Okay, we'll continue with the next session. My name is Paul Choi, and I cover the biotechnology sector here at the firm. Our next panel is with HUTCHMED. We're joined by, to my immediate left, Michael Shi, CMO, and to my far left, David Ng with IR. What we'll do maybe is give Michael and David maybe just a minute or two to sort of give a quick overview of HUTCHMED before we jump into questions, and then we'll go with that.
Sounds good.
Great.
David?
Yeah, so let me do a quick introduction. We are HUTCHMED. We're a small molecule innovative drug company based out of China. We have already four drugs commercialized in China, and of the four, one of those four we actually also got the FDA and the EMA approval and launch already. We have global sales of about HKD 290 million from this product called fruquintinib, which is a VEGFR inhibitor for colorectal cancer. We do have a second one upcoming. It's currently in phase III trial. It's a c-MET inhibitor for lung cancer. We partner with AstraZeneca, so hopefully in maybe two years' time we will have our second drug being able to go overseas. Apart from this, what we call the bread and butter of our operation, we do have a next technology or next generation technology platform called ATTC, which I'm sure that Dr.
Shi will elaborate into in a while. We have a very strong balance sheet, over HKD 1 billion cash, profitable last two years, and we target to remain financially self-sufficient in the upcoming years.
Okay, great. Thank you for that, David. Maybe let's start with sort of the big picture, and I guess it's no secret or it's a fairly obvious thing to say that the U.S. and China are having a little bit of diplomatic tension here. This is something that's out of your control as a biotech company. Maybe to the degree you can quantify it or as you think about it, how does this sort of macro consideration affect you as a company?
I guess for the overall macro picture, of course, it's very unpredictable, so we can only try to do our best. I think one thing that we decided about two and a half years ago is for overseas market, we decide to out-license. While we do have the capability, the scientific and clinical capability to push through to the very last stage before approval, we decided at that time due to what you mentioned, geopolitical risk, as well as also the capital market uncertainty, that we out-license our product. In retrospect, it was a very good decision in the sense that we do get the upfront payment. At that time, the upfront payment accounted for almost half of our balance sheet.
At the same time, we got the mid-double-digit royalty from our partner, Takeda, which have been doing a fantastic job in launching the drug, and we continue to pursue this strategy. I know people will worry about different things, including tariff and things like that, but in this instance, the cost that we supply to Takeda is like a very small single- digit of the ultimate selling price. Even if tariff is being applied, it is a very, very small number or percentage of the ultimate sales of the product. Of course, we remain very vigilant of any latest development, but so far we have to say that the impact has been relatively minimal on our business, and we continue to pursue this out-licensing strategy for the overseas market. Whereas for domestic China, we do everything by ourselves, manufacturing and marketing and clinical development.
This is continuing to be our business model.
Okay, great. Maybe staying on the topic of Takeda and your partnership there, to your earlier comment, the launch today of f ruquintinib called FRUZAQLA here in the U.S. market has been going pretty well. You talked about your earlier partnership with AstraZeneca, but maybe at a high level and a strategic level in terms of markets outside of China, how do you think about continuing to develop partnerships or expanding on your current partnerships going forward here?
I think we continue to, and we will continue to work hard to attract overseas partnership. I think the gist of it is we do need to have good product and then good clinical data to support it. I think definitely in the history, that's something that really defined HUTCHMED. Our partnership, for example, with AstraZeneca was struck 13, 14 years ago when the product is just about to end the clinical trial. The data that you have just seen coming out from this product just like two weeks ago from ASCO is very impressive. I think there's a very strong case for us to secure even more partnership down the road for our future products. Again, the thing definitely is on the top of our mind is the ATTC program, which is about to enter into human trial later this year.
This is definitely a program that we will continue to discuss with potential partners, maybe when the data start to come out next two years. Again, the key thing is that we want to make sure that it's good quality data and good quality product to secure multinational pharmaceutical partners.
Maybe just to add on to David's point, right, for FRUZAQLA is very good experience, right? Our partner, Takeda, has a very strong base in a medical commercial setting in the U.S., in EU, and Japan, right? From the product launch perspective, they have a good penetration with the community of oncology, oncologists here in the U.S., and also just the growth in Japan is pretty impressive. They have massive experience, which we do not have the commercial end to accomplish. This has been very good so far.
Yeah. I want to come back to your point, David, in a little bit on the data you presented at ASCO, which I agree was very impressive in the context of the post-aggressive EGFR landscape. Maybe just sticking with FRUZAQLA here in the U.S., you have an approval here for previously treated or recurrent CRC, which Takeda is marketing here. Can you maybe talk a little bit about what is in the clinic in terms of potential life cycle management plans for this molecule and just thinking about how you might expand the opportunity set beyond CRC?
Yeah.
Maybe I'll add on to the point because in China, because of the earlier development, we have pretty good experience for life cycle indication. We just got approval for fruquintinib plus sintilimab in the second line endometrial cancer earlier this year. We have also recently announced the top line results for second line RCC, also fruquintinib plus sintilimab versus axitinib and everolimus in the second line RCC. We're going to present the data in a later conference, and the NDA has been submitted, and it has just been accepted by NMPA a few days ago. For our partnership with Takeda, initially we focused on some of the indications where we can generate clinical evidence, for example, in CRC, gastric cancer in certain areas.
Our partner, Takeda, is continuing to evaluate the life cycle and if we have taken the knowledge we have generated in China, position fruquintinib, FRUZAQLA as the life cycle indication globally.
Okay, great. You touched upon a number of opportunities, Michael, in China, one of which I think the most interesting and the largest probably would be the RCC opportunity just from an incidence, sort of mathematical basis here. Can you maybe just remind us in terms of the China market right now, is there utilization of PD-1 plus TKI combinations? I think typically in the U.S., people think of OPDIVO plus nivolumab plus cabozantinib or pembrolizumab plus another agent there. Just kind of what is the landscape like in China for you as for your sintilimab plus fruquintinib combination?
Yeah, so this is actually the indication if it is approved, it will be the only PD-1 plus VEGF in the second line setting. I think the market actually could be very, very good because if you think about a scale, although we haven't presented data yet, just the phase II data has been presented at ASCO 2023, we actually show 60% overall response rate and a pretty long progression-free survival, 16 months in that particular setting. This is what we think. This is unlike CRC, you have several months PFS, but this is actually a very long duration. Clearly show fruquintinib have a differentiated safety to combine with other molecules.
In the larger context in China, the dominant first line therapy is still VEGF inhibitor, although there are some you'll see start to see the combination of PD-1 VEGF show up in the first line setting. We think in the market potential with the unique second line setting with the only VEGF and PD-1 will have continued opportunity to penetrate the market.
Okay, great. Maybe sticking with the performance of Elunate in China, fruquintinib in China, can you maybe talk to us a little bit about what's the competitive dynamic like in terms of that particular product there and how does your recent label expansion in endometrial cancer potentially help to offset some of the competitive dynamics where I think you guys are first to get that indication?
Yeah, so definitely in China, things get competitive very quickly, as you can imagine. Of course, in the colorectal cancer landscape, our competitors start to have some generic substitutes in China. Now, of course, our patent still has a couple of years of runway, but then we start to still feel increasing competition for the colorectal cancer setting. Now, having said that, the endometrial cancer new indication is a good add-on to try to resume the growth rate. Now, last year we are at around single- digit growth rate for fruquintinib in China. Of course, giving credit that it is already the fifth year it is on the market. Coming this year, we have endometrial cancer, which of course has almost two times the duration of treatment than colorectal cancer.
As Mike had mentioned, the kidney cancer indication that we are now under review, if it gets approved next year, that will be another nice add-on. For renal cell carcinoma, it is even longer duration of treatment. Even though the number of patients may not be as large as colorectal cancer, the duration of treatment probably much more than offsets that. I guess the other thing that a lot of people worry about in the Chinese market is the pricing. Will the new indication severely discount the price again? We do not think that is the case. I think with the new or the latest trend of the policy, additional indication, there may be still a little bit of a discount, but it is not going to be that severe.
We think that these two new indications can help to sustain the growth of fruquintinib in China in the next three to five years.
Yeah, even for fruquintinib, it's been on the market for third line colorectal cancer for a longer time, but it's still generating continued support and evidence, right? I think from a physician perspective, getting fruquintinib approved globally also really impressed a lot of these physician treatment patterns because as a single agent, have a very good tolerability, duration on treatment. Continue our medical team and our commercial team will be able to continue to keep the dominating market share.
Okay. Maybe just briefly, you also talked about your recent EMA approval there as well and just kind of like what has the utilization, I guess, in Europe been to date? Can you give us a little bit of flavor as to what's been happening there?
Yeah, so I think we get first reimbursed in Spain, right? Takeda is really putting effort in the EU to get the reimbursement across country in the U.K., in Germany or so. The uptake has been strong. From their practicing perspective, getting reimbursement is the focus. Certainly this is the new molecule coming to the market, is certainly with the U.S., Japan approval generally a strong interest. The sales start to increase. Yeah.
Okay, great. I want to maybe switch gears a little bit and come back to a subject you brought up earlier, David, which is your recent savolitinib data presented at ASCO. Could you maybe sort of summarize what we saw between the various data sets? There's probably mostly a focus on the TAGRISSO progressors, but just maybe summarize for us the data you presented at ASCO and then we can go on from there.
Yes. SACHI trial is the phase III randomized trial across China in the phase III setting, right? These are the patients who progress on first line EGFR TKI, including first, second generation, and third generation EGFR TKI. About 35% of patients actually progress on TAGRISSO or third generation EGFR TKI. This is the all oral combo savolitinib plus versus chemotherapy in MET- amplified patients. From a science perspective, it is a clear driver for EGFR resistance setting. About a third of the patient population have the MET amplification. We have this combination savo plus osi versus chemotherapy. At the time, for the first interim analysis, about 66% information fraction achieved. We have randomized 211 patients. We have clearly shown the clinical benefit, right? The IDMC recommend early stop the trial due to efficacy. We have seen very strong clinical data.
The PFS for the control chemo arm is 4.5 months. Savo plus osi has achieved 8.2 months PFS with a hazard ratio 0.34. It is highly significant with a very significant p-value. We believe this is practice changing. Clinical data clearly show in the MET- amplified patients, this is strong clinical data regardless of the first-, second-, or third-generation EGFR TKI. We believe this is going to be, I mean, we are, they filed the NDA in China under priority review. Hopefully we can get that approved second part of the year. To bring into the context about the global setting, AstraZeneca is running the phase III SAFFRON trial. Also, last, I mean, ELCC in March, they presented a phase II SAVANNAH trial, which is a similar setting, not only including the MET amplification, but also with the MET overexpression patients.
They achieved 7.5 months PFS, over response rate 65%. It is highly consistent with SACHI data. This is going to be a very significant development not only for HUTCHMED in China, but also AZ with the registration trial ongoing. Hopefully they can develop, recruit a patient later this year. The top line readout will be sometime next year. That is going to be a significant value driver for this molecule in the global and the China setting.
Yeah. I want to go into the SACHI data. The number you gave of eight something months is the blended average between patients on first- and second-generation TKIs versus third-generation TKIs. You actually saw a higher response or better PFS in the patients who were treated with first- and second-generation drugs, if I recall correctly. It was even better there. You mentioned that the SAVANNAH data in terms of the global cohort versus the China-only cohort in SACHI is pretty comparable on average. I guess one of the things that stood out to me was the discussion's comment at ASCO that this is potentially a new standard of care for this population, as you said, likely practice changing.
We also saw over the weekend some other EGFR treatment experience data from the HARMONY A study, which was also briefly discussed during the ASCO panel. It's not exactly the same population. It's not MET amplified or MET overexpressors. Can you maybe help us contextualize again what population you guys are looking at versus some of the other EGFR combination studies?
Yeah, thank you, Paul. This is actually a very good question. I have a very important one because for the savo- osi combo, it's the only oral combo in the biomarker-selected patient population because amivantanab and MARIPOSA-2, HARMONY also, these are unselected patient population. What we observe, I mean, just compare apple to apple for the post third-line, third-generation EGFR TKI resistance, that's really representing the global practice. We have a third of the patients in the SACHI trial also fit in that category. What we observed is the PFS in chemo control arm. Remember, these are MET-amplified patients with the fresh biopsy after progression. These patients actually perform very badly because the overall PFS is only three months. In this patient population, savo plus osi achieved 6.9 months PFS. Again, the hazard ratio is very significant, 0.32.
Also, very interesting to your point, we also observed MARIPOSA-2 published their biomarker data in the ASCO, same ASCO setting. It is very interesting because the control arm for MARIPOSA-2 is very similar to our SACHI third-generation EGFR TKI with the PFS 3.1 for the chemo arm, similar to our chemo arm. The amivantanab plus chemo, the PFS only 4.4 months, which is not that significant. You actually start to wonder, right? Because these are poor prognosis, MET-driven disease. We actually are surprised actually amivantanab did not perform that well for the SACHI data. It tells us the combo with the EGFR TKI and the MET inhibitor demonstrated the most significant response in this patient population.
We think moving forward in a biomarker selected patient population, the MET inhibitor plus EGFR TKI is going to be a more efficient or more efficacious treatment regimen for patient and this physician to select the treatment.
Yeah. Maybe just contextualizing against the bispecific HARMONY data that came out over the weekend. We do not have all the details yet, right? Just maybe high-level thoughts there.
Right. So the HARMONY data, what they report is they have achieved the PFS benefit, right? Similar like the China trial, but the OS is towards the trend, but it really demonstrates the OS benefit. Also contextualize about this treatment for the SACHI trial what we run is actually the patient once they progress on the chemotherapy, they will allow to cross over the MET TKI. In the SACHI trial, over 55% of the patient actually cross over to the MET inhibitor. What we observe is also there's an OS trend increase with five- month OS improvement. Although in most of the patient cross over the EGFR TKI in this MET- driven patient population, we think demonstrate OS benefit is actually not easy, but we actually start to see that separation. At this point, the OS maturity rate is only 40% for SACHI.
Less than half so far.
Yeah. So we can continue to follow up on the OS data. On a global set, the SAFFRON trial, which AstraZeneca is running, actually will not allow the patient cross over the EGFR TKI, the MET TKI. So we would think in the global setting, there is a high chance they can not only demonstrate PFS, but OS benefit could potentially be also wider than we anticipated in SACHI.
Just to add on that, right? All these other trials are not MET-specific patients, right? They are all comer. For the longest time that we were trying to figure out for MARIPOSA-1 and -2, which got approved for all comer, how do they perform in MET-specific subgroup? We do not know until actually the ASCO data come out that the MET-specific subgroup perform worse than the MET non-comer.
Yeah.
That's a bit interesting. I mean, we can only speculate maybe because these antibodies just can attach on the surface of the cell, whereas for us, which is a small molecule, we can bind to intracellular receptor and that may play a role in our efficacy being superior when we do this cross trial comparison.
Okay, great.
We also have seen this, right? From clinical practice perspective, these patients have very poor prognosis. You almost have to identify the driven disease given the most effective treatment early to give them actually a second chance to see the post- treatment therapy. Testing MET is certainly important. I think the clinical physicians really realize testing that MET amplification is very important in order for patients to select the most efficacious treatment at that point.
Maybe just one more on your last point, Michael, I think the presenter at ASCO mentioned that in the China SACHI study that the patients were identified through local FISH mostly. Just for the global study SAFFRON, how are patients being identified there? Is there a standard? Is it just based on local practices? How do you harmonize for that and just make sure you're identifying the correct patients here?
Yeah. For SAFFRON, it's actually AstraZeneca defined the biomarker selection for the amplification FISH and also the IHC for MET overexpression with IHC 90+ patients. That includes even broader patient population compared with SACHI. We think this is going to be, I mean, it's actually quite standard. Even in the China development, we actually followed the SAVANNAH- developed the biomarker selection criteria. All these are centrally tested biomarker in order for patient to be recruited to the trial. Yeah.
Okay, great. Maybe the last one is you talked about data potentially coming in 2026. Is that still the case here? And then just sort of thinking about timelines for you and your partner to do global regulatory filings, will that also happen in 2026 as well?
Yeah. As I mentioned, the recruitment is close to finish. Our partner projection, the SAFFRON readout will be next year. The global filing will soon follow. Yeah.
Okay, great. Maybe turning to other aspects of your pipeline. I've always felt like in the past years too, one of your most promising internal assets has been also savolitinib which you've worked on and you've shown very strong data in ITP in Chinese patients. And you've also filed on it. Can you maybe just remind us for what you saw in your China- only study and then just sort of what rough timelines with the NMPA might be for it since you filed?
Yes, right. We presented the ESLIN 1 data at EHA last year, showing very robust durable response rate, which is the primary endpoint, right? Because just to give you a context, for fostamatinib, it was another SYK inhibitor first marketed leading to the approval. Have overall, I mean, the durable response rate 18%. SACHI ESLIN 1 data, we showed sovleplenib in the second line setting ITP observed a durable response rate 48%, which is really not only compared with the SYK inhibitor, but also different modality of treatment. This has really shown very impressive durable response rate. We filed for the China NDA and it was under review at NMPA. During the report review process, we actually observed, based on the discussion with the CDE, we're addressing there's an impurity issue. We actually changed the excipient for this formula.
We are continued testing the stability on the rolling base. We updated the agency about the stability data. Our current projection is going to targeting for the approval later this year.
Okay. So that would potentially be included in the next round of drug pricing considerations if you make it through, get a decision in this calendar year, am I correct?
June 30th tends to be the usual time. Yeah. So it will be in the next month, 2026. Yes.
Okay, got it. Okay. Maybe just broadly speaking, I think this asset has potentially multiple applications as well as probably should be considered for global markets and other opportunities. Just in broad strokes, what are your global development plans here?
Yeah. We are continuing to evaluate the global development plan, right? Because as you can see, international development, you have to consider all the other competition. Now, latest we observed suddenly filed the BDK inhibitor and also the CD38 monoclonal but also in the global registration. We are actually evaluating the treatment landscape about the government. Certainly we'll have the thinking about how we can develop this molecule for the global market. Yeah.
Okay, great. Maybe in terms of other considerations for this molecule, you've mentioned in the past thing about follicular lymphoma where FL as a potential adjacent opportunity here. I think typically standard of care here in the U.S., European and most major other markets has been BTK utilization. So can you maybe talk about the pros and cons of sovleplenib versus maybe what I think is standard of care, which typically is BTKs here?
Yeah. I think what you mentioned at sovleplenib, we do have a follicular lymphoma development. We do have pretty good data presented in this setting, right? As you know, we also have China ripe for another molecule, the EZH2 inhibitor in follicular lymphoma, the tazemetostat. We actually got it just approved this year. We are launching the product in a month or so. In terms of the treatment landscape, tazemetostat is our first push for the hematology product, third line follicular lymphoma. Also in our collaboration with partnership with Ipsen, we are running a global SYMPHONY-1 trial, try to move it into the second line setting. That trial is ongoing combination with RSQUARE globally. That is also our priority to move it to early line, second line follicular lymphoma setting.
For sovleplenib, we are still evaluating in terms of the treatment landscape, how we're going to develop program. To your information, also we have another molecule is a BDK inhibitor. And we are also generating quite interesting data. We're thinking about how we in the hematology space, how we can really fully develop a HEM pipeline globally.
Okay, great. From Dr. Suhan down, you guys have excelled at working on medicinal chemistry in the small molecule space. In recent years, you've also talked about other modalities, including ADCs and other mechanisms to some other degree. Can you maybe just at a high level in the time we have left, talk about sort of what are your other modality efforts, at least at this stage, and when we might start to see a little bit of clinical data from those programs?
Yes. Earlier this year, we actually announced we're focusing on a new kind of a platform. What we call is antibody target therapy conjugate, ATTC. This is the new platform we have developed in pharmacy. It really leveraged our 20 years of experience in small molecule, linking this small molecule to the antibody. The first wave of antibody we selected, these are clinically validated antibody that has a function activity in the multiple tumor type, linking with our target therapy because a lot of reports showing the toxin-based ADC patient readily develop a resistance, particularly for patient with genetic driver mutations. Our approach will have the opportunity to addressing the resistance for the traditional ADCs because the key advantage is really by linking this antibody because traditional small molecule oral target therapy also have a narrow therapeutic window.
If you want to have a sustained tumor suppression, it needs a higher dose and then you see the safety issue. This approach, the ATTC, will allow us to deliver the target therapy precisely into the tumor and have a sustained expression. The preclinical data show very robust data. One dose of ATTC has a two weeks, three weeks sustained tumor suppression. There is also the opportunity to combine with other treatment modality, for example, the immunotherapy, target therapy, and also chemotherapy because we know a lot of companies for these toxin-based ADCs, it is almost impossible to combine with the other standard of care like chemotherapy in the earlier line setting. Our ATTC approach really allows us to combine with all these different standards of care in order to move earlier lines.
The approach for us is selecting the target therapy to targets with a broader mutation frequency and also these functional mono can cover very broad tumor type and allow us to combine with different therapies to really helping to prevent the disease progression and have a higher chance to win in the earlier line setting. That is a focus for our company in the next few years. The first few molecules, we are the nominee three preclinical candidates enabling the GLP tox package study now. Our first ATTC will be in the clinic this year. We are targeting two IND submission this year.
Okay, great. We're up on time here, so we'll have to end it on that note. My thanks to Michael and David for joining us here at HUTCHMED.
Thank you for having us.
Thank you.
Thank you.