On March 3, 2022 HUTCHMED (China) Limited ("HUTCHMED") (Nasdaq/AIM:HCM; HKEX:13), the innovative, commercial-stage biopharmaceutical company, reported its audited financial results for the year ended December 31, 2021 and provides updates on key clinical and commercial developments since the start of 2022 (Press release, Hutchison China MediTech, MAR 3, 2022, View Source [SID1234609475]).

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2021 FULL YEAR Results & Business Updates
"2021 was an exceptional year for HUTCHMED," said Mr. Simon To, Chairman of HUTCHMED. "Commercial success on ELUNATE and the launches of SULANDA and ORPATHYS contributed to an almost four-fold increase in consolidated oncology/immunology revenues to $119.6 million, with momentum continuing in 2022.

ORPATHYS took a major step forward in 2021 with its first approval and important, and as yet unpublished, data from the SAVANNAH study in combination with TAGRISSO. We and our partner AstraZeneca[1] initiated four Phase III studies and one Phase II study, with registration potential, for ORPATHYS during 2021. These actions have triggered $40 million in milestone payments to HUTCHMED since mid-2021. A seventh registration study, a global Phase III in NSCLC[2], the SAFFRON study, is set to initiate in mid-2022.

We are rapidly progressing our plan to expand our oncology assets into global markets. Led by our team of over 800-personnel in discovery, development and manufacturing operations, we have an un-equaled fifteen-year track-record of producing highly quality novel oncology/immunology drug candidates.

Seven of our assets are now being developed outside China. In addition to the global progress of ORPATHYS, surufatinib’s U.S. NDA[3] and EU MAA[4] are in the later stages of regulatory review for advanced NETs; enrollment was completed for fruquintinib in a fourteen-country global Phase III study, the FRESCO-2 study, in CRC[5] which reads-out later in 2022; positive and differentiated POC data was presented for amdizalisib and sovleplenib; and our FGFR[6], IDH1/2[7], ERK[8], third generation BTK[9] and CSF-1R[10] inhibitors all made good progress in early development.

With a strong track record in bringing innovative drugs to patients through rigorous clinical trials, our seasoned clinical team is now enrolling 13 registration studies for six assets with an additional 5 registration studies set to initiate in 2022. With over $1 billion in cash, and the intention to divest further non-core assets, we anticipate having sufficient runway to see our plans through.

Our strategy is to launch a stream of new products in both the China and global markets over the coming years, helping patients with unmet needs and creating value for all our stakeholders."

I. COMMERCIAL OPERATIONS
Total revenues increased 56% to $356.1 million in 2021 (2020: $228.0m), driven by commercial progress on our three in-house developed oncology drugs ELUNATE, SULANDA and ORPATHYS;
Full year 2021 Oncology/Immunology consolidated revenues of $119.6 million, up 296% (2020: $30.2m), and in line with 2021 guidance of $110-130 million;
Continuing expansion of in-house oncology commercial organization in China, which at the end of 2021 numbered about 630 personnel (end 2020: ~390) covering over 2,500 oncology hospitals and over 29,000 oncology physicians;
ELUNATE (fruquintinib in China) in-market sales[11] increased 111% to $71.0 million (2020: $33.7m), reflecting a full year of HUTCHMED management of all on-the-ground medical detailing, promotion and local and regional marketing activities in China;
SULANDA (surufatinib in China) launched for both extra-pancreatic NET and pancreatic NET with in-market sales in 2021 of $11.6 million (2020: nil). An encouraging start in the self-pay market and positioned well for national reimbursement which started in January 2022;
ORPATHYS (savolitinib in China) launched in mid-2021 through AstraZeneca’s extensive oncology commercial organization, with in-market sales of $15.9 million (2020: nil). Rapid initial self-pay uptake due to being the first-in-class selective MET[12] inhibitor in China;
Successful management of the NRDL[13] process to expand access to our key products in January 2022. Concluded ELUNATE NRDL renewal and first time NRDL inclusion of SULANDA; and
S. commercial team continued to build for the potential surufatinib U.S. approval in 2022. The team, more than 30 personnel, is fully engaged on all aspects of launch readiness including supply chain, market access, marketing, sales and commercial operations.

II. REGULATORY ACHIEVEMENTS
China
Received China NMPA[15] NDA approval for ORPATHYS (savolitinib) as a treatment for patients with MET exon 14 skipping alteration NSCLC in June 2021, making savolitinib the first-in-class selective MET inhibitor in China.
Received second China NMPA NDA approval for SULANDA (surufatinib) in June 2021 as a treatment for patients with advanced pancreatic NET;
A $25 million milestone payment was made to us by AstraZeneca in July 2021 upon first sale of ORPATHYS in China;
Received Breakthrough Therapy Designation in China for amdizalisib (HMPL-689) in September 2021 for the treatment of relapsed or refractory follicular lymphoma; and
Received Breakthrough Therapy Designation in China for sovleplenib (HMPL-523) in January 2022 for the treatment of ITP[16].

United States and Europe
Surufatinib U.S. FDA[17] NDA process update:
Completed submission of U.S. FDA NDA for surufatinib, which was accepted in June 2021, for the treatment of both pancreatic and extra-pancreatic NET;
S. FDA NDA review, as well as the clinical site inspections and pre-approval inspections of our manufacturing facilities, are ongoing, several inspections have been completed with others pending subject to COVID-19 travel restrictions and security requirements for foreign visitors; and
The PDUFA[18] goal date is April 30, 2022 and mid- and late-cycle review meetings with the FDA have completed. Timing of completion of the NDA review is subject to FDA scheduling limitations.
Surufatinib EMA[19] MAA process update:
Fully submitted EMA MAA for surufatinib, which was validated and accepted in July 2021, for the treatment of both pancreatic and non-pancreatic NET; and
Completed the 120-day assessment, and now entering the later stages of MAA review.
Savolitinib: conducted U.S. FDA EOP2[20] meeting for SAVANNAH study of savolitinib plus TAGRISSO in EGFR[21] TKI[22] refractory NSCLC.
Continued evaluation of SAVANNAH study for potential accelerated approval use; and
Completed clinical trial applications in U.S., EU and Japan for the SAFFRON study, a global pivotal Phase III study of savolitinib and TAGRISSO in patients with NSCLC who have progressed following TAGRISSO treatment due to MET amplification.

III. CLINICAL DEVELOPMENT ACTIVITIES
Savolitinib (ORPATHYS), a highly selective oral inhibitor of MET being developed broadly across MET-driven patient populations in lung and gastric cancer and renal cell carcinoma

Major clinical milestones for savolitinib in 2021:

Initiated SAMETA, a global Phase III pivotal study of the savolitinib plus IMFINZI combination in MET-driven, unresectable and locally advanced or metastatic PRCC in October 2021 (NCT05043090);
Initiated SANOVO, a pivotal Phase III study in China for the savolitinib plus TAGRISSO combination in treatment naïve patients with EGFR mutant NSCLC with MET aberration in September 2021 (NCT05009836);
Initiated SACHI, a pivotal Phase III study in China for the savolitinib plus TAGRISSO combination in patients with EGFR mutant NSCLC who have progressed following EGFR TKI treatment due to MET amplification in November 2021 (NCT05015608);
Initiated Phase II study with potential for registration (NCT04923932) for savolitinib in metastatic gastric cancer with MET amplification in China in mid-2021;
Initiated a confirmatory China Phase IIIb post-approval study (NCT04923945) of savolitinib monotherapy in MET exon 14 skipping alteration patients in mid-2021; and
A further $15 million milestone payment, to us by AstraZeneca, was triggered in February 2022 upon initiation of start-up activities for SAFFRON.

Major savolitinib clinical data presentations in 2021:

Presented CALYPSO Phase II study data in MET-driven PRCC patients (NCT02819596) for savolitinib in combination with IMFINZI at the 2021 ASCO (Free ASCO Whitepaper)[23] Annual Meeting;
Published in The Lancet Respiratory Medicine updated data from the Phase II study in patients with MET exon 14 skipping alteration NSCLC (NCT02897479); and
Presented final Phase II data at WCLC[24] 2020 for the TATTON study (NCT02143466) in NSCLC patients with MET amplification who had progressed after prior treatment with EGFR inhibitors.

Potential upcoming clinical and regulatory milestones for savolitinib in 2022:

Submit for presentation the SAVANNAH Phase II study (NCT03778229) for the savolitinib plus TAGRISSO combination in NSCLC patients harboring EGFR mutation and MET amplification or overexpression at a scientific conference in the second half of 2022; and
Commence enrollment in SAFFRON, a global, pivotal Phase III study for the savolitinib plus TAGRISSO combination in mid-2022 (NCT05261399).

Surufatinib (SULANDA in China), an oral inhibitor of VEGFR[25], 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

Major clinical milestones for surufatinib in 2021:

Initiated the SURTORI-01 Phase III trial in NEC[26] patients in China, the first pivotal study combining SULANDA and TUOYI, Junshi’s[27] anti-PD-1 antibody, in September 2021 (NCT05015621);
Initiated a bridging study in NET patients in Japan in September 2021 (NCT05077384) based on dialogue with the Japanese PMDA[28]; and
Initiated an international Phase Ib/II study of surufatinib combined with tislelizumab (NCT04579757), BeiGene’s[29] PD-1[30] antibody, in the U.S. and Europe in March 2021.

Major surufatinib clinical data presentations in 2021:

Presented NEC cohort data from the China Phase II study of surufatinib plus TUOYI (NCT04169672) at the 2021 ASCO (Free ASCO Whitepaper) and ESMO (Free ESMO Whitepaper) IO[31] 2021 annual meetings;
Presented data from the gastric and gastroesophageal junction cancers cohort of the China Phase II study of surufatinib plus TUOYI (NCT04169672) at the 2021 ASCO (Free ASCO Whitepaper) and ESMO (Free ESMO Whitepaper) IO 2021 annual meetings;
Presented data from two additional cohorts of the China Phase II study of surufatinib plus TUOYI (NCT04169672) at the ESMO (Free ESMO Whitepaper) IO 2021 for esophageal and small cell lung cancer;
Presented updated results from U.S. Phase Ib monotherapy NET cohorts (NCT02549937) in heavily pretreated patients with NET at the 2021 ASCO (Free ASCO Whitepaper) Annual Meeting;
Presented a subgroup analysis by Ki-67 and baseline CgA[32] of the Phase III monotherapy study in pancreatic NET (SANET-p) (NCT02589821) at the 2021 ASCO (Free ASCO Whitepaper) Annual Meeting; and
Presented Phase II data for surufatinib monotherapy in BTC[33] patients (NCT02966821) at the 2021 ASCO (Free ASCO Whitepaper) Annual Meeting in U.S. patients after first-line chemotherapy.

Potential upcoming clinical and regulatory milestones for surufatinib in 2022:

Submit for presentation data from the Phase Ib/II combination study with tislelizumab at a scientific conference in the second half of 2022;
Submit for presentation further Phase II data for the TUOYI combination study for biliary tract, thyroid cancer, non-small cell lung cancer, endometrial cancer and sarcoma cohorts at a scientific conference in the second half of 2022, and
Plan to initiate SURTORI-02, a Phase III study of surufatinib in combination with TUOYI in esophageal cancer in China in the second half of 2022.

Fruquintinib (ELUNATE in China), a highly selective oral 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

Major clinical milestones for fruquintinib in 2021:

Completed enrollment in the FRESCO-2 global Phase III registration study (NCT04322539) in refractory metastatic CRC in late 2021, with 691 patients recruited in 15 months, across 14 countries including U.S., EU, Japan and Australia, ahead of schedule;
Initiated registration-intent Phase II study in endometrial cancer for fruquintinib in combination with TYVYT (NCT03903705) following discussion with the NMPA;
Initiated a Phase II study in China and Korea for fruquintinib in combination with tislelizumab (NCT04716634) with advanced or metastatic, unresectable gastric cancer, CRC or NSCLC;
Initiated a Phase Ib/II study in the U.S. for fruquintinib in combination with tislelizumab (NCT04577963) in patients with triple negative breast or endometrial cancer and metastatic CRC; and
Completed enrollment in four cohorts of the Phase II study of fruquintinib combined with TYVYT (NCT03903705), in CRC, endometrial cancer, HCC[34] and RCC[35] in China.

Major fruquintinib clinical data presentations in 2021:

Presented preliminary endometrial cancer, HCC and RCC cohorts data from the Phase Ib/II studies of fruquintinib combined with TYVYT at CSCO[36] 2021 (NCT03903705);
Presented preliminary CRC cohorts data from the Phase Ib/II studies of fruquintinib combined with TYVYT and of fruquintinib combined with geptanolimab, Genor’s[37] PD-1 antibody, at the 2021 ASCO (Free ASCO Whitepaper) Annual Meeting (NCT04179084 and NCT03977090, respectively); and
Presented Phase Ib U.S. monotherapy data in two different cohorts of patients with refractory metastatic CRC (NCT03251378) at the 2022 ASCO (Free ASCO Whitepaper) Gastrointestinal Cancers Symposium.

Potential upcoming clinical and regulatory milestones for fruquintinib in 2022:

Complete enrollment of the FRUTIGA China Phase III registration study (NCT03223376) in advanced gastric cancer in 2022, which is expected to enroll about 700 patients in China;
Report outcome of the FRESCO-2 trial (NCT04322539) in the second half of 2022 when the event-driven primary endpoint, OS[38], is reached;
If FRESCO-2 is positive, HUTCHMED plans to initiate a simultaneous submission program to apply for fruquintinib marketing authorization with the U.S. FDA, the EMA and the PMDA; and
Plan to initiate Phase III studies of fruquintinib plus TYVYT combination in HCC, RCC and endometrial cancer in China.

Amdizalisib (HMPL-689), an investigative and highly selective oral inhibitor of PI3Kδ[39] designed to address the gastrointestinal and hepatotoxicity associated with currently approved and clinical-stage PI3Kδ inhibitors

Major clinical milestones for amdizalisib in 2021:

Initiated two Phase II studies with potential for registration in China for the treatment of patients with follicular lymphoma and patients with marginal zone lymphoma in April 2021; and
Initiated dose expansion portion of the Phase I/Ib study in the U.S. and Europe (NCT03786926) in the second half of 2021 in multiple types of non-Hodgkin’s lymphoma.

Major amdizalisib clinical data presentation in 2021:

Presented initial dose expansion data at ESMO (Free ESMO Whitepaper) in September 2021 at the RP2D[40], in patients with multiple types of non-Hodgkin’s lymphoma in China.

Potential upcoming clinical and regulatory milestones for amdizalisib in 2022:

Initiate additional Phase II studies with potential for registration intent in China in additional relapsed/refractory non-Hodgkin’s lymphoma indications in the second half of 2022;
Initiate studies in combination with other anti-cancer therapies in China in early 2022; and
Complete recruitment of patients for Phase II studies with potential for registration intent in China for the treatment of follicular lymphoma and marginal zone lymphoma in late 2022.

Sovleplenib (HMPL-523), an investigative and highly selective oral inhibitor of Syk[41], an important component of the B-cell receptor signaling pathway, for the treatment of hematological cancers and immune diseases

Major clinical and regulatory milestones for sovleplenib in 2021:

Initiated the ESLIM-01 Phase III pivotal study in ITP (NCT03951623) in China in October 2021; and
Initiated dose expansion portion of the international Phase I study in the second half of 2021 in multiple non-Hodgkin’s lymphoma indications.

Major sovleplenib clinical data presentations in 2021:

Presented initial Phase Ib ITP study (NCT03951623) in China at ASH (Free ASH Whitepaper) 2021[42]; and
Presented initial data from the dose escalation portion of the international Phase I study (NCT03779113) in lymphoma patients in the U.S. and Europe at ASH (Free ASH Whitepaper) 2021.

Potential upcoming clinical milestone for sovleplenib in 2022:

Complete U.S. IND and initiate Phase I study in the U.S. in patients with ITP.

Tazemetostat (TAZVERIK in the U.S. and Japan), an inhibitor of EZH2 licensed from Epizyme for which HUTCHMED is collaborating to research, develop, manufacture and commercialize in Greater China

Potential upcoming clinical and regulatory milestones for tazemetostat in 2022:

Initiate a bridging study in follicular lymphoma in China for conditional registration based on U.S. approvals;
Initiate the China portion of the global SYMPHONY-1 Phase III trial (NCT04224493) of tazemetostat combined with lenalidomide and rituximab in patients with relapsed or refractory follicular lymphoma after at least one prior line of therapy;
Initiate Phase II combination studies with other HUTCHMED assets; and
Engage with NMPA on potential path for regulatory approval for the treatment of patients with epithelioid sarcoma, a rare disease for which TAZVERIK has FDA approval.

HMPL-453, an investigative and highly selective oral inhibitor of FGFR 1/2/3

Initiated combination studies with other anti-cancer therapies, including chemotherapies and/or PD-1 antibodies, in China in January 2022 (NCT05173142).

HMPL-306, an investigative and highly selective oral inhibitor of IDH1/2 designed to address resistance to the currently marketed IDH inhibitors

Major clinical and regulatory milestones for HMPL-306 in 2021:

Initiated Phase I dose escalation study in China in hematological malignancies;
Initiated dose escalation portion of a Phase I study (NCT04764474) in the U.S. and Europe in patients with hematological malignancies with an IDH1 and/or IDH2 mutation in early 2021; and
Initiated dose escalation portion of a Phase I study (NCT04762602) in the U.S. and Europe in patients with solid tumors with an IDH1 and/or IDH2 mutation in early 2021.

Potential upcoming clinical and regulatory milestones for HMPL-306 in 2022:

Submit for presentation data from the dose escalation portion of the Phase I study (NCT04272957) in China at a scientific conference in mid-2022; and
Initiate dose expansion portion of the Phase I study in China in mid-2022; and
Initiate dose expansion portion of the Phase I studies in the U.S. and Europe in mid-2022.

HMPL-295, an investigative and highly selective oral inhibitor of ERK in the MAPK pathway [43] with the potential to address intrinsic or acquired resistance from upstream mechanisms such as RAS-RAF-MEK

Initiated Phase I trial (NCT04908046) in patients with advanced solid tumors in China in July 2021.

HMPL-760, an investigative, highly selective, third-generation oral inhibitor of BTK with improved potency versus first generation BTK inhibitors against both wild type & C481S mutant enzymes

Initiated Phase I trials in China (NCT05190068) and the U.S. (NCT05176691) in patients with advanced hematological malignancies in January 2022.

HMPL-653, an investigative, highly selective, and potent CSF-1R inhibitor designed to target CSF-1R driven tumors as a monotherapy or in combinations

Initiated Phase I trial in China (NCT05190068) in patients with advanced malignant solid tumors and tenosynovial giant cell tumors in January 2022.

HMPL-A83, a differentiated, red blood cell sparing CD47 monoclonal antibody

Completed IND submission for HMPL-A83 in China in early 2022.

IV. MANUFACTURING
Commercial scale-up and launches of SULANDA and ORPATHYS, alongside ongoing supply of ELUNATE;
Completed all relevant amdizalisib and sovleplenib manufacturing process studies, in preparation for potential NDA submissions; and
Rapid progress in building our new flagship Shanghai manufacturing facility, designed to increase our novel drug product manufacturing capacity by over five-fold. Small molecule and large molecule equipment installation is planned for late 2022, with GMP compliance targeted for late 2023.

V. OTHER VENTURES
Other Ventures include our profitable prescription drug marketing and distribution platforms covering about 290 cities and towns in China with around 2,900 mainly manufacturing and commercial personnel.

Other Ventures delivered encouraging growth with consolidated revenues up 20% (13% at CER[44]) to $236.5 million (2020: $197.8m). This does not include revenues from our non-consolidated joint venture SHPL[45], which also grew by 20% (12% at CER) to $332.6 million (2020: $276.4m);
Consolidated net income attributable to HUTCHMED from our Other Ventures grew by 24% (16% at CER) to $54.4 million (2020: $44.0m), excluding one-time gains; and
One-time gains totaled $88.5 million (2020: $28.8m), including $82.9 million (2020: nil) from the divestment of HBYS[46] and $5.6 million (2020: $28.8m) from land compensation, before withholding tax.

VI. OTHER CORPORATE DEVELOPMENTS
Completed listing on the Main Board of HKEX[47], raising net proceeds of approximately $585 million;
Completed divestment of interest in HBYS, a non-core and non-consolidated over-the-counter drug joint venture business for $159.1 million in cash, representing about 22 times HBYS’s adjusted net profit attributable to HUTCHMED equity holders in 2020 with an additional $46.4 million related to declared dividends expected to be collected in 2022;
Entered into a collaboration with Epizyme in August 2021 to research, develop, manufacture and commercialize in Greater China its drug TAZVERIK, an EZH2 inhibitor approved by the U.S. FDA for the treatment of certain patients with epithelioid sarcoma and follicular lymphoma;
Changed our group company name/corporate identity to HUTCHMED in April 2021, unifying the names of the majority of our key subsidiaries;
Announced a strategic partnership with Inmagene[48] in January 2021 to further develop four novel preclinical drug candidates discovered by HUTCHMED for the potential treatment of multiple immunological diseases; and
Arbitral award in favor of Hutchison Sinopharm[49] in connection with the termination of its distribution rights for SEROQUEL in mainland China by Luye Pharma Hong Kong Ltd. In 2021, the Hong Kong International Arbitration Centre made a final award in favor of Hutchison Sinopharm against Luye Pharma Hong Kong Ltd. in the amount of RMB253.2 million ($39.6 million), plus costs and interest. Payment of the award is expected in 2022.
Potential upcoming corporate developments:

Divestment of further non-core operations, we continue to look for opportunities to divest non-core businesses, including SHPL, to better focus on the development and global commercialization of our innovation-driven assets; and
Large molecule advancement, we continue to evaluate opportunities which might accelerate our capabilities in the large molecule arena.

VII. IMPACT OF COVID-19
COVID-19 did not impact our research, our clinical studies or our commercial activities in any material manner in 2021. Certain regulatory inspections of our manufacturing facilities in China by the U.S. FDA have, however, been postponed due to travel restrictions. We will continue to closely work with regulators and monitor the evolving situation.

VIII. SUSTAINABILITY

As an innovative, commercial-stage biopharmaceutical company, HUTCHMED embraces sustainability at the core of how we operate. Over the past two decades, we worked hard to strengthen healthcare systems by providing quality and accessible drugs. As the world is gradually adapting to the changes brought about by COVID-19, the pandemic has highlighted the importance of building sustainability and environmental, social and governance factors into business strategy. HUTCHMED has embarked on our sustainability journey in 2020 by publishing our inaugural ESG report to demonstrate our efforts, and establishing a board level Sustainability Committee in 2021 to support the Board of Directors in fulfilling their responsibilities. We plan to publish our second sustainability report for 2021 at the end of May 2022.

Going forward, HUTCHMED will be working with our stakeholders to embrace sustainable business practices and develop a sustainability strategy that will help focus our efforts on areas which are most relevant to our business. Through a materiality assessment exercise for 2021, priority areas include: Business ethics; Drug research-related topics; Drug development; Commercial operations responsibilities; Environmental topics; and Management of our people. Over the course of 2022, we will continue to engage our stakeholders to identify areas for improvement to building a more sustainable and responsible future.

FULL YEAR 2021 Financial Results
Cash, Cash Equivalents and Short-Term Investments were $1,011.7 million as of December 31, 2021 compared to $435.2 million as of December 31, 2020.

Adjusted Group (non-GAAP[50]) net cash flows excluding financing activities were -$73.5 million (2020: -$78.4m), with the net decrease mainly due to $159.1 million in proceeds from the divestment of HBYS, which offset the increasing Oncology/Immunology R&D spending and lower dividends received from our non-consolidated joint ventures totaling $49.9 million (2020: $86.7m); and
Net cash generated from financing activities totaled $650.0 million (2020: $296.4m) mainly resulting from the global offering of shares and listing on the HKEX in June 2021 and a private placement in April 2021 to a fund affiliated with Baring Private Equity Asia.

Revenues for the year ended December 31, 2021 were $356.1 million compared to $228.0 million in 2020.

Oncology/Immunology consolidated revenues increased 296% (287% at CER) to $119.6 million (2020: $30.2m) resulting from:
ELUNATE revenues increased 168% to $53.5 million (2020: $20.0m) in manufacturing revenues, promotion and marketing service revenues and royalties, as our in-house sales team increased in-market sales 111% to $71.0 million (2020: $33.7m), as provided by Lilly[51];

SULANDA sales revenues of $11.6 million since mid-January 2021 launch, initially approved to treat patients with advanced extra-pancreatic (non-pancreatic) NET and subsequently also approved to treat patients with pancreatic NET in June 2021;

ORPATHYS revenue of $36.3 million since mid-July 2021 launch, which was comprised of a $25.0 million first sale milestone payment and $11.3 million in manufacturing revenues and royalties. AstraZeneca reported $15.9 million in-market sales (2020: nil) of ORPATHYS in 2021; and

Other R&D service fee revenues of $18.2 million (2020: $10.2m), which were primarily fees from AstraZeneca and Lilly for the management of development activities in China.

Other Ventures consolidated revenues increased 20% (13% at CER) to $236.5 million (2020: $197.8m), mainly due to continued sales growth of third-party prescription drug products.

Net Expenses for the year ended December 31, 2021 were $550.7 million compared to $353.7 million in 2020.

Cost of Revenues were $258.2 million (2020: $188.5m), the majority of which were the cost of third-party prescription drug products marketed through our profitable Other Ventures, as well as full year costs associated with ELUNATE, including the provision of promotion and marketing services to Lilly which commenced in October 2020, and the costs for SULANDA and ORPATHYS which commenced commercial sales in 2021;
R&D Expenses were $299.1 million (2020: $174.8m), which increased mainly as a result of an expansion in the active development of eleven novel oncology drug candidates. Our rapidly scaling international clinical and regulatory operations in the U.S. and Europe incurred expenses of $140.1 million (2020: $63.3m), while R&D expenses in China were $159.0 million (2020: $111.5m);
SG&A Expenses[52] were $127.1 million (2020: $61.3m), which increased primarily due to higher staff costs and share-based compensation expense to support rapidly expanding operations. This included the build-up of a large-scale national oncology commercial infrastructure in China and commercial launch readiness in the U.S. to support our oncology products; and
Other Items generated net income of $133.7 million (2020: $70.9m), which increased primarily due to a one-off gain on the divestment of HBYS attributable to the Group of $82.9 million (comprised of a gain of $121.3 million offset in part by related taxes of $14.4 million and amounts attributable to a non-controlling interest of $24.0 million), offset in part by lower one-time land compensation of $5.6 million (2020: $28.8m) recognized for HBYS.

Net Loss attributable to HUTCHMED for the year ended December 31, 2021 was $194.6 million compared to $125.7 million in 2020.

As a result, the net loss attributable to HUTCHMED in 2021 was $0.25 per ordinary share / $1.23 per ADS[53], compared to net loss attributable to HUTCHMED of $0.18 per ordinary share / $0.90 per ADS, in 2020.

FINANCIAL GUIDANCE
We provide financial guidance for 2022 below reflecting expected revenue growth of ELUNATE, SULANDA and ORPATHYS in China. We intend to update guidance to include ex-China consolidated revenues, upon the occurrence of surufatinib U.S. and EU approval (if granted) and to reflect any developments in the non-core market out-licensing of our products.

While we are not providing net cash flow guidance for 2022, we do expect an increase in investment to support global clinical and organizational expansion. To support our cash needs, we continue to engage in active discussions regarding the potential divestment of non-core assets, such as SHPL, as well as evaluate equity capital markets action, such as a potential future listing on the STAR Market of the Shanghai Stock Exchange.

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 9 p.m. HKT / 1 p.m. GMT / 8 a.m. EST – 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/.