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I expect HCM will be examining something similar. They will need to construct a new facility as soon as the current new factory is commissioned….makes sense to put down more roots in the US

https://uk.finance.yahoo.com/news/beigene-announces-plans-build-manufacturing-110000485.html

So now we know what the Proceeds of the US listing are to be used for.
Acquisition of a Californian subsidiary Biovision of NYK a Chinese company.
Paying 12x sales (after covid sales removed) and about 30x earnings..not cheap but better than return on cash.

CHs interview is available on the Hutchmed website….one of the banner items on the home page

Hopefully they will launch the HK offer with the HY results.
The driver for the share offer appears to be retaining funds in Jackson….the timing of the demerger of Jackson and the share offer do not need to be linked….unless the US regulators actually want Pru to inject more capital into jackson

We have to be v careful in trying to apply US regulations to HCM.
HCM is a Cayman registered company. Operationally it is Chinese, but it is not linked to Chinese state bodies.

I thought CH was very measured in his Bloomberg interview and gave reassurance over the market fears about Chinese control of the bio pharma market. I suspect they will use NRDL to reduce margins and favour local producers. In some respects that is no different to NICE approving treatments and negotiating lower prices to pass economic value tests.

Sold 1% of the company…..still holds 7%. This is most likely Just profit taking and portfolio management.
Octopus has a successful IHT investment portfolio based on AIM assets…it has a need to diversify across AIM.

Transcript of yesterday’s call published by the fools
https://www.fool.com/earnings/call-transcripts/2021/07/28/hutchison-china-meditech-ltd-hcm-q2-2021-earnings/

The Q&A has improved and is the most interesting aspect as the management is forced off script.
CH says they have enough cash to do what they want with the pipeline. https://www.fool.com/earnings/call-transcripts/2021/07/28/hutchison-china-meditech-ltd-hcm-q2-2021-earnings/
They will consider in licensing if it is synergistic with their pipeline - I would like this to be aligned with ROW distribution.
China regulation trying encourage innovation rather than replication May release systematic resources that help HCM (space for trials and regulatory capacity).

HK 77.6 or 715p showing considerable upside

Surprised the rebound was so quick….today’s RNS about the orpathys gastric cancer trial with a 6m survival target timeline shows this trial could be done within a year.
It follows a study with good response rates, if this is targeting a subset it should get better results.
My guess is they think they will be able to use it as registration study with NDA at the end of 2022.

Results at midday, presentation at 13:00.

A robust s trading update today.
Looking set for steady progress into the 900s.
V positive macro environment for the company.

Still a buy for me.

Davey, it seems the Chinese have found the other way for Hcm to be rated like beigene, innovent, junshi….
This may turn out to be a good time to buy into the HK listings of mainland Biopharmas.
May have to make do with HCM.

MTB paying as little as possible is the point of the National drug reimbursement list….but in return you get access to a large number of patients. They let competing products onto the list to pressure incumbents into dropping prices each year……once on the list the best that can be hoped for is stable pricing…
Beijing probably has to do little more than let the pharma cos battle it out to claim good value….plus they know that if they confiscate property rights they will not get the innovation they need.

There were developments in education where it appeared China said companies should not make a profit.
Over the past 5 days Innovent, Junshi and Beigene have all lost 17-18% on the HK market.
HCM had a spike but has given it up in the same period.

Thank you for the endorsements and kind words…..I see much to be positive about for the long term future of HCM…..but we must not be blind to the challenges management face in building the business.
Next week (weds) we get the next set of financial reporting. The corporate presentation has trailed most of the drivers of the results. We will see the profit from selling the OTC JV, the increasing cost of pipeline development and early sales data. There may also be some greater clarity on the timing of pipeline data announcements.
I am hoping sales of Elunate have continued to develop, sulanda is becoming established and these clearly show the previous guidance will be met. The prompt marketing of orpathys adds a potential upside and I am hoping they will raise revenue guidance.
There should be a positive mood in HK and I look forward to listening to the presentation live or on replay.

Today HK has pushed on over HKD70.
We seem to have a virtuous circle with HK pushing the price up, and the US following it…HK then takes heart from US support and goes higher…..exactly the reverse of the UK US dynamic when there was no HK listing. The London market still looks to open on the US price rather than looking east.
We know HK will run out of steam and perhaps overshoot on valuation leading to a pull back, .but it is a good ride at the moment.

Nothing in particular affecting Aviva. most financials are down a similar amount.

Reasons to be cheerful
1 cash, HCM has approx three years of development spend in its accounts…
2 equity issuance should be limited to staff incentives, outstanding warrants and possible a large project
3 pipeline shows no signs of slowing up, indeed the combination therapies seem to be enhancing Elunate and sulanda.
4 AZ seems to be getting behind Savolitinib
5 HK and Chinese investor enthusiasm
6 commercialisation in China appears to be effective
7 depth of management experience

There are some risks out there
1 regulatory risks, until the FDA approves sulanda HCM is unproven in the US
2 US China relations are not better under Biden. HCM applies good standards and should be spared the worst consequences, but there remains the risk of forced divestment by US entities
3 unknown approach to US, EU a and ROW distribution needs to be developed
4 HK stability and whether HCM is sufficiently Chinese
5 operational risks of commissioning the new manufacturing site
6 succession planning for the Board who will succeed CH and when

I am expecting a competent execution by management…..there may be delays and some issues along the way but I expect them to be overcome….they have plotted an independent path and I expect them to walk the path to become a global pharma company.
I will be very happy if the sp doubles over five years, which is only 15% pa. Some of the PE investors hope for far greater returns.

Most financials have retreated recently as yields keep falling and inflation increasing.
A fall of 10-15% has been commonplace. In that context MNG has reflected the wider market and in some respects has outperformed. When the market returns to financials MNG is well placed.

An encouraging update…..vets have pricing power and customer loyalty and will be alright in an inflationary environment.
They will suffer if there is a reduction in pet ownership and farming of animals as meat alternatives are promoted as a climate friendly alternative.
Should beat the market today but whether that is up or down we will have to see..

Trading update on Tuesday per telegraph

Asia is quite diverse as a set of economies.
Pru has wanted to achieve top 3 in the markets it participates in, and wants ales growth. Over the last few years it has been ditching is more mature northern Asia life cos (Japan, Korea, now Taiwan) it has often kept the asset management units as they are useful to source assets for its wider funds.
For awhile Indonesia was the star performer, this waned. Diversity has been their friend over the years as Thailand, Malaysia and others have had their troubles. HK may have been a good performer in recent years but don’t assume that will continue.
Pru needs to identify itself as Asian to secure its future and leave London as a primary listing to be replaced by HK.

Bids are difficult in life assurance because of the capital requirements, also there will be many competition issues with AIA for a bid to succeed…..I don’t see a bid, but I could see further units being sold.

I am of the view this fund raising should have been done nay now to end uncertainty.