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Group, RNS Announcements | 31 Jul 2017

Chi-Med Reports 2017 Interim Results and Updates Shareholders on Key Clinical Programs

London: Monday, July 31, 2017: Hutchison China MediTech Limited (“Chi-Med”) (AIM/Nasdaq: HCM), the China-based biopharmaceutical company focused on discovering and developing targeted therapies for oncology and immunological diseases for the global market, today announces its unaudited financial results for the six months ended June 30, 2017.

Group: Record revenue; continued investment in clinical pipeline

  • Group revenue up 21% to $126.6 million (H1 2016: $104.5m).
  • Net income attributable to Chi-Med of $1.7 million (H1 2016: $0.5m), including $37.5 million in research and development expenses on an as adjusted basis (H1 2016: $36.0m).

Innovation Platform: Submitted first China New Drug Application (“NDA”) on fruquintinib; initiated first global Phase III registration study on savolitinib; five other pivotal Phase III studies underway or completing; three more preparing to start

  • Deep clinical pipeline of novel small molecule tyrosine kinase inhibitors (“TKIs”):
    • Eight clinical drug candidates now in 31 active or completing clinical trials (H1 2016: 25) around the world; over 3,100 subjects dosed in our trials to date, with over 300 dosed in the first half of 2017.
  • Fruquintinib – Highly selective TKI of vascular endothelial growth factor receptor (“VEGFR”)-1/2/3:
    • Positive outcome in Phase III study, the FRESCO study, in third-line colorectal cancer (“CRC”) patients in China;
    • Potentially best-in-class in terms of both efficacy and safety relative to Stivarga® (regorafenib);
    • 2017 American Society of Clinical Oncology (“ASCO”) oral presentation;
    • NDA submitted in third-line CRC to the Center for Drug Evaluation of the China Food and Drug Administration (“CFDA”).
  • Savolitinib – Highly selective TKI of the mesenchymal epithelial transition factor (“c-MET”):
    • Presented positive Phase II data in c-MET-driven papillary renal cell carcinoma (“PRCC”) at the ASCO Genitourinary Cancers Symposium;
    • Initiated global Phase III study, the SAVOIR study, in c-MET-driven PRCC in a head-to-head comparison with current standard therapy Sutent® (sunitinib). The first Phase III study ever conducted with molecularly selected patients in renal cell carcinoma;
    • Initiated a global epidemiology study in c-MET-driven PRCC to demonstrate the importance of treatment with a c-MET inhibitor.
  • Presented positive proof-of-concept data on:
    • Fruquintinib in gastric cancer in combination with Taxol® (paclitaxel);
    • Sulfatinib in neuroendocrine tumors (“NET”) as well as preliminary data in thyroid cancer.
  • Progressing multiple Phase I dose escalation studies in Australia and China on:
    • HMPL-523 against spleen tyrosine kinase (“Syk”);
    • HMPL-453 against fibroblast growth factor receptor 1/2/3 (“FGFR”);
    • HMPL-689 against phosphoinositide 3-kinase delta (“PI3Kδ”);
    • Theliatinib against epidermal growth factor receptor (“EGFR”) wild-type;
    • Expect to complete dose escalation and initiate proof-of-concept expansion trials on these drug candidates towards end of 2017 or early 2018.

Commercial Platform: High-performance drug marketing and distribution platform covers ~300 cities/towns in China with >3,300 sales people. High value products and household name brands

  • Total consolidated sales up 26% to $103.9 million (H1 2016: $82.3m).
  • Total sales of non-consolidated joint ventures were $253.1 million (H1 2016: $249.6m) mainly due to a price increase on a key product in late 2016; a relatively quiet influenza season; and -5% currency effect. Dividends paid to Chi-Med Group level from non-consolidated joint ventures totaled $42.6 million in first half of 2017 (H1 2016: $15.9m).
  • Total consolidated net income attributable to Chi-Med up 14% to $25.2 million (H1 2016: $22.1m).

Solid cash position:

  • Cash resources of $192.5 million at Chi-Med Group level as of June 30, 2017 ($173.7m as of December 31, 2016), including cash and cash equivalents, short-term investments and unutilized bank facilities.

Potential major milestones targeted for rest of 2017 and into 2018

  • Savolitinib in non-small cell lung cancer (“NSCLC”):
    • Data from Phase II studies to be presented later in 2017 at a major scientific conference:
      1. Savolitinib in combination with Tagrisso® (osimertinib) in second- and third-line NSCLC;
      2. Savolitinib in combination with Iressa® (gefitinib) in second-line NSCLC;
    • Subject to the strength of Phase II data, global Phase III registration and potential Breakthrough Therapy strategy for NSCLC will be determined.
  • Fruquintinib:
    • Potential NDA approval and launch in China, via our partner Eli Lilly and Company (“Lilly”), as the first approved treatment for third-line CRC patients;
    • Completion of enrollment in the FALUCA study, an approximately 520 patient Phase III registration study in third-line NSCLC in China;
    • Initiation of Phase III registration study of fruquintinib in combination with Taxol® in second-line gastric cancer in China.
  • Epitinib (EGFR): Initiation of Phase III registration study in first-line NSCLC patients with EGFR activating mutations with brain metastasis in China.
  • HMPL-523 (Syk): Potential presentation of preliminary efficacy data from Phase I dose escalation study in hematological cancer.

References in this announcement to adjusted research and development expenses, consolidated net income attributable to Chi-Med from our Commercial Platform and consolidated net income attributable to Chi-Med from our Prescription Drugs business 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.

U.K. Analysts Meeting and Webcast Scheduled Today at 9:00 a.m. BST (4:00 p.m. HKT) – at Panmure Gordon & Co, One New Change, London EC4M 9AF, U.K.. Investors may participate in the call at +44 20 3003 2666 or access a live video webcast of the call via Chi-Med’s website at www.chi-med.com/investors/event-information/.

U.S. Conference Call Scheduled Today at 9:00 a.m. EDT – to participate in the call from the United States, please dial 1 866 966 5335.

Additional dial-in numbers are also available at Chi-Med’s website. For both calls and all dial-in numbers, please use conference ID “Chi-Med.”

Simon To, Chairman of Chi-Med, said: “Chi-Med’s consistent strategy over the past 16 years has generated considerable shareholder value, and we believe it is now poised to deliver substantially more.

In our Innovation Platform, we have progressed our deep portfolio of eight clinical drug candidates, now in 31 active or completing clinical trials around the world. In the process we have achieved two particularly important milestones: the formal NDA submission for fruquintinib in third-line CRC in China; and the initiation of our first global Phase III registration study of savolitinib in c-MET-driven metastatic PRCC. We also presented positive Phase Ib/II data at major scientific conferences in early 2017 on savolitinib in PRCC, fruquintinib in gastric cancer, and sulfatinib in NET and thyroid cancer.

Now, subject to approval, we expect to launch fruquintinib in China in 2018 with our commercial partner, Lilly. Importantly also, later in 2017, we will present eagerly-awaited Phase II clinical trials data on savolitinib in combination with Tagrisso® and Iressa® in NSCLC thereby allowing AstraZeneca AB (publ) (“AstraZeneca”) to clarify their plans for potential global Phase III registration. Furthermore, we are also now preparing to initiate Phase III registration studies in China of fruquintinib in gastric cancer and of epitinib in NSCLC patients with brain metastasis. The progress of our pipeline is testament to the quality of our in-house research organization, which has discovered all eight of our clinical drug candidates. It also demonstrates that global quality drug discovery is now very much possible in China.

At the same time, regulatory reform is moving at speed in China, improving transparency and raising the standards of clinical data reliability. This helps us, since, at Chi-Med we have always run all our clinical trials to global standards, be they inside or outside China. Fruquintinib is now set to establish an important new reference point, under the reformed regulatory framework in China, for both quality and rigor of clinical trials and for speed to approval. Change is also underway on the National Drug Reimbursement List (“NDRL”) in China, with the first steps having been taken this month to include multiple innovative cancer drugs for some level of reimbursement in a clear move to broaden accessibility.

In parallel, our Commercial Platform continues to grow sales and profits showing resilience against the normal pressures of dynamic and competitive markets. During late 2016 and early 2017, we increased prices in our Prescription Drugs business; and moved our Consumer Health factory over 1,400 kilometers to a lower-cost, larger capacity site in central China. Both had short-term effects; but both are now set to benefit our businesses materially. There were also market pressures on our Consumer Health business, with rapid raw material price increases, a relatively quiet influenza season and around a 5% fall in the Chinese RMB, which affected our U.S. dollar stated financial results. Despite this, net income attributable to Chi-Med from our Commercial Platform increased by 14% to $25.2 million, and we expect to meet full year guidance on core operations. We see this as a measure of the strength of our brands, teams and operations.

Our consistent commercial and scientific strategy, and our pragmatic approach to managing finance and risk, have led to the strength of both our position today and our prospects. The first of our new drug candidates, led by fruquintinib, and including savolitinib, sulfatinib and epitinib, are all progressing towards potential registration and launch in major markets with the balance of our pipeline of drug candidates including theliatinib, HMPL-523, HMPL-689 and HMPL-453 now mostly in proof-of-concept studies.

In addition, our discovery platform is generating a third wave of innovation with a strong focus on immunotherapy. Combining this innovation pipeline with our China marketing and distribution platform, our international partners and our financial stability, all lead Chi-Med to view our future with great confidence.”

FINANCIAL HIGHLIGHTS

Consolidated financial results of the Group are reported under U.S. generally accepted accounting principles (“U.S. GAAP”) and in U.S. dollar currency unless otherwise stated. Chi-Med also conducts its business through three non-consolidated joint ventures, which are accounted for under the equity accounting method as non-consolidated entities in our consolidated financial statements. Within this announcement, certain financial results reported by such non-consolidated joint ventures are referred to, which are based on figures reported in their respective consolidated financial statements prepared pursuant to International Financial Reporting Standards (as issued by the International Accounting Standards Board). Unless otherwise indicated, references to “subsidiaries” mean the consolidated subsidiaries and joint ventures (excluding non-consolidated joint ventures) of Chi-Med.

Group Results

  • Consolidated revenue up 21% to $126.6 million (H1 2016: $104.5m).
  • Net income attributable to Chi-Med of $1.7 million (H1 2016: $0.5m).
  • Solid cash position: Available cash resources of $192.5 million as of June 30, 2017 (December 31, 2016: $173.7m) at the Chi-Med Group level, including cash and cash equivalents, short-term investments and unutilized banking facilities. During the first half of 2017, Chi-Med received dividends from its non-consolidated joint ventures of $42.6 million (H1 2016: $15.9m).

Innovation Platform – a deep broad, risk-balanced global oncology/immunology pipeline

  • Consolidated revenue of $22.7 million (H1 2016: $22.3m) from milestone payments from Lilly ($4.5m, fruquintinib NDA filing) and AstraZeneca ($5.0m, savolitinib Phase III initiation) and service fee payments from Lilly, AstraZeneca and Nutrition Science Partners Limited (“NSP”), our 50/50 joint venture with Nestlé Health Science S.A. (“Nestlé”).
  • Net loss attributable to Chi-Med of $14.8 million (H1 2016: -$13.7m) driven by $31.6 million (H1 2016: $31.2m) in research and development expenses, or $37.5 million (H1 2016: $36.0m) on an as adjusted (non-GAAP) basis, spent on our 31 active or completing clinical trials, five of which are pivotal Phase III studies on fruquintinib, sulfatinib and savolitinib.

Commercial Platform – a deeply established, cash-generative, pharmaceutical business in China – a platform to commercialize our Innovation Platform candidate drugs

  • Total consolidated sales up 26% to $103.9 million (H1 2016: $82.3m) mainly resulting from growth in our Prescription Drug commercial services business.
  • Total sales of non-consolidated joint ventures were $253.1 million (H1 2016: $249.6m) resulting from flat sales on She Xiang Bao Xin (“SXBX”) pill due to a price increase that we implemented in December 2016; and a relatively quiet influenza season on the over-the-counter (“OTC”) drug business.
  • Total consolidated net income attributable to Chi-Med up 14% to $25.2 million (H1 2016: $22.1m) or up 2% to $22.7 million on an adjusted basis to exclude $2.5 million one-time government subsidies; strong Prescription Drug net income growth was offset by short-term pressures in OTC drugs caused by our factory move and certain raw material price increases.
  • Both top- and bottom-line growth were reduced by -5% in U.S. dollar terms during the first half of 2017 as a result of the weakening of the Chinese RMB as compared to the same period in 2016.

KEY H1 2017 OPERATIONAL HIGHLIGHTS

Innovation Platform: In June this year, we both completed our first NDA submission, for fruquintinib in third-line CRC, and initiated our first global Phase III study in oncology, for savolitinib in PRCC. Each triggered milestone payments from our partners Lilly and AstraZeneca, and each represents major achievements for Chi-Med and for the biotech industry in China.

  • Savolitinib: Potential first-in-class selective c-MET inhibitor currently in 12 active clinical studies worldwide in multiple tumor types including kidney, lung and gastric cancers as a monotherapy or in combination with other targeted and immunotherapy agents. Developing globally in partnership with AstraZeneca:
    1. Kidney cancer:
      • Presented Phase II global multicenter study in advanced PRCC at the 2017 ASCO Genitourinary Cancers Symposium showing robust efficacy with savolitinib monotherapy in c-MET-driven patients. Median progression free survival (“PFS”) of 6.2 months in patients with c-MET-driven tumors as compared with 1.4 months (p<0.0001) in c-MET-independent patients. Objective response rate (“ORR”) was 18.2% in c-MET-driven patients vs. 0% (p=0.002) in c-MET independent patients. Encouraging durable response and a tolerable safety profile were reported in savolitinib treated patients. The full article has now been published in the Journal of Clinical Oncology.
      • A global Phase III study, the SAVOIR study, was initiated in late June 2017. The SAVOIR study is an open-label, randomized, controlled trial evaluating the efficacy and safety of savolitinib, compared with Sutent®, in patients with c-MET-driven, unresectable, locally advanced or metastatic PRCC. Approximately 180 patients will be randomized in the United States and Europe; c-MET-driven PRCC patients will be selected through the use of a companion diagnostic kit.
      • Confirmed combination dose of savolitinib in combination with anti-programmed death-ligand 1 (“PD-L1”) antibody, Imfinzi® (durvalumab), via Phase Ib study in clear cell renal cell carcinoma (“ccRCC”) patients. A ccRCC expansion phase is now underway.
    2. Lung cancer:
      • Continued enrollment of Phase II studies in NSCLC patients with EGFR mutations who have progressed following first-line EGFR TKI therapy and harbor c-MET gene amplification. We are preparing to present data on the following studies at major scientific conferences later in 2017: (1) a Phase II study, the TATTON study (Part B), of savolitinib in combination with Tagrisso® in second-line or third-line EGFR TKI refractory NSCLC patients; and (2) a Phase II study of savolitinib in combination with Iressa® in second-line EGFR TKI refractory NSCLC patients.
  • Fruquintinib: Designed to be a best-in-class selective inhibitor of VEGFR 1/2/3 – we are developing outside of China and in partnership with Lilly within China:
    1. CRC (third-line or above): Reported in March 2017 that fruquintinib convincingly met the primary endpoint of median overall survival (“OS”), 9.30 months versus 6.57 months (p<0.001), and all secondary endpoints in the FRESCO Phase III study as a monotherapy among third-line CRC patients in China; further, that the adverse events (“AEs”) demonstrated in FRESCO did not identify any new or unexpected safety issues; then presented the full FRESCO data-set in an oral presentation at ASCO and completed submission of our China NDA in June 2017. Subject to CFDA approval, fruquintinib is expected to launch in China in 2018. Based on the patient population in third-line CRC in China, as well as the sales performance of TKIs launched in recent years in China, we estimate peak fruquintinib revenues, in third-line CRC alone, could reach between $110-160 million annually resulting in peak net income to Chi-Med of around $20-35 million.
    2. NSCLC (third-line): Continue to enroll a Phase III study, named FALUCA, with a primary endpoint of OS, to evaluate fruquintinib in third-line NSCLC patients in China; expect to complete enrollment in early 2018; top-line Phase III data expected to be reported in late 2018; subject to positive FALUCA outcome, we target to submit a second China NDA shortly thereafter.
    3. Gastric cancer (second-line): Presented positive interim results in the Phase I/Ib dose finding/expansion study in early 2017 at the ASCO Gastrointestinal Cancers Symposium. Established a well-tolerated combination dose of 4mg fruquintinib with 80mg/m2 weekly of Taxol® with encouraging efficacy, including ORR of 36%; Disease Control Rate (“DCR”) of 68%; ≥16 week PFS of 50% and ≥7 month OS of 50%. On track now to initiate a Phase III registration study in China in 2017.
    4. NSCLC (first-line): In January 2017, we initiated a Phase II study of fruquintinib in combination with Iressa® in first-line NSCLC patients with EGFR activating mutations in China.
    5. Production facility in Suzhou, China operated by Chi-Med is now ready to support commercial launch of fruquintinib in 2018.
    6. Planning to initiate global development of fruquintinib in 2017, initially through a Phase I dose confirmation study in Caucasian patients in the United States.
  • Sulfatinib: A unique angio-immuno TKI therapy with high potency against VEGFR, FGFR1 and colony stimulating factor-receptor 1 (“CSF-1R”) with emerging strong efficacy in multiple solid tumor settings – enrolling two pivotal Phase III studies:
    1. NET:
      • Presented positive Phase II study at the European Neuroendocrine Tumor Society (“ENETS”) conference in early 2017. Established that sulfatinib was well tolerated with highly encouraging efficacy in both pancreatic NET (ORR 17.1%; DCR 90.2%; and median PFS 19.4 months) and non-pancreatic NET (ORR 15.0%; DCR 92.5%; and median PFS 13.4 months) with 100% DCR in twelve patients who had disease progression on targeted therapies such as Sutent® and Afinitor® (everolimus); now enrolling two Phase III studies in China, named SANET-p (in pancreatic NET patients) and SANET-ep (in non-pancreatic NET patients), with primary endpoint median PFS.
      • U.S. Phase I dose confirmation study in Caucasian patients is near completion, and a Phase II expansion study in the United States is expected to be initiated in late 2017 or early 2018.
    2. Thyroid cancer: Presented Phase II data at ASCO in June 2017 in patients with locally advanced or metastatic radioactive iodine (“RAI”)-refractory differentiated thyroid cancer (“DTC”) or medullary thyroid cancer (“MTC”) in China. Preliminary data in 18 patients showing an ORR of 25% in RAI-DTC and an ORR of 17% in MTC patients, with all other patients reporting stable disease (“SD”).
    3. Biliary tract cancer: Initiated a Phase II proof-of-concept study in China in January 2017.
  • Epitinib: Highly differentiated EGFR TKI designed for optimal blood-brain barrier penetration allowing for higher drug exposure in the brain than currently marketed first generation EGFR TKIs:
    1. NSCLC with brain metastasis: Epitinib has been shown to be well tolerated with encouraging efficacy with an overall ORR (lung and brain) of 62% in all EGFR TKI naïve NSCLC patients (those patients not previously treated with an EGFR TKI) and an ORR of 70%, including both confirmed and unconfirmed partial responses (“PRs”), in EGFR TKI naïve NSCLC patients who also had measurable brain metastasis and were c-MET negative. Based on these data we are preparing to initiate a Phase III registration study in China in late 2017 or early 2018.
    2. Glioblastoma: Planning underway to start a Phase II study in glioblastoma, a primary brain cancer that harbors high levels of EGFR gene amplification, in 2017.
  • HMPL-523: Potential first-in-class Syk inhibitor in oncology and immunology:
    Hematological cancer: Currently enrolling Phase I dose escalation studies in Australia and China in patients with hematologic malignancies. Dose escalation continues to evaluate both once daily (“QD”) and twice daily regimes and will begin dose expansion with single agent HMPL-523 in due course. We target to present proof-of-concept data in 2018.
  • HMPL-689: Potential best-in-class, highly selective PI3Kδ inhibitor, which we believe should have meaningful safety and tolerability advantages over Zydelig® (idelalisib):
    Hematological cancer: Completed Phase I study in healthy volunteers in Australia, now preparing to start Phase I in patients with lymphomas in China where we received IND clearance in early 2017.
  • Theliatinib: EGFR inhibitor, with high binding affinity to wild-type EGFR protein, with potential in patients with solid tumors presenting EGFR gene amplification or protein over-expression:
    Esophageal cancer: Phase I dose escalation study is continuing and a Phase II expansion in esophageal cancer patients with a high level of EGFR activation, including gene amplification and protein over-expression was initiated in early 2017.
  • HMPL-453: Potential first-in-class and/or best-in-class selective FGFR 1/2/3 inhibitor:
    Solid tumors: During the first half of 2017, we initiated Phase I dose escalation studies in both Australia and China.

Commercial Platform: Net profit increased 14% to $25.2 million (H1 2016: $22.1m) with strong Prescription Drugs growth and $2.5 million in one-time government subsidies more than offsetting the effect of challenging conditions in the OTC business; as well as the -5% weakening of the Chinese RMB.

  • Prescription Drugs business continuing profit growth – consolidated sales up 27% to $85.8 million (H1 2016: $67.6m); total sales of non-consolidated Prescription Drugs joint venture flat at $129.7 million (H1 2016: $126.8m); and total consolidated net income attributable to Chi-Med up 27% to $19.4 million (H1 2016: $15.3m).
    1. Shanghai Hutchison Pharmaceuticals Limited (“SHPL”) – our large-scale non-consolidated Prescription Drugs joint venture – Continued progress on SXBX pill, our most important commercial product, a prescription vasodilator that accounts for about 12% of China’s over $1.5 billion botanical coronary artery disease prescription drug market. SXBX pill is a proprietary product with full patent protection through 2029. During late 2016 and early 2017, we have been able to effectively implement a pricing strategy that provides an important foundation for future margin improvement and profit growth.
    2. Shanghai government subsidy – SHPL was awarded a significant one-time increase in its regular government research and development subsidies. This totaled $5.9 million, equivalent to $2.5 million in net income attributable to Chi-Med.
    3. Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Limited (“Hutchison Sinopharm”) – our Prescription Drugs commercial services business – Continued commercial success in the first half of 2017 on Seroquel® (bi-polar disorder/schizophrenia), which grew sales by 10% to $18.9 million (H1 2016: 17.2m), and Concor® (hypertension/high blood pressure) where strong results, 75% year-on-year growth, recently led Merck Serono to expand Hutchison Sinopharm’s exclusive territory by over 70% to now cover a total of six provinces/municipalities with a population of over 360 million people.
  • Consumer Health business stable despite challenging conditions – consolidated sales up 24% to $18.1 million (H1 2016: $14.6m); total sales of non-consolidated Consumer Health joint venture flat at $123.4 million (H1 2016: $122.7m); and total consolidated net income attributable to Chi-Med down 16% to $5.8 million (H1 2016: $6.8m).
    Short-term OTC profit pressure – capacity constraint and depreciation costs – caused by regulatory hiatus before the start of production at our new factory; an increase in certain key raw material prices; and the quietest influenza season since 2014.

2017 AND EARLY 2018 MILESTONES

We target to present multiple clinical data updates during the balance of 2017 and early 2018, including:

  • Savolitinib:
    1. Phase II data in second- and third-line NSCLC in combination with Tagrisso®;
    2. Phase II data in second-line NSCLC in combination with Iressa®;
    3. Molecular epidemiology study (n >300) in PRCC.
  • Fruquintinib: Phase III FRESCO study full data sub-group analysis in third-line CRC.
  • HMPL-523 (Syk): Preliminary efficacy data from Phase I dose escalation study in hematological cancer.
  • HMPL-689 (PI3Kδ): Phase I dose escalation data in healthy volunteers.

We hope to achieve multiple clinical and regulatory milestones during 2017 and early 2018, including:

  • Savolitinib: Potential decision on Phase III registration and potential Breakthrough Therapy strategy in NSCLC in combination with Tagrisso®/Iressa®.
  • Fruquintinib:
    1. Potential NDA approval and launch in third-line CRC in China;
    2. Complete enrollment of Phase III FALUCA study in third-line NSCLC;
    3. Initiate China Phase III study in second-line gastric cancer;
    4. Initiate U.S. Phase I dose confirmation study in Caucasian patients.
  • Epitinib:
    1. Initiate China Phase III study in first-line EGFR-mutant NSCLC patients with brain metastasis;
    2. Initiate China Phase II study in glioblastoma (primary brain cancer).
  • Sulfatinib: Initiate Phase II expansion study in NET patients in the United States.
  • HMPL-523 (Syk): Initiate Australia and China dose expansion proof-of-concept studies in hematological cancer.
  • HMPL-689 (PI3Kδ): Initiate Phase I dose escalation study in China in hematological cancer patients.

FINANCIAL GUIDANCE

Our updated guidance for 2017, compared to the most recent guidance in our full year results announcement for the year ended December 31, 2016 dated March 13, 2017, reflects no overall change to estimated net income/(loss) for the Chi-Med Group. The only adjustment that we would highlight is the potential for deferral, into 2018, of the one-time property gains resulting from Guangzhou government policy. Full year 2017 financial guidance is detailed below:

2017 Previous Guidance[1] 2017 Current Guidance Adjustment
Group Level:
Consolidated revenue $225-240 million $225-240 million none
Admin., interest & tax $(18)-(19) million $(18)-(19) million none
Net income/(loss)[2] $(13)-(28) million $(13)-(28) million none
Innovation Platform:
Consolidated revenue $35-40 million $35-40 million none
Adjusted R&D expenses $(85)-(90) million $(85)-(90) million none
Commercial Platform:
Sales (consolidated) $190-200 million $190-200 million none [4]
Sales of non-consol. JVs[3] $480-500 million $480-500 million none
One-time property/R&D gains[2] $14-16 million[4] $3-16 million[4] $0-11 million less[4]
Net income[2] $46-50 million $35-50 million $0-11 million less

Notes: [1] Company Guidance March 13, 2017; [2] Attributable to Chi-Med; [3] Joint ventures; [4] timing subject to Guangzhou government policy.

 

CONTACTS

Investor Enquiries

Mark Lee, SVP Corporate Finance & Development
+852 2121 8200

U.K. & International Media Enquiries

Anthony Carlisle, Citigate Dewe Rogerson
+44 7973 611 888 (Mobile)
anthony.carlisle@cdrconsultancy.co.uk

U.S. Based Media Enquiries

Brad Miles, BMC Communications
+1 (917) 570 7340 (Mobile)
bmiles@bmccommunications.com

Susan Duffy, BMC Communications
+1 (917) 499 8887 (Mobile)
sduffy@bmccommunications.com

Investor Relations

Matt Beck, The Trout Group
+1 (917) 415 1750 (Mobile)
mbeck@troutgroup.com

David Dible, Citigate Dewe Rogerson
+44 7967 566 919 (Mobile)
david.dible@citigatedr.co.uk

Panmure Gordon (UK) Limited

Richard Gray / Andrew Potts
+44 (20) 7886 2500

 

About Chi-Med

Chi-Med is an innovative biopharmaceutical company which researches, develops, manufactures and sells pharmaceuticals and healthcare products. Its Innovation Platform, Hutchison MediPharma Limited, focuses on discovering and developing innovative therapeutics in oncology and autoimmune diseases for the global market. Its Commercial Platform manufactures, markets, and distributes prescription drugs and consumer health products in China. Chi-Med is majority owned by the multinational conglomerate CK Hutchison Holdings Limited (“CK Hutchison”) (SEHK: 0001). For more information, please visit: www.chi-med.com.

References

Unless the context requires otherwise, references in this announcement to the “Group,” the “Company,” “Chi-Med,” “Chi-Med Group,” “we,” “us” and “our” mean Hutchison China MediTech Limited and its consolidated subsidiaries and joint ventures unless otherwise stated or indicated by context.

Past Performance and Forward-Looking Statements

The performance and results of operations of the Group contained within this announcement are historical in nature, and past performance is no guarantee of future results of the Group. This announcement contains forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words like “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “pipeline,” “could,” “potential,” “believe,” “first-in-class,” “best-in-class,” “designed to,” “objective,” “guidance,” “pursue,” or similar terms, or by express or implied discussions regarding potential drug candidates, potential indications for drug candidates or by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these statements. Such forward-looking statements are based on the current beliefs and expectations of management regarding future events, and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. There can be no guarantee that any of our drug candidates will be approved for sale in any market, or that any approvals which are obtained will be obtained at any particular time, or that any such drug candidates will achieve any particular revenue or net income levels. In particular, management’s expectations could be affected by, among other things: unexpected regulatory actions or delays or government regulation generally; the uncertainties inherent in research and development, including the inability to meet our key study assumptions regarding enrollment rates, timing and availability of subjects meeting a study’s inclusion and exclusion criteria and funding requirements, changes to clinical protocols, unexpected adverse events or safety, quality or manufacturing issues; the inability of a drug candidate to meet the primary or secondary endpoint of a study; the inability of a drug candidate to obtain regulatory approval in different jurisdictions or gain commercial acceptance after obtaining regulatory approval; global trends toward health care cost containment, including ongoing pricing pressures; uncertainties regarding actual or potential legal proceedings, including, among others, actual or potential product liability litigation, litigation and investigations regarding sales and marketing practices, intellectual property disputes, and government investigations generally; and general economic and industry conditions, including uncertainties regarding the effects of the persistently weak economic and financial environment in many countries and uncertainties regarding future global exchange rates. For further discussion of these and other risks, see Chi-Med’s filings with the U.S. Securities and Exchange Commission and on AIM. Chi-Med is providing the information in this announcement as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.

In addition, this announcement contains statistical data and estimates that Chi-Med obtained from industry publications and reports generated by third-party market research firms, including Frost & Sullivan and QuintilesIMS, independent market research firms, and publicly available data. All patient population, market size and market share estimates are based on Frost & Sullivan or QuintilesIMS research, unless otherwise noted. Although Chi-Med believes that the publications, reports and surveys are reliable, Chi-Med has not independently verified the data. Such data involves risks and uncertainties and are subject to change based on various factors, including those discussed above.

Inside Information

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

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