Member Info for Jatw

BBD, we have to ask ourselves whether capital protection plus some income is a good outcome over the last 5yrs?
Mature enterprises behave more like bonds as they age…..looks like Pru and its progeny are mature so capital protection is probably ok for some investors…..others like growth in sp more.
I think we thought an Asia focused Pru would be more growth oriented, but it is facing considerable headwinds under the pandemic restrictions….and is outperforming some key competitors…life insurance is always a long game…2009 to 2016 we’re very rewarding.
Pru should be growing like it’s new business profits let’s hope it will return to that growth path in the new few years.

There seems to be a discrepancy between the RNS that announced the GA investment and the Tr1 form tacly identified. I am pretty sure the 18m term of the option started on completion of the original investment, the 6 July, ie it expires today….not Long to find out definitively as a new investment will trigger a set of disclosures tomorrow/ early next week when settled.

Coming round to PKs view that the risk reward for PIs is to sell now.
While I think an improved offer is likely, the upside is limited to 10-30p from 920.
The downside is the bid goes through at 883 or fails in which case 700 looms again.

Cash is largely spent on acquisitions which at the last update were trading as expected.

P38-40 set out he competitor performance and the phase 1 results for 523 leading to the eslim study which is 24 weeks duration for each patient…..so it could be completing late 22.
The appendix shows 91k new cases of ITP in China which is one of the larger targets.
One to watch as it is a long duration treatment….

in my business the top three products tend to get the majority of the market…..I assume something similar happens in medicines perhaps there is a greater practitioner loyalty to certain trusted brands…does anyone have a sense of how hard it will be for Hutchmed to take market share from an existing but inferior product? Any examples?

Btw epizyme sp continues to fall, it is now valued at 250m USD of which about 200m is cash and HCM provided 25m of that. They look likely to need a significant cash injection in 18m time. HCM is ideally placed to assess the value of one of its drug candidates….and improve the deal should the opportunity be available…..potential for M&A in late 22.

Should start to see some gains as the omicron variant wanes in SA.

Meanwhile JxN touched USD45 today…..market took UK forced sellers for a ride back in September.
There is no sign of consolidation in the sp yet……$50 with the FY results?

Updates to the recent pipeline and future clinical and regulatory events (but not analysed within 2022 which would be helpful) and some more detail on certain trials.
Given the length of the document it would be helpful to have a summary of the changes/updates.

Next material update will likely be with the FY 21 results which are tentatively scheduled for 1 March.

HK share price performance for insurers has been poor
Pru -6%
AIA -19%
ping An -40%
These are the 1yr performance figures from Yahoo finance….while they ignore dividends it is clear that the Pru has outperformed some Asian insurers and has been closing the valuation gap in the wrong way. Hopefully they all go up and Pru continues to outperform.
USD denominated debt is probably a common factor in poor performance which is not helped by US interest rates rising, the covid slowdown Chinese crackdown on HK and profits generally and poor US China relations.

I will hold waiting for a change in the political climate.

The latest order requires additional licensing approval before US technology can be sold to a list of companies…..that could easily become not for sale in China….but becomes harder when the hardware is not exported….Beigene’s plan to build an R&D and Manufacturing hub in the US will pose political issues if the US administration tries to clamp down on use of technology there.

While HCM is not associated with the Chinese regime it does present itself as Chinese which may get problematic in future…..I do expect they will have to expand US operations to stay relevant in the USA.
HCM is on the right side of the accounting standards debate. Hopefully HK retains some economic independence and the standards are maintained there.

HCM has a bright future….if they continue delivering on the pipeline the market value will look after itself. Looking forward to 2022.

The vote is now set for 18 Jan
HL has given me until 13 Jan to place my votes.

If you vote for the deal you really should sell while the market price is higher……giving more power to the no voters.
The game of chicken runs until about 10 Jan, although the silence is deafening.

Rome was not built in a day…..20 years of development has gone into Hutchmed…building it from the ground up…it s easy to forget how much was achieved this year and underestimate what will be achieved next year.
As well as trial results there will be key moments to digest
Feb 22 we have the FY results. There will be a large loss caused by pipeline investment, but the first year with meaningful revenues from the oncology drugs on sale in China.
April sees the PDUFA date for sulanda in the US. Approval will be a marvellous milestone to celebrate. EU Marketing approval around the same time will lead to the unveiling of a new partnership to bring products to market in Europe.

This company does tend to do things it’s own way but it does have a strategy and a cautious approach to business born of having to go step by step. The next few years should get better from a delivery perspective……

As 2021 draws to a close there is a lot to look back on for Hutchmed.
A new (if clunky) name.
Sulanda and Orpathys marketed in China
Sulanda NDA in US, MAA in EU submitted
Elunate regulatory pathway clear for US

Many new Ph3 trials including combinations.
4 new drug discoveries licensed out to Inmagene, Tazverik in bound.
New factory build commenced
China sales force built out
US sales team building

New HK listing, lots of cash on the balance sheet.
The SP could have been brighter….but it is holding up better than many competitors.

Here’s to an even better 2022.

Pharma karma, I don’t smoke anything.
I am commenting on the psychology of the deal…Triton having got the Board onside will not want to lose the deal, and they start with few shares committed. Without an increase in the offer they are unlikely to get the deal done…..it will be a game of chicken between Triton and the institutional investors.
If there is an improved bid, it needs to be more than the 1% to get to 900. 5% minimum which takes the 883 to 927. I would agree more than 950 is unlikely.
Triton is investing money in a fund, it does not carry the asset itself, making it more likely it can fund a higher offer as it cannot be directly punished in the market itself for over paying.

This deal is a long way from done.

The current mcap is about the same as the new money raised and spent on acquisitions.
The old VL is deemed valueless…..can this really be true?
SP Seems to have overshot on the downside….but there needs to be a change in sentiment to trigger a change in the SP.

Not sure there will be a competing bid…..but as said by others the big institutions will demand and get a higher price.
930-950 to get the votes to make the bid work….

Iapr…..platforms have a maximum of 10 days to credit accounts with dividends.
Good platforms with high levels of automation do it the same day.
There really is no reason for them to not credit accounts on the day, maybe next day if overseas.

If I were GA I would buy.at the moment it can book a 10% instant gain.
Even if the sp was slightly below the strike price you could not buy USD100m without expecting the price to move substantially upwards.
Also by not exercising the option what are they telling the market and would that damage their existing holding.
I hope they will buy and the market will take this as a positive endorsement.

In uncertain times there is often a flight to safety/quality. Usually this means well capitalised profitable large caps.
Even after the gains in London and NY there are still quite large differences between the markets with HK higher than London higher than NY.
Reading the article it does not sound like the US actions will be severe, it might limit Chinese access to US technology….in which case China will need to build it…..but are the US going to force delistings on these companies - it does not sound like it.

I see the FT and SCMP have reported the possibility of extending the list of sanctioned investments to include some bio pharma.
HCM will be v unlucky to find ltself on any lists as it is not closely linked to the chinese govt or military…..but it may get dragged down by the others……there may be some rotation out of other shares into HCM in due course once any US list is revealed.