Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Healthcare services will be a main area of focus for HarbourVest’s China investments this year, as the country’s ageing population and growing household income drive demand for “more premium and better healthcare services”, including outpatient treatment and elective surgeries.
https://www.scmp.com/business/banking-finance/article/3251567/china-drive-private-market-opportunities-asia-healthcare-consumption-offer-pickings-harbourvest
Bit early to assess fully, but drop in HCM shorts by 12% or so..
https://www.sfc.hk/en/Regulatory-functions/Market/Short-position-reporting/Aggregated-reportable-short-positions-of-specified-shares
The quote from Takeda in their Q3 to 31/12/23 presentation was;
"Strong uptake following U.S. FDA approval in November 2023 for metastatic
colorectal cancer (mCRC) patients previously treated with certain anti-cancer
medicines, with new patient starts exceeding expectations"
Sounds promising
FY 31/3/24 - reporting on 9 May may comment on Q1 sales of Fruq
Q1 sales 31 July. (Links to HCM H1 royalty revenues)
Q2 sales 30 October (should show continuing take up in US)
Likely to be our earliest sight of HCM revenue (NB not product sales but royalties and manufacturing fees)
Seems to be $44m US…which is flat on the 22m achieved in H1.
Volume is up so HCM manufacturing fee gives a greater share of revenue to HCM.
Looks like HCM will consolidate $30m
Expecting HCM product revenue to exceed 160m, but not by much, 170m would be a good result…..may get to 200m in 2024 if Elunate GC and Sovlep are launched mid year, Hence they will still be burning cash reserves 24/25.
HCM at the end of H1 had $850m in cash and growing, R & D is on the decline, plenty for incremental purchases over 12-24 months.
Checking the register with the public info shows no change in major holders for sometime, buying back 5% would take some time and may not be successful due to illiquidity and/or rising share price
Alibaba has just announced a further increase up to 2027
'Alibaba said the $25 billion increase is added to its share repurchase program through the end of March 2027, bringing the total available under the plan to $35.3 billion.'
A 5% buy back would cost around HK$1bn or £100m/ $130m.
I just dont see the Board doing it on current revenue visibility - there is too much uncertainty to be sure of being cash positive from drug sales. Of course if they land an international partner for Sovlep, then a large upfront payment may change the picture somewhat.
As for M&A, CKHH will need to be persuaded of the merits….a deep pocketed Western pharma can easily afford HCM even with a 100% premium….local offers may be more share based with lower premium…there are significant cost savings to be realised with overlapping programs with Innovent / Beigene etc but we dont know whether there are change of control terms in the licenced products that could strip product value out of any deal…it is complicated when potential M&A partners have competing licensing arrangements..
I think there is probably a moral obligation as Hutchmed is HK based and listed, not to mention a large proportion of its sale and development originate in China.
HCM is listed in HK which will mean at least some exposure to these initiatives via the ETF purchases, don't think they are done yet..
https://www.cnbc.com/2024/02/07/china-appoints-markets-veteran-wu-qing-as-new-chairman-of-securities-regulator.html
Cash flow is strong with enough capital reserves to support a modest (see SFOR) share buy back, free float is only around 20% so 5% should be more than enough imo.
That’s is correct. We agree, this company is not going to give any dividend for, at least, another couple of years.
What about Mergers and acquisitions? It is also mentioned in the circular. Jatw, what is your opinion regarding lack of ‘interests’ , so far, from other major companies? Market capital is less than $ 2.5B as per today’s data.
Mr To is CKHH’s man…..he will get his orders…..difficult for the Board to do anything that CKHH does not want.
HCM itself is too small and not yet listed in the mainland so will not be on the radar of the chinese financial market regulator…..the same cannot be said for China legacy pharma, esp those with CCP owners.
BTW when do you think HCM will be making sufficient profits to enable significant returns to Shareholders? I cant see this until 2026/27. The 2024 NDAs should lead to marketing approvals during 2025 and first full year of sales in 2026…..so that is my earliest timeframe for determining excess capital.
Its going t be very difficult for the board to just ignore these requests, not only are they coming from shareholders but government regulators too.
Copy and link article to board, more the merrier imo.
Thank you both for posting this here .
“The regulator also urged listed companies to bolster their value through share buybacks, stock purchases by major shareholders, regular dividend payouts and merges and acquisitions…”
Precisely, what we have been shouting from this messaging platform for many days!
With the right incentives in place, owners and executives should be aiming to advance share prices…..when the regulator has to remind companies of this, there must be great concern about popular discontent in the CCP.
I don’t think the HCM board is in a position to declare it has excess assets to do a buy back yet..although that is quite a likely outcome in 2026/27…..but it might see short term opportunities to buy mainland operations…..the regulatory door would appear to be open to this…and if you dont pay much premium over the hard assets acquired there is limited risk..
This is the official line, have the Hutchmed board seen this?, if so what measures are being taken in response?
"The regulator also urged listed companies to bolster their value through share buybacks, stock purchases by major shareholders, regular dividend payouts and merges and acquisitions."
https://www.reuters.com/markets/asia/china-regulator-unveils-more-curbs-short-selling-2024-02-06/#:~:text=BEIJING%2FSHANGHAI%2C%20Feb%206%20(,efforts%20to%20curb%20short-selling.
Now we have some analysis of the Frutiga results, Takeda will need to decide whether to progress to a global study…..If they do, they will need to consider the design and end points, The PFS data looks strong, with OS harder to determine. From a patient perspective PFS may be just as significant as OS
how long it will take to hear their decision?
Central Huijin said it has expanded its purchases of exchanged-traded funds linked to the country’s onshore stock markets to safeguard market stability.
China’s securities regulator has made several statements over the past few days aimed at stabilizing the market including warning against “malicious” short-selling.
https://www.cnbc.com/2024/02/06/chinas-tools-for-propping-up-its-stock-market-warnings-liquidity-boost.html
According to a statement from the China’s securities and regulatory commission, it would “guide institutional investors ... to enter the market with greater efforts.” This comes at a time where a clear lack of targeted stimulus from Beijing weighed on market sentiment.
https://www.cnbc.com/2024/02/06/asia-markets.html
What made the dead cat to jump? Trade volume of 7 million HKse. Has there been any significant news?
Twice or even double regular volume days, jumpy times for traders ..
I am beginning to fear the worst for the Amdiz study….an NDA was suggested by end 23 but there has not even been news of the results….
They should tell us the bad as well as the good news….rather than just quietly dropping it into a pipeline update….it was prominent in last year’s milestones and there is no hiding from it.
Having said that, it could just be administrative delays….the Sovlep read out was given in (august/sept?) but missed the Y/E NDA target by a short time.
Indeed, but even the very best trampolines have yet to master perpetual motion.
…it would appear so
The value of the 4 assets licensed to Inmagene is probably not counted towards their future profitability aim….the two assets (IMG 004 and 007) are shown on the Inmagene pipeline as entering Ph 2….the phase 1s ran from 2022-23. Still several years from a regular income stream for HCM
I agree with 1pencil….very difficult to achieve.
It is only CKHH that could do it…and they would need to bid for the whole company…..the NEDs and advisor roles would be critical…..as they would need to consider the fairness and reasonableness of any offer for all shareholders.
HK used to have some rules that allowed creeping takeovers without a formal offer, I am not sure if those rules still exist….but that would require CKHH to buy in the market or perhaps a buy back of shares raising their stake over time…..
CKHH has a number of listed subsidiaries and as far as I am aware has not actively bought any out. Ownership % range from 15% to 75% - It has sold /merged a few of these with other listed companies eg Orange to Mannesmann/Vodafone, HTA (3 in Australia was listed and then merged with Vodafone and then merged again recently (the listing remains), Husky Oil was merged with Cenovus.
It does have large unlisted businesses (and has traded a number of Telecoms entities recently) and I would not be surprised if at some point CKHH looked to merge HCM with another business….whether that is listed or not will depend on the potential partner (eg a PE backed entity would not be, but presumably we would get a cash offer in that case).
CKHH is a relatively benign owner it holds HCM as an investment/Finance asset and while it has supported past development it has not put more cash in for some time and has been content for its ownership share to reduce. I think they will continue with this approach and be happy with a 15%-20% stake in a larger entity in time.
HUTCHMED Announces that Inmagene Exercises Option to License Two Drug Candidates as Part of Strategic Partnership
Hong Kong, Shanghai & Florham Park, NJ — Friday February 2, 2024: HUTCHMED (China) Limited (“HUTCHMED”)
(Nasdaq/AIM:HCM; HKEX:13) today announced that, Inmagene Biopharmaceuticals (“Inmagene”) has exercised options to license two drug candidates discovered by HUTCHMED, IMG-007 and IMG-004 (the “Options”) pursuant to the terms of the strategic partnership announced on January 11, 2021. Following the exercise of the Options and subject to receipt by HUTCHMED of ordinary shares representing approximately 7.5% of shares (fully diluted) in Inmagene, Inmagene will be granted an exclusive license to further develop, manufacture and commercialize these two drug candidates worldwide.
As part of the partnership, HUTCHMED granted Inmagene exclusive options to multiple drug candidates solely for the treatment of immunological diseases. Since the execution of the Option agreement, Inmagene has funded and led two of these candidates, IMG-004 and IMG-007, to clinical development. For each of the drug candidates, IMG-004 and IMG-007, HUTCHMED is entitled to receive potential payments subject to the achievement of development milestones of up to US$92.5 million and subject to the achievement of commercial milestones of up to US$135 million, as well as royalties upon commercialization.