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Started: Jatw, 14 Jun 2024 17:16
Last post: Jatw, 15 Jun 2024 14:09
Https://library.ehaweb.org/eha/2024/eha2024-congress/422420/
Link to the EHA paper attached…..or you can go back to the RNS of May 17 announcing data will be presented and follow the link to S316 in the table towards the bottom of the announcement.
Dr Shi speaks well as CMO…..and is a good spokesperson to speak to the pipeline.
IR guy David is also much improved……they have moved on from Mr Hogg and are not dependent on Dr Su either (who will probably retire next year as breakeven /profitability is achieved.
It is clear that they expect to maintain a strong balance sheet, the IR guy was hinting that this would give them other options in the medium term….(watch that space but dont hold your breath).
Just listened to Mondays meeting.
There is new data on Sovlep being presented today 14th at EHA (? European Haematology Association?). Expect a good RNS with the data on Monday.
They were very positive…..
Started: saigonsally, 10 Jun 2024 08:16
Last post: 1pencil, 13 Jun 2024 12:38
Cheers Jatw/saigonsally, looks like the note is helping sentiment.
Its not going to take much to move the needle given small free float v outstanding shorts, could get interesting if even one institution decides to take a notifiable position.
Even if Cavendish’s “investment research“ is only half correct, why is the market valuation so poor? It would have been interesting if cavendish had provided, for an example, market valuation of another pharma company with similar pipeline and products in the market bringing nice profits.
What are the reasons for the share price to come down from £3.50 (achieved following Takeda results)? When will this company get the correct recognition it deserves in the stock markets?
They are pinning a lot on Sovlep as does the Company. They will be able to run a US trial in 2025 but approval will not follow until late 2026 at earliest. A licence deal with a chunky upfront payment in 2025 would be very welcome.
As per a recent posting of mine with some US numbers, I think they are right in the rapid growth of Fruq sales by Takeda which I projected will comfortably exceed expectations.
AZ may get US approval for an Orpathys line in H2 25. Which will unleash sales in 2026.
Depending on how the pipeline approvals and partner discussions go, they could do much better than breakeven in 2025.
I would not be surprised if we see 400p with the HY results in July 25….but these remain volatile.
It's paid-for research but a few highlights:
Investment thesis
HUTCHMED is a China based, sales generating, biopharmaceutical company focussed on the
development of innovative medicines for the treatment of cancer and immunological diseases. To
date, HUTCHMED has launched three, internally developed, oncology drugs in China (Elunate,
Orpathys and Sulanda) and one drug in the US (Fruzaqla), which it has executed through both
internal-commercialisation and strategic partnerships. The approval of Fruzaqla in the US in
November 2023 marked a significant milestone for HUTCHMED and the strategic expansion of its
portfolio into the highly lucrative US market.
The key value drivers that form the foundation of our underlying investment thesis for HUTCHMED
are:
- HUTCHMED is a revenue growing biopharmaceutical company, with its pharmaceutical
products experiencing strong commercial traction in both China and the US.
- HUTCHMED is expected to become a self-sustaining, profitable business by 2025.
- HUTCHMED has established strategic partnerships with some of the world’s largest
pharmaceutical companies with global partnerships for Fruzaqla and Orpathys with Takeda and
AstraZeneca, respectively and a China partnership with Eli Lilly for Elunate.
- HUTCHMED has a significant pipeline of 14 drug candidates involved in c40 active clinical
studies, 16 of which are in Phase III registrational or Phase II registration-intent studies,
providing multiple shots on goal and helping derisk the company’s equity thesis.
In our view, there are two fundamental components of the HUTCHMED investment thesis that the
market has not yet priced in:
(i) The growth of Fruzaqla in the US
(ii) The value of sovleplenib
- Sovleplenib has already successfully completed a Chinese phase III trial and we believe the
presentation of more detailed clinical data from the study at the European Haematology
Association conference in June 2024 could result in a significant rerating of the stock.
- If approved, we estimate sovleplenib annual sales in China alone could exceed US$100m by
2027 and US$200m by 2029. Our forecasts do not currently account for sovleplenib sales-ex China which could unlock
significant future value and upside should a clinical strategy involving expansion into the US
market or licensing deal materialise.
Here’s the link to the company website:
https://www.hutch-med.com/shareholder-information/analyst-coverage/
There are two boxes that have a link to their research Topsperity and Trinity Delta. The TD link below works, the Topsperity link does not.
https://www.trinitydelta.org/companies/HUTCHMED/
Started: Jatw, 12 Jun 2024 21:10
Last post: Jatw, 12 Jun 2024 21:10
Indications are mow for only one cut this year.
This is positive in the short term for HCMs interest on its cash but has been depressing the SP,
With expectations for reductions nearly as low as they can go we may see the downward pressures ease……
Started: 1pencil, 6 Jun 2024 14:31
Last post: 1pencil, 8 Jun 2024 11:08
Talking of shorts, down from record highs in HK 18,125,547 to 17,560,047
Given the currency conversion not huge but still for HK quite high, and remember -
'for every short seller there is a guaranteed buyer'
https://www.sfc.hk/en/Regulatory-functions/Market/Short-position-reporting/Aggregated-reportable-short-positions-of-specified-shares
“Shorting any UK mid-cap is insane, literally insane,” said one hedge fund executive who specialises in shorting stocks.
“The numbers [valuations] are just so low in the vast majority of cases that a $2bn UK company is peanuts for any mid-sized American company. Your sell case has to be unbelievably compelling and feature the stock going down at least 50 per cent” or there is a risk you lose 50 per cent if the stock gets bid for, the person added.
https://www.ft.com/content/e4d32fb6-4f42-41bc-adf1-9a10edec4928
HCM has initiated a new drug into clinical work (506), this follows Amdizalisib, and 306.
It appears that there is significant competition in this space with Beigene / Innovent etc progressing product……
Amdiz seems to have dropped off the main developments or atleast has moved to 2027/28.
If they have another significant delay (I am not sure we can call it a failure) to another programme, then maybe management should punt all the blood cancer work into a JV with another player to rationalise the pipeline costs.
Started: Jatw, 5 Jun 2024 06:22
Last post: Jatw, 5 Jun 2024 06:22
Have caught my eye:
1 NHS starting a trial a vaccine treatment for rectal cancer that has been resected. This is a long way from being a treatment, but could reduce the flow of patients into 2L /3L mCRC. I suspect as it is an individualised vaccine it will be £££.
2 NICE has refused to endorse Enhertu for certain breast cancer patients despite efficacy, it says the price is too high. With a quality adjusted life year value of £20-30k that NICE wants to achieve this is an effective cap on UK cancer treatment costs. This will then flow into other European value assessments. Takeda will be moving into European markets with Fruq in H2, it shows there may be some pricing issues and delays in take up as governments do their value assessments.
I mention these for interest and examples of potential competition and commercialisation issues ahead…..
Started: Jatw, 3 Jun 2024 14:30
Last post: Jatw, 3 Jun 2024 14:30
Updates include
Takeda sales
Changes to registration studies
More detail on some of the late stage assets in development.
Sustainability measures.
Started: Jatw, 21 May 2024 15:41
Last post: 1pencil, 3 Jun 2024 09:40
Guess who..2500..
Innovent, Beigene also down…..sectoral and not very specific to HCM
The publication of Frutiga suggests it is strong science…..the approval in China should be not too long in coming….
in the meantime…time to consider topping up….this approval and the Sovlep first approval could both arrive before the HY results at the end of July….
Its proper text book stuff this, every time there's positive news (today) prop traders try to squash sentiment by pushing it down, Hang Seng currently up by 2.3%
Hutchmed was down 3% at one point, same mo' as results and following updates..
This retrace has been much quicker than I anticipated…..but it is not HCM specific as the other HK Biopharmas I track have also gone backwards (not by as much, but they did not rise as far either).
Definitely time to top up soon.
Amazing what they can do, holding off for another 20/30p drop before taking my shoes and socks off ..lol
Started: 1pencil, 20 May 2024 12:08
Last post: 1pencil, 20 May 2024 12:08
AstraZeneca exec: Chinese medical innovations benefit patients globally
China is a base for developing country markets for AstraZeneca. Wang said that reality gives the company an edge in understanding such markets well and knowing which countries to begin with when Chinese enterprises kick off their plans to go global.
"We usually recommend they begin with big countries that are also very friendly to China. Many such countries, such as Brazil, Saudi Arabia, Russia, Indonesia, Vietnam and Mexico, have populations of over 100 million, which translates into substantial market demand," he said.
https://www.chinadaily.com.cn/a/202405/15/WS6644124aa31082fc043c7293.html
The announced durable response is better than the data shown in the corporate presentation.
The product comparators in that presentation are on different metrics so not sure what the relative performance is….Only 1 is approved in China and Sovlep is much superior to that, hence the breakthrough designation and faster review. Web searches revealed that the average approval time in China is 10 months for BTD vs 16 for standard - data was 2019-21 with stated objectives to accelerate further. This is inline with the statements made in the FY results call….time to start looking for an international partner.
Still a CK appointee as Chairman so we cannot expect much change to the strategy.
Started: 1pencil, 13 May 2024 21:25
Last post: 1pencil, 17 May 2024 14:30
Talking of volatility lol, at least the pull backs in UK are on lower volume..
China is on the up too, with Hang Seng approaching 20,000 if it can push through we see it join other bull markets around the globe..
It may be best to let sleeping dogs lie in this case….there are plenty of Biopharmas with HK and US listings with no UK listing…and if they do a review it is more likely to result in a de-listing in the UK than a move to the main board.
The upside for investors is likely less volatility, driving the price down to unrealistic levels would be difficult as backstopped by FTSE trackers.
Its also worth remembering, AIM is not cheap either especially for overseas companies - HCM will be paying a minimum of £500k p/a, that would be a bare bones quote without PR which HCM have in all three locations.
Another upside could be a higher valuation, this is not guaranteed of course but given small free float likely imo.
The London Stock Exchange has a fee calculator for listings.
For a £3bn company there is an admittance fee of 700k and annual fee of 168k (118k on AIM).
There will be additional fees to FCA, legal work and administration costs, so probably around £1m to move and additional 75k pa.
Not material to the Group but also not insubstantial when considering the needs of some additional investors.
That is the downside amones, its very expensive and would add another layer of bureaucracy to their workload.
That said, things are different now with a change of strategy/management, it has to be tempting being so close.
Started: amones, 9 Apr 2024 09:40
Last post: Jatw, 12 May 2024 17:49
Yes amones, one and the same.
HCM will be fully grown up when it needs to decide its approach to returns to shareholders…..assuming their plans come about that should be the 2026 financial year.
That is assuming they have not spent any spare cash on adding to the pipeline (either by expanding the research, in-licensing or corporate M&A).
Cash burn is reducing - which means they should have several hundred million USD to decide what to do with. A nice problem to have.
The figures for a dividend are HKD1 / 10p/12.5c 850mhkd / 85GBP / 105USD.
ss aka hcms, agree with you. it’s been good two to three consecutive weeks for hcm. hopefully, we are approaching towards the brighter end of the tunnel. last two years had been rough ride for the long term shareholders. over the other side of world, experience of investors who joined during hkse listing of “lucky” 0013 has been not so pleasant either. in spite of the recent progress, friday’s closing sp is well behind the listing price (?hkse40).
i was reading recent posts on adv.n from 1jat (?a.k.a jatw). the company is cash rich and a dividend of 10p per share/ hk$ 1 is possible, provided the management wishes to express their gratitude towards the shareholders. however, the company has passed a resolution in its agm giving right to the directors to buy back the shares. which is better, buy back scheme or a first ever dividend?
takeda’s financial figures (fru*****inib sales) are very encouraging. is hcm obliged to release a statement quoting the actual payment /profit resulting from fruq… golbal sales ? that should help shareholders to understand the actual profit from that source.
thanks to jatw for the informative posts.
What a nice way to end the week! It reminds me of the good old days back in 2010-2015 when we often ended a week with a litle surge like this. And whereas in October 2022 we needed a five-fold increase we now only need to double. Highly achievable. GLA.
SS AKA HCMS
Close to a 12 month high in HK, Hang Seng up over 1% with bullish calls on China,
Amones, the EU approval of the MAA should follow 67 days after the CHMP opinion is received.
So a little over 3 months. It should be approved in July.
The China approvals seem more variable and less certain.
The Fruq sNDA for Gastric cancer has been in for 13m already, but the company is anticipating that Orpathys may get its extension to 1l within 8m.
The BTD/Priority reviews for Sovlep (Jan) and Fruq+Sintilimab (Apr) seem to be expected after about 9m.
I dont think China issues a decision due date like the US PDUFA, I agree some greater clarity would be helpful not least for the company to plan product launches.
Started: Jatw, 9 May 2024 07:23
Last post: compoundingm, 9 May 2024 08:40
Got that, thank you.
The JPY 10.1bn is the Takeda full year number (to 31/3/24).
It is approx $65m taking off the 2023 sales of $15m gives Q1 24 sales of $50m
All numbers approximate as I dont know what exchange rate Takeda has used or what HCM will use when they come to report the numbers.
Link to the presentation:
https://www.takeda.com/investors/financial-results/quarterly-results/
Open the presentation rather than the announcement and See slide 41.
Are you sure that the 10,1bn HPY revenue isn't the quarterly number and from approval in november?
Just seen it, added another 3% rise, volume too.
https://finance.yahoo.com/quote/0013.HK/
Thanks 1pencil
Just a reminder that HCM will use a more stable USD exchange rate than Takeda and will also have production fees in revenue. The Q4 production fee was $5 of $15m sales, that would scale to $17m in Q1 but with limited profit impact.
The royalty is all profit, so $7.5m in Q1.
There could be additional milestone payments for US sales later this year but we don’t know what those triggers are (100m? 500m).
SP jumped another HK$ and looks like 340p to start on AIM
Started: 1pencil, 3 May 2024 07:03
Last post: 1pencil, 3 May 2024 07:03
Global hedge funds chase Hong Kong stocks rally, UBS says
HONG KONG (Reuters) - Global hedge funds that use an equities long-short strategy are growing increasingly bullish on China, evidenced by the heavy pick-up in their purchases of Hong Kong-listed shares, UBS Group said in a note.
Hong Kong's stock markets, which closely mirror China's struggling performance, have recovered since March as Beijing rolled out economic support measures. The Hang Seng Index rose more than 7% in April, marking its best monthly gain since January 2023 and outperforming most major markets.
https://finance.yahoo.com/news/global-hedge-funds-chase-hong-024837696.html
Started: Jatw, 1 May 2024 17:42
Last post: Jatw, 2 May 2024 11:05
Two HK announcements this week:
29/4 Innovent produced an overall Q1 sales number and YOY comparator +60%.
Innocare has announced a Board meeting to release its Q1 performance is on13/5.
Nice job Jatw
This is the response to my recent email to IR (I was surprised to get a reply). As they acknowledge competitors starting to do quarterly sales reporting I think this will be considered and will come in due course…..probably best once new revenue streams start kicking in and start Q1 25.
Sorry for slow reply.
Thank you for your strong and long support of Hutchmed.
Some of our peers start to do quarterly updates as their portfolio of products and scale of operation expand.
We will seriously and carefully consider your suggestion.
In the meantime, please do realize the reporting formats may differ between our partners and ourselves.
Our revenue also comprises different components, including royalties, manufacturing,...
So, our case may be slightly different from peers who do their own manufacturing, marketing and distribution, capturing 100% of product profits.
Please continue to support us and feel free to send us comments.
Started: Jatw, 29 Apr 2024 10:10
Last post: Jatw, 29 Apr 2024 10:10
I have delved a little more into the EU processes for delivering new drugs to patients.
It seems that many markets have a state system that controls the price of the drugs reimbursed by the state. These are largely unco-ordinated although some reference the prices paid in other countries in price setting. They have a benchmark of added value and don’t reimburse new drugs unless they add value above the cost / benefit of existing treatments.
Germany seems to be the first market that drugs should be launched in as they have a one year period before the state price is set.
All of this makes me think that Takeda will require 2-3 years to establish full volume sales across the EU, although some of the less restricted markets can be up and running quite quickly.
Started: Jatw, 26 Apr 2024 16:30
Last post: 1pencil, 26 Apr 2024 21:17
Par for the course, see comments on results day..
I understand the sentiment but I hope they have the patience (and the patients)
The UK MHRA can approve marketing of drugs that already have an EC MAA in 3 months from EC approval….it then takes NICE a while to approve use in the NHS ( a year and then 3 months for funding to be made available)….so the majority of the UK isn’t getting Fruq* until 2026 atleast…maybe Takeda wont even bother with the UK market.
Started: Jatw, 24 Apr 2024 09:14
Last post: Jatw, 24 Apr 2024 09:18
Sorry the reference to HCM should be FRUSICA-1
gsk has submitted a supplementary biologics application to be assessed by 24/08/24 by fda, this seems to cover a similar population to the endometrial cancer submission for fru*****inib + sintilimab.
the gsk study is called ruby, the results of both studies are to be published. as i follow both companies i will update when more is known.
An opportunity to showcase their entire ‘assets’ in a major venue. Nice efforts by the team to display their poster presentations. Keenly waiting to see the final results from the global Multi centre clinical trials for surufatinib.
The AACR presentations are not what we might expect….. early investigations for 3 new candidates and several for surufatinib in combination or different types of cancer. Very much experimental stuff.
Still waiting for the Sovlep results to be presented in detail….I think they said that would be mid-year.
Started: 1pencil, 2 Apr 2024 07:14
Last post: Jatw, 2 Apr 2024 09:28
HCM has made good on its pipeline promises so far this year….it now only has a Taz bridging study and a possible Savo submission highlighted this year.
There are now a number of submissions with the Regulatory Authorities.
Fruq - GC in China, CRC in EU and JPN, with Sintilimab BTD in China
Sovlep -
Savo - confirmatory and new indication for MET-14 EXON skipping.
That represents a significant boost to sales by mid 2025…
To do list - get a partner for Sovlep and start globalised development.
..ruse didn't last long, *good effort though..
* terrible effort, more transparent than a sheet of air..
lol
— nda accepted and both fru*****inib and sintilimab granted priority review, following breakthrough therapy designation in july 2023 —
— first regulatory filing for fru*****inib for use in combination with a leading immune checkpoint inhibitor —
par for the course, prop traders mark it down on any good news, try and dampen momentum while working buy orders.
it would be nice if they marked it down properly, then we can all load up lol
Started: 1pencil, 29 Mar 2024 20:40
Last post: 1pencil, 1 Apr 2024 09:08
Caixin survey shows China’s March factory activity at its most robust in 13 months
https://www.cnbc.com/2024/04/01/china-april-2024-caixin-manufacturing-pmi.html
CKHH is having a management reshuffle whether it will mean anything for HCM remains to be see. HCM did get a bit more of a mention in the annual results as it is one of the bright spots within the conglomerate. That said, HCM is reported as a financial asset alongside CKHH investment in a Canadian oil producer (it used to hold a larger share of a smaller producer and merged it about 5 years ago). If CKHH needs funds these stakes are most likely for sale, however with gearing of 16% this seems unnecessary at present.
Commentators suggested some asset shuffling within the CK Group might result from the management changes - although there are no new faces at the top table.
Apart from Mr To representing CKHH and Ms Shih as a further director, HCM seems to be structured to operate independently. There are many pharma cos under development in China, consolidation will happen/can be expected to be encouraged by Beijing to create national champions…..HCM needs to be part of that discussion.
China will make it easier to move capital in and out of the country and promote financial market deregulation, a senior forex regulator said on Friday, as Beijing seeks to woo foreign investors amid heightened geopolitical tensions.
https://www.cnbc.com/2024/03/29/china-will-further-enhance-capital-account-opening-fx-official-says.html
Started: 1pencil, 19 Mar 2024 13:07
Last post: amones, 28 Mar 2024 12:36
Thank you Jatw for your opinion.
More than 20 year old “budding” pharma company. based in a country with stable governance and economy. 5000 personnel with 1200 working in oncology and immunology. 3 oncology drugs already in the pharma market in China, one is marketed in the USA, pending approval in Europe. Finally, attractive pipeline and a healthy positive balance in the bank. Market value a mere 3 billion!
Yet, no news of ‘expression of interest’ for takeover (or merger) from bigger companies.
(Possibly, that is the only hope for long term holders)
Amones, from what I can tell AZN has been acquiring in areas that are novel but adjacent to their existing businesses.
They get new capabilities and can then explore combinations with their other therapies. HCM may be producing better/ safer compounds but if you already own similar assets the incremental value may not be there to justify the 5/6bn CKHH would want to sell up. However a share based merger when you can then take forward the better products and deprioritise parts of the research programmes would add value to the combined entity.
Innovent results are tomorrow….it carries a higher MV and has a larger pipeline but makes larger losses. The company strategies seem to be similar and they are at a similar position of moving towards sustainable profitability. It will be interesting to see how the results are assessed in the market..
I think we know the answer is four letters…….CKHH…..
The assets and the pipeline can be evaluated and a number suggested for a deal, but unless it is a very large number (2.5-3x current) I doubt CKHH would entertain it.
It will be interesting to compare the assets/ pipeline/ number of scientific staff/ ongoing clinical studies of various drug candidates/ research and production facilities of HCM and the two companies that have been taken over.
What might the reasons for HCM not being (at least, until now) considered for takeover? Is it the “Grand” market value of 3 billion USD/ the pipeline unattractive??
Started: 1pencil, 28 Mar 2024 00:21
Last post: Jatw, 28 Mar 2024 07:59
Naive treatment does mean no previous treatment - I suspect surgical removal of the tumour would also be acceptable within this definition as it does not involve pharmaceutical treatment.
No indication of priority review (maybe to come?) but we can anticipate approval in mid 2025 and new revenue in H2 25. The commercialisation would be with AZ under the licensing deal.
You ceased to have a short position of 1% or more in the shares, or the percentage level of your short position in such shares decreased because:
any other event (you must briefly describe the relevant event in the Supplementary Information box)
Yes, good news indeed, also noted Deutsche Bank have moved to a small net long position, this is unusual for them.
https://sc.hkexnews.hk/gb/di.hkex.com.hk/di/NSForm2.aspx?fn=CS20240322E00161&sa2=an&sid=344192&corpn=HUTCHMED+(China)+Ltd.&sd=28%2f03%2f2023&ed=28%2f03%2f2024&cid=0&sa1=cl&scsd=28%2f03%2f2023&sced=28%2f03%2f2024&sc=13&src=MAIN&lang=EN&g_lang=en&
Another achievement! Market response is as anticipated!! Nothing to be surprised at.
If approved by NMPA as therapy for the new indication, who will have marketing rights? AZN or HCM?
‘…..Naive patients …., does it mean as primary therapy?
Just in case not picked up on news feed here;
https://finance.yahoo.com/news/hutchmed-announces-savolitinib-snda-accepted-000000806.html
Started: 1pencil, 20 Mar 2024 19:01
Last post: 1pencil, 21 Mar 2024 19:15
NASDAQ shorts at 12 month or more lows, HK short positions dropping nicely first big drop of 20% seen for a while.
We now have interest rates cuts on both sides of the pond, HCM had a small spike on Fed news.
https://www.cnbc.com/2024/03/19/stock-market-today-live-updates.html
My own view; this will do more for HCM than any other factor thus far.