Here. Please join me in welcoming Mr. Michael Shi, Chief Medical Officer, and Mr. David Ng, Director of Investor Relationship from HUTCHMED, for this first chat session. Welcome both.
Thank you.
Thank you.
Maybe let's begin with some high-level overviews of the company before going into details about the commercial products and extensive pipeline programs. What are HUTCHMED's current key focus and priorities, and what should investors be focused on in the near term?
Yeah, thank you, Kelly. Yeah, so HUTCHMED is a biopharmaceutical company, headquartered in Hong Kong, and we have a global development plan. We have four products now in the China market, and globally we have fruquintinib approved in the U.S. and worldwide, partnership with Takeda. For the company, I think the near-term focus for us is really trying to accelerate our new life cycle indication, including fruquintinib, surufatinib, and savolitinib for China new indication development. Globally we partner with AstraZeneca, also for the savolitinib development outside of China. As you can see, for fruquintinib, we have new indication approved in China with endometrial cancer. Last night, actually, we announced our second-line renal cancer also got NDA acceptance in China. Additionally, the other new indication is in development. Also there are new products, including our in-license product, EZH2 inhibitor, also got approved in China.
Near-term, we think we can accelerate the growth by new product, new life cycle indication development, and also our next wave product also in late registration phase in gastric cancer for Savolitinib. We have our fruquintinib, our FGFR inhibitor. We have our IDH1 and IDH2 inhibitor in the hematology development. Probably longer term, we are going to talk about a new platform, hopefully will accelerate the growth.
Fantastic. It was a great achievement announced last year. HUTCHMED became profitable from an accounting perspective. If we are considering the revenue projection and also you have a growing clinical pipeline, do you think on the financial front, moving forward, we would continue to expect the company to be profitable? Is this one of the goals, financial goals?
Yeah, maybe. Yeah.
Sure. So thank you, Kelly. I think we used the word financially self-sufficient. Basically, you know, I think, you know, we were profitable not just last year, but the year before, probably because of some big one-off item. We expect that ongoing we will be continuing to be financially self-sufficient. That will be driven definitely increasingly by the sales of our innovative drugs, which we collect a royalty and some manufacturing income from. That will continue. We also have a very strong balance sheet, over CNY 1 billion cash, of course, with the recent disposal of some non-core asset that has also strengthened our ability to invest more in the R&D in the upcoming years.
Fantastic. Also, with the rising interest in China biotech, we have experienced several high-profile deals from China assets. Curious, for HUTCHMED, actually in a pretty sweet spot, has a very strong balance sheet. How do you think about on the BD front? Maybe talking about BD transactions from both directions.
I think, you know, yeah, that's definitely correct. Like we are now considering two directions. I think on one hand, we have a very established sales team in China. We have the manufacturing facilities as well. If there are late-stage products or maybe even already generating earnings products in China, we definitely have the capacity to incorporate. That's definitely one direction. The other thing that I think, you know, Mike will elaborate further on is our upcoming ATTC platform, right? That one so far is 100% in-house, whether the large molecule side, the linker, and the small molecule targeted drugs, these are all in-house. This platform, if proven to be workable, will have a lot of opportunities, right? Including on the large molecule side, we can think of, you know, collaboration or various forms of cooperation opportunities with other companies.
That will be another area that we will consider down the road in terms of BD.
Fantastic. Move to commercial pipeline. A lot of recent focus is Fruquintinib about its commercialization path in the U.S., where you have partnered with Takeda. It was approved late 2023 and for previously treated metastatic colorectal cancer. How has the U.S. launch progressed so far? And what feedback are you receiving from prescribers and payers?
It has done fantastically last year, especially at the beginning of last year, I think exceeding expectation of a lot of investors, as well as from Takeda as well, as compared to the initial expectation. You know, we continue to have a lot of confidence in this product, you know, not just the better efficacy than the incumbent, but also the safety profile is also much better. As you know, the sales, especially in the initial stage, may be a little bit bumpy, right? You know, some quarter the growth may be better, some may be, you know, less impressive. We think that, you know, Takeda has been doing a great job. According to Takeda, the guidance is over 20% growth for the upcoming fiscal year.
That, of course, includes not just the U.S., but also Europe, where, you know, we will expect more countries to include in the insurance coverage. Also, Japan, if you notice that the latest quarterly data, the sales in Japan have been very impressive as well. We continue to have a lot of confidence that, you know, fruquintinib overseas will continue to have very impressive growth in the upcoming years.
Yeah, maybe I add on a little bit from prescriber, right, investigator side, because I've been talking to our Takeda commercial colleagues and also the U.S. prescriber for so. I think it's, you know, the market is very excited about Fruquintinib, right? This is over a decade for the third-line colorectal cancer. So this is the first non-biomarker selected patient population clearly demonstrated OS benefit and with a very good safety profile because we've been asking a lot of investigators and what is the market feedback. Can you tell me anything not good for this compound? So far it's overwhelmingly, you know, positive. We are quite excited for the new product launch. As David said, we're really working very well with our partner and Takeda. Hopefully I think the market share with the new approval, with the additional insurance coverage, the commercial launch will continue to be successful.
How should we think about launch trajectory in the coming quarters and also the mix of its use across the different lines of therapies?
Yeah. So, you know, of course, Takeda is our marketing partner. Unfortunately, they did not give such granularity in the guidance. You know, the only thing that is more kind of black and white is more than 20% growth. Definitely we think that, you know, it has done very well in the fourth-line setting. I think last year they did some market share in fourth-line, and it was very impressive in the ramp-up. Third-line may be a little bit lacking last year, but that will probably pick up as well. Yeah, you know, there's no true definitive guidance in terms of the breakdown.
Yeah, maybe I just add on. I think Takeda has a very good, you know, strong communication oncology engagement. I think from their perspective, right, have a very good strategy to starting from late line, moving to the third-line. So the trend is actually favorable. We, you know, as our partner said, they're seeing increasing uptake in the third-line CRC place.
Can you also comment on opportunities besides China and the U.S.? Your partner have sent fruquintinib actually into other geographic locations like Europe, Japan, and some other countries. Would you mind to give us like a revenue projection from that region as well?
Again, like I think the projection per geography, it's a little bit lacking at this stage. We, of course, defer still to Takeda official guidance, which is like a global growth of more than 20% for the next fiscal year.
Okay. In the global market, what is the plan from you and your partner to expand opportunity beyond the CRC?
Yeah. I think our partner is, I mean, in China, we have done a lot, right? As you can see, we get approval in endometrial cancer, in RCC. We just filed a data acceptance for RCC, the company released yesterday. For our partner perspective, they're very, you know, producing, they have a pretty solid plan to have evidence-generating cell trials. For example, in the RCC, gastric cancer and the area, they think the medical knowledge in ex-China patient population will enhance the development for this product. Yeah.
Okay. Maybe switch gear to c-Met inhibitor, Savolitinib, and you have ASCO presentations. Maybe for the investors, not actually get up to date. Could you share with us what's new at ASCO?
Yeah, so thank you, Kelly. I think this is really an exciting ASCO for HUTCHMED because our SACHI trial, which is in the second-line non-small cell lung cancer patient who progressed on prior EGFR TKI developed by MET amplification, this is one of the major resistance mechanisms for EGFR TKI. The SACHI data is a China phase three trial, osimertinib plus savolitinib versus traditional chemotherapy in biomarker selected patient population, those patients with MET amplification. We have reported the top-line data for SACHI clearly demonstrate in this patient population have a very strong efficacy and good safety data for this combination because the PFS is the primary endpoint for the overall patient population. The PFS increased from 4.5 months to 8.2 months, which is really a hazard ratio 0.34, very robust data. We see very consistent overall response rate, durability of the response.
Generally, a lot of interest for this combination because it's the only chemo-free oral combination with the patient with very high unmet needs. This is from the investigator's perspective, have a lot of interest for this combination. Yeah.
Fantastic. Congrats on the achievement. Can you also comment on the overall tolerability profile? As you mentioned, it's non-chemo combo, especially in contrast to MARIPOSA two trials. Also, maybe help us to understand how the bispecific AMI from J&J, their regulatory status in China.
Okay. Yeah. So yeah, I think from safety profile, we have known, we haven't seen any new signal, right? The combination is actually very well tolerated. If you look at the, because SACHI trial is, you know, is a randomized trial with a true comparator, you can actually see versus chemotherapy, we have significantly less hematology toxicity. Overall, the tolerability and in terms of the patient on treatment, discontinuation, or interaction is very, is much lower than the chemotherapy. I'm also glad you mentioned about MARIPOSA two because this is one of the area for amivantanab, right? You can see the chemo combo with AMI is really show a lot of burden in this setting because not only the chemo related toxicity, but also the much, much longer, I mean, the healthcare burden, right?
All those pretreatment, the KUKURN trial add a significant burden for the patients to be tolerable for this treatment. Also, this is very interesting, a little bit add on for the efficacy perspective because MARIPOSA 2 published their biomarker for them at this same ASCO. What is very intriguing is you see the patient who failed first generation, I mean, who failed the prior TKI treatment in the worldwide population is osimertinib. You look at this poor prognosis patient group, the PFS is 3.0 for the chemo arm, which is almost exactly the same as the SACHI chemo arm is three months. AMI plus chemo only deliver 4.4 months PFS. In the same setting for SACHI, we do the OSI and savolitinib, we see actually 6.9 months difference.
In the truly in the biomarker selected patient population with a poor prognosis, savolitinib plus osimertinib truly demonstrates a much better efficacy, not only from a safety perspective.
Any feedback you hear from physicians at ASCO in terms of their preference for oral versus IV regimens?
Yeah, I think they're just pretty much universal. You talk to the investigator, they're very excited, but all these are oral regimen, right? Particularly for the AMI plus chemo, you do see this is a high burden and also the tolerability. Clearly physicians are very excited about the potential new options coming up in this setting. Yeah.
How big is this MET overexpression population in second line?
Yeah. So it's about 1/3 . For EGFR TKI failed patients and within this group of patients, those who can meet our MET amplification, it's also MET high amplification, it was about 34% previously from a SAVANNA trial. That seems to be about roughly one third.
Could you also remind us of where you and your partner are at in terms of the full scale development plan for savolitinib?
Yeah. Let me talk about clinical development, right? Because just similar to SACHI, which is a China phase three, our partner AstraZeneca also developed, you know, have a parallel global trial, Safron, which is close to the full recruitment and with the expected readout next year. Slightly different is the Safron trial not only included MET amplified patient, also has a MET overexpression. That will potentially broaden the patient population for the EGFR resistant MET amplified patient population. Also our partner is running a papillary renal cell carcinoma trial. For HUTCHMED, we have quite some clinical development, not only in the non-small cell lung cancer, in the second line SACHI trial, but also we have a first line Sanovo trial is currently ongoing in China. In the first line, MET overexpressed patient population.
We also have a MET amplified patient in the third line gastric cancer. That is a single arm registration trial. We agree with the CDE. Currently, we have reached the full recruitment. We anticipate the data readout later this year could potentially broaden the indication for the gastric cancer.
I just want to maybe at one point, of course, the ultimate market size, different people will have different assumptions, also very depending on the pricing, ultimate pricing. I think one thing that comes out from the ASCO presentation is that, you know, our c-Met inhibitor will be very competitive for biomarker specific patients. Increasingly, you have different modalities for second line lung cancer, but most of them are not biomarker specific. Actually, you know, I think back in April during the ELCC conference and in a panel, some of the physicians start to get confused, like, you know, what will be the future standard of care for second line lung cancer after EGFR TKI fail? One of the things that they hope to achieve is that maybe we can have some biomarker specific therapy. I think our savolitinib definitely fits into that category.
As long as the patients have done the biopsy and proven to be MET amplified, you know, savolitinib may be the only choice out there, right? For the remaining two thirds, of course, they still have to struggle to find out what is the SOC. But you know, for those which is like MET amplified, you know, it will be coming clear and clear that, you know, savolitinib is the choice.
Okay. Maybe switching from oncology pipeline and talk about a Syk inhibitor, sovleplenib, and you have presented ITP data and also wAIHA data in the past year. Can you help us to understand where are you on the regulatory front and also how to understand the market potential in China first?
Okay. Yeah. So we announced earlier this year, right? Due to, you know, discussion with CDE, we have a new formulation with a change of excipient. So we'll continue to, we have a rolling submission for this NDA review and we have a longer term stability testing, but we're still addressing the question. Our anticipation is with the stability with the new formulation, our target approval is this year. In terms of the market, you know, I'll let David.
Sure. This one's slightly different from our other products in the sense that it's a chronic disease. There are a lot of existing patients, even in China. We're talking about active treatment patients will be over 200,000, and there will be another 200,000, which basically has given up because of lack of alternatives after they have, you know, become refractory to existing treatment. This is talking about like a, you know, more than 400,000 patient market size. Of course, the key is the duration of treatment, which is of course maybe different in China than in the Western world. I think, you know, we're talking about at least like, you know, six or seven months per year. That's actually presented a very decent market size out there.
I think for our efficacy data, which we have presented earlier, we are way better than all the other so-called later line alternatives out there, whether under development or already approved in the Western world. We have a very good confidence that if our product gets approved and launched, it will have a very good competitive positioning.
Can you also share the pricing point relative to global, the drug actually used in global for the same indication?
I think it's a little bit too early to say. Of course, in China, you know, we also have to, you know, discuss with the authorities if we want to get included in the insurance coverage, you know, but you know, that will come. I think, you know, when it gets approved and launched, we will, you know, actively engage with authorities to do that.
Yeah. So just one more thing, right? Because in China, they only approve the product, right? The steroid first line, you have the TPO, TPO -RA, but this is a truly, you know, novel mechanism first launched in China, right? Because not only Syk inhibitor, they can prevent the macrophage, destroy the platelet, but also they can inhibit the B cell production autoantibody. From a novel mechanism perspective, we do think this deserves a premium pricing compared with the TPO, the same mechanism. Yeah.
Maybe lastly on ATTC platform and CEO Dr. Xu actually introduced this novel modality, one of the costs, but I would say it's very sophisticated and in a way that could you help us to understand by using a mature established modality for comparison? What does ATTC can do, maybe like targeting on drug or targeting or any other like aspects that established modalities cannot do?
Yeah. This is a new platform. Actually, we first disclosed it earlier this year, but it's pretty much a major effort at three years in the cooking, right? Because HUTCHMED is, as a biotech company, we have over 20 years of innovative drug development experience. Our real strength is medicinal chemistry. What is different from ATTC to traditional toxin-based payload is really the payload we chose for the ATTC is a small molecule target therapy as a payload. What it will do is there are two components, right? The antibody part we select for this molecule is the commonly biologically validated functional antibody. Pairing with the target therapy, the first wave of the payload we chose, the target therapy is a major pathway targeting major genetic aberration and also some of the key signal pathway. You potentially have a very broad coverage for multiple tumor types.
What is unique for this, we have pretty strong preclinical proof of concept data really showing a, you know, this combination really bypasses some of a lot of these challenges, the small molecule phasing. When you do the RR route, you know, the therapeutic window can limit some of these developments, but this conjugated product can allow the precise delivery of the target therapy intracellularly for a sustained period of time. A single injection could last two weeks, three weeks, right? Just like the common ADC. If you look at the traditional ADCs, right? It is basically a chemo payload, right? You encounter a lot of these chemotherapy related toxicity.
The advantage for ATTC, not only in the selected population, it could have a better efficacy, long sustained tumor inhibition, but also it's amenable to combine with all the other therapy, let it be target therapy, immunotherapy, and also the standard of care chemotherapy. We'll allow this, you know, this class product to be moving to the earlier line of therapy because as you can see, a lot of these traditional toxin-based ADCs, it is very hard for them to beat the standard of care therapy, chemotherapy in the front line setting. It is also very difficult for them to combine with any chemo-based therapy. I think our product has a unique advantage to really allow to move to the earlier line. Yeah.
Okay. Fantastic. We will wrap up our session here and thanks both for a great discussion. Thanks everyone for attending.
Thank you. Thank you.
Yeah. Thank you.
Thank you.