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Group, RNS Announcements | 3 Mar 2020

Chi-Med Reports 2019 Full Year Results and Provides Updates on Key Clinical Programs

Company to Host Annual Results Conference Call Today at 1:00 p.m. GMT / 8:00 a.m. EST / 9:00 p.m. HKT

 

London: Tuesday, March 3, 2020: Hutchison China MediTech Limited (“Chi-Med”) (Nasdaq/AIM: HCM), a commercial-stage biopharmaceutical company with eight oncology drug candidates in development around the world and a deep commercial presence in China, today announces its audited financial results for the year ended December 31, 2019 and provides updates on key clinical and commercial developments.

 “2019 was a year in which we laid the foundations for a new era for Chi-Med,” said Simon To, Chairman of Chi-Med.  “Our first launched drug, Elunate®, is set to broaden patient access this year due to its recent addition to the NRDL1 in China.  We are scaling up our oncology commercial team in preparation for the potential launch of surufatinib, our first un-partnered oncology drug candidate, late this year in non-pancreatic NET2; and another two NDA3 submissions are imminent, one with savolitinib in lung cancer and a second with surufatinib in pancreatic NET, with launches anticipated for 2021.”

“Based on extensive clinical data, we also expect to initiate multiple global registration studies this year with fruquintinib, surufatinib and potentially savolitinib.  China registration studies with certain of our hematological malignancy assets are also in planning.”

“We believe that the potential launches of multiple new oncology products will address a broad range of unmet medical needs and benefit a large number of patients, propelling Chi-Med rapidly forward.”

 

RECENT OPERATING HIGHLIGHTS

Set out below are some of Chi-Med’s operating highlights for 2019 and so far this year.  For more details, please refer to “Operations Review” below.

SAVOLITINIB – GLOBAL

  • AstraZeneca4 collaboration – Prime position in EGFR TKI5 resistant NSCLC6:
    • EGFRm7 NSCLC patients with acquired resistance to Tagrisso® driven by MET8 amplification: Published full results of TATTON study in The Lancet Oncology in 2020 for the savolitinib/Tagrisso® combination reporting 30% ORR9 and 5.4 months’ median PFS10 in 69 patients;
      The SAVANNAH Phase II study, with registration potential, underway in North and South America, Europe and Asia, is on-target for interim analysis in mid-2020 and enrollment completion by end-2020;
    • EGFRm NSCLC patients with acquired resistance to Iressa® or Tarceva® driven by MET amplification: Published full results of TATTON study in Lancet Oncology for the savolitinib/Tagrisso® combination reporting 64% ORR and 9.0 months’ median PFS in 93 patients; and
    • Completed enrollment in 70 patients Phase II registration study – MET Exon 14 deletion NSCLC: Interim China Phase II data presented at CSCO11.  As a result of our regulatory interaction with the NMPA12, we now expect to submit savolitinib NDA in early 2020.
  • Papillary renal cell carcinoma (“PRCC”) – Renewed global development strategy:
    • Actively evaluating restart in MET-driven PRCC: In late 2018, enrollment was terminated in SAVOIR, a global Phase III registration study of savolitinib monotherapy compared with sunitinib monotherapy in MET-positive PRCC.  Data from the approximately 60 patients randomized in SAVOIR prior to termination has matured during 2019 and will be presented at an upcoming scientific conference in mid-2020. Based on these data, AstraZeneca and Chi-Med are actively evaluating the opportunity to restart clinical work in PRCC for monotherapy savolitinib; and
    • Preliminary signal for savolitinib/Imfinzi® (PD-L113) combination in all PRCC: Presented data for the PRCC cohort of the CALYPSO Phase II study at ASCO GU14 showing the combination was tolerable and associated with durable efficacy. Median OS15 was 12.3 months and twelve-month OS rate was 52%. Based on these data, AstraZeneca and Chi-Med continue to explore development of the savolitinib and Imfinzi® combination.
  • Promising savolitinib efficacy in MET-amplified gastric cancer: The VIKTORY Phase II umbrella trial results were published in Cancer Discovery16.  VIKTORY sequenced 715 metastatic gastric cancer patients, with MET-amplification observed in 3.5% of patients.  In MET-amplified gastric cancer patients, savolitinib monotherapy met pre-specified 6-week PFS rate and reported an ORR of 50%.

 

SURUFATINIB – CHINA

  • First targeted therapy to address NETs of all origins: Recently reported two positive Phase III studies, SANET-ep (mid-2019) in non-pancreatic NET and SANET-p (early 2020) in pancreatic NET.  Both studies were terminated early following positive interim analyses that confirmed they had already met their median PFS primary endpoint:
    • China Non-pancreatic NET:  Presented full results of SANET-ep Phase III study at ESMO17 reporting a median PFS for surufatinib of 9.2 months as compared to 3.8 months for placebo (HR 0.334, p<0.0001). An NDA for the treatment of non-pancreatic NETs was submitted to the NMPA in China in November 2019 and Priority Review status was granted in December 2019; and
    • China Pancreatic NET:  Following positive interim analysis and early termination of the SANET-p Phase III study, NDA preparations are now underway.
  • Initiated China Phase II/III study in biliary tract cancer (“BTC”): Based on preliminary Phase Ib/IIa data, we initiated a Phase IIb/III registration study in BTC in China in March 2019; and
  • Progressed PD-118 combination development: Completed a Phase I dose-finding study in China of surufatinib plus Tuoyi®, an approved PD-1 monoclonal antibody from Junshi19, then initiated an exploratory Phase II study of the combination in early 2020 in multiple solid tumor indications.  Phase I development of surufatinib plus Tyvyt®, an approved PD-1 monoclonal antibody from Innovent20, is also in planning.

 

FRUQUINTINIB – CHINA

  • Progress on Elunate® (fruquintinib capsules) in third-line colorectal cancer (“CRC”) in China:
    • $17.6 million in sales during 2019: In-market sales of Elunate® to third-parties, as provided by Lilly21, in the first full year since its late 2018 launch; and
    • Inclusion in the National Reimbursement Drug List (“NRDL”): Elunate® was included in the China NRDL in November 2019, with reimbursement effective January 1, 2020.  NRDL inclusion now makes Elunate® a highly attractive approved therapy in third-line CRC in China in terms of price, efficacy and safety profile.  Elunate® sales22 in January-February 2020, were $6.6 million.
  • Phase III interim analysis in second-line gastric cancer: In April 2019, an interim analysis for futility of the FRUTIGA study in China was performed. The IDMC23 recommended to continue the study without changes; and
  • Progressed PD-1 combination development: Approaching completion of Phase I dose-finding study in China of Elunate® plus Tyvyt® (Innovent).  Phase I development of Elunate® plus genolimzumab, a PD-1 monoclonal antibody under development by Genor24, is also now underway.

 

OTHER DEVELOPMENT CANDIDATES – CHINA

  • Non-Hodgkin’s lymphoma (“NHL”): Advanced Phase Ib dose expansion of both of our NHL assets, HMPL-523 (selective Syk25 inhibitor) and HMPL-689 (selective PI3Kδ26 inhibitor) in China.  We expect these Phase I/Ib studies to inform our China registration study decisions in 2020;
  • HMPL-453 – selective FGFR27 1/2/3 inhibitor: We completed Phase I development, with a Phase II study in advanced malignant mesothelioma in China set to initiate; and
  • IND28 clearance in China for HMPL-306: Our ninth in-house discovered asset, an IDH29 1/2 dual inhibitor, received China IND clearance in late 2019 with Phase I set to initiate.

 

INTERNATIONAL OPERATIONS

  • Global development footprint: Through our International organization, based in New Jersey, we have rapidly expanded our clinical and regulatory capabilities in the U.S., Europe and now Japan;
  • Fruquintinib: Completed EOP230 meetings with U.S. Food and Drug Administration (“FDA”) in February 2020, regarding our global Phase III, the FRESCO2 study, in colorectal cancer.  Europe and Japan EOP2 meetings are planned shortly;
  • Surufatinib: Data from a U.S. Phase I/Ib study were presented at ESMO.  In late 2019, the U.S. FDA granted Orphan Drug designation for the treatment of pancreatic NET.  Regulatory consultations in U.S., Europe and Japan are underway, to clarify registration pathway for surufatinib in NETs; and
  • HMPL-523 and HMPL-689: Expanded development into the U.S. and Europe during 2019. Twenty Phase I sites are now enrolling and have completed multiple dose cohorts.

 

ORGANIZATION

  • Chi-Med Group compensation and share-based incentive policy: The Group has comprehensively reviewed its compensation and share-based incentives policies, performed benchmarking research on peer group U.S. and China biotech companies and established a new competitive policy to ensure we are able to attract and retain top talent; and
  • Establishment of China oncology commercial organization: Currently over 140 commercial staff, aiming to recruit a total of 300-350 staff to support potential surufatinib launch in late 2020.

 

UPDATE ON IMPACT OF COVID-19

  • Improvising amid COVID-19 challenges:  The outbreak is posing some challenges to our operations resulting from restrictions on movement in China.  Reduced patient hospital visits for clinical assessment affected the conduct of certain clinical studies and commercial team activities.  To-date, none of our manufacturing operations in China have been materially affected.  Our teams have adapted quickly and effectively thus far across our businesses, and we will continue to closely monitor what is an evolving situation. At this stage we are unable to assess the long-term effect of the outbreak, if any.

 

KEY EVENTS PLANNED FOR 2020

Early 2020: 

  • Savolitinib – Phase Ib/II data (CALYPSO) – PRCC cohort overall survival results for the Imfinzi® / savolitinib combination presented at ASCO GU (February 2020);
  • HMPL-453 – Phase II study start – FGFR 1/2/3 inhibitor in advanced malignant mesothelioma;
  • Savolitinib – NDA submission in MET exon 14 deletion NSCLC in China – first NDA submission globally for savolitinib;
  • Surufatinib – NDA submission in pancreatic NET in China – following the recent positive SANET-p Phase III interim analysis;
  • PD-1 combos – Initiation of multiple Phase II studies in China – for surufatinib/fruquintinib in combination with Tuoyi®/Tyvyt®; and
  • PD-1 combos – Phase I dose-finding data for surufatinib plus Tuoyi® combination – presentation of preliminary data at major scientific conference.

Mid-2020: 

  • HMPL-306 – First in Human dose of IDH 1/2 inhibitor – initiate Phase I study in China;
  • Savolitinib – Data from terminated Phase III study (SAVOIR) – presentation at major scientific conference of data comparing savolitinib to sunitinib in MET-driven PRCC patients; Mature data from about 60 patients;
  • Savolitinib – Interim analysis on SAVANNAH – interim analysis on first ~50 patients on SAVANNAH Phase II study of the savolitinib/Tagrisso® combination;
  • Surufatinib – Completion of global regulatory consultations – clarity on U.S., Europe and Japan registration pathway for surufatinib in NETs. Initiation of required clinical studies in U.S. and Europe;
  • Savolitinib – MET exon 14 deletion NSCLC data – presentation of full data from the savolitinib Phase II registration intent study at major scientific conference;
  • Surufatinib – Phase III data (SANET-p) – presentation of full data from the SANET-p study in pancreatic-NET patients at a major scientific conference;
  • Fruquintinib – Second Phase III interim analysis (FRUTIGA) – interim analysis for futility in second-line gastric cancer Phase III in China of fruquintinib / Taxol® (paclitaxel) combination;
  • Fruquintinib – Global Phase III study (FRESCO2) – initiation of registration study of fruquintinib in ≥3rd line colorectal cancer in U.S., Europe and Japan; and
  • HMPL-523 – Global Phase Ib expansion – in indolent NHL in U.S. and Europe.

Late 2020: 

  • Surufatinib – Phase II/III interim analysis – for futility in second-line BTC in China;
  • Surufatinib – Potential NDA approval and launch for non-pancreatic NET in China – first un-partnered oncology drug launch for Chi-Med in China. Commercial team of 300-350 medical sales personnel in place for launch;
  • HMPL-689 – Potential registration study start – in indolent NHL in China;
  • Fruquintinib – Enrollment completion of FRUTIGA – to complete enrollment of China Phase III registration study in second-line gastric cancer;
  • Savolitinib – Enrollment completion of SAVANNAH – AstraZeneca to complete enrollment of global Phase II study, with registration potential, of savolitinib/Tagrisso® combination; and
  • HMPL-689 – Global Phase Ib expansion – in indolent NHL in U.S. and Europe.

 

Financial Highlights

The items below are selected financial data for the year ended December 31, 2019. All dollars are expressed in US dollar currency unless otherwise stated.   For more details, please refer to “Financial Review”, “Operations Review” and “Audited Consolidated Financial Statements” below.

OVERALL GROUP:

  • Group revenue of $204.9 million (2018: $214.1m).
  • Net loss attributable to Chi‑Med of $106.0 million (2018: net loss of $74.8m).
  • Adjusted Group net cash flows excluding financing activities was -$82.3 million (2018: -$49.1m). Cash from our Commercial Platform, as well as cash received from our multi-national partners, continued to offset a material portion of our R&D31
  • Recent Nasdaq follow-on strengthens cash position. We held cash, cash equivalents and short-term investments of $217.2 million as of December 31, 2019 (December 31, 2018: $301.0m).  In January 2020, we conducted a Nasdaq follow-on offering, raising an additional $110.1 million in net proceeds, to further strengthen our cash position; and
  • Additional unutilized bank facilities of $119.3 million (December 31, 2018: $119.3m) and borrowings of $26.8 million (December 31, 2018: $26.7m).

 

INNOVATION PLATFORM:

  • Consolidated revenue was $16.0 million (2018: $37.6m) mainly from service fee payments from AstraZeneca and Lilly. 2018 revenues included a one-time $13.5 million milestone payment from Lilly following fruquintinib approval; and
  • Net loss from our Innovation Platform attributable to Chi-Med of $133.2 million (2018: net loss of $104.4m) resulting from expansion in the development of our eight clinical drug candidates, five of which are now in global development, and establishment of sizable international clinical and regulatory operations.

 

COMMERCIAL PLATFORM:

  • Total consolidated sales up 7% (11% at CER32) to $188.9 million (2018: $176.5m) mainly due to continued progress on our Prescription Drugs subsidiary Hutchison Sinopharm33 as well as manufacturing sales and royalties from Elunate® during its first full year on the market;
  • Total consolidated net income from our Commercial Platform attributable to Chi-Med up 9% (13% at CER) to $47.4 million (2018: $43.4m) underpinned by the growing profits of our legacy operations in China as well as Elunate®.

 

FINANCIAL GUIDANCE

In 2019 we performed in-line with our most recent guidance.  We provide Financial Guidance for 2020 below.

In 2020, on the broader Innovation Platform, we plan to continue to increase our investment in R&D particularly on clinical development of our main assets in the U.S., Europe and Japan as well as in China (as discussed in the “Product pipeline progress” section below).  On the Commercial Platform, we expect to continue to generate cash flow directly through our subsidiaries and via dividends from our joint ventures.  We assume at this stage that the financial impact of the recent 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 new material information emerges.

2020 Guidance  
Adjusted (non-GAAP) Innovation Platform segment operating loss $(180) – (210) million
Adjusted (non-GAAP) Group Net Cash Flows excluding financing activities $(140) – (160) million

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.

 

 

Conference Call and Audio Webcast Presentation Scheduled Today at 1:00 p.m. GMT / 8:00 a.m. EST / 9:00 p.m. HKT –  Investors may participate in the call as follows: +44 20 3936 2999 (U.K.) / 1 845 213 3398 (U.S.) / +852 5808 4954 (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 “413486.”

 

 

FINANCIAL STATEMENTS

Chi-Med will today file with the U.S. Securities and Exchange Commission its Annual Report on Form 20-F.

 

ANNUAL GENERAL MEETING

The Annual General Meeting of Chi-Med will be held at 4th Floor, Hutchison House, 5 Hester Road, Battersea, London SW11 4AN on Monday, April 27, 2020 at 11:00 a.m.

 

About Chi-Med

Chi-Med (Nasdaq/AIM: HCM) is an innovative 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 eight 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, Corporate Finance & Development
+852 2121 8200

Annie Cheng, Vice President, Corporate Finance & Development
+1 (973) 567 3786

David Dible, Citigate Dewe Rogerson
+44 7967 566 919 (Mobile)
david.dible@citigatedewerogerson.com

Xuan Yang, Solebury Trout
+1 (415) 971 9412 (Mobile)
xyang@troutgroup.com


Media Enquiries

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

Americas – Brad Miles, Solebury Trout
+1 (917) 570 7340 (Mobile)
bmiles@troutgroup.com

Asia – Joseph Chi Lo, Brunswick
+852 9850 5033 (Mobile)
jlo@brunswickgroup.com

Zhou Yi, Brunswick
+852 9783 6894 (Mobile)
yzhou@brunswickgroup.com


Nominated Advisor

Freddy Crossley / Atholl Tweedie, Panmure Gordon (UK) Limited
+44 (20) 7886 2500

 

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,” “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; health crises in China or globally; 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. Although Chi-Med believes that the publications, reports and surveys are reliable, Chi-Med has not independently verified the data and cannot guarantee the accuracy or completeness of such data. You are cautioned not to give undue weight to this 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.

 

Ends

 

  1. National Reimbursement Drug List (“NRDL”)
  2. Neuroendocrine Tumors (“NET”)
  3. New Drug Application (“NDA”)
  4. AstraZeneca AB (publ), a wholly owned subsidiary of AstraZeneca PLC
  5. Epidermal growth factor receptor tyrosine kinase inhibitor (“EGFR TKI”)
  6. Non-small cell lung cancer (“NSCLC”)
  7. Epidermal growth factor receptor mutation (“EGFRm”)
  8. Mesenchymal epithelial transition receptor (“MET”)
  9. Objective response rate (“ORR”)
  10. Progression free survival (“PFS”)
  11. Chinese Society of Clinical Oncology 22nd Annual Meeting – September 2019
  12. China National Medical Products Administration (“NMPA”)
  13. Programmed Death-Ligand 1 (“PD-L1”)
  14. American Society of Clinical Oncology Genitourinary Symposium – February 2020
  15. Overall survival (“OS”)
  16. Lee J, Kim ST, Kim K, et al. Tumor Genomic Profiling Guides Patients with Metastatic Gastric Cancer to Targeted Treatment: The VIKTORY Umbrella Trial. Cancer Discov. 2019;9(10):1388–1405. doi: 10.1158/2159-8290.CD-19-0442
  17. European Society for Medical Oncology congress – September 2019
  18. Programmed Cell Death Protein-1 (“PD-1”)
  19. Shanghai Junshi Biosciences Co. Ltd (“Junshi”)
  20. Innovent Biologics (Suzhou) Co. Ltd (“Innovent”)
  21. Eli Lilly and Company (“Lilly”)
  22. In-market sales of Elunate® to third-parties, as provided by Lilly and unaudited
  23. Independent Data Monitoring Committee (“IDMC”)
  24. Genor Biopharma Co. Ltd. (“Genor”)
  25. Spleen tyrosine kinase (“Syk”)
  26. Phosphoinositide 3-kinase delta (“PI3Kδ”)
  27. Fibroblast growth factor receptor (“FGFR”)
  28. Investigational New Drug application (“IND”)
  29. Isocitrate dehydrogenase (“IDH”) 1/2
  30. End of Phase 2 (“EOP2”)
  31. Research & development (“R&D”)
  32. We also report changes in performance at constant exchange rate (CER) which is a non-GAAP measure. Please refer to “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.
  33. Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Company Limited (“Hutchison Sinopharm”).
  34. American Association for Cancer Research Annual Meeting – April 2019
  35. European Society for Medical Oncology Asia Congress – November 2019
  36. Disease control rate (“DCR”)
  37. Renal cell carcinoma (“RCC”)
  38. Vascular endothelial growth factor receptor tyrosine kinase inhibitor (“VEGFR TKI”)
  39. Vascular endothelial growth factor receptor (“VEGFR”)
  40. Vascular endothelial growth factor (“VEGF”)
  41. Pharmaceuticals and Medical Devices Agency of Japan (”PMDA”)
  42. Colony stimulating factor-1 receptor (“CSF-1R”)