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Get your squeegee out, $20 glass celling incoming ..
Always good to get more press coverage, doesn't take much to move the needle with Hutchmed given low free float.
This is a link to the New Drugs ("1+" mechanism) described below, should help the broader healthcare market return to more normalized valuations.
https://www.info.gov.hk/gia/general/202310/26/P2023102600381.htm#:~:text=The%20%221%2B%22%20mechanism%20will%20facilitate%20the%20registration%20of%20new,early%20access%20to%20new%20drugs.
Https://www.scmp.com/business/companies/article/3242840/ck-hutchison-backed-hutchmed-eyes-global-expansion-after-fda-approval-novel-cancer-drug
CKH / Hutchmed getting some press coverage in HK
Detailed Sovlep results publication and submission of NDA in China.
Amdiz high level result of registration study.
First sales of Fruq in USA? Could easily happen, Takeda was going to launch asap.
Takeda to test Fruq in GC in Japan/S Korea? Seems a logical approach given China sNDA is in.
EMA approval for Fruq? Have not seen a date for this, I assume it is H1 2024.
That's a great link, plenty of info - should help raise Hutchmeds profile amongst the investment community too.
"Hong Kong has been striving to attract tech firms to the city and is to launch a new "1+" mechanism to accelerate the approval of new drugs treating life-threatening diseases, which require only one certificate of pharmaceutical product with local clinical data."
Https://www.thestandard.com.hk/section-news/section/2/258113/Hutchmed-is-coming-home
"Hutchmed is confident of breaking into profit soon as the drug could bring about US$100 million (HK$780 million) in royalties from its sales partner Takeda. To also said Hutchmed doesn't need to raise more funds as it has sufficient cash for future expenses."
Yup, its there although its behind a paywall
https://www.scmp.com/news/china/science/article/3242440/china-gearing-take-big-pharma-and-drive-biotech-boom-innovator?module=top_story&pgtype=homepage
Quite surprised by the HK rise this morning…..maybe that is what happens when the US is on holiday….RISK ON.
There is an article in SCMP today (it appeared in my Apple News) saying that there are 10000 pharma cos in China reasearching new treatments…..and suggesting some consolidation is needed.
It was mostly citing comments from Beigene.
https://apple.news/ApctT2EozTm2ElgVaCV7vtg
It was in the top stories from SCMP but I cant find it on the SCMP website
Funds bet on ‘cheapness’ history, Beijing policy spark to reverse US$140 billion rout in Chinese stocks
Valuations of MSCI China Index stocks have slipped back to level last seen in late 2018, from where the market rallied: Cambridge Associates
Cambridge Associates has peers Franklin Templeton and abrdn in the bullish camp
https://www.scmp.com/business/markets/article/3241345/funds-bet-cheapness-history-beijing-policy-spark-reverse-us140-billion-rout-chinese-stocks
Good time to be invested in China right now imo, not only is the economic situation improving but diplomatic relations between China/USA are back on a cooperative footing.
Analysts already tipping their selection of Chinese companies.
Roche steps up efforts to tap potential of China's healthcare market
https://www.chinadaily.com.cn/a/202311/20/WS655ad49aa31090682a5ef154.html
The Jeffries investor meeting did not disclose much in the way of new information apart from two China regulatory items:
The Elunate NDA for Gastric Cancer is expected to be decided in mid 2024, so a full 12m review period.
The Amdiz NDA seems to be slipping into 2024. While they still said YE 23, they also allowed for it to go into 24. They have had 3m for Sovlep since the trial endpoint results were reported as met without the NDA being submitted in full, so it seems inconceivable they can submit Amdiz before the end of 23.
Whatever got into the Nasdaq trading did not seem to land in HK today….should bounce back in NY later today….
Tim Cook, Elon Musk, Steve Schwarzman spotted at Xi Jinping dinner with U.S. CEOs
https://www.cnbc.com/2023/11/16/xi-dinner-with-us-ceos-tim-cook-elon-musk-steve-schwarzman-spotted.html
Yup, Xi/Biden meeting seems to have gone well, restoration of military comms and other ties.
Trading on Beigene and Innovent does seem to be correlated but it could just be same market makers at work, aware Goldman have a long/short strategy here, always best to keep some powder dry ..
But no consistent direction from HK or NY they often seem to be moving in different directions on the same day.
Volume is very much in HK now, and I look there more than US for direction.
Hope the Xi/Biden meeting goes ok.
HK back over 18k, prop traders working overtime to cover..
ECONOMY
Inflation was flat in October from the prior month, core CPI hits two-year low
https://www.cnbc.com/2023/11/14/cpi-inflation-report-october-2023.html
UBS sees a raft of Fed rate cuts next year on the back of a U.S. recession
https://www.cnbc.com/2023/11/14/ubs-sees-a-raft-of-fed-rate-cuts-next-year-on-the-back-of-a-us-recession.html
An interesting point from the IPSEN presentation to DB was that they have a minimum sales target of 300m EUR to buy in a drug/enter a partnership. So it would seem reasonable to infer that Suru cannot reach this target ex-china.
I did listen to the HCM presentation again and they said they were not pursuing Suru outside China at present….rather that do it themselves.
Thanks for that, interesting commentary in the first para given previous trials;
"The approval was based on the Ph3 MRCT FRESCO-2 (18% patients enrolled from the US) as well as the China FRESCO trial, implying the recognition of China clinical data by the FDA"
Perhaps there is potential for Surufati nib after all, that study also had bridging data from Japan could a smaller US study be added similar to above ?
CMB have posted a new research note with updated and upgraded financials
https://www.cmbi.com.hk/article/9075.html?lang=en
FCF starts in 2026
Dropped initially to match the US end of session but recovered that 3% to end broadly flat.
Still good volume.
There was always going to be one market caught out by the early FDA decision announcement….and the US did not like it.
The HK reaction today is positive in my view.
at the db meeting there was additional clarity over surufatinib, they have not found a partner due to the small perceived market….so they are going to do it themselves,,,presumably slowly if at all…..so surufatinib may be restricted to china, unless a new indication can be developed.
takeda have not given target sales….for fru*****inib.
sovlep said to be the next catalyst for the company…..still awaiting the effectiveness data for the slides
i cant recall amdiz featuring strongly, prepare for the trial to need more work.
It was so predictable apart from the fact of announced three weeks early !
Great news though..
Todays update from AZ notes $34m sales, this is down 1% (although up 6% at constant exchange rates).
This is consistent with the HY sales numbers….it seems NRDL inclusion will not benefit the pharma cos margin as volumes will drive cost of sales up - but given the licensing arrangement this is worse for AZ than HCM as HCM still gets manufacturing fee and a royalty on sales..
It should make management think twice about the benefits of NRDL inclusion - and reduce the discount on future applications (not sure that is feasible with renewals).
Amones, I think todays reaction is fairly predictable…..there was a big run up towards the PDUFA date and presumably the speculators on a positive result will cash up and move on to another bet. So for a few days there will be selling pressure.
The business itself is enhanced, and there is another $35m in the bank.
Takeda now has the task of selling the product, HCM will be able to bank the royalty stream.
The EU and Japan approvals can’t be far behind.
I expect this will drift lower for a short while…but the pipeline messaging is strong and there should be multiple NDAs and approvals in 24/25.
Also - Healthcare executives saying the effects of the anti-corruption drive are easing and US/China relations appear to be being nursed back to a better place.
I intend to Buy in Jan ahead of the results.