Member Info for Jatw

Still a CK appointee as Chairman so we cannot expect much change to the strategy.

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.

If a proposal of £2/share (or about £300m) was being considered….what do you think the share price would currently be? (Surely atleast £1?)

I would like to be proven wrong, but I would not be surprised if the bids are currently 50p-£1.

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.

Like the sound of multiple acquirers - suggests an auction of sorts.

Indeed, back to being the largest AIM stock….(not a position that has ended happily for many incumbents)

Not sure there are many Pharma peers within the FTSE100 and even less convinced that HCM is a peer of GSK/AZN. Its peers (maybe up to US$10bn are really found in HK/Shanghai and for the more internationally focused Nasdaq. A small number also exist in Europe.

I can see RENX going it alone for a further six months to a year.

The gap between what the business value is today to a buyer and the hoped for value by the sellers may be too large to bridge without evidence of a sales breakthrough….that allow improved assumptions to drive a higher valuation. Either that or the offer has to have a larger deferred consideration.

The main listing has been moved to HK….so it would further restrict eligibility within the FT100.

We should be careful about wishing for the AIM listing to change as it may mean no UK listing!.

In other news, the two pipeline announcements both seem encouraging and in line with disciplined prioritisation. They always wanted to take Surufatinib into pancreatic cancer…..and a combination is a positive way forward atleast in China.

The second announcement about 306 was indicated in their latest corporate presentation as a new pipeline entry.

I do wonder if with funding less of an issue we will see the purse strings loosened on the earlier stages of pipeline development.

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.

The deals AZ has announced recently are extending the technology base the company can use for collaboration across its portfolios. There may be hits and misses in these deals but recent history suggests AZ is quite good at assessing prospects.

This is already a core holding for me and I will be adding when I can.

Must admit to being a bit disappointed by the share price and that it barely moved with the results.

I guess the next upward move may come with the sales update at the end of July as a preview of the HY results in September. There is always the prospect of an acquisition with an ad-hoc update.

For those interested, there is a board for Jackson - 0jkf (zero at the start).

After starting at $25 on demerger, it is recently trading between $75-80.

It seems to have plenty of capital to spend on buy backs.

The US regulators appear to have royally screwed Pru by not allowing it to take a special dividend before demerger (which led to a HK share offering)….only for US management to pay it out to now mostly US shareholders.

Anyway, it is good news to see the Pru SP rising after such a sharp decline. I am sure it will go back to £10 in the not too distant future driven by 9-12% sales growth, but whether it can get back to the £13-15 range is much less certain….It was probably priced for a prolonged boom in China which is still doing quite well compared to European economies but not as well as predicted pre-pandemic.

For those interested, there is a board for Jackson - 0jkf (zero at the start).

After starting at $25 on demerger, it is recently trading between $75-80.

It seems to have plenty of capital to spend on buy backs.

The US regulators appear to have royally screwed Pru by not allowing it to take a special dividend before demerger (which led to a HK share offering)….only for US management to pay it out to now mostly US shareholders.

Anyway, it is good news to see the Pru SP rising after such a sharp decline. I am sure it will go back to £10 in the not too distant future driven by 9-12% sales growth, but whether it can get back to the £13-15 range is much less certain….It was probably priced for a prolonged boom in China which is still doing quite well compared to European economies but not as well as predicted pre-pandemic.

The security approval is one of approving processes to overcome security concerns.

Vod already had to establish a security committee to manage its relationship with E& - so it is hardly surprising that it can come up with a similar solution for 3/CKHH.

What the CMA will do is anyone’s guess….bureaucrats may be looking to their future under a new government rather than care about the current govt….and the election could come before a decision which someone is going to criticise…..there are probably no votes in supporting the deal.

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.

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

Building the patient book at this rate should add $30m per quarter to sales

50/80/110/140 (less some patients leaving) could result in US sales of $350m which would generate about $50m royalty revenues for HCM.

EU and JP revenues on top,

I see analysts updating their forecasts…..positively,

The appendix to their finance presentation reports 10.1bn JPY sales. That is approx $65m (at 155Y= 1USD).

So Q1 sales are approx $50m.

That is pretty good in my view and continues the strong uptake.

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.

After market reaction to results is extremely positive….it may not hold in the market tomorrow, but $80 has been achieved….as the number of shares continues to shrink the /share profits look larger….will this go to $100 in the next year?