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LONDON (Alliance News) - Hutchison China Meditech Ltd on Thursday pointed to a wider annual loss after a change to its agreement with Eli Lilly & Co over cancer drug Fruquintinib.
Shares in Hutchison China were down 13% at 4,300.00 pence on Thursday.
The agreement is with Lilly Shanghai, an affiliate of Eli Lilly & Co, and has been amended so that Hutchison China will receive a larger share of the drug's future economic interest.
The two pharma firms signed their initial agreement over Fruquintinib back in 2013, with Lilly taking on the majority of development costs associated with the life cycle indications of the drug.
Fruquintinib is already indicated for colorectal cancer, lung cancer, and gastric cancer.
The newly signed amendment, however, grants all planning, execution and decision making responsibilities in China for Fruquintinib's life cycle indications to Hutchison China.
In return, Lilly will make a USD20 million milestone payment to Hutchison China for each new indication up to USD60 million. In addition, once the first indication is launched, Hutchison China's royalty payable on Chinese sales will increase to between 15% and 29% from 15% to 20%.
As such, Hutchison China's 2018 guidance has been updated to include a USD12 million increase in its innovation platform research and development expense to between USD142 million and USD152 million.
The firm now expects to post a total net loss of between USD71 million and USD84 million for 2018, rising from the USD39 million to USD72 million loss previously guided.
Davey, I copied and pasted their text in it's entirety. However, this is Morningstar on Savolitinib.Elsewhere, a study of the Hutchison China cancer drug Savolitinib, in combination with AstraZeneca PLC drug Tagrisso, has been initiated. The phase two study, known as Savannah, will enrol approximately 170 lung cancer patients.Savolitinib is also being studied as a potential treatment for kidney cancer. Preliminary data from a phase two study of the drug in combination with AstraZeneca's Imfinzi will be presented at a future conference.Enrolment in Hutchison China's phase three Savoir registration study of Savolitinib in kidney cancer patients has been suspended, as the likelihood of success is now considered to be low.The company intends to change its Savolitinib kidney cancer strategy.
Shares in Hutchison China Meditech (HCM) took another hit this morning after the group announced changes to its 2013 license and collaboration agreement on cancer drug fruquintinib with US partner Eli Lilly (US:LLY). The amendment effectively changes the roles and responsibilities of Chi-Med and Lilly, in China, for the development and commercialisation of fruquintinib, as well as collaborations for the development of fruquintinib with third-party anti-cancer agents as well as the promotion and distribution rights of fruquintinib. Chairman Simon To said Chi-Med was “stepping forward” to take on more responsibility in the development stage in order to reap more reward from the “future economic interest” of the drug. That includes a $12m (£9.4m) increase in expected full-year R&D expense at the group’s innovation division to $142m-$152m. Without any further changes to financial guidance, we remain buyers.
The market launch of Elunate® in China will be through collaboration with our partner Eli Lilly & Company ("Lilly"). Dr. Wang Li, Senior Vice President, Head of Lilly China Drug Development & Medical Affairs Center, said, "The approval is a testament to the overall clinical profile of Elunate® and is an important step forward for our collaboration with Chi-Med." This approval also triggers an approximately US$13.6 million milestone payment to Chi-Med from Lilly.