Full Year 2021 HUTCHMED (China) Ltd Earnings Call
My family has.
Oh.
Effectively been been moved back to the UK to schools. My my young three young thumbs or what went to boarding schools in the UK My wife had to move to be close to them and I.
I found myself in Hong Kong all alone.
With my young family as well as our parents getting older.
My wife, and I decided that it was time for us to move back to Europe . So.
About five months ago, I informed the board and the nominations Committee.
This desire we went through a very detailed.
Diligent succession process, which was already underway.
So some time anyway, and we concluded after looking at external and internal candidates and also asking the question.
I remain CEO based out of Europe , we concluded that the best way forward for the business.
Dr <unk>.
The next CEO parchment, I am fully supportive and I think it's a great thing for the business.
Why go obviously many of you are aware widely in his.
Is remarkable history and track record so.
It's a personal decision it's a tough one for me because it's been a long journey that we've been on but I have great confidence in the future of the company the organization.
The board and our shareholders.
I just wanted to say thank you to everybody for the support that's been given to me and the company through the years.
I really look forward to seeing great things coming.
From wider and the team.
So leaving.
Leaving it at that I would like to move now onto.
The corporate presentation I'm sure we can answer any Q&A.
At the end, but hopefully I think we will all understand that the the.
The reason for this move are.
A purely based on my family responsibilities.
So on page three you can see I'm, sorry to go back to page three please.
The agenda. Please thank you.
So I'll touch on some quick opening remarks than we have.
Ken home or Heng Chen.
The convention in China to talk about our senior Vice President of commercial and China to talk about.
Commercial results in oncology.
<unk> on Merit County, I will talk about our discovery and development programs, our CFO Jonny Chang will talk about the financial status.
Our Chief operating officer, Dr. <unk> will talk about operations and business development.
And finally.
<unk> will lay out the.
Upcoming events.
Final.
Closing remarks, and then we'll go into Q&A. So next slide please.
So <unk> is built just a fantastic platform over the last 22 years.
Great Pride.
Two two.
From this chart.
The organization now has over 4600 personnel across the group.
A team of 1500 people in oncology and immunology.
We have a genuinely world class global novel drug discovery and manufacturing operation in China, you can see that over those 20 years led by wide growth.
And the team we have created 12 innovative.
Small molecule.
Drug candidates.
Built a team on the on the innovation side too and over 800 integrated RMB <unk>.
Oncology and immunology teams of that scale anywhere.
And.
It gives us enormous capability in.
The pink box.
Obviously led by wide growth, but also by Maverick in <unk> and the rest of the world The United States, Europe , and Japan, we built up great clinical development and regulatory operations. We're currently running over 45 clinical studies.
Round the world.
And our first three novel drug a novel oncology drugs have all been approved and are now closer to approval outside of China. So.
Sure.
Creating the innovation in the blue box and bringing it to patients in the pink box.
Now on.
On the right hand side, you can see we've been investing greatly over the last three years.
Our commercial infrastructure led by Jen Hong we now have a team at the end of last year was 630 people actually now it's closer to 750 people on the ground in China covering all the main oncology hospitals in China in General who will take you through the results.
Last year and the very encouraging.
Unaudited.
Revenue results of the first two months of this year, which we've included in this presentation because of their.
Importance.
We've also built on the Merrick in all our commercial head in the U S home held a terrific group of people.
In the U S in commercial and medical Affairs, and now numbers over 50 people already for the launch of our first product in 2022.
<unk>.
So next slide please.
The 2021 was an exceptional year.
It was extremely hard work bye bye everybody on this call.
And we just achieved some fantastic things I put them into three buckets on the commercial.
<unk> side commercial results in China oncology with the two launches to London path is building the team up to 630 people and then commercial results that Gen. Hong will explain in a bit more detail later, but terrific.
<unk>.
Commercially.
The clinical portfolio.
Really enjoyed step change progress.
We are running 13 registration studies and another five plus a planned for this year.
Ore passes with Astrazeneca has stepped up to being a truly global initiative. We've just received word from Australia, we've triggered.
Global Phase III milestone of $15 million milestone in the last couple of days and that means that we are now moving very rapidly into a global phase III for the cyber degrees of combo.
And major data presentations.
A number of new assets have been put into the clinic and a good deal with that with <unk> on <unk>, Barry So a lot of progress on the portfolio.
And the last box as the global ambition I mean, one of the things that differentiates <unk> from many trying to biotech is that we don't see ourselves as the China biotech, we see ourselves as a biotech company, that's bringing homegrown Chinese innovation to the global market.
That.
Development organization clinical regulatory team in New Jersey, and then Europe is now a 130 or so people is allowing us to do that we've got seven assets in clinical trials outside of China.
For Clinton has just completed its global phase III. The fresco study, so where we're getting hopefully a readout of that middle of this year, which would be what youll be of enormous that footprint.
Surpassing that of the U S NDA and European MAA are filed and under review and in the very late stages of those of those processes.
And we're getting ready for the launch the second half of the year on <unk>. So you know.
2021 has just been a great year for us all and.
We're positioning ourselves very well for our 22 next slide please.
So I'll stop there and hand, it over to Ken.
<unk> home to talk about the progress in commercial.
So far this year.
Sure.
But to your channel.
Thank you Christian.
Next slide.
Uh huh.
Hudson met status on the ground promotion activities for aggregates.
And careful attention to <unk>.
So 2021, what's the first full year for catchment who commercialized.
<unk> products.
The annual rate on our solander suites and commercialization platform.
The first slide shows Hudson that the commercialization capability in.
In terms of the team side.
<unk> leasing Hudson city coverage.
We can see that the tintype increased to 670 by the end of 10 depends a lot on the while continue to expand.
It's up in its growth.
The growth of all hospital pharmacy listening hospital and the city coverage.
71%.
73% and 40.
10 minutes actively comparing with the end of September .
Next slide please.
This slide shows the market performance of Equinix.
I mean, it attempt to $71 million in market itself in terms of 10 to one.
111% growth.
The 10-K.
More than.
<unk> 2000, and it suddenly seeing new patients were taken away any intent dependent one.
Around the 4800 educational events.
Okay.
And he wanted to emulate a call.
Adding to the post the launch of chicken studying implemented by our Caribbean.
And then it changed the senior leadership by exceeding the marker.
Which was launched two years early.
Yeah.
Is there any need to capturing 39% of patient share in Q4 last year.
And interconnect testimony partner DRG review last year with only 5% price cut.
The 10% temporary while the outcry.
Yeah.
From the January taken of the patient in the combination and audited the first two months after Tencent Tencent tube.
We tend to see I know it continues to keep very fast growth.
Next slide please.
Yes.
This slide.
The market compliments of Orlando.
So landa was launched generate 10 to 21 and that came with the $11 $6 million in month of sales for the first of the year.
About 4800 patient with tainted by Philander animals on Teva call them, the peace more modeling and academic lengths tend to change a lot.
Okay.
Comparing with the average at 64% price cut across all oncology products.
We weren't successful with slack and teams with B L.
52% price cut.
We can see that changing the patient the number you can generate this year, which was one of them that first amount for investment.
San Juan phone net thing a year ago.
The value growth increased up to 21% in January and February this year, although that was the price cut impact.
Next slide please.
Yeah.
The last slide.
<unk>.
Often it often.
<unk> is the first lean cost met inhibitor and it was launching in July and they tend to widen by our commercial partner.
Outside of any kind in China.
Around the 1900, new patients were treated in the second half of this year of last year.
With about 16 million U S dollar.
No about the searching for the new patients per year with met exon 14, skipping for lung small cell lung cancer.
Even more importantly.
Yeah, well over 100 small them and that's G. When patient in China across all indications.
So seven registration studies are already ongoing in China.
<unk>.
Lung kidney and gastric cancers.
That's not in any case, a strong commercial partner.
It has a well established and extensive commercial platform on lung cancer business.
There are a lot of synergies.
<unk> <unk> and then it kind of asthma lung cancer products.
We can see opportunities.
Also had a good start in the first two months of this year with seven four beginning in.
The market itself.
So overall, we have had a very good in 2021 and are off to a soft start in terms of 'twenty two.
Pat.
This momentum will continue to go from strength to strength.
That's all of our commercial team continues to build over the balance of the 10 to 20.
Thank you.
Thanks, John .
Now I will hand, it over to why Marek to take us through the discovery and development programs, where I go Mark.
You may be on mute.
[noise] Shaw I was okay. Good evening and good morning America, and I will give you an update on our pipeline and excellence.
Yeah.
So 2021 was a busy year a year with significant progress on our pipeline highlighted by NDA approvals for several isn't a answered with fashion being China.
NDA MAA submissions for <unk> in the.
The U S and EU.
And at the same time progressing our second wave of compounds and as elusive and solve the planet into registration studies in China.
Next slide.
But behind the initial approval travel isn't being China.
With our partner Astrazeneca, we are now shaping a very strong lifecycle management strategy with seven studies, where the registration potential across lung kidney and gastric cancers.
Next.
Yeah.
Three of these studies in Egfr mutant non small cell lung cancer with met amplification or overexpression using degrees. So silver combo supported by POC data from Tanton Orchard and the ongoing Savannah studies.
Next slide.
The <unk> study is a global phase III.
Given PRC suite supported by strong data from the Calypso study in combination with <unk> in phases.
To date.
<unk> patients have a poor prognosis and very limited treatment options.
Moving moving to sort of affect them.
Let me first ask my colleague Dr. Americana head of Hirschmann International to give you an update on our global activities.
Yes, Hi, Mike.
Marek.
Through a partnership.
We spent really majority of last year progressing our red lobster processed in ambition to come back down a combination of coverage with number of.
A combination partner Thanksgiving.
Hey.
PD, one big chain, because you can see on the slide summarizing our package tour, our regulatory submissions across U S EMA and.
Near future.
Japan, we progress this package through.
Regulatory process.
As a reminder, this package.
Two positive phase III studies conducted in China supported by.
My boss packets of U S patients from U S someday.
Christian.
But again, we haven't.
Review process in the U S.
Pending some remaining inspections.
Any kind of side as well.
Mandatory inspection on the manufacturing side on my side.
120 day assessment moving to late stage.
If you're a prospect.
Mike.
Whether we are progressing our review process, we also push down Pat.
Aggressively preparing for.
Shall launch building, a very capable medical insurance team as wireless.
There is strong.
Commercial team currently 64 F C.
Uh huh.
As launch Worldview four.
Strong asphalt.
Somehow.
Next slide please.
Okay.
Yes.
Lifecycle management program for Sufentanil is currently a focus on PD one combinations.
You saw Tori, Panama, being China, and <unk> globally.
Based on encouraging phase two data, we initiated a phase III.
So torry.
One study in second line <unk>.
Endocrine carcinoma, and we are preparing to initiate another phase III.
Second line esophageal cancer later this year.
The indications will be considered if more mature data would support.
Now moving to <unk>.
Next slide.
Back to merit.
Yes, let me quickly summarize huge efforts in 2021 progressing our pricing program, which in addition to conducting our combination studies with <unk>.
So PD one combination.
Our majority of our foreign to us focusing on that.
Upon execution of the two.
<unk> and.
Global starting as a reminder, this truly first.
Phase III Global study conducted in 14 countries.
Across 150 sites I'm pleased to share that.
So in December we reached full enrollment and we.
It just happened in 15 months.
Probably the Pandemics and limitations there was huge upfront on the team.
And we have great for physicians and patients wanting to.
During this Sunday.
The highlights are high unmet medical need to introduce a few of them.
Before something Thats.
Also confirm and give us high confidence.
They will complement our robust international package.
Would it be based.
Upcoming NDA MAA submission.
Submissions.
Importantly safely permit this package was fully aligned with the USDA.
In asking the scientific.
Patients as well.
Japan, one last go around.
Our.
Pmt's submission.
Next slide.
In China, we continue to expand lifecycle management programs, both through Clinton at the fruit Tigger study in second line gastric cancer in combination with Paclitaxel is expected to complete enrollment.
Second half 2022, and top line results mid next year.
Combination with a PD one inhibitor <unk> currently.
Second line endometrial cancer is already in the registration study with HCC and RCC Registrational studies to follow during 2022.
Yeah.
Moving onto our second wave of compounds and elicit the Pis forget Delta inhibitor and several planet S Y K inhibitor close with applications for hematologic malignancies next.
Speaking of.
Hematologic malignancies, we are building a very strong portfolio to date six compounds.
Already in clinics with several more in discovery.
Together the portfolio provides a broad coverage of three subtypes lymphoma leukemia, and multiple myeloma with a diverse.
Types of.
M always.
A strong potential.
Full combination.
The two lead compounds <unk> and solve the planet progressing two registration studies in China.
And are making good progress as well in global studies and excellent.
But China multi cohort phase one B study continues to enroll mcl CIL.
P T C L.
Yes.
Follicular and marginal zone have moved into phase III registration studies last year.
Based on our favorable efficacy and a safety profile data in Follicular published at ESMO 2021.
China CD granted Amgen elicit a breakthrough therapy designation for Follicular, we expect to complete enrollment for both indications this year and potential NDA submissions during 2023.
Additional indications will be considered for registration studies if data supports.
Several exploratory studies, including combination with Tazemetostat preparing to start this year.
Slide.
Back to Merrick.
Yes.
Both sides, we are conducting parallel development for Brazil.
And based on our initial promising results.
The only thing.
Our development, we expanded significantly and our ongoing studying tomorrow than 200 patients.
Zero.
Cohorts as you can see we believe in the second half of the year will be in a very good position to.
No the only having a more robust dataset, but also longer tunnel, which will inform our next phase of development of decisions at the same time. We also embarking on combination studies as we speak with several potential combination partners.
Next slide please.
Continuing onto our sick inhibitor solvable planet or H M. P O 523.
In addition to lymphoma, we completed phase one slash two study.
At <unk> last year.
<unk> is a validated target for ITT as you know first and then it was approved in 2018.
<unk> is a much more selective.
<unk> inhibitor and demonstrated a favorable safety profile with much improved the Gi and hypotension safety profile.
Level of efficacy in this phase one slash two study was also very promising or 80% and durable.
Our 40% Elba with smallest emphasize it.
Based on our favorable efficacy and safety.
<unk> granted subtler planet breakthrough therapy designation for ITT.
Phase III study is now ongoing we expect to complete enrollment by end of 'twenty, one 'twenty, two and topline results in 2023.
Next slide.
On the global side for <unk>.
As you can see we have to come back really parallel development in as well.
Especially on corn.
And then in.
The lymphoma conducting as we speak.
Hope to report more data.
By end of the year, which will inform our next phase of development in lymphoma.
Same time, we are.
Recurring <unk> for our non malignant indication ICP again is why I can match them based on promise.
From our China service on a game that's part one.
Our own development.
Next slide please.
Yes.
Okay, just a quick update on.
Tazemetostat.
Tazemetostat is a first in class <unk> inhibitor approved in the U S.
We believe aegis II is an important target with the potential for both solid and blood tumors last year, we entered into a collaboration with <unk> and again <unk> for greater China.
Yes, they are.
Our priority is to bring it to registration in China quickly.
Currently the bridging study the bridging study in Follicular has been clear and this study is ready to go.
Second registration study the global Symphony Symphony one.
In second line Follicular will be starting off shortly as well.
In addition, we are in.
Interesting exploring a broad range of indications, including in combination with <unk> Elisa.
<unk> Internet and <unk>.
Globally. We're also in discussion with episodic to potentially explore combination with <unk> in lymphoma.
Next slide.
To sum it up.
We are expanding our registration studies with our late stage compounds, both in China and globally. We anticipate this to continue with more compounds, reaching registration and approvals next slide.
At the same time.
Portfolio continues to grow for new compounds into the clinic recently.
Our goal is to build a pipeline that can provide a good coverage of various tumor types with diverse MLS that allow science based combinations.
Although all of our products to further improve efficacy and to maximize the value of our products.
Next.
Alright. Thank you. Thank you <unk>. Thank you Margaret.
Now I will hand, it over to Jonny Chang our CFO to cover.
On a high level the.
Financial results that were published today Johnny.
Okay. Thank you Christian.
Next slide.
Okay. We have a strong balance sheet end of last year with cash resources to over $1 billion contributed by cash proceeds from various sources.
The IPO the pipe and the divestment of our non core OTC business.
Moving on to our operating results in the next slide.
Okay.
Group revenues up more than 50% to over 250 minutes.
I encourage you revenue was in line with our guidance at approximately four times of 2020 revenues.
Our R&D investments up over 70% to around $300 million.
Investment in U S and EU have increased significantly and is now at a scale similar to China.
The divestment of the OTC business together with the income from the other benches have helped to offset the cost of the R&D investment.
As a result, the overall net loss of $195 million.
Next slide please.
So on this slide we can see still a lot of value within our other benches looking at a high level those businesses have to de lever the over half a billion dollars of net income in the large chunky yes.
So if we divest further the non core business, we can help to fund our R&D investment in oncology.
Moving on to the next slide.
Well you all heard from channel talk about the commercial progress with best in May and the momentum that continues into this year.
We also see strong initial results in January and February so as a result, our guidance for 2022 is $160 million to $119 million revenues from the oncology business. This.
Is it China only so we will incorporate the global revenues and deal costs, when we see the approval coming outside of China.
I will now pass to <unk>.
Kevin.
Thank you Tony and next slide please.
We are building a world class leadership team much met in line with our ambition to be global innovative oncology biotech pharma company operating to international standards.
What's really notable about our team of leaders he has a long tenure and the track record.
But also in other major multinational pharmaceutical companies.
Tom held U S commercial head and Selina Yang who joined US recently as our new head of global H L and myself as the Chief operating officer are all doing more recently to filling new roles in the company.
Actually there are many more highly experienced leaders who have joined us beyond the few that you can see in this white box on the slide.
Next slide please.
We've doubled the number of people in the oncology team in the last two years.
The sequester.
We currently have 1500 people and last year, we added more particularly in clinical and regulatory so that we can run our China clinical trial programs with an in house team to better speed and quality as well as building out our international clinical and regulatory team to ensure we can run truly global development programs.
As you heard before we've been expanding our oncology commercial team and at the end of last year. We had 25 people in the U S. Commercial it's now expanded to over 50 people in U S medical and commercial in anticipation of the launch of suicide units this year.
Next slide please.
We've had clear success with our in house R&D pipeline as evidenced by the three innovative medicine approvals in China.
Specific partnerships are also very important to us.
From a business development perspective, we engaged in four key activities.
Firstly, we have long term strategic pumps shipped with multinational pharmaceutical companies, such as Astrazeneca and Eli Lilly.
Secondly pipeline synergy collaborations and see really see count the best combinations for example, with Emricasan can chip in.
And Beijing.
We're also looking for partnerships to increase our bandwidth and finally to gain new capabilities in oncology for example, in the biologics area potentially through strategic acquisitions.
Next slide please.
We have a clear strategy.
Geographical perspective.
In the largest two markets the U S and China, we will launch with our in house team, let's partnering out elsewhere.
We have the cash and the resources to be able to commercialize ourselves in China, and the U S, which makes sense. If we can retain the maximum economic value from our innovation.
We already have strong commercial track record in China, and the U S team is moving forward now with seven clinical stage assets, but also setting up a suicide switch.
<unk>.
For the three late stage products in the international team, we have clear registration plans in place for the U S EU and Japan with clinical studies underway and we have the capability to self developed in those regions.
However for commercialization in Europe , Japan, and the rest of the world, we recognize the complexity with more than 100 different countries each requiring in depth local knowledge to be successful and so we've chosen to look for strategic commercial partners outside the U S and China, starting with Superfast Nip and frequenting it does.
Yeah.
I'd now like to hand over to Waco.
Yeah.
Thank you Karen.
Next slide yeah.
So a quick update on the upcoming events in China we.
We expect.
2022.
Work with so many studies ongoing.
And 23, a year of results and a potential regulatory submissions.
Obviously, we will be publishing.
Scientific data along the year.
Next slide.
Globally, 2022 will be a transformative year with important milestones to hit including potentially through <unk> approval and launch.
For coincident with the fresco Tu tu readout and potentially file.
Next slide.
To conclude we expect the momentum to continue in 2022.
China commercial will continue to grow in the U S set through stock.
Development programs continue to expand with potentially more.
Multiple NDA is lined up for the coming years.
And our organization is set to grow to support the execution of all goes.
In the next few years.
So 2021 was a busy and fulfilling year and we expect 22 to two equally busy and excited.
Next slide.
Thank you and I think we are ready now to take questions.
Thank you we will now begin the question and answer session with no participants with questions to postpaid is the real one on your telephone keypad and you will be placed in the queue to cancer the queue.
Is there a room.
Once again is general one on your telephone keypad now.
Our first question comes from the line of Alex China from Bank of America.
Go ahead.
Hey, everyone. Thanks for taking our questions and Christian wanted to offer our congratulations on your move obviously quite a legacy you leave behind a hutch met.
I guess two questions from US first could you maybe talk about two things.
Cory Palomar for the statutory to study versus some of the other PD ones such as.
And is there anything emerging from the clinical data that would suggest that these assets synergize differently.
With savanna or any of your other assets and as a follow up to that when you think about the combination strategy is going forward how much of your approach will be on top of the approved therapies like PD, one versus rational combinations in house together with some of your earlier stage assets.
And then secondly could.
Could you talk a bit about what led to declining the NR <unk> inclusion for Savo I'm guessing. This was about the balance of access pricing concessions, but any color on your thoughts of Astra is would be great. Thanks.
Yeah.
Maybe whitewash.
I think during the Q&A whitewater, we'll leave it but thank you Alex for your kind words, and maybe why grow handles. The PD. One question then I can maybe give a couple of comments on <unk>.
Yes sure.
Yes, thanks for the question Alex.
Tori Oh two is the.
Registration study.
In esophageal cancer being planned and we plan.
We anticipate the star.
Sometime this year.
The combination with Tesla is actually an exploratory stage maybe marriage.
Give you some more details.
Yes, Alex Thanks for question.
We then go into details but.
Across the <unk>.
Yes.
So we're partnering and Boeing has multi cohort combination studies going on with Tesla.
Obviously, we hope by end of the year well in his new position of formulating some good proof of concept.
It kind of across.
Cohort, we have colorectal or we have a small town.
And so on so that's a little bit.
Currently focusing is already.
Alright.
On the signal from those projects.
Good question from a U S perspective, obviously.
That's all.
Our first priority.
Thanks America.
With regard to your second question on our kind of preference.
Preference for.
For combinations approved versus our own novel drugs.
The PD ones are really a window of opportunity that we pursued and it really <unk>.
Generated very promising data that now.
Resulted in.
Multiple.
Registration studies.
But going forward, obviously, we would love to.
Combined with our own products in our pipeline and our ability to address.
Strong on that medical need obviously, all these combos will be will be a science space as I was.
Walking through the.
The pipe all pipeline chart.
Our goal is really to design and build.
A pipeline with diverse M away at that can cover the tumor types.
And that offers.
Our highest potential for science space combinations, I think going forward you will see a lot more.
Such combinations, maybe Christian can touch on it in audio for silver.
Thanks Jordan.
It was a tough decision astrazeneca and Hodge made agreed our strategy going into the negotiations for <unk>.
The gap was just too too wide.
The regulatory authorities wanted to deeper discounts than we were willing to accept one of the reasons that we didn't accept it.
Because <unk> is a first in class asset in China with the only selective <unk> inhibitor in China, so until such time as.
Yes.
That changes.
Where.
We're happy to go on self pay with big patient access programs to help those lower income patients access the drug.
My sense is that.
From a competition standpoint.
Unlikely to be anything coming to market.
Anytime soon so I imagine we will we'll go back to the discussions with the regulatory authorities for the <unk> discussion this year.
And we'll go into it with an open mind, but it will be dependent on the competitive environment.
And under reasonable a reasonable discount versus an extensive discount.
Got it makes sense. Thank you.
The next question comes from the line of Rotten Chalmette from Deutsche Bank. Please go ahead.
Hi.
Questions on <unk>.
And congratulations on.
Anytime.
Best of luck for the future.
First question actually relates to that see the change in CEO and Jeff.
You mentioned it was something that you would inform our board about five months ago.
Just wondering why does the kind of immediate change in CEO as of Tomorrow, and why Theres, no kind of longer transition period.
Maybe I'll follow up with a second months afterwards.
Yes, Thanks, Raj and I'll answer that one.
<unk>.
None of these things happen overnight.
I've been away from my home for 34 years.
Good.
As I said, it's been 27 years in China I am not sure there are too many western executives that have spent 27 years in China.
And as my family and my children has been growing up I know, it's been in the back of my mind, but I have to say.
The move of my entire family to the UK just for their education that that really was the was the event that sort of pushed me to the point of realizing.
Staying in Hong Kong and Shanghai for myself was not sustainable so yeah, we approached the nominations committee and the board in September where I did.
And.
And we have an ongoing process, but we just sort of escalated the intensity of that process.
It does seem im sure to everybody that this news today as quite a surprise, but obviously its a sensitive matter that we couldnt signal.
To the market until we were until we were ready.
And as.
As we worked through his board and concluded that <unk> was the head and shoulders, the best candidate for the succession.
We've now come.
With this as quickly as we could.
The reason the reason for no extended transition as we feel that first of all you don't want to have the old CEO hanging around it's even hard enough in the analyst call today, right and certainly don't want it in the long term.
But <unk> has been deeply involved in all aspects of the business over the last 16 years, there's no need for a transition as it were other gun.
In my role as a strategic advisor to be there for wide roads to help him in any way I can.
With would be areas that ive been managing independently.
Independently over the last few years and also to help the board and.
Simon.
The Hutchison group too.
To keep the momentum going so I'll be there as a strategic advisor.
And as a result, there is no need for some sort of extended transition hopefully that answers your question.
Yeah. That's helpful. Thank you.
And then just maybe one on operations and on the.
<unk> side of things just.
Flagged in the release that.
You would look at obviously non core asset divestments as a potential for future financing, but then also potentially a.
Second or forecasting in Shanghai, but could you just perhaps talk about your preference for either of those.
<unk>.
Choose to go for Shanghai listing would that mean that you would think.
Yes from another exchange.
Maybe I'll.
Sure.
Assignment Simon <unk> to answer that question, maybe Johnny to supplement why does that make sense to you yeah, absolutely that was going to suggest.
Okay. Thank you Simon total here.
Yes, as you know we divested of the Bayou designs.
You know the company and.
It was a very good.
Turn for our investment in desktop Denis.
We of course have this other.
PCM business in Shanghai.
On that.
This quarter, we call <unk>.
The city of Shanghai, <unk>, which is the cardio vascular.
Prescription medicine and this is a very successful company.
And there are a lot of people wanting to buy this asset.
<unk>.
Of course, you know.
We feel that we get an offer that is extremely attractive.
We will consider it and that would.
It's very good for the can you speak shareholders.
Matt if.
If we can raise a bunch of money.
Non diluted financing and then that would then.
That's very.
Cash reach.
$1 billion in the bank now.
We could.
<unk> got up and that will give us plenty of runway to order philosophy apply bullish thing in Shanghai.
Yeah, that's what we are considering right now.
Thanks Tommy.
Johnny.
Additional comment.
No I think I think we will continue to discuss explore with the interested parties and.
Our chairman.
Mr. <unk> said that this <unk> is a very attractive business. So there are many parties who are interested and so we will we will be very selective and as far as the.
The listing in Shanghai, I think we understand the process have been.
In our extended purposely, but now it seems that authorities.
So it is in China have been able to speed up the billing process. So we will we will again go back and I'll be available.
That's the plan and then if the timing is right and they will.
Let me share some of this.
The initiatives that we have are looking to earlier.
Yeah.
Okay. Thank you very much.
The next question comes from the line of Louise Chen from Cantor Fitzgerald. Please go ahead.
Thank you for taking my questions Christian Thank you for all your contributions to Hutch, Matt and good luck with all your future endeavors.
My questions are as follows can you help us think about the global sales potential of your oncology and immunology portfolio and how you plan to get there and then on the cash balance you have a very strong cash balance what are your capital allocation priorities.
And then last question I have is how should we think about the trajectory of the U S launch of surfactant and what kind of sales should we expect to see this year and what is the U S sales potential of this strike. Thank you.
Yeah.
Yes.
Okay.
Global sales.
I'll ask America, and Christian perhaps too.
Taking the question.
Yes, Thank you John .
Yes.
Europe sales potential we are not going to speculate on numbers everything it depends on the timing for approval and as you observed.
Dynamics with pandemic related scheduling in Paducah changes, we're not going to speculate when that will happen we are still pending some infections.
Now that all depends came on the horizon to maximize our launch readiness non commercial activity post launch and we.
Confidence with our profile.
It wont be a good place and the testing so you can economically resilient haul billing.
When appropriate, but we feel very confident.
Overall.
On your first part of broader portfolio performance and <unk>.
Tina.
I think it's really a robust.
Global development to maximize our global model.
Future commercial potential obviously talking from patient on online.
Clinical trial, and bringing those patients representing multinational regardless of clinical practice.
We believe this.
Differentiation profile.
Planned two phase to grow in third line plus color lifestyle testing.
We feel very confident now.
Obviously pending topline results.
Okay.
Hi.
<unk> from.
Approved agents protect dawn and 25% of them.
Agents approved in this setting.
Everything else subscription thing.
Quick question.
Around there.
On the broader portfolio, obviously will be led by science and maximize our positioning in the respective et cetera.
Clearly on the on bringing new clinical benefits.
We believe that maybe some of the results of commercial success as well.
I'll stop here for some lines.
Yes, Thanks, Brian It's a good question I think we provide in the appendices to our corporate presentation.
Quite detailed analysis of the global patient populations in the indications we're going after for frequent to nib and sort of tried to nib.
I think if you're modeling it you can just assume.
The levels of pricing that that you would expect for these targeted selective targeted therapies in oncology.
Obviously, <unk> been sort of flat to maybe have many hundreds of millions of dollars of global potential outside of China and inside of China as well. So we don't see the both of these drugs become billion dollar drugs. So that's what our what our hope is.
On the capital allocation.
You can see it joining shared with you the financial results from this year.
The investment in R&D.
Around our international activities is now effectively caught up with with our investment in China.
Clinical regulatory operations, so about 150 million U S dollars each of R&D spend I would expect as the pipeline continues to develop.
We will see those continue to increase in both areas, but probably particularly outside of China. So that's how how we think about but as Mark says, we allocate capital based on the science based on the clinical data and as we see exciting clinical data come forward I'm sure we'll be allocating aggressively.
Weigela any any thoughts comments on that.
Well I think in general.
Supporting R&D.
Our activities and expanding our manufacturing capacity and ultimately can also building our organization.
Further to support our all goes.
Particularly on the globalization side, so I think I think.
This would it be.
So many of our top priorities.
Moving to the third question with regard to the trajectory of the U S launch of <unk>.
I think American probably.
Shed some light on that.
Oh, My God I can't.
Address that.
Depending on the timing of approval.
Or is the.
Our strong positioning.
A few factors it depends on the final label and.
And the timing of sort of launch.
Sure well aggressively position to maximize our six months first six months of launch trajectory.
Perfect.
Perfect.
And again similar to colorectal.
Only 11.
10% of patients are treated with currency.
Hmm.
Target the Beijing.
Then two apartment profile has plenty of space to play.
Thank you.
Good.
The next question comes from the line of young Wang from Credit Suisse. Please go ahead.
Thank you.
First of all.
Good luck to you.
Sorry to hear that.
Christian.
Okay great.
<unk> creates work for the company and also to win core congratulation to be it's going to become the CEO of the company.
Are you sure you go past and my question won't be central around industrial setting their breath of FDA review process.
In your presentation of mashing, the middle late cycle review meeting and have been created.
Do you have any kind of.
Any color on the beauty and also our menu.
Manufacturing and the cream corresponding inspections candy, so I assume that that was going to be virtually inspection wells that will be on that.
Issue Kevin.
In the recent days I have seen some career comprehend when they did their some virtual inspection it seemed to be some problem and they just want to get a color wins on the inspection side and then lastly for those sort of pattern there, but we've got approved in the U S. What could be the label will say.
For second line third line or exactly where we expected the labor to be thanks.
Thank you okay.
Yes.
Yes go ahead.
So thank you for your question.
Regarding your question number one our ongoing review, obviously I'm not going to speculate about outcomes, nor is showing because of the review but.
As you know well a regulatory review process is long complex and robust.
So it has a relative play.
Any regulatory agency.
Importantly, royal to play.
And this process to go through full completion and there are multiple paths of engaging.
Collaboratively with agency answering mainly and then a question.
But what I can say.
<unk>.
No.
So definitely a few months too.
Go through regarding your question about the infections from SBA perspective.
It does not like virtual inspection, so I think that's the reality of today.
Paul.
<unk> seen across number of sponsors and indications.
Application.
SBA is being in the backlog.
Infection issues, including not just China related, but also domestic and U S.
Limitation.
You've seen strength.
So even reacting Purdue has suggest that you go through there.
Workload.
So we do expect that.
Whenever possible physical inspections, and we will have to happen.
Obviously really helped the regulations so the limitation within China to travel and things move will be.
Tom.
Limited and allowing them to happen.
Excellent.
But the rate process.
Financing to complete.
Obviously, we're already on both round one.
You should.
Our notification.
Your last question about labeling.
<unk>.
And that space is not really lines.
Yeah.
Indicated probably on the information we have.
But it's in that zone.
Matt.
<unk>.
And.
Peanuts peanut indications so that's that's our ongoing review.
We won't be receiving labor lens it won't be in that line.
Discussions.
Pending so we're not there.
Yes.
That is one of our strategic aim and we continue to be there.
It's on both sides.
Bobby.
I don't know exactly to your question.
Thanks, Eric.
Okay. If I may a quick follow up so often in your presentation, where you showed so when look at the prior therapy right.
China Phase III data.
Yeah sure some difference with U S. Caribbean starting Ryan for example, if we look at.
Prof MRO the message used in China. The percentage is very low and you asked for it you can start it's very close to a 100%.
Does that indicate there's some some kind of standard of care of depressed butane you asked him in China.
Well as we said.
Some of them.
Broadly similar obviously there are some differences because the timing of approvals in China at the time of the conduct of the summer.
Yes.
Because you have limited access to targeted agents at some point in the timing of approval I'll tell you. When you look at the historical data that as humans and some difference, but keep in mind that bridging study bridging southern cross both peanuts and peanut in U S. Let's come back to that in the highly refractory population.
In line with the prior therapy.
And aligned and so you know you.
Obviously that population there was no point of time.
In parallel, but really demonstrating things tend to pick up the data.
Well.
Four P king.
PK analysis.
Almond prices.
Now consistent result.
You cannot you cannot compare one to one between a phase III start to come back.
Correctly before and the highly refractory population in the U S.
Phase one.
Okay. Okay.
Yes.
We have a refractory.
Talk to you.
I'm quite.
Impressive.
<unk> benefits in this highly pretreated population and that's what's encouraging.
That's what drove us.
<unk> actually even western Europe .
Thanks.
Yeah.
Youre welcome.
Yeah.
The next question comes from the nine T. One from Jefferies. Please go ahead.
Hi, Sheila.
Jefferies.
Finally on behalf of Kelly.
Congratulations on the great year I just have two quick questions number one.
I think in January for <unk> showed a great data and phase one metastatic colorectal cancer trial.
Wanted to understand whether the trial data will have any impact on the timeline of your Fracs go to trial and also the.
Maybe subsequent potential filing for NDA and my second question is your commercial build up in the U S. I understand your China commercial <unk> commercial team has progress very rapidly looking at the U S personnel on Slide 37, you show the 25 people in our commercial team in the <unk>.
Could you share your plan for your U S commercial buildup, maybe this year and next year. Thank you.
Yes, Eric.
Yeah. So first question about.
For companion data.
But overall, we are very encouraged by our results in Las Vegas.
Dosing cohort.
Yeah.
You saw on the slide and we're just consistent again mimicking almost like fresco.
Population and the other cohorts, making principle to population.
I'll answer your question directly now is not does not change our obviously timing of projects three of our ongoing effort.
Because we completed the enrolment.
Enrollment pending mature at the end result.
Event, driven overall survival that can rebound.
In the second half of the year, both phase one study.
Turning to <unk>.
They completed in China.
The approval in China.
While the entire package.
Implementing out there to support the project so.
What this phase one study is giving us really confident some consistency across different settings.
And also from certain of our assumptions and our flexible.
That's been very encouraging.
To answer your question about the commercial build we are now.
Very active.
<unk> launched horizon is Mount actually cross functionality in both commercial and medical affairs teams are working.
As we speak very hard thing.
Quantify what's actually as of last year.
Currency combined.
Head count as I showed with the Q4.
Or will it be.
Flat.
It's obviously built we're continuing we're continuing to expand with our frequent.
Top line results, so the beauty and efficiently. So we have here.
Operating within Gi oncologists space Lance.
As well as future colorectal.
There is a number of efficiency and with the current existing very strong team on both commercial and medical affairs side, which will give us great trajectory upon substantially based on our business in the.
Second half of the year, we feel very.
And positive confident that our five well program.
They can enhance consumer launch.
Will it be at the margin parity with what the needs are highly concentrated.
Congress and like have them expand.
But also as a tool interact with health care professionals and they are coming from the whole trade.
Yeah.
I'm thinking of a question.
Yes.
Yeah.
Yeah.
Yeah.
The next question comes from the line of Mike Mitchell Panmure Gordon. Please go ahead.
Thanks, Brian .
Thanks for taking my questions the first.
You shouldn't see it go Kristina congratulations on everything you've achieved with <unk>.
And also congratulations to while I go for assuming the leadership role I just wanted to on that point given that both CEO and CFO roles can be taken on by <unk>.
Are there any organizational changes that have been made in R&D, specifically to further support the CSO role I mean, clearly it's been a dedicated so responsibility for why go to date, but just wanted to see how that would potentially change organizationally.
Well thanks for the question.
We are actively evaluating several options both internally and externally with regard to the CSO Roe and.
I think there will be.
Organization change in the future.
Understood Okay.
Thanks Waqar.
I think I read between the lines there and also.
I just wanted to follow on from <unk> question actually I'm, just wondering what the optimal global capital markets presence looks like but I'm just thinking about the proposed Shanghai listing.
The listing is already in the U K U S and Hong Kong is a supporting full global listings a realistic expectation on your side over the future.
And maybe I.
Maybe I could say.
Johnny.
Yeah.
He'll also lead time, and then Jonny mentioned as well, but I think it's.
<unk> three <unk>.
Lat am.
Obviously, we've mentioned during this call that.
We are we are evaluating.
Other opportunities as well.
I think it is not realistic to go higher than three listing, but I'll hand, it over to Joni and Simon to say a couple a couple of things.
Yeah.
Johnny.
Oh, yes, so Kurt.
Johnny.
Maybe you go first.
So sorry, you go first.
Yes.
At the moment.
Didn't really see any urgency to apply.
Apply for Shanghai listing.
I was in Shanghai recently.
The stock exchange.
They did mentioned that yeah.
What we like.
<unk> holistic.
But.
At the moment.
Plenty of cash.
Also alternative.
Nancy possibilities.
Non diluted financing possibilities.
So there's no real urgency.
Oh.
Shanghai lifting of course, we will look at what's just the best.
For the shareholders.
So yes, that's my answer at the moment.
John .
Yeah, No I think I think this non dilutive financing.
Corporate be it at the highest priority for us to look into and there is no immediate to the run rates in terms of our cash balance.
It's more than two years.
<unk>, which is our average for biotech company, and which is healthy for us and we.
We had also our.
The other ventures that we talk about.
Potentially if we can find a good buyer for that I think that that is something that we will focus a little bit more resources on it.
And for Shanghai listing like like Mr. Told just mentioned I think it is.
We will continue to evaluate and we will not eliminate that.
Possibilities, but but it's just not the agenda method for us.
That's great. Thanks for your response to Brian Congratulations once again.
Thank you.
<unk>.
We are now going to take the last two questions and the next question comes from the line of John .
Please go ahead.
Hi, Good morning, Thanks for taking my question I also wanted to add my congratulations to you Christian truly build one of the leading biotechnology companies in China, So congrats to yourself and obviously to the to the whole team.
I just had one quick question really on the sick inhibitor. Just curious if you could talk a little bit more about the timeline for global development and the reason I ask is we obviously have a few sick inhibitor has improved in the United States, but your asset.
As a very interesting safety profile as well as efficacy. So curious about the timeline for global development. Thanks.
Yeah, I'll I'll first give you.
My thoughts and American can chime in as well. So we are all very excited about that.
Proof of concept data no China as it is in phase III, we all considering.
The U S and our global development activities for <unk>.
For the sick inhibitor and and we believe that data is very very competitive.
Obviously with regard to timeline.
Operationally.
We are mobilizing maybe American all you can chime in and provide some more details.
Thanks, Michael So John .
As Michael said, we are aware of.
Very encouraged by the profile and we believe.
It can really stand out.
Having said that we are aggressively focusing on execution of the expansion cohorts.
Yeah.
This study was impacted by our colleagues limitation on kind of slows down.
So now we are catching up momentum.
In the second half or maybe even by late this year and well have our cohorts.
Next question on the phone it's completed.
And these are doing data assessment and what do we can take.
We have to look carefully at our data both in China and U S College, typically but also on a separate we have.
Some exposure that trying to.
From a regulatory strategy perspective, we have a different dose.
In China.
While having a careful look at.
Things developing.
We are encouraged.
And train.
At the same time, you're an entrepreneur.
Presenting we are taking forward our development <unk> indication as well.
Overall with this program.
Quite significant potential.
Thank you.
The next question comes from the line of Matthew Young from CLSA. Please go ahead.
Hi, Thanks for taking my question.
Quick one for tablets.
And I understand that the phase two trial, readouts and likely to come by second half this year.
Wonder how we see the permeability of patting themselves.
Supporting an NDA filed and overseas.
Or is this more likely with some follow in and David Feaster.
Thanks, Ron.
My question. Thanks.
I'm talking about sorry are you talking about phase two gastric cancer.
No I was talking about.
Okay.
Yeah, obviously savanna is ongoing.
Ongoing and it's still.
But we believe that data is very compelling.
Actually hum.
Suddenly warrants discussion with.
Regulatory authorities.
Registration for conditional approval in.
But data is obviously.
The data continues to mature and we will.
We will evaluate.
If it warrants.
Discussion with regulatory authorities.
And.
We are very.
I'm very happy with the level of efficacy in.
That's why we are.
Working with Astrazeneca to initiate the phase III the global Phase III.
In this patient population.
As I mentioned during my presentation that together with data from tapped in Orchard and Savannah.
Form has a great base for a strong base for this study.
Globally.
Particularly for the opportunity in China.
In the U S for conditional approval, we think Savannah is a is a very strong and we're just.
Following the data very closely as it matures.
Yeah.
Okay understood. Thank you very much.
Yeah.
There are no further questions from the.
Thank you.
Yes.
Well. Thank you very much will end.
Turning there.
The call and look forward to working with you all in the future Christian do you have any anything else to do.
Uh huh.
Alright, glad just other than to say thanks, everybody for your support through the years and.
You know I wish all the very best of luck to why go into team going forward.
And.
Thank you.
Thank you very much.
Thank you.
Thanks Bye bye.
Thank you.
Thanks Bye bye. Thank you ladies and gentlemen. This concludes today's conference call. Thank you for your participation you may now disconnect.
[music].