Chi-Med Reports 2020 Interim Results and Provides Updates on Key Clinical Programs

Strong global pipeline progress – three U.S. FDA¹ Fast Track Designations; surufatinib U.S. NDA² preparations underway; and initiation of global Phase III for fruquintinib – 

– Two further NDAs submitted in China – savolitinib in MET³ Exon 14 skipping mutation NSCLC⁴, and surufatinib in pancreatic NET⁵ – 

– Expansion of commercial activities in oncology – Chi-Med to be responsible for medical detailing and marketing for Elunate^® throughout Mainland China starting October 2020 –

– Company to Host Results Call & Webcast Today at 1 p.m. BST / 8 a.m. EDT / 8 p.m. HKT –

 Hong Kong, Shanghai & Florham Park, NJ: Thursday, July 30, 2020: Hutchison China MediTech Limited (“Chi-Med”) (Nasdaq/AIM: HCM), an innovation-driven, commercial-stage biopharmaceutical company, today announces its unaudited financial results for the six months ended June 30, 2020 and provides updates on key clinical and commercial developments.

 

“During the first half of 2020, we continued to build our fully integrated business in China, from research and development to manufacturing and commercialization and sales, with a focus on oncology,” said Mr. Simon To, Chairman of Chi-Med.  “NDAs for surufatinib and savolitinib are currently under review by the China NMPA⁶ and we are now preparing for multiple potential launches employing our newly-established commercial organization in oncology, covering all provinces in Mainland China.” 

 

“We are also one of a few China-based biotech companies working to realize the global potential of our home-grown innovative drug candidates,” he added.  “We currently have nine novel drug candidates in clinical trials, many with global potential, and an additional five drug candidates at the IND⁷-enabling stage.”

 

“Over the past three years, we have significantly expanded our international development footprint and, in the first half of 2020, locked in global registration strategies for surufatinib and fruquintinib, while our global partnership with AstraZeneca⁸ is approaching the same for savolitinib. A deep pipeline of unpartnered earlier-stage oncology assets follows, with most notably, global development of our Syk⁹ and PI3Kδ¹⁰ assets progressing well and our IDH 1/2¹¹ inhibitor expected to start Phase I in the United States this year.”

 

“We believe that the anticipated launches of multiple innovative oncology drugs over the next twelve to eighteen months will address a broad range of unmet medical needs and benefit a large number of patients globally, propelling Chi-Med into a new phase of growth.”

 

 

FIRST HALF 2020 OPERATING HIGHLIGHTS

 

Set out below are some of Chi-Med’s operating highlights so far this year.  For more details, please refer to “Operations Review” below.

 

 

I.     PREPARING TO LAUNCH MULTIPLE ONCOLOGY DRUGS IN CHINA

 

Savolitinib – NDA submitted for potential first-in-class selective MET TKI¹² in China:

·         NDA accepted by NMPA in MET Exon 14 skipping mutation NSCLC:  presented positive results at ASCO¹³ from a registration study in MET Exon 14 skipping mutation NSCLC demonstrating 49.2% ORR¹⁴, 93.4% DCR¹⁵ and 9.6 months DoR¹⁶ in efficacy evaluable patients, underpinning the NDA acceptance in May 2020 and subsequent grant of Priority Review status in July 2020.

 

Surufatinib – Two NDAs with first China launch in NET planned for late 2020:

• Progressed non-pancreatic NET NDA:  Supported by the positive SANET-ep Phase III and submitted in late 2019, the NMPA NDA review process is on-track, and we continue to plan for launch in late 2020;
• Submitted Pancreatic NET NDA:  Following positive interim analysis and early termination of SANET-p Phase III, an NDA for pancreatic NET has been submitted in China, which we anticipate may be accepted in the near term;  
• Progressed to Phase II for Tuoyi^® combination:  Initiated a Phase II in early 2020 in eight solid tumor indications for surufatinib plus Tuoyi^®, a China-approved PD-1¹⁷ antibody from Junshi¹⁸.  Data presented at AACR¹⁹, shows the combination is well tolerated with encouraging activity, ORR 64% and DCR 100% in efficacy evaluable patients at the RP2D²⁰; and  
• Initiated Tyvyt^® PD-1 combination:  In July 2020, Innovent²¹ initiated a Phase I combining surufatinib with their China-approved PD-1 monoclonal antibody, Tyvyt^®.

 

Fruquintinib – Commercial progress on Elunate^® (fruquintinib capsules):

·         174% overall increase in Elunate^® prescriptions²² during the first half of 2020:  Inclusion in the 2020 National Reimbursement Drug List (“NRDL”) has led to a major increase in access.  In-market sales, as provided by Lilly²³, were $14.0 million²⁴ (H1-19: $11.4m) during the first half of 2020;

·         Chi-Med to commercialize Elunate^® in China beginning in October 2020:  In July 2020, an agreement was reached with Lilly that Chi-Med will commence medical detailing and marketing activities for Elunate^® across all of China effective October 1, 2020;

·         Phase III interim analysis in second-line gastric cancer:  In June 2020, following the second and final interim analysis for futility of the FRUTIGA study in China the IDMC²⁵ recommended to continue the study.  FRUTIGA is expected to complete enrollment in late 2020 or early 2021; and

·         Expanded Tyvyt^® PD-1 combination: Phase I dose escalation for the fruquintinib and Tyvyt^® combination completed in July 2020.  A Phase Ib expansion study at the RP2D is underway in China targeting five solid tumor indications.

 

Established in-house oncology commercial organization – Team now in place for imminent launches:

• An in-house oncology commercial organization has now been established with over 320 staff, versus about 90 at the start of 2020, in order to support the potential launch of surufatinib in China and commercialization of Elunate^®.

 

 

II.    REALIZING THE GLOBAL POTENTIAL OF OUR LATE STAGE ONCOLOGY ASSETS

 

Surufatinib – U.S. NDA under preparation:

 

·         Secured FDA Fast Track Designations:  FDA granted Fast Track Designations for both pancreatic NET and non-pancreatic NET in April 2020;

·         Positive U.S. NET bridging study:  Presented results at ASCO from the U.S. Phase Ib NET study in June 2020, reporting 100% DCR in heavily pre-treated pancreatic-NET and non-pancreatic NET patients;

·         Agreed U.S. NDA submission pathway:  In May 2020, agreed with FDA that the two pivotal NET studies in China, along with existing data from the U.S. bridging study, could support an NDA submission.  Now planning a U.S. NDA rolling submission from late 2020 into early 2021;

·         U.S. commercial launch strategy:  Work underway to establish U.S. launch readiness for late 2021;

·         Progressed European regulatory discussions:  Engaging extensively with European regulatory authorities, targeting MAA²⁶ submission for NET during 2021; and

·         BeiGene²⁷ global PD-1 collaboration:  Entered into a clinical collaboration in May 2020 to explore the combination of surufatinib with BeiGene’s PD-1 antibody, tislelizumab, in the U.S..

 

Fruquintinib – global Phase III registration study in CRC²⁸ underway:

 

• Secured FDA Fast Track Designation:  Granted in June 2020 for patients with metastatic CRC;

·         Initiated FRESCO-2 global Phase III registration study in CRC:  Following study design endorsement by the FDA, EMA²⁹ and PMDA³⁰, we initiated the global Phase III registration study in metastatic CRC.  Enrollment of over 500 patients in ~130 sites in 10 countries targeted to complete in late 2021; and

·         BeiGene and Innovent global PD-1 collaborations:  Entered into a clinical collaboration with BeiGene in the U.S., Europe, China and Australia in May 2020 to explore the combination of fruquintinib and tislelizumab.  Our work with Innovent has now established the RP2D for the fruquintinib and Tyvyt^® combination and a U.S. IND is planned for late 2020.

 

Savolitinib – AstraZeneca collaboration making progress in lung and kidney cancer:

 

·         SAVANNAH interim analysis – In late July 2020, AstraZeneca and Chi-Med conducted a first internal interim analysis for the SAVANNAH global Phase II study of the savolitinib plus Tagrisso combination in EGFR mutation positive TKI refractory NSCLC patients.  Early interim efficacy and safety data is now under review.  The enrollment of the SAVANNAH study continues apace in 13 countries;  

·         Encouraging efficacy in MET-driven PRCC³¹:  In June 2020, we presented data at ASCO for SAVOIR, a Phase III study of savolitinib versus sunitinib.  Savolitinib demonstrated encouraging efficacy compared to sunitinib with a 27% versus 7% ORR, a trend toward benefit in PFS³² and an improvement in OS³³ with tolerability advantages; and

·         Preliminary signal for savolitinib/Imfinzi^® (PD-L1³⁴) combination in all PRCC:  In February 2020, we presented data from the CALYPSO Phase II study at ASCO GU³⁵ showing the combination was tolerable and associated with durable efficacy, with a 12.3 month median OS. 

 

 

III.   INVESTING IN THE FUTURE – EARLY PIPELINE

 

·         Non-Hodgkin’s lymphoma (“NHL”):  Advanced Phase Ib expansion of both of our NHL assets, HMPL-523 (Syk) and HMPL-689 (PI3Kδ) in China.  We expect these studies to inform our China registration study decisions in 2020.  In the U.S. and Europe, we continued to expand development of HMPL-523 and HMPL-689, with over twenty Phase I sites now enrolling; 

·         HMPL-453 – selective FGFR³⁶ 1/2/3 inhibitor:  We initiated a Phase II study in advanced malignant mesothelioma in China in March 2020, with a second Phase II, in Cholangiocarcinoma, in planning;

·         HMPL-306 – IDH 1/2 dual inhibitor:  In late July 2020, we dosed our first patient in a Phase I study in China with our ninth in-house discovered asset, HMPL-306; and

·         Five additional novel drug candidates in oncology are currently progressing through IND-enabling studies and are anticipated to reach the clinic over the next twelve to eighteen months.

 

 

IV.   UPDATE ON THE IMPACT OF COVID-19

 

·         Working to effectively manage COVID-19 challenges:  The COVID-19 outbreak initially posed some challenges to our operations resulting from restrictions in travel.  Our teams adapted quickly and have been able to minimize the effect across our businesses thus far.  We will continue to closely monitor the evolving situation.  At this stage, we are unable to assess the long-term effect of the outbreak, if any.

 

 

KEY EVENTS PLANNED FOR BALANCE 2020 & EARLY 2021

 

CHINA EVENTS:   A FULLY INTEGRATED ONCOLOGY BUSINESS IN CHINA
Fruquintinib	Elunate® China commercialization – Chi-Med to assume medical detailing and marketing activities for Elunate® in all China on October 1, 2020; and ·         Enrollment completion of FRUTIGA Phase III – complete enrollment of China registration study in second-line gastric cancer.
Surufatinib	Presentation of SANET-p Phase III data – pancreatic NET patients study at ESMO37 2020 conference; Acceptance of NDA in pancreatic NET – following recent NDA submission based on positive SANET-p Phase III interim analysis;  Phase II/III interim analysis – for futility in second-line BTC38 in China; and ·         Potential NDA approval and launch for non-pancreatic NET – first un-partnered oncology drug launch for Chi-Med in China.
Savolitinib	Potential NDA approval and launch for NSCLC – monotherapy in MET Exon 14 skipping mutation NSCLC.  If approved, this will be the first approval worldwide and the first selective c-MET TKI approval in China.  Material milestone triggering event.
Early-stage Assets	HMPL-689 (PI3Kδ) Phase I/Ib NHL data – potential presentation of China data at major scientific conference; HMPL-689 (PI3Kδ) – Potential registration study start – in indolent NHL in China; HMPL-523 (Syk) – Potential registration study start – in indolent NHL in China; and HMPL-523 (Syk) – completion of dose escalation in ITP39.

 

 

GLOBAL EVENTS:   REALIZING THE GLOBAL POTENTIAL OF OUR ONCOLOGY ASSETS
Fruquintinib	·         Global Phase III study (FRESCO-2) – expansion of registration study in CRC in 10 countries including the U.S., Europe and Japan; and ·         Presentation of U.S. Phase Ib data – preliminary data from study of third and later line CRC patients at ESMO 2020 conference.
Surufatinib	·         U.S. NDA submission for pancreatic- and non-pancreatic NET – U.S. NDA rolling submission beginning in late 2020 through early 2021.
Savolitinib	·         Internal interim analyses on SAVANNAH – Complete the review of the first internal interim analysis and conduct further interim analysis to inform regulatory strategy; Potential endorsement of global Phase III in kidney cancer – savolitinib monotherapy in MET-driven PRCC; ·         Potential endorsement of global Phase III in NSCLC – Tagrisso® combination in EGFRm40 positive, MET positive, NSCLC.  Material milestone triggering event; ·         Potential endorsement of global registration study in NSCLC – savolitinib in MET Exon 14 skipping mutation NSCLC; and ·         Enrollment completion of SAVANNAH – AstraZeneca to complete enrollment of Phase II study, with registration potential, of savolitinib/Tagrisso® combination.
Early-stage Assets	·         HMPL-523 (Syk) – Global Phase Ib expansion – in indolent NHL in the U.S. and Europe; HMPL-306 (IDH 1/2) – U.S. IND submission and initiation of Phase I; and   HMPL-689 (PI3Kδ) – Global Phase Ib expansion – in indolent NHL in the U.S. and Europe.

 

 

FINANCIAL HIGHLIGHTS

 

The items below are selected financial data for the six months ended June 30, 2020.  All dollars are expressed in U.S. dollar currency unless otherwise stated. For more details, please refer to “Financial Review”, “Operations Review” and “Interim Unaudited Condensed Consolidated Financial Statements” below. 

 

OVERALL GROUP:

 

·         Group revenue of $106.8 million (H1-19: $102.2m);

·         Net loss attributable to Chi‑Med of $49.7 million (H1-19: net loss of $45.4m);

·         Adjusted Group (non-GAAP) net cash flows excluding financing activities was -$32.5 million (H1-19: -$34.2m).  Cash from our Commercial Platform, as well as cash received from our multi-national partners, continued to offset a substantial portion of our R&D⁴¹ expenses;

·         Recent financing activity strengthens cash position.  We held cash, cash equivalents and short-term investments of $281.0 million as of June 30, 2020 (December 31, 2019: $217.2m).  In early July 2020, we completed a private placement to General Atlantic⁴², raising an additional $100.0 million in gross proceeds, to further strengthen our cash position; and

·         Additional unutilized bank facilities of $119.3 million (December 31, 2019: $119.3m) and bank borrowings of $26.8 million (December 31, 2019: $26.8m).

 

INNOVATION PLATFORM (our R&D operations):

 

·         Consolidated revenue was $7.8 million (H1-19: $7.3m) mainly from service fee payments from AstraZeneca and Lilly; and

·         Net loss from our Innovation Platform attributable to Chi-Med of $73.6 million (H1-19: net loss of $67.1m) resulting from expansion in the development of our nine novel drug candidates, with five now in global development, and establishment of scaled international clinical and regulatory operations.

 

COMMERCIAL PLATFORM (our commercial operations):

 

·         Total consolidated sales up 4% (9% at CER⁴³) to $99.0 million (H1-19: $94.9m) mainly due to continued progress on our Prescription Drugs subsidiary Hutchison Sinopharm⁴⁴ as well as manufacturing revenues and royalties from Elunate^®;

·         Total consolidated net income from our Commercial Platform attributable to Chi-Med up 14% (19% at CER) to $35.5 million (H1-19: $31.0m), strong performance despite the limitations posed by COVID-19 underpinned by the growing profits of our Prescription Drugs operations in China; and

·         Guangzhou land compensation:  In June 2020, our 50/50 joint venture, HBYS⁴⁵, entered into an agreement with the Guangzhou government for the return of an unused piece of land in return for cash compensation of up to $95 million.  HBYS will receive compensation in stages over a period of approximately one year.  The first $24.1 million payment was received by HBYS in late June 2020 and the return will be recorded in Chi-Med’s statement of operations in H2 2020.

 

 

FINANCIAL GUIDANCE

 

During the first half of 2020, we performed in-line with published guidance, with dividends from our Commercial Platform offsetting a material portion of our R&D expenses as expected. 

 

Over the balance of 2020, cash investments will rise in a number of areas including:  several major global clinical and regulatory activities such as the global FRESCO-2 Phase III for fruquintinib and the submission of the U.S. NDA for surufatinib; the first phase of construction of our new large-scale oncology manufacturing facility in Shanghai; and expansion of our commercial activities in oncology in China, specifically our new commercial role on Elunate^® and preparation for the surufatinib launch.

 

We assume at this stage that the financial impact of the COVID-19 outbreak will not be material to the Group.  Since we cannot predict how the situation will evolve, we will monitor and adjust if needed, as new material information emerges.  We therefore provide unchanged Financial Guidance for 2020 below.

 

	H1 2020 Actual	2020 Current Guidance	Adjustments vs.  Previous Guidance
Adjusted (non-GAAP) Innovation Platform segment operating loss	$(81.2) million	$(180) – (210) million	nil
Adjusted (non-GAAP) Group net cash flows excluding financing activities	$(32.5) million	$(140) – (160) million	nil

 

 

Use of Non-GAAP Financial Measures and Reconciliation – References in this announcement to adjusted Innovation Platform segment operating loss, adjusted Group net cash flows excluding financing activities and financial measures reported at CER are based on non-GAAP financial measures.  Please see the “Use of Non-GAAP Financial Measures and Reconciliation” below for further information relevant to the interpretation of these financial measures and reconciliations of these financial measures to the most comparable GAAP measures, respectively. 

 

 

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Conference Call and Audio Webcast Presentation Scheduled Today at 1 p.m. BST / 8 a.m. EDT / 8 p.m. HKT –  Investors may participate in the call as follows: +44 20 3194 0569 (U.K.) / +1 646 722 4977 (U.S.) / +852 3027 6500 (Hong Kong), or access a live audio webcast of the call via Chi-Med’s website at www.chi-med.com/investors/event-information/.

 

 

Additional dial-in numbers are also available at Chi-Med's website. Please use participant access code “54962123#.”

 

 

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About Chi-Med

 

Chi-Med (Nasdaq/AIM: HCM) is an innovative, commercial-stage, biopharmaceutical company committed, over the past twenty years, to the discovery and global development of targeted therapies and immunotherapies for the treatment of cancer and immunological diseases.  It has a portfolio of nine cancer drug candidates currently in clinical studies around the world and extensive commercial infrastructure in its home market of China.  For more information, please visit: www.chi-med.com.

 

 

CONTACTS

 

Investor Enquiries
Mark Lee, Senior Vice President	+852 2121 8200
Annie Cheng, Vice President	+1 (973) 567 3786
Media Enquiries
Americas – Brad Miles, Solebury Trout	+1 (917) 570 7340 (Mobile)  bmiles@troutgroup.com
Europe – Ben Atwell / Alex Shaw, FTI Consulting	+44 20 3727 1030 / +44 7771 913 902 (Mobile) / +44 7779 545 055 (Mobile) Chi-Med@fticonsulting.com
Asia – Joseph Chi Lo / Zhou Yi, Brunswick	+852 9850 5033 (Mobile), jlo@brunswickgroup.com / +852 9783 6894 (Mobile), yzhou@brunswickgroup.com
Nominated Advisor
Freddy Crossley / Atholl Tweedie, Panmure Gordon (UK) Limited	+44 (20) 7886 2500

 

 

 

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