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Group, RNS Announcements | 28 Jul 2015

Interim Results for the Six Months Ended 30 June 2015

For the complete release, please download the PDF.

Drug R&D Division – our Innovation Platform: enrolling 17 clinical trials (H1 2014: 10), with 24 targeted by year-end.

China Healthcare and Consumer Products Divisions – our Commercial Platform: sales of subsidiaries and JVs up 17%, net profit up 15%.

Strong outlook for full year and beyond.

London: Tuesday, 28 July 2015: Hutchison China MediTech Limited (“Chi-Med”) (AIM: HCM), the China-based healthcare group, today announces its unaudited financial results for the six months ended 30 June 2015.

Results are reported in US dollar currency unless otherwise stated.

Group Results

  • Revenue on continuing operations up 117% to $65.7 million (H1 2014: $30.3m).
  • Net profit attributable to Chi-Med equity holders of $2.3 million (H1 2014: $5.6m), despite major increase in spending on clinical activity.
  • Continued stable cash position: cash and bank balances at the Chi-Med Group level of $48.8 million (31 December 2014: $51.1m); in addition, and not included at Chi-Med Group level, cash and bank balances held at the Joint Venture (“JV”) level of $70.4 million (31 December 2014: $77.0m).

 

Innovation Platform (formerly Drug R&D Division)

  • Revenue of $10.2 million (H1 2014: $9.9m) and net loss attributable to Chi-Med equity holders of $11.7 million (H1 2014: -$6.3m) driven by major expansion of clinical trial activity.
  • Total first half spending on clinical activities estimated at $30.3 million (H1 2014: $22.3m) balanced by aggregate $22.9 million (H1 2014: $20.1m) in cash milestone and service payments from our partners AstraZeneca AB (publ) (“AstraZeneca”), Eli Lilly and Company (“Lilly”), Nutrition Science Partners Limited (“NSP”) (our JV with Nestlé Health Science SA) and Janssen Pharmaceuticals, Inc. (part of the Johnson & Johnson group of companies).

 

Commercial Platform (formerly China Healthcare and Consumer Products Divisions)

  • Total sales of subsidiaries and JVs up 17% to $285.4 million (H1 2014: $244.9m) with the majority from expansion of both own-brand and third party prescription drugs sales.
  • Net profit attributable to Chi-Med equity holders on continuing operations up 15% to $19.9 million (H1 2014: $17.3m) due to steady growth in the Prescription Drugs business.

 

Christian Hogg, CEO of Chi-Med, said: “Chi-Med has made great progress on all fronts so far this year. Our vision is to become a major China-based pharmaceutical company – we believe we will achieve this by being an important innovator in the global targeted therapy arena. In line with this, during the first half, Chi-Med and its partners invested over $30 million pushing our oncology and immunology clinical pipeline as hard and fast as we could.

We now have 17 clinical trials (H1 2014: 10) underway, with a further seven to start in the second half – and we expect to be enrolling four pivotal Phase III oncology studies by year end. Almost all of our drug candidates have global first-in-class or best-in-class potential, and many are being tested in potential Breakthrough Therapy indications. Our drug candidates have all been designed in-house over the last decade and are highly selective, allowing for high drug exposure, potent target coverage and minimal off-target toxicity. This has resulted in some of the highest clinical response rates ever seen in the tumour types we are studying. Most importantly, we are closing in on approvals, with our first drug candidates targeting New Drug Application (“NDA”) submissions next year in the US and China.

Our Commercial Platform continues to grow rapidly with strong profit growth and cash flow. Our focus today is the commercialisation of our own-brand as well as third party prescription drugs through a powerful network of over 1,800 medical sales staff, covering about 13,500 hospitals and detailing our products to over 80,000 doctors. Soon however, we intend to leverage this organisation to commercialise our own Innovation Platform drugs once they are approved in China.

With our high potential clinical pipeline, our efficient and highly productive discovery engine and our powerful, profitable, high growth commercial and distribution platform, we believe Chi-Med is uniquely positioned to achieve its vision and to generate considerable shareholder value this year and beyond.”

H1 2015 Highlights

 

Innovation Platform: Across the board clinical trial progress – now expect to be enrolling four pivotal Phase III oncology studies by year end – two on fruquintinib and two on sulfatinib.

  • Savolitinib: Nine clinical trials underway and three more in final planning – Highlights:

1. Kidney Cancer: First-line papillary renal cell carcinoma (“PRCC”) global Phase II study progressing as expected, now over 50 patients enrolled and will complete in late-2015. We are seeing obvious efficacy in patients with high levels of c-Met amplification and plan to report results at the American Society of Clinical Oncology (“ASCO”) meeting in mid-2016;

2. Lung cancer: Results of the Phase Ib dose finding study (“TATTON”) in combination with AZD9291 (T790M inhibitor) were reported at the ASCO meeting in mid-2015. We published astonishing tumour shrinkage visuals and very encouraging efficacy data – a 55% objective response rate (“ORR”), in second-line gefitinib/erlotinib refractory non-small cell lung cancer (“NSCLC”). The TATTON study is now being expanded (30 patients) and is expected to complete enrolment in early-2016 and, subject to continued high ORR, could then move directly to Phase III;

3. Gastric cancer: Four clinical trials are underway in c-Met aberrant gastric cancer patients. During H1 2015 we observed clear response to savolitinib monotherapy, for the first time, in the c-Met amplified gastric cancer setting;

4. Immunotherapy combinations planned: AstraZeneca is an important innovator in the immunotherapy field with MEDI4736/durvalumab (PD-L1) particularly in the use of this immunotherapy agent in combination with other anti-cancer agents. In H2 2015 we intend to start three further clinical studies in kidney cancer, two of which will combine savolitinib with MEDI4736.

  • Fruquintinib: Four clinical trials underway – Highlights:

1. Colorectal cancer (third-line): Clearly met Phase II study primary endpoint, Progression Free Survival (“PFS”), triggering $18 million milestone and reimbursement payments from Lilly. Full Phase II results to report at European Society of Medical Oncology meeting in September 2015. We have now enrolled over 120 patients in the FRESCO pivotal Phase III study and expect completion in early 2016 and NDA submission in China in late 2016;

2. NSCLC (third-line): Phase II study completed enrolment in March 2015 and we will report top-line results in Q3-2015, and if positive, we intend to start a pivotal Phase III study in late 2015;

3. Gastric cancer (second-line): Fruquintinib in combination with chemotherapy (paclitaxel) – Phase Ib dose-finding study 3mg fruquintinib dose was shown safe and tolerable and we are now in 4mg cohort (a dose that provides full target inhibition). We expect to start a Phase II/III study in late 2015 which will be used to prove combinability with chemotherapy, the key to much broader indications and hence fruquintinib’s global potential.

  • Sulfatinib: One clinical trial underway and three more in final planning – Highlights:

1. Neuroendocrine tumours (“NET”) (first-line): Reported 35% ORR in our Phase I study, which is about four times the ORR of current approved therapies, then started Phase Ib study in China in NET (over 50patients already enrolled). We have submitted a Phase II/III clinical trial application in China and upon clearance in late 2015 we will start two pivotal Phase III studies in China, one in pancreatic NET and a second in advanced carcinoid patients;

2. Thyroid cancer: We expect to initiate a Phase Ib study in China in Q3 2015;

3. US Development: Sulfatinib is the first wholly-owned cancer drug candidate that we are developing in the US. Our US Investigational New Drug application was cleared in early 2015 and, after a dose confirmation study in Caucasians, we expect to start a US Phase II NET study in early 2016.

  • HMPL-523: Very high potential first-in-class Syk inhibitor for immunology and oncology – Highlights:

1. Immunology: Phase I single ascending dose section completed with 800mg single dose showing no material toxicities in healthy volunteers – with higher doses providing drug exposures well above expected efficacious dose. The 14-day multiple ascending dose section of the Phase I study is now underway with 200mg daily cohort successfully complete – we expect to determine Phase II dose for rheumatoid arthritis by the end of 2015;

2. Hematological Cancer: Phase I, primarily in lymphoma and leukemia patients, set to start in Australia in H2-2015, the fastest route to a possible efficacy signal for HMPL-523 by early 2016.

  • Other clinical/near clinical drug candidates: Highlights:

1. Epitinib (HMPL-813): Emerging early human efficacy data in Phase Ib study of NSCLC patients with brain mets. Seeing clear partial responses in both primary lung and metastasised brain lesions;

2. Theliatinib (HMPL-309): Phase I dose-escalation study nearing completion with dose well above efficacious dose already qualified;

3. HMPL-689: Our selective PI3Kδ inhibitor is set to start Australian Phase I study in hematological cancer patients in late 2015;

4. HMPL-453: Our selective FGFR 1-3 inhibitor is set to start Australian Phase I study in solid tumour patients in early 2016.

Commercial Platform: Focus on broadening scope and capacity of higher margin Prescription Drugs business.

  • Expansion in our Prescription Drugs business: Shanghai Hutchison Pharmaceuticals Limited (“SHPL”) and Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Company Limited (“Hutchison Sinopharm”) – the main strategic prescription drugs focus area of our Commercial Platform – grew sales of subsidiaries and JVs by 44% to $149.3 million (H1 2014: up 31% to $103.9m).
  • Important 20-year invention patent granted: A new patent covering formulation was granted in July 2015 on our largest prescription drugs product, She Xiang Bao Xin pill (“SXBXP”) which will extend our proprietary protection in China through 2029. SXBXP sales grew by 14% to $94.9 million in the first half of 2015, representing 64% of Prescription Drugs business sales.
  • Great progress on Seroquel®: Within our third party Prescription Drugs business, we have now established a dedicated over 80-person psychiatric disorder medical sales team to commercialise Seroquel® on behalf of AstraZeneca. Monthly in-market Seroquel® sales are progressing well – evidence of the strength and adaptability of our Commercial Platform to enter new therapeutic areas in future, including oncology and immunology.
  • New factories: Coming online at the end of 2015 or early 2016 leading to about three-fold production capacity expansion in own-brand products and likely conclusion of property compensation deal, particularly in Shanghai.

Ends

Enquiries

Chi-Med
Telephone: +852 2121 8200
Christian Hogg, CEO

 

Panmure Gordon
Telephone: +44 20 7886 2500
Richard Gray
Andrew Potts

 

Citigate Dewe Rogerson
Telephone: +44 20 7638 9571
Anthony Carlisle – Mobile: +44 7973 611 888
David Dible – Mobile: +44 7967 566 919

 

An analyst presentation will be held at 9:00 am today at Citigate Dewe Rogerson, Third Floor, 3 London Wall Buildings, London, EC2M 5SY.

 

About Chi-Med

Chi-Med is a China-based healthcare group focused on researching, developing, manufacturing and selling pharmaceuticals and health-related consumer products. Its Innovation Platform focuses on discovering and developing innovative therapeutics in oncology and autoimmune diseases. 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.

 

Please download the PDF for the full text of our interim announcement.