HUTCHMED (China) Limited Q2 FY2021 earnings call

Regulatory and Commercial Achievements - Regulatory approvals in China for SULANDA, ORPATHYS; US NDA acceptance and European MAA acceptance. - Oncology/Immunology revenues up 161% in first half. - ELUNATE (fruquintinib) sales up 186% in market sales. - SULANDA commercialization in China with over 12,000 healthcare professionals involved. - ORPATHYS relying on AstraZeneca for commercialization in China. ### Pipeline Updates - Surufatinib has unique mechanism of action, PD-1 combo data presented at ASCO, moving to registration studies. - Fruquintinib has FRESCO-2 study for global Phase III, data at ASCO encouraging, moving to registration in endometrial cancer. - Savolitinib has treated over 1200 patients, expanding into global registration studies, and data from TATTON and CALYPSO. - 689 in late stage in China, moving to registration studies, IND cleared in US, and expected data at ASH. - Other early-stage programs like IDH1/2 Dual inhibitor, ERK inhibitor, third-generation BTK inhibitor, CSF-1R, CD47 antibody in development. ### Organizational Progress - International R&D and US commercial teams building out. - China commercial team scaling to over 600 people by end of year. - Building flagship manufacturing facility to increase small molecule capability and establish large molecule CMC platform. - Cash and resources at about US$1.2 billion from Hong Kong listing and divestment of OTC drug business.

In Oncology/Immunology, revenues were up 161% to US$42.9 million in the first half. Surufatinib, fruquintinib, and savolitinib are approved in China and being commercialized. Fruquintinib's in-market sales in the first half were $40.1 million, with a 186% growth from the previous year. SULANDA had about US$8 million in sales in the first half, treating about 2,000 patients. ORPATHYS was approved in June and had first sales triggering a $25 million milestone. The oncology commercial team in China has grown from 70 to 540 people in 18 months and covers over 2,500 oncology hospitals and clinics.

- Guidance for oncology revenues in the year is US$110 million to US$130 million, including the $25 million milestone on ORPATHYS. - Expect to deliver on the guidance as the company is on track with its oncology assets' progress.

Q: Alec Stranahan from Bank of America asked about the thought process behind BTK and ERK programs in terms of best-in-class and focus on combos, and PD-1 combo data timing.

A: Wei-Guo Su discussed the third-generation BTK inhibitor targeting resistant mutations and its place in the B-cell signaling portfolio. Marek Kania talked about the strong differentiation and global thought leader interest in the BTK program. Christian Hogg mentioned the ERK inhibitor as the first of many in the MAP kinase pathway and expected steady stream of PD-1 combo data over next six to nine months.

Q: Louise Chen from Cantor asked about differentiating in US market, peak sales potential for savolitinib, and thoughts on new draft guidance for oncology drug development in China.

A: Christian Hogg and Marek Kania discussed differentiation in US market through portfolio robustness and team. Wei-Guo Su talked about the new guidance in China as a positive for innovative programs. Marek Kania added on team culture and value creation. Wei-Guo Su explained the guidance as discouraging irrational investment and freeing up resources for innovative programs.

Q: David Ng from Macquarie asked about second half excitement, business development focus, learning from AstraZeneca on savo launch, and speed of next in-house products.

A: Christian Hogg talked about upcoming events in second half and disciplined BD approach. Wei-Guo Su and Marek Kania discussed the speed of next in-house products, with 689 leading and others having great opportunities. Marek Kania added on team culture and value creation in US market.

Q: Paul Choi from Goldman Sachs asked about updated data on TAGRISSO plus savolitinib and expectations for 689 data at ASH.

A: Christian Hogg discussed updated data on TAGRISSO plus savolitinib and upcoming Phase III design. Wei-Guo Su and Marek Kania talked about 689 data at ESMO and ASH, highlighting superior efficacy and safety profile.

Q: Mike Mitchell from Panmure Gordon asked about pipeline strategy, monotherapy vs combinations, and collaboration agreements.

A: Christian Hogg stated that monotherapy approval is prioritized, and collaborations evolve from exploratory to exclusive around registration studies. For savolitinib, collaboration with AstraZeneca is in place for certain combinations.

Q: Sean Wu from Morgan Stanley asked about tightening collaboration agreements and global collaboration of savolitinib with PD-1.

A: Christian Hogg explained that collaborations evolve from nonexclusive exploratory to exclusive around registration studies, and savolitinib's PD-1 combination outside China is not free but AstraZeneca has Imfinzi for collaboration.