity Asia. 57 We also report changes in performance at constant exchange rate ("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. 58 Lilly = Eli Lilly and Company. 59 SG&A = Selling, general and administrative. 60 Other items = Includes other income, net of other expenses, income tax expense, equity in earnings of equity investees, net of tax and net income attributable to non-controlling interests. 61 ADS = American depositary share.
This announcement in its entirety is available at: http://ml.globenewswire.com/Resource/Download/495fc1d8-ba3e-4ecb-9e98-565edce2f91f