Member Info for Jatw

Not sure I understand why they need the TPG deal and the equity investment or to issue 4m new shares when they have been buying back as much stock as they can.

I suppose one way of looking at it is that they are making a decent profit on the last $500m of buy backs

But i do like the effect it has had on the share price

Touching £12 equivalent in HK today. (Up5%).

The announcement clearly states this is the 2026 buy back, using half the recent IPO proceeds and delaying the return of the remaining proceeds to 2027 (presumably one the cash has been extracted from India).

It is good they are early on this announcement rather than waiting for results day.

Also a dominant shareholder/founder.

The future of the company is bound up by his personal exit strategy (there will be one). His holdings may already be in offshore trusts and so will survive him for his family/ charitable foundation……however when he steps back from the business he may want to see some diversification of his wealth (or independent trustees will) at which point Ashmore will be in play.

1pencil - yes the ATTC candidate is the one to watch - but even with strong progress it is unlikely they get to an NDA before mid 27 at the earliest. Nothing is on the roadmap for this yet.

Before then I suspect the Sovleplenib NDA (mid 26) and hopefully approval (early 27) will be significant as HCM will get full benefit and a potential out licence deal.

The global savolitinib work is also significant, but the majority of benefits accrue to AZ as HCM will get a high teens royalty and some manufacturing fees.

There is a good SCMP article about the volume of biotech listings expected - doing the maths from the article it suggests there could be 60 IPOs of pharma / related stocks in HK this year. The market is open for business - the excitement of the new is probably reducing interest in existing stocks like HCM…..I think it means there is a lot of potential for M&A out there…as the current 40 listings expands to maybe 100 or more someone will start consolidating them and make good money after stripping out the duplicated costs - that is how big pharma came to be in the US/Europe and I see a similar path will need to be followed in China.

Biffa

Are those the nominal positions you are citing? (They only have $50bn AUM and to have 15% in one basket case of an economy would appear unlikely).

7bn nominal might only be $1bn of value…..and may revalue to $2bn - still a good gain but not the $10bn you are thinking of.

It will be interesting to see how LATAM focused funds do this week. Will they be spooked by higher geopolitical risk or see the US as likely a positive protection for western investors?

A very long term prospect….complete the Ph3 trial sometime 2028, approval 2029…..who knows what the competitive situation will be in 3 years time, hence analysts ascribe spend only to this now.

The website suggests there is a new corporate presentation (not downloading yet)……maybe they will include some new 2026 catalyst information…they are just about done on the ones set at the HY results.

I am expecting sales growth to continue to gain momentum. The US may have reached a steady state, but the rest of the world is beginning to adopt Fruzaqla.

Takeda reported JPY27.3bn of sales in its H1 results with Q2 hitting JPY15bn.

The JPY has weakened to 156 to USD from its H1 reporting rate of 148.

JPY15-16bn in Q3 would be broadly flat sales depending on the exchange rate used. Hoping for JPY17-18bn and a Q3 total of 44-45bn for growth continuing.

Pru announced it expects net proceeds from the JV IPO of $1.4bn and will return this to shareholders subject to regulatory approvals…..I assume they are negotiating the remittance of funds from India and will probably announce a larger buy back with the annual results.

I agree with JO there is still potential for further gains in the SP, although more modest than the last year. For those who want to trade, historically Pru has been a reliable trading range share gaining and losing £1 over short periods.

Todays option exercise of roughly 500k shares is positive (in that the SP has gained 50% since the award).

The shares dont exist yet, even if Mr Randall keeps most of the shares, we should expect him to sell roughly half of them to pay his tax bill.

He and a couple of others have significant performance related options outstanding….and hopefully becoming more valuable.

The two NDA acceptances are indicative of the great gains that have been achieved in oncology over the last 20 years…..to have a commercial success you now need to have significantly better efficacy than the current standard of care and this is leading to either biomarker specific targets (much smaller in number) or combination therapies (more expensive as more than one drug is needed). The margins available are squeezed by ever tighter government procurement processes (NICE, NRDL etc). There is still potential for new treatment mechanisms, which is why the ATTC is critical to HCMs future.

There are a number of paths the company can take:

At the optimistic end, ATTC represents a breakthrough and the company thrives.

AZ pushes Savolitinib hard as Tagrisso as a monotherapy loses exclusivity…and the company gets sustainable strong global revenues

The company continues with its own portfolio, breaks even within China and makes regular but limited profits. They should participate in China consolidation with similar companies to boost shareholder returns.

At the negative end, the company muddles along slowly burning through its cash pile and becoming an also ran than no-one wants to take over.

In 2016 HCM was probably a bright light with considerable potential, now it is one of many with some potential but less than others. The market is yet to be convinced about ATTC and AZs commitment is unproven, so I think market perception will probably depend on how HCM approaches consolidation within China….and that needs a new CEO and backing from the Board and key shareholders.

A more significant update as this represents HCM broadening the scope for Savolitinib away from the core AZ focus of lung cancer.

Priority review and breakthrough designation as this is a small subset of hard to treat patients - RNS suggests the market is 18000 new patients…but these need to fail two prior treatments. Expect approval in mid 26, then it is over to AZ to commercialise (HCM may need to push AZ hard, or make an offer to market it themselves for this indication). More interesting will be whether AZ seeks to expand the label in other markets (something for the medium term).

I am relying on the internet telling me the annual level of liver cancer in China….it could be wrong.

Another question for the FY results meeting - how do you see the target market for Fanregratinib?

This is a relatively minor development - there are 200k cases of liver cancer in China annually, by the time you factor in the limitations of the usage 10-15% IHCC then 10-15% of these having the target identification that is down to 2-5k potential patients per annum. (Then there is limited capacity to pay in China).

Of their short term catalysts, the Savo GC submission is more important, and the most important is the upcoming approval of FRUSICA-2 which should bring in some additional Fruquintinib sales, ramping up in 2027 when it will surely be added to the NRDL.

SYN00Gold

They have passed up a chance to make a share split with the US listing, each ADS was half a share. They could have done a 2:1 and then an ADS would have become one share. The US and Europe has no problems with large share prices (think Berkshire A shares topped 200k each) and share prices above £50 are increasingly common so I suspect we will not get a share split any time soon - and it does not really matter.

The SP is beginning to resemble the value of the company. There have been a number of occasions when Pru gets severely undervalued (dot com crash, Global financial crisis, US/China tensions and Covid) with hindsight these have been times when fortunes can be made.

This SP run has some way to go before I would consider Pru overpriced, and I would be quite happy with the SP adding in line with its business growth (12%) for a few years….the trick will be to exit if it goes significantly above that trend line and buy if it falls well below.

My rule of thumb for the next 5 years is add £1 every year should be normal. Add £2 getting a bit top heavy, add £3 take 50% off the table to buy back lower.

Actual trading price was 20% up on the IPO price. Which means Pru has pocketed around $1bn and is left with an investment that is largely unchanged in value- nice work.

The Buy Back of up to 10% of shares seems to be helping drive up the price.

It will take a very long time to complete the full mandate meaning there will always be a forced buyer.

While this does not mean the SP will keep on rising, it will keep the pressure on the SP to move up (absent a wider market correction).

A new CEO is the priority.

I know they have said they are looking at licensing deals (in and out), but I think the margins are quite small for unlicensed medicines in China. I would be in favour of M&A with a chinese company that already has some marketed products where there can be synergies across the business, but there is a limit on how much cash they could commit while progressing their global development of Sovleplenib and the ATTC platform.

The TD paper suggested they would be marginally cash flow positive in 2026. They really need 2027 to be big for cash from Sovlep and Savolitinib otherwise their reserves will dwindle rapidly.

They will not tell us what they think on how they may spend their cash pile, but assuming they need to keep $500m for a rainy day, they will need 50-100m for Sovlep, 100-300m for ATTC. That would leave around $500m available for acquisitions.

Some questions for results day:

What do you expect your 2026 R&D budget to be? And how does that breakdown between existing marketed products, products in Ph2/3 and ATTC?

Do you expect that $ value and mix to change in 2027?

What is the range you have set for consolidated oncology revenue in 2026?

Grey market price showing 16% uplift…..stags appear to be back in Mumbai.

DC - What’s your thinking behind 350+?

Possibly more capital releases coming from regulatory change and continued buying from Japan

But no indication of a significant increase in profits / operating cash flow to drive such a SP on fundamentals?