On March 4, 2021 Hutchison China MediTech Limited ("HUTCHMED") (Nasdaq/AIM: HCM), an innovation-driven, commercial-stage biopharmaceutical company, reported its audited financial results for the year ended December 31, 2020 and provides updates on key clinical and commercial developments (Press release, Hutchison China MediTech, MAR 4, 2021, View Source [SID1234576080]). The Company also intends to seek shareholders’ approval to change its name to HUTCHMED (China) Limited at its forthcoming Annual General Meeting. For more information on the new corporate name, see 2020 Full Year Results & Business Updates—VI. Evolution of Our Corporate Identity.

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2020 FULL YEAR RESULTS & BUSINESS UPDATES

"At the heart of HUTCHMED lies a prolific in-house novel drug discovery and development engine that has produced ten clinical-stage drug candidates and a further seven late-stage preclinical assets in oncology and immunology over the past fifteen years." said Mr. Simon To, Chairman of HUTCHMED. "Our aim is to bring these internally discovered and developed innovations to patients the world-over."

"To support this strategic objective, we have built an oncology and immunology operation with around 1,200 personnel based mainly in our two core markets, China and the U.S. In China, supported by a robust manufacturing infrastructure, our commercial team is now delivering impressive sales results on our first two oncology drugs, ELUNATE in metastatic colorectal cancer and the recently launched SULANDA in neuroendocrine tumors. A New Drug Application was also submitted mid-last year for savolitinib in lung cancer and, subject to approval, it will be our third approved oncology drug and the first-in-class selective MET inhibitor on the market in China."

"Outside China, our fast expanding international organization, led mainly from the U.S., is developing five un-partnered oncology drug candidates. In 2020, it achieved three U.S. Food and Drug Administration fast track designations and initiated the rolling submission of surufatinib, our first U.S. New Drug Application filing."

"Over the next three years, we will continue to grow our R&D and commercial organizations globally to support the anticipated launch of our oncology drugs in China, the U.S. and Europe."

I. COMMERCIAL OPERATIONS

Full year 2021 Oncology/Immunology consolidated revenues guidance $110-130 million (2020 actual: $30.2m) with in-house oncology commercial organization in China now expanded to over 420 personnel (end 2019: about 90) covering over 2,300 oncology hospitals and over 20,000 oncology physicians;
ELUNATE (fruquintinib) in-market sales increased 91% to $33.7 million1 (2019: $17.6m), as provided by Lilly2, during 2020 as a result of inclusion in the 2020 China NRDL3;
Accelerating sales growth on ELUNATE since Q4 2020 when HUTCHMED assumed responsibility for all on-the-ground medical detailing, promotion and local and regional marketing activities in China;
(Growth vs. Prior Period) Lilly Sales Team HUTCHMED Sales Team
* = Unaudited; ** = Represents total sales to third parties as provided by Lilly; *** = Represents manufacturing fees, commercial service fees and royalties paid by Lilly to HUTCHMED, and sales to other third parties invoiced by HUTCHMED.

Launched SULANDA (surufatinib) as a treatment for patients with advanced non-pancreatic NET4 in China in mid-January 2021 within three weeks of approval. Unaudited sales of SULANDA in January-February 2021, in its first two months on the market, were $4.9 million; and
Established our U.S. commercial organization with the recruitment of senior leadership team based in New Jersey to prepare launch readiness for the potential surufatinib U.S. approval in late 2021 or early 2022.
II. REGULATORY ACHIEVEMENTS

China

Received China approval for SULANDA from the China NMPA5 as a treatment for patients with advanced non-pancreatic NET in December 2020;
Submitted a China NDA6 for savolitinib as a treatment for patients with MET7 Exon 14 skipping alteration NSCLC8. The NDA was accepted in May 2020. Priority Review status was granted in July 2020 and review is underway;
Submitted a second China NDA for SULANDA as a treatment for patients with advanced pancreatic NET. The NDA was accepted in September 2020 and review is underway; and
IND9 cleared for HMPL-295, a novel ERK10 inhibitor in the MAPK pathway11, in late 2020.
United States & Europe

Initiated surufatinib U.S. FDA12 rolling submission of a NDA for the treatment of both pancreatic and non-pancreatic NET in December 2020;
Secured U.S. FDA Fast Track Designations for surufatinib for the treatment of both pancreatic and non-pancreatic NET in April 2020;
Received scientific advice from the EMA13 CHMP14 for surufatinib for the treatment of both pancreatic and non-pancreatic NET with no MAA15 filing issues identified;
Secured U.S. FDA Fast Track Designation for fruquintinib for the treatment of advanced CRC16 in June 2020; and
Cleared two U.S. FDA INDs for HMPL-306 in late 2020, in hematological malignancies and solid tumors.
III. CLINICAL DEVELOPMENT ACTIVITIES

Surufatinib (SULANDA in China), a small molecule inhibitor of VEGFR17, FGFR18 and CSF-1R19 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

Presented Phase III study in pancreatic NET (SANET-p) (NCT02589821) at the ESMO (Free ESMO Whitepaper)20 Congress 2020 and published simultaneously in The Lancet Oncology. The study met all primary and secondary endpoints and supported NMPA NDA submission;
Presented preliminary data of U.S. Phase Ib NET cohorts (NCT02549937) at the ASCO (Free ASCO Whitepaper)21 Conference 2020 in heavily pretreated patients with pancreatic or non-pancreatic NET, demonstrating encouraging efficacy in patients refractory or intolerant to AFINITOR and SUTENT;
Presented pharmacokinetic and safety data of U.S. Phase Ib NET cohorts (NCT02549937) at the AACR (Free AACR Whitepaper)22 Conference 2020, demonstrating similar profiles of surufatinib between Chinese and U.S. patients; and
Presented Phase I dose-finding study for surufatinib plus TUOYI, Junshi’s23 anti-PD-124 antibody, (NCT04169672) at the AACR (Free AACR Whitepaper) Conference 2020. Data demonstrated that surufatinib plus TUOYI were well tolerated with encouraging antitumor activity in patients with advanced solid tumors. In January 2020, we initiated a Phase II study in nine solid tumor indications in China.
Potential upcoming clinical and regulatory milestones for Surufatinib:

Complete the U.S. FDA rolling NDA submission for the treatment of both pancreatic and non-pancreatic NET in the first half of 2021;
Initiate a Phase Ib/II study of surufatinib in combination with tislelizumab (NCT04579757), BeiGene’s25 PD-1 antibody, in the U.S. in the first half of 2021;
Submit the EU MAA for the treatment of both pancreatic and non-pancreatic NET in mid-2021;
Present Phase II data for the SULANDA plus TUOYI combination in select indications in mid-2021;
Receive China approval for patients with advanced pancreatic NET which may occur as early as the second half of 2021; and
Initiate Phase III pivotal studies for the SULANDA plus TUOYI combination in select indications in the second half of 2021 and beyond.
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

Initiated a global Phase III registration study (NCT04322539), the FRESCO-2 study, in refractory metastatic CRC. FRESCO-2 is expected to enroll over 680 patients from over 150 sites in 14 countries. The first patient was dosed in September 2020 in the U.S.;
Presented preliminary data of U.S. Phase I/Ib colorectal cancer cohorts (NCT03251378) at the ESMO (Free ESMO Whitepaper) Congress 2020 in heavily pretreated metastatic CRC patients, demonstrating encouraging efficacy and tolerability in patients refractory or intolerant to STIVARGA and LONSURF;
Completed second planned interim data review for a Phase III registration study (NCT03223376), the FRUTIGA study, in advanced gastric cancer. Based on preset criteria the IDMC26 and Joint Steering Committees recommended that the trial continue with a sample size increase to ~700 patients; and
Initiated a Phase II study for fruquintinib in combination with TYVYT, Innovent’s27 PD-1 antibody, in four solid tumor indications (NCT03903705) in Q4 2020.
Potential upcoming clinical and regulatory milestones for Fruquintinib:

Initiate a Phase Ib/II study in the U.S. for fruquintinib in combination with tislelizumab (NCT04577963) in patients with advanced, refractory triple negative breast cancer in the first half of 2021;
Present Phase Ib U.S. expansion data in metastatic CRC (NCT03251378) in mid-2021;
Present preliminary Phase Ib data for fruquintinib plus TYVYT (NCT04179084) and fruquintinib plus geptanolimab (NCT03977090) in CRC in mid-2021;
Initiate pivotal studies for the ELUNATE plus anti-PD-1 antibody combination in select indications in the second half of 2021;
Complete enrollment of the FRESCO-2 study (NCT04322539) in refractory metastatic CRC in late-2021; and
Complete enrollment of the FRUTIGA study (NCT03223376) in advanced gastric cancer in late-2021;
Savolitinib, 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

Presented Phase II registration study (NCT02897479) for savolitinib in MET Exon 14 skipping mutation patients at the ASCO (Free ASCO Whitepaper) Conference 2020 which met study endpoints and supported NMPA NDA submission;
Presented Phase II data for the CALYPSO study (NCT02819596) for savolitinib in combination with IMFINZI, AstraZeneca’s28 PD-L129 antibody, in PRCC30 patients at the ASCO (Free ASCO Whitepaper) GU31 Conference 2020 demonstrating encouraging synergy in efficacy and tolerability in line with single agent safety profiles;
Presented Phase III data for the SAVOIR study (NCT03091192) for savolitinib in MET positive PRCC patients at the ASCO (Free ASCO Whitepaper) Conference 2020 showing a clear trend to superiority in efficacy and tolerability versus SUTENT in first 60 patient data; and
Presented final Phase II data for TATTON (NCT02143466) at WCLC32 2020, a global exploratory study in NSCLC aiming to recruit patients with MET amplification who had progressed after prior treatment with EGFR33 inhibitors. TATTON clearly confirmed the importance of the savolitinib plus TAGRISSO combination.
Potential upcoming clinical and regulatory milestones for Savolitinib:

Potential receipt of approval in China for the treatment of patients with MET Exon 14 skipping alteration NSCLC which may occur as early as Q2 2021, enabling a $25 million first sale milestone payment from AstraZeneca. If approved, savolitinib would be the first-in-class selective MET inhibitor in China;
Initiate global Phase III pivotal studies for the savolitinib plus IMFINZI combination in MET positive PRCC in mid-2021;
Initiate Phase II study with potential for registration intent for savolitinib in metastatic gastric cancer in China in mid-2021;
Conclude the SAVANNAH Phase II study (NCT03778229) for the savolitinib plus TAGRISSO combination in NSCLC patients harboring EGFR mutation and MET amplification or overexpression. SAVANNAH will inform final regulatory, biomarker and dose regimen strategy for global Phase III development in the second half of 2021; and
Initiate two further pivotal Phase III studies in China in NSCLC patients in the second half of 2021.
HMPL-689, an investigative and highly selective small molecule inhibitor of PI3Kδ34 designed to address the gastrointestinal and hepatotoxicity associated with currently approved and clinical-stage PI3Kδ inhibitors

Presented Phase I dose escalation data (NCT03128164) for HMPL-689 in patients in China with relapsed/refractory lymphoma at the ASH (Free ASH Whitepaper)35 Annual Meeting 2020 demonstrating encouraging efficacy and tolerability profile.
Potential upcoming clinical and regulatory milestones for HMPL-689:

Complete Phase Ib expansion study (NCT03128164) and present interim data in the second half of 2021;
Initiate Phase II studies with potential for registration intent in China in multiple relapsed/refractory non-Hodgkin’s lymphoma indications during 2021;
Complete Phase I dose escalation in the U.S. and Europe (NCT03786926) in Q2 2021 and initiate Phase Ib expansion studies in multiple non-Hodgkin’s lymphoma indications; and
Complete U.S. FDA regulatory discussions in the second half of 2021 followed by the initiation of registration intent studies in indolent non-Hodgkin’s lymphoma by the end of 2021.
HMPL-523, an investigative and highly selective small molecule inhibitor of Syk36, an important component of the B-cell receptor signaling pathway, for the treatment of hematological cancers and immune disease

Completed enrollment of Phase I dose escalation study (NCT03779113) in the U.S. and Europe; and
Completed enrollment of Phase I/Ib study (NCT03951623) in China of HMPL-523 in ITP37.
Potential upcoming clinical and regulatory milestones for HMPL-523:

Initiate a Phase III study in ITP in China in the second half of 2021.
HMPL-453, an investigative and highly selective small molecule inhibitor of FGFR 1/2/3

Initiated a Phase II study (NCT04353375) in China in patients with advanced IHCC38 with FGFR239 fusion that had failed at least one line of systemic therapy.
HMPL-306, an investigative and highly selective small molecule inhibitor of IDH1/240 designed to address resistance to the currently marketed IDH inhibitors

Initiated a Phase I dose escalation study (NCT04272957) in China in patients with relapsed or refractory hematological malignancies with an IDH1 and/or IDH2 mutation.
Potential upcoming clinical and regulatory milestones for HMPL-306:

Initiate a Phase I dose escalation study in the U.S. in patients with relapsed or refractory hematological malignancies with an IDH1 and/or IDH2 mutation in the first half of 2021; and
Initiate a Phase I dose escalation study in the U.S. in patients with solid tumors with an IDH1 and/or IDH2 mutation in the first half of 2021.
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.

Potential upcoming clinical and regulatory milestones for HMPL-295:

Initiate a Phase I study in China in mid-2021
Discovery, our in-house scientific team has been responsible for the discovery of all ten of our clinical drug candidates including our two approved oncology drugs ELUNATE and SULANDA

Potential upcoming discovery milestones:

IND-enabling toxicity studies are underway for three additional in-house discovered oncology drug candidates, two small molecules and one antibody. If the outcomes of these studies are as we anticipate, we will follow with IND submissions during 2021.
IV. MANUFACTURING OPERATIONS

Received surufatinib update to drug manufacturing license at our Suzhou manufacturing facility, following the NMPA approval in December 2020; and
Broke ground in December 2020 on our $130 million new Shanghai manufacturing facility designed to support a five-fold increase in small molecule drug product manufacturing capacity relative to our existing Suzhou facilities. We plan also that in the future the Shanghai facility will also establish scale biologics manufacturing capability.
V. OTHER CORPORATE DEVELOPMENTS

Announced a clinical collaboration agreement with BeiGene in May 2020 to evaluate combining surufatinib and fruquintinib with BeiGene’s anti-PD-1 antibody tislelizumab, for the treatment of various solid tumor cancers, in the U.S., Europe, China and Australia;
Announced a land compensation agreement in June 2020 with the Guangzhou government for the return of the remaining 34-year land-use rights on an unused plot of land under our HBYS41 joint venture in consideration for cash compensation of up to approximately $100 million; and
Announced a strategic partnership with Inmagene42 in January 2021 to further develop four novel preclinical drug candidates discovered by HUTCHMED for the potential treatment of multiple immunological diseases.
VI. EVOLUTION OF OUR CORPORATE IDENTITY

Today we announce the consolidation of the two corporate identities that we have used since our inception. Hutchison China MediTech, or Chi-Med, has been used as our group identity, while Hutchison MediPharma has been the identity of our novel drug R&D43 operations under which our oncology products have been developed and are now being marketed. We believe now is the right time to consolidate to a single and ubiquitous corporate identity that captures the history and brand equity we have built over the past twenty years.

Therefore, we have chosen to rename ourselves HUTCHMED. The brand HUTCHMED will immediately replace Chi-Med as our abbreviated name. We plan to formally change our group company name at our Annual General Meeting in April 2021, and the names of our key subsidiary companies over the balance of 2021. Our ticker symbol, HCM, will remain unchanged on the Nasdaq Global Select Market and the AIM market of the London Stock Exchange. We have also changed our website to www.hutch-med.com. The information required pursuant to AIM Rule 26 may be found at this address.

VII. IMPACT OF COVID-19

The COVID-19 outbreak initially posed some challenges to our operations in 2020 resulting from restrictions in travel. Our teams adapted quickly and were able to minimize the effect across our businesses. We will continue to closely monitor the evolving situation.

FULL YEAR 2020 FINANCIAL RESULTS

Change in Segment Reporting:

As a consequence of our recent commercialization of both ELUNATE and SULANDA and the possible approval and launch of savolitinib during 2021, we have decided to change the manner in which we report segment results in our financial statements. Effective from the year ended December 31, 2020, we will report two segments, (1) Oncology/Immunology, covering all activities related to oncology/immunology including sales, marketing, manufacturing and research and development with respect to our drugs and drug candidates; and (2) Other Ventures, which includes all other HUTCHMED businesses. We have retrospectively revised prior period segment information to conform to current period presentation in the financial information contained in this announcement.

Cash, Cash Equivalents and Short-Term Investments were $435.2 million as of December 31, 2020 compared to $217.2 million as of December 31, 2019.

Adjusted Group (non-GAAP44) net cash flows excluding financing activities were -$78.4 million (2019: -$82.3m) mainly due to Oncology/Immunology R&D spending and partially offset by dividends received from our non-consolidated joint ventures totaling $86.7 million (2019: $28.1m); and
Net cash generated from financing activities in 2020 totaled $296.4 million (2019: -$1.5m) mainly resulting from a Nasdaq follow-on offering in January 2020 and two private placements to General Atlantic45 and CPP Investments46 completed in July and November 2020 respectively.
Revenues for the year ended December 31, 2020 was $228.0 million compared to $204.9 million in 2019.

Oncology/Immunology consolidated revenues were $30.2 million (2019: $26.8m) comprised of $20.0 million (2019: $10.8m) in manufacturing revenues, promotion and marketing service revenues and royalties from the commercial sale of ELUNATE; and $10.2 million (2019: $16.0m) in research and development service fee revenues primarily from AstraZeneca and Lilly; and
Other Ventures consolidated revenues increased 11% (11% at CER47) to $197.8 million (2019: $178.1m) mainly due to continued sales growth of third-party prescription drug products.
Net Expenses for the year ended December 31, 2020 were $353.7 million compared to $310.9 million in 2019.

Cost of Sales were $188.5 million (2019: $160.2m), the majority of which was the cost of third-party prescription drug products marketed through our profitable Other Ventures;
R&D Expenses were $174.8 million (2019: $138.2m) mainly as a result of an expansion in the development of our ten novel oncology drug candidates. With six now in global development, our rapidly scaling international clinical and regulatory operations in the U.S. and Europe incurred expenses of $63.3 million (2019: $21.7m) while R&D expense in China was stable at $111.5 million (2019: $116.5m);
SG&A48 Expenses were $61.3 million (2019: $52.9m) primarily due to increases in staff costs and share-based compensation to support expanding operations. This included the build-up of a large-scale national oncology commercial infrastructure in China to support the launch of SULANDA and the assumption of commercial responsibility on ELUNATE; and
Other Items49 generated net income of $70.9 million (2019: $40.4m) resulting primarily from an increase in our share of equity in the earnings from equity investees under our Other Ventures in China which delivered solid underlying net income growth of 7% (9% at CER) in 2020 and also benefited from a one-time land compensation gain of $28.8 million (2019: nil).
Net Loss attributable to HUTCHMED for the year ended December 31, 2020 was $125.7 million compared to $106.0 million in 2019.

As a result, the net loss attributable to HUTCHMED in 2020 was $0.18 per ordinary share / $0.90 per ADS50 compared to net loss attributable to HUTCHMED of $0.16 per ordinary share / $0.80 per ADS, in 2019.
FINANCIAL GUIDANCE

We provide select Financial Guidance for 2021 below reflecting expected commercial progress on ELUNATE and SULANDA as well as the potential launch of savolitinib in mid-2021. While we do not provide net cash flow guidance for 2021, we do expect an increase in investment to support the many new potential registration studies we plan this year as well as the continued expansion of our organization in China, the U.S. and Europe.

To support our growth plans, we continue to actively evaluate non-core assets divestment opportunities as well as monitor market conditions for seeking further listings on other stock exchanges such as Hong Kong and Shanghai.

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.

Additional dial-in numbers are also available at HUTCHMED’s website. Please use participant access code "38028560#."

This announcement in its entirety is available at: View Source

FINANCIAL STATEMENTS

HUTCHMED will today file with the U.S. Securities and Exchange Commission its Annual Report on Form 20-F.

ANNUAL GENERAL MEETING

The Annual General Meeting of HUTCHMED will be held on Wednesday, April 28, 2021. Notice of the 2021 Annual General Meeting will be published and issued to shareholders in due course.