HUTCHMED (China) Limited Q2 FY2023 earnings call

Strategy Execution

• Focused on long-term growth and reaching profitability by 2025, including China commercial growth and spending control.

Pipeline Progress

• Fruquintinib U.S. NDA granted priority review with PDUFA date Nov 30, 2023; EU MAA submitted; multiple programs in pivotal registration studies.

Balance Sheet

• Strong cash position over $850 million, mainly from Takeda's $400 upfront payment. Shanghai Factory construction completed with loan balance ~$14 million at 3.5% interest.

Commercial Performance

• Oncology product sales maintained growth; 3 market products included in NRDL, improving patient access.

Pipeline Updates

• Various clinical trials ongoing for compounds like savolitinib, Sovleplenib, amdizalisib, etc., with key data readouts and potential NDA filings in the near term.

Consolidated revenue increased by 164% from around $200 million to over $530 million, mainly due to $260 million upfront income from Takeda and 35% growth in oncology product sales at constant exchange rate. Oncology product sales reached $80 million with 35% growth, contributing to overall oncology business revenue of around $360 million, 3x higher than last year. ELUNATE had in-market sales growth of 12% to USD 56.3 million in the first half of 2023 with ~17,000 new patients treated (21% growth). SULANDA's in-market sales accelerated 66% to around USD 22.6 million in the first half of 2023 with ~12,000 new patients treated. ORPATHYS had flat sales in the first half due to delayed NRDL implementation and price reduction, but volume sales grew 84% in Q2 2023 compared to Q2 2022.

2023 Full Year

• On track to meet guidance of $450 million to $550 million revenue.

Profitability Goal

• Aim to be profitable by 2025 through growing China business and managing spending.

Pipeline Milestones

• Expect NDA submissions for compounds like Sovleplenib, amdizalisib, and others in the next 6 to 12 months, with third wave compounds entering pivotal studies in 6-9 months.

• COVID Impact: Early Q1 2023 impact on commercial activities, but second quarter returned to normal.
• Regulatory Uncertainty: Uncertainties around regulatory approvals and timelines for pipeline products.
• Commercial Anticorruption: Concerns about potential impact on commercial operations, but HUTCHMED is highly compliant and expects no major impact.

Q: Scope of top line for Sovleplenib and amdizalisib in second half, primary endpoints A: Sovleplenib Phase III ITP study top line expected in second half; Amdizalisib follicular lymphoma study completed enrollment, readout towards end of year.

Q: Takeda's launch readiness for fruquintinib in U.S. and manufacturing A: Takeda working on launch readiness, manufacturing qualified 2 sites (Suzhou, China and Switzerland), initial supply from Suzhou.

Q: Sovleplenib U.S. study plans, differentiation A: Need China Phase III data recapitulation to expedite U.S. study; differentiated by strong efficacy, good safety, low thrombosis risk.

Q: Savolitinib SAVANNAH trial interim update, 2023 oncology guidance A: No interim analysis for SAVANNAH trial; 2023 guidance doesn't include U.S. fruquintinib sales.

Q: SAFFRON study readout, other ventures growth, anticorruption impact A: SAFFRON study ongoing, no immediate readout; other ventures growth from logistics distribution; no major impact from anticorruption.

Q: Fruquintinib earlier line approval, SULANDA market dynamics A: Discussing earlier line indications with Takeda; SULANDA growing patient numbers, fragmented neuroendocrine tumor market.