REG - Hutchmed China Ltd - 2024 Interim Results and Business Updates

HUTCHMED (China)Announcement

31/07/2024 12:00

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RNS Number : 5926Y  Hutchmed (China) Limited  31 July 2024

HUTCHMED Reports 2024 Interim Results and Provides Business Updates

 

Hong Kong, Shanghai & Florham Park, NJ - Wednesday, July 31, 2024:
HUTCHMED (China) Limited ("HUTCHMED (https://www.hutch-med.com/) ", the
"Company" or "we") (Nasdaq/AIM: HCM; HKEX: 13) today reports its financial
results for the six months ended June 30, 2024 and provides updates on key
clinical and commercial developments.

 

HUTCHMED to host results webcasts today at 8:00 a.m. EDT / 1:00 p.m. BST /
8:00 p.m. HKT in English, and at 8:30 a.m. HKT in Chinese (Putonghua) on
Thursday, August 1, 2024. After registration, investors may access the live
webcast via HUTCHMED's website at www.hutch-med.com/event
(https://www.hutch-med.com/event/) .

 

All amounts are expressed in US dollars unless otherwise stated.

 

Continued revenue momentum with substantial cash balance to support growth

 

·      Reiterate full year 2024 guidance for Oncology/Immunology
consolidated revenue of $300 to $400 million, with $168.7 million in the first
half of 2024, driven by 59% (64% at CER(1)) oncology product revenue growth.

·      FRUZAQLA(®) US in-market sales(2) of $130.5 million in the first
half of 2024 - demonstrating strong demand and commercial traction since
launch in November 2023.

·      Net income of $25.8 million in the first half of 2024. Cash
balance of $802.5 million as of June 30, 2024, as we continued to prioritize
key R&D(3) projects and enhance commercial efficiency.

 

Globalization of fruquintinib continues, broader pipeline makes strong
progress

 

·      Preparation for EU launch of FRUZAQLA(®) underway led by partner
Takeda(4) after European Commission approval in June 2024 - Filings in over a
dozen jurisdictions supported by FRESCO-2.

·      HUTCHMED preparing for China launch of sovleplenib for ITP(5) -
potentially its first hematology medicine, after the NDA(6) was accepted and
granted Priority Review status in January 2024.

·      Potential US NDA filing for savolitinib for NSCLC(7) at year end,
based on SAVANNAH trial readout.

·      NDAs accepted to expand use of ORPATHYS(®) and ELUNATE(®), and
for TAZVERIK(®) in China - for treatment-naïve METex14(8) NSCLC, endometrial
cancer and follicular lymphoma, respectively.

·      Key late-stage registration trials initiated with 15
ongoing/under review - across six drug candidates: ESLIM-02 for sovleplenib in
warm AIHA(9), RAPHAEL for HMPL-306 in AML(10), and for surufatinib in
PDAC(11).

·      Growing hematology portfolio with new programs targeting Menin
and CD38, joining the existing portfolio of inhibitors and antibodies
targeting Syk(12), EZH2(13), IDH(14), BTK(15) and CD47.

 

Dr Dan Eldar, Non-executive Chairman of HUTCHMED, said, "HUTCHMED has
delivered strong performance in the first half of this year. The team has made
significant progress implementing our strategy in discovering and developing
novel, effective medicines; conducting clinical trials in our home market and
in the global markets; and rapidly advancing regulatory and commercial goals.
I am very pleased with the ongoing success of our partnership with Takeda and
with the growing ability of the Company to provide health benefits to patients
overseas. We have grown our revenues from the US during this period and we
expect to see revenue growth from many other countries in the coming months.
We are also capitalizing on our proven track record of bringing new medicines
and additional indications for our marketed medicines to China, with several
potential NDA approvals for the next few years."

 

"I would like to take this opportunity to express my appreciation to Mr Simon
To, my predecessor, who has recently retired. Mr To has stood at the cradle of
HUTCHMED and has made a very significant contribution to grow the Company and
turn it into a global innovative player, discovering, developing and
commercializing therapies for the treatment of cancer and immunological
diseases, improving the quality of life of patients around the world. I look
forward to guiding the Company along its next phase of growth, which is full
of potential and promise."

 

 

2024 Interim Results & Business Updates

 

Dr Weiguo Su, Chief Executive Officer and Chief Scientific Officer of
HUTCHMED, said, "The HUTCHMED team has been working tirelessly to continue the
outstanding clinical and regulatory momentum that we have had in recent years,
whilst importantly driving the commercial success of our approved products. I
would like to extend my thanks to everyone for their hard work and commitment.
Our oncology product revenue has grown 59% compared to the first half of 2023
and we are progressing a more focused R&D pipeline that has considerable
potential for value creation. This year we initiated three key late-stage
studies across our pipeline and are excited to be running over a dozen such
studies that could support future drug approvals."

 

"The partnership strategy that we adopted for globalizing our medicines is
allowing us to simultaneously fuel our in-house R&D engine, drive sales in
our home market, and bring our medicines to patients in new geographies.
Takeda's impressive initial sales of FRUZAQLA(®) demonstrates both the
quality of our medicines and their potential across the globe and our strategy
of working with partners outside of our home market."

 

"We expect to advance our registration trials in the second half of the year.
Around year end, we anticipate the potential approval of sovleplenib in China
and potential NDA filing of savolitinib in the US. We will continue to
progress towards becoming a self-sustaining biopharma business."

 

I. COMMERCIAL OPERATIONS

 

Oncology in-market sales were up 140% (145% at CER) to $243.3 million (H1-23:
$101.3m), which led to strong growth in consolidated oncology product revenue
of 59% (64% at CER) to $127.8 million (H1-23: $80.1m), and mainly comprised of
the following:

 

·      FRUZAQLA(®) (fruquintinib ex-China) in-market sales were $130.5
million (H1-23: nil), which was launched in the US in November 2023. Its
strong performance was due to rapid US patient uptake, as well as fulfilling
sales channel inventory requirements;

·      ELUNATE(®) (fruquintinib China) in-market sales increased 8%
(13% at CER) to $61.0 million (H1-23: $56.3m), in line with CRC(16) market
growth, maintaining our leading market share position while weathering greater
market competition;

·      SULANDA(®) (surufatinib) in-market sales increased 12% (17% at
CER) to $25.4 million (H1-23: $22.6m), as doctors' awareness continues to
increase, leading to greater NET patient access and market share; and

·      ORPATHYS(®) (savolitinib) in-market sales increased 18% (22% at
CER) to $25.9 million (H1-23: $22.0m), as it benefited from improved testing
and diagnosis for METex14 NSCLC and also ongoing growth momentum in the second
year on the NRDL(17).

 

Oncology/Immunology consolidated revenue comprised of consolidated oncology
product revenue, which included product revenue, commercial service fees and
royalties, as well as R&D income from our collaboration partners, mainly
as follows:

 

·      Takeda upfront, milestones and R&D services revenue were
$33.8 million (H1-23: $269.1m), which included recognition of $19.4 million of
the $435.0 million upfront and milestone payments already received from Takeda
in cash during 2023. This compared to recognition of $258.7 million in the
first half of 2023.

 

As a result, total Oncology/Immunology consolidated revenue was $168.7 million
(H1-23: $359.2m). Including Other Ventures revenue, total revenue was $305.7
million (H1-23: $532.9m).

 

 

 (Unaudited, $ in millions)  In-market Sales*                                    Consolidated Revenue**
                             H1 2024           H1 2023           % Δ    (CER)    H1 2024  H1 2023  % Δ     (CER)
 FRUZAQLA(®)                 $130.5            -                 -               $42.8    -        -
 ELUNATE(®)                  $61.0             $56.3             +8%    (+13%)   $46.0    $42.0    +9%     (+14%)
 SULANDA(®)                  $25.4             $22.6             +12%   (+17%)   $25.4    $22.6    +12%    (+17%)
 ORPATHYS(®)                 $25.9             $22.0             +18%   (+22%)   $13.1    $15.1    -14%    (-10%)
 TAZVERIK(®)                 $0.5              $0.4              +40%   (+46%)   $0.5     $0.4     +40%    (+46%)
   Oncology Products         $243.3            $101.3            +140%  (+145%)  $127.8   $80.1    +59%    (+64%)
 Takeda upfront, milestone and R&D services                                      $33.8    $269.1   -87%    (-87%)
 Other R&D services                                                              $7.1     $10.0    -29%    (-27%)
   Total Oncology/Immunology                                                     $168.7   $359.2   -53%    (-52%)
 Other Ventures                                                                  $137.0   $173.7   -21%    (-18%)
   Total Revenue                                                                 $305.7   $532.9   -43%    (-41%)

* = For FRUZAQLA(®), ELUNATE(®) and ORPATHYS(®), mainly represented
total sales to third parties as provided by Takeda, Lilly(18) and AstraZeneca,
respectively.

** = For FRUZAQLA(®), represented drug product supply and royalties paid by
Takeda; for ELUNATE(®), represented drug product supply, commercial service
fees and royalties paid by Lilly to HUTCHMED, and sales to other third parties
invoiced by HUTCHMED; for ORPATHYS(®), represented drug product supply and
royalties paid by AstraZeneca and sales to other third parties invoiced by
HUTCHMED; for SULANDA(®) and TAZVERIK(®), represented the Company's sales of
the products to third parties.

 

II. REGULATORY UPDATES

 

China

 

·      Savolitinib sNDA(19) accepted by NMPA(20) for first-line and
second-line METex14 NSCLC in 2024;

·      Fruquintinib approved in Hong Kong for third-line CRC in January
2024;

·      Fruquintinib sNDA accepted by NMPA with Priority Review for
second-line endometrial cancer in early 2024;

·      Tazemetostat approved in Hong Kong for R/R(21) follicular
lymphoma in May 2024; and

·      Tazemetostat NDA accepted by NMPA with Priority Review for R/R
follicular lymphoma in July 2024.

 

Ex-China

 

·      Fruquintinib approved in the EU in June 2024, following positive
opinion received from the EMA(22) Committee for Medicinal Products for Human
Use for previously-treated metastatic CRC in April 2024.

 

III. LATE-STAGE CLINICAL DEVELOPMENT ACTIVITIES

 

Savolitinib (ORPATHYS(®) in China), a highly selective oral inhibitor of
MET(23)

 

·      Completed enrollment of SAVANNAH (NCT03778229), a Fast
Track-designated pivotal global Phase II study for NSCLC patients who have
progressed following TAGRISSO(®) due to MET amplification or overexpression,
which may file in the US for accelerated approval. A small parallel study
(NCT04606771) in this patient population presented data at AACR(24) also
demonstrated higher clinical activity with the combination therapy, with
safety consistent with the known profiles of each treatment; and

·      Continued enrolling SAFFRON (NCT05261399), a global, pivotal
Phase III study in this patient population of the TAGRISSO(®) combination
supporting SAVANNAH; SACHI (NCT05015608), a similar pivotal Phase III study
for patients in China that progressed on EGFR(25) inhibitor treatment, and
SANOVO (NCT05009836), a pivotal Phase III study for first-line patients in
China with EGFR mutation & MET overexpression.

 

Potential upcoming clinical and regulatory milestones for savolitinib:

 

·      Complete enrollment of SACHI in late 2024; and

·      File FDA(26) NDA on SAVANNAH, subject to positive results, around
year end 2024.

 

Fruquintinib (ELUNATE(®) in China, FRUZAQLA(®) outside of China), a highly
selective oral inhibitor of VEGFR(27) 1/2/3 designed to have enhanced
selectivity that limits off-target kinase activity

 

·      Presented results of FRUSICA-1, the registration Phase II study
combined with sintilimab for patients with endometrial cancer with pMMR(28)
status, which showed meaningful efficacy improvements regardless of prior
bevacizumab treatment and a manageable toxicity profile (NCT03903705);

·      Presented FRESCO-2 subgroup analyses at ASCO(29), biomarker
analysis at AACR and quality-of-life analysis at ASCO GI(30) (NCT04322539).
Analyses showed that the treatment was effective regardless of prior therapy
or sequence, that CEA(31) response may be an early predictor of improved
efficacy, and that it demonstrated clinically meaningful quality-adjusted
survival benefit in patients with previously-treated CRC; and

·      Published in Nature Medicine the results of FRUTIGA, the study
combined with paclitaxel for gastric cancer patients in China, concurrently
with ASCO and following initial presentation at ASCO Plenary (NCT03223376).
PFS(32), ORR(33) and DCR(34) showed statistically significant improvements,
and although OS(35) improvement was not statistically significant overall, it
was statistically significant in a pre-specified analysis excluding patients
taking subsequent antitumor therapy.

 

Potential upcoming clinical and regulatory milestones for fruquintinib:

 

·      Complete PMDA(36) NDA review for previously-treated metastatic
CRC in late-2024; and

·      Announce top-line results from the FRUSICA-2 Phase II/III
registration trial in clear cell RCC(37) around year end if the requisite
number of PFS events is reached (NCT05522231).

 

Sovleplenib (HMPL-523), an investigative and highly selective oral inhibitor
of Syk, an important component of the Fc receptor and B-cell receptor
signaling pathways

 

·      Published ESLIM-01 (NCT05029635) results in adult patients with
primary ITP in China in Lancet Haematology concurrently with presentations at
EHA(38). In addition to demonstrating a clinically meaningful early and
sustained durable response of 48.4% and a tolerable safety profile, it
significantly improved quality of life and showed consistent clinical benefits
regardless of prior lines of therapies, prior TPO/TPO-RA(39) exposure or
treatment types;

·      Published results of the Phase II proof-of-concept stage of a
study in patients with warm AIHA in China at EHA, demonstrating a favorable
safety profile and encouraging hemoglobin benefits; and

·      Initiated ESLIM-02, the Phase III stage of the study, as a result
of this positive data (NCT05535933).

 

Potential upcoming clinical milestones for sovleplenib:

 

·      Initiate a dose-finding study in ITP in the US/EU in mid-2024
(NCT06291415); and

·      Complete ESLIM-01 NMPA NDA review around year end.

 

Surufatinib (SULANDA(®) in China), an oral inhibitor of VEGFR, FGFR(40) and
CSF-1R(41) designed to inhibit tumor angiogenesis and promote immune response
against tumor cells via tumor associated macrophage regulation

 

·      Initiated a Phase II/III trial for treatment-naïve metastatic
PDAC in China, in combination with PD-1(42) antibody camrelizumab,
nab-paclitaxel and gemcitabine (NCT06361888). This study was informed in part
by an investigator-initiated trial presented at ASCO GI 2024 of a similar
combination. This highly aggressive form of cancer has an estimated 511,000
people diagnosed annually worldwide.

 

Tazemetostat (TAZVERIK(®) in Hainan, Macau and Hong Kong), a first-in-class,
oral inhibitor of EZH2

 

·      Potential to complete China NDA review for R/R follicular
lymphoma in mid-2025.

 

HMPL-453, a novel, highly selective and potent inhibitor targeting FGFR 1, 2
and 3

 

·      Continued enrolling the registrational Phase II trial for
IHCC(43) with FGFR 2 fusion (NCT04353375).

 

HMPL-306, an investigative and highly selective oral dual-inhibitor of IDH1
and IDH2 enzymes, which have been implicated as drivers of certain
hematological malignancies, gliomas and solid tumors

 

·      Presented results from China and US/European Phase I studies at
EHA, showing it as an effective treatment for IDH1 and/or IDH2-mutated R/R AML
(NCT04272957, NCT04764474); and

·      Initiated RAPHAEL Phase III Trial for IDH1- and/or IDH2-mutated
R/R AML in China (NCT06387069).

 

Other early-stage investigational drug candidates

 

·      Presented preclinical and Phase I results at AACR, ASCO and EHA
for ERK1/2(44) inhibitor HMPL-295, third-generation BTK inhibitor HMPL-760,
Menin inhibitor HMPL-506, and CD38 ADC(45) HMPL-A067; and

·      Initiated Phase I trial for HMPL-506 for hematological
malignancies in China (NCT06387082).

 

IV. COLLABORATION UPDATES

 

Further clinical progress by Inmagene(46) with two candidates discovered by
HUTCHMED

 

·      Received approximately 7.5% of shares (fully diluted) in Inmagene
following exercise of its option for an exclusive license to further develop,
manufacture and commercialize IMG-007, a nondepleting anti-OX40 antibody, and
IMG-004, a reversible, non-covalent, highly selective oral BTK inhibitor;

·      Inmagene announced positive interim results from a Phase IIa
trial of IMG-007 for atopic dermatitis. Treatment led to rapid, marked, and
durable improvement of skin signs in patients with atopic dermatitis, while
remaining well-tolerated overall. Final results are anticipated later in the
third quarter of 2024. Inmagene also completed enrollment of a Phase IIa trial
for alopecia areata; and

·      Inmagene announced positive topline results of a multiple
ascending dose study with IMG-004, indicating once daily dosing potential. It
was well tolerated, without reports of liver enzyme elevation or bleeding
events, across once daily doses ranges for 10 days. Preliminary modeling and
data support 50mg once daily as a potential therapeutic dose and further
development as a differentiated treatment for BTK-mediated immunological
diseases.

 

V. OTHER VENTURES

 

·      Other Ventures revenue is predominantly from our prescription
drug distribution operation in China. Consolidated revenue decreased by 21%
(18% at CER) to $137.0 million (H1-23: $173.7m) primarily as a result of lower
COVID-related prescription drug distribution sales in 2024.

·      SHPL(47), a non-consolidated joint venture, saw revenue decrease
by 4% (flat at CER) to $225.2 million (H1‑23: $235.3m) mainly due to pricing
reduction in a few higher-priced provinces to standardize the pricing
structure of MUSKARDIA(®) in preparation for potential national
implementation of volume-based procurement.

·      Consolidated net income attributable to HUTCHMED from our Other
Ventures decreased by 8% (4% at CER) to $34.1 million (H1-23: $37.2m), which
was primarily due to decrease on the net income contributed from SHPL of $33.8
million (H1-23: $35.1m) as a result of price reduction impact from
volume-based procurement, as well as increase in R&D spending.

·      We continue to explore opportunities to monetize the underlying
value of our SHPL joint venture including various divestment and collaboration
alternatives.

 

VI. SUSTAINABILITY

 

HUTCHMED is committed to progressively embedding sustainability into all
aspects of our operations and creating long-term value for our stakeholders.
In April 2024, we published our 2023 Sustainability Report
(https://www.hutch-med.com/wp-content/uploads/2024/04/HCM-SusRpt-2023.pdf) ,
which highlighted progress made in our 11 goals and targets; our enhanced
climate actions including Scope 3 emissions screening and measurement and
engaging with suppliers; our enhanced data quality; our strengthened alignment
of our five most relevant and material sustainability pillars; and our
enhanced disclosure and sector specific disclosure standards ahead of
requirement.

 

Wider recognition of HUTCHMED's efforts have been reflected in steady
improvements in major local and international sustainability ratings including
from Hang Seng, ISS, MSCI, S&P Global, Sustainalytics and Wind. Recently,
HUTCHMED scored 49 for S&P Global ESG(48) Ratings, significantly higher
than the industry average of 31. HUTCHMED also received the Best ESG(E) at the
Hong Kong Investor Relations Association's 10(th) Investor Relations Awards,
two awards at Bloomberg Businessweek's ESG Leading Enterprises event, five
awards from Metro Finance's GBA ESG Achievement Awards, and was listed amongst
the Top 20 Chinese Pharmaceutical Listed Companies in ESG Competitiveness by
Healthcare Executive.

 

In 2024, we continue our efforts on the above areas and further strengthening
our climate action by conducting a more comprehensive climate risk assessment
to quantify the impact of climate risks in our major operations; incorporate
sustainability into our corporate culture; and considering future goals and
targets.

 

Financial Highlights

 

Foreign exchange impact: The RMB depreciated against the US dollar on average
by approximately 4% during the first half of 2024, which has impacted our
consolidated financial results as highlighted below.

 

Cash, Cash Equivalents and Short-Term Investments were $802.5 million as of
June 30, 2024 compared to $886.3 million as of December 31, 2023.

 

·      Adjusted Group (non-GAAP(49)) net cash flows excluding financing
activities in the first half of 2024 were ‑$51.3 million (H1-23: $219.3m),
mainly due to $39.8 million net cash used in operating activities and $10.1
million of capital expenditure; and

·      Net cash used in financing activities in the first half of 2024
totaled $32.6 million due to purchases for equity awards of $36.1 million
(H1-23: net cash generated from financing activities of $5.8m).

 

Revenue for the six months ended June 30, 2024 was $305.7 million compared to
$532.9 million in the six months ended June 30, 2023.

 

·      Oncology/Immunology consolidated revenue amounted to $168.7
million (H1-23: $359.2m) from:

§ FRUZAQLA(®) revenue was $42.8 million, reflecting its successful US launch
since early November 2023, comprising royalties and manufacturing revenue;

§ ELUNATE(®) revenue increased 9% (14% at CER) to $46.0 million (H1-23:
$42.0m) in its sixth year since launch, comprising of manufacturing revenue,
promotion and marketing service revenue and royalties, which is in line with
CRC market growth, maintaining our leading market share position while
weathering greater market competition;

§ SULANDA(®) revenue increased 12% (17% at CER) to $25.4 million (H1-23:
$22.6m) continued sales growth after NRDL renewal as doctors' awareness
continues to increase, leading to greater NET patient access and market share;

§ ORPATHYS(®) revenue decreased 14% (10% at CER) to $13.1 million (H1-23:
$15.1m), due to a reduction in manufacturing revenue to $5.3 million (H1-23:
$8.5m), offset by an increase in royalties to $7.8 million (H1-23: $6.6m)
reflecting strong in-market sales growth of 18% (22% at CER);

§ TAZVERIK(®) revenue was $0.5 million (H1-23: $0.4m) mainly from sales in
the Hainan Pilot Zone(50);

§ Takeda upfront, milestones and R&D services revenue decreased to $33.8
million (H1-23: $269.1m, of which $258.7m was the recognized portion of the
$400 million upfront cash payment received from Takeda in April 2023); and

§ Other R&D services revenue of $7.1 million (H1-23: $10.0m), primarily
related to fees from AstraZeneca and Lilly for the management of development
and regulatory activities.

·      Other Ventures consolidated revenue decreased 21% (18% at CER) to
$137.0 million (H1-23: $173.7m), primarily as a result of lower COVID-related
prescription drug distribution sales in 2024. This excluded non‑consolidated
revenue at SHPL of $225.2 million (H1-23: $235.3m).

 

Net Expenses for the six months ended June 30, 2024 were $279.9 million
compared to $364.3 million in the six months ended June 30, 2023, reflecting
our strong efforts on cost control.

 

·      Cost of Revenue decreased by 14% to $180.1 million (H1-23:
$208.3m), which was the net result of a reduction in cost of revenue from our
Other Ventures, offset by the increase in product sales of our marketed
products and the cost of promotion and marketing services for ELUNATE(®)
resulting from the increased sales force;

·      R&D Expenses reduced 34% to $95.3 million (H1-23: $144.6m),
mainly due to the strategic prioritization of our pipeline, particularly
outside China. Clinical and regulatory expenses in the US and Europe were
$14.9 million (H1-23: $55.6m), while R&D expenses in China were $80.4
million (H1-23: $89.0m);

·      S&A(51) Expenses were $57.8 million (H1-23: $68.3m), which
decreased primarily due to tighter control over our spending, while utilizing
existing infrastructure to support further revenue growth; and

·      Other Items mainly comprised of equity in earnings of SHPL,
interest income and expense, FX and taxes, generated net income of $53.3
million (H1-23: $56.9m), which decreased primarily due to lower foreign
currency exchange gains recognized in the period.

 

Net Income attributable to HUTCHMED for the six months ended June 30, 2024 was
$25.8 million compared to $168.6 million for the six months ended June 30,
2023.

 

·      The net income attributable to HUTCHMED for the six months ended
June 30, 2024 was $0.03 per ordinary share / $0.15 per ADS(52), (H1-23: $0.20
per ordinary share / $1.00 per ADS).

 

FINANCIAL GUIDANCE

 

We reiterate full year 2024 guidance for Oncology/Immunology consolidated
revenue is $300 million to $400 million, driven by 30% to 50% growth target in
oncology marketed product revenue. HUTCHMED's work in 2024 and beyond will be
supported by its strong balance sheet. The Company is thus well placed to
deliver against its target to become a self-sustaining business and its goal
to bring its innovative medicines to patients globally through its own sales
network in China markets and through partners worldwide.

 

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" for further information relevant to the interpretation of
these financial measures and reconciliations of these financial measures to
the most comparable GAAP measures, respectively.

 

---

 

 

Financial Summary

 

Condensed Consolidated Balance Sheets Data

 (in $'000)                                               As of               As of

June 30, 2024
December 31, 2023
 Assets                                                   (Unaudited)
   Cash and cash equivalents and short-term investments   802,453             886,336
   Accounts receivable                                    156,916             116,894
   Other current assets                                   88,891              93,609
   Property, plant and equipment                          94,815              99,727
   Investment in an equity investee                       80,519              48,411
   Other non-current assets                               37,274              34,796
 Total assets                                             1,260,868           1,279,773
 Liabilities and shareholders' equity
   Accounts payable                                       43,398              36,327
   Other payables, accruals and advance receipts          249,218             271,399
   Deferred revenue                                       108,777             127,119
   Bank borrowings                                        82,100              79,344
   Other liabilities                                      25,357              22,197
 Total liabilities                                        508,850             536,386
 Company's shareholders' equity                           740,084             730,541
   Non-controlling interests                              11,934              12,846
 Total liabilities and shareholders' equity               1,260,868           1,279,773

 

 

Condensed Consolidated Statements of Operations Data

 (Unaudited, in $'000, except share and per share data)          Six months ended June 30,
                                                                 2024                    2023
 Revenue:
   Oncology/Immunology - Marketed Products                       127,796                 80,149
   Oncology/Immunology - R&D                                     40,841                  279,034
   Oncology/Immunology consolidated revenue                      168,637                 359,183
   Other Ventures                                                137,044                 173,691
     Total revenue                                               305,681                 532,874

 Operating expenses:
   Cost of revenue                                               (180,135)               (208,324)
   Research and development expenses                             (95,256)                (144,633)
   Selling and administrative expenses                           (57,811)                (68,263)
     Total operating expenses                                    (333,202)               (421,220)

                                                                 (27,521)                111,654
   Other income, net                                             22,765                  25,434
 (Loss)/income before income taxes and equity in earnings of an  (4,756)                 137,088
 equity investee
   Income tax expense                                            (2,886)                 (2,730)
   Equity in earnings of an equity investee, net of tax          33,807                  35,110
 Net income                                                      26,165                  169,468
   Less: Net income attributable to non-controlling interests    (364)                   (917)
 Net income attributable to HUTCHMED                             25,801                  168,551

 Earnings per share attributable to HUTCHMED (US$ per share)
   - basic                                                       0.03                    0.20
   - diluted                                                     0.03                    0.19
 Number of shares used in per share calculation
   - basic                                                       856,030,704             846,928,863
   - diluted                                                     872,534,466             866,990,610

 Earnings per ADS attributable to HUTCHMED (US$ per ADS)
   - basic                                                       0.15                    1.00
   - diluted                                                     0.15                    0.97
 Number of ADSs used in per share calculation
   - basic                                                       171,206,141             169,385,773
   - diluted                                                     174,506,893             173,398,122

 

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 it has focused on bringing
cancer drug candidates from in-house discovery to patients around the world,
with its first three oncology medicines marketed in China, the first of which
is also marketed in the US. For more information, please visit:
www.hutch‑med.com (https://www.hutch-med.com/) or follow us on LinkedIn
(https://www.linkedin.com/company/hutchmed/) .

 

Contacts

 Investor Enquiries                                                    +852 2121 8200 / ir@hutch-med.com (mailto:ir@hutch-med.com)

 Media Enquiries
 Ben Atwell / Alex Shaw, FTI Consulting                                +44 20 3727 1030 / +44 7771 913 902 (Mobile) /
                                                                       +44 7779 545 055 (Mobile) / HUTCHMED@fticonsulting.com
                                                                       (mailto:HUTCHMED@fticonsulting.com)
 Zhou Yi, Brunswick                                                    +852 9783 6894 (Mobile) / HUTCHMED@brunswickgroup.com
                                                                       (mailto:HUTCHMED@brunswickgroup.com)

 Nominated Advisor
 Atholl Tweedie / Freddy Crossley / Rupert Dearden, Panmure Liberum    +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 US
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 have been obtained will continue to
remain valid and effective in the future, 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; discovery,
development and/or commercialization of 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 pandemics and disease outbreaks. For further discussion of these and other
risks, see HUTCHMED's filings with the US Securities and Exchange Commission,
on AIM and on HKEX(53). 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 (EU) No 596/2014 (as it forms part of retained EU law as defined in
the European Union (Withdrawal) Act 2018).

 

Medical Information

 

This announcement contains information about products that may not be
available in all countries, or may be available under different trademarks,
for different indications, in different dosages, or in different strengths.
Nothing contained herein should be considered a solicitation, promotion or
advertisement for any prescription drugs including the ones under development.

 

Ends

 

This announcement in its entirety is available at:
http://www.rns-pdf.londonstockexchange.com/rns/5926Y_1-2024-7-31.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/5926Y_1-2024-7-31.pdf)

 

REFERENCES & ABBREVIATIONS

 

1.     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.

2.     In-market sales = total sales to third parties provided by Eli
Lilly (ELUNATE(®)), Takeda (FRUZAQLA(®)), AstraZeneca (ORPATHYS(®)) and
HUTCHMED (ELUNATE(®), SULANDA(®), ORPATHYS(®) and TAZVERIK(®)).

3.     R&D = Research and development.

4.     Takeda = Takeda Pharmaceuticals International AG, a subsidiary of
Takeda Pharmaceutical Company Limited.

5.     ITP = immune thrombocytopenia purpura.

6.     NDA = New Drug Application.

7.     NSCLC = Non-small cell lung cancer.

8.     METex14 = MET exon 14 skipping alterations.

9.     AIHA = Autoimmune hemolytic anemia.

10.   AML = Acute myeloid leukemia.

11.   PDAC = Pancreatic ductal adenocarcinoma.

12.   Syk = Spleen tyrosine kinase.

13.   EZH2 = Enhancer of zeste homolog 2.

14.   IDH = Isocitrate dehydrogenase.

15.   BTK = Bruton's tyrosine kinase.

16.   CRC = Colorectal cancer.

17.   NRDL = China National Reimbursement Drug List.

18.   Lilly = Eli Lilly and Company.

19.   sNDA = Supplemental New Drug Application.

20.   NMPA = China National Medical Products Administration.

21.   R/R = Relapsed and/or refractory.

22.   EMA = European Medicines Agency.

23.   MET = Mesenchymal epithelial transition factor.

24.   AACR = American Association for Cancer Research Annual Meeting.

25.   EGFR = Epidermal growth factor receptor.

26.   FDA = Food and Drug Administration.

27.   VEGFR = Vascular endothelial growth factor receptor.

28.   pMMR = Proficient mismatch repair.

29.   ASCO = American Society of Clinical Oncology Annual Meeting.

30.   ASCO GI = ASCO Gastrointestinal Cancers Symposium.

31.   CEA = Carcinoembryonic antigen.

32.   PFS = Progression free survival.

33.   ORR = Objective response rate.

34.   DCR = Disease control rate.

35.   OS = Overall survival.

36.   PMDA = Pharmaceuticals and Medical Devices Agency.

37.   RCC = Renal cell carcinoma.

38.   EHA = European Hematology Association.

39.   TPO/TPO-RA = Thrombopoietin and/or thrombopoietin receptor agonists.

40.   FGFR = Fibroblast growth factor receptor.

41.   CSF-1R = Colony-stimulating factor 1 receptor.

42.   PD-1 = Programmed cell death protein-1.

43.   IHCC = Intrahepatic cholangiocarcinoma.

44.   ERK = Extracellular signal-regulated kinase.

45.   ADC = Antibody-drug conjugate.

46.   Inmagene = Inmagene Biopharmaceuticals.

47.   SHPL = Shanghai Hutchison Pharmaceuticals Limited.

48.   ESG = Environmental, Social and Governance.

49.   GAAP = Generally Accepted Accounting Principles.

50.   Hainan Pilot Zone = Hainan Boao Lecheng International Medical Tourism
Pilot Zone.

51.   S&A= Selling and administrative expenses.

52.   ADS = American depositary share.

53.   HKEX = The Main Board of The Stock Exchange of Hong Kong Limited.

 

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