Christian Hogg
Thank you very much, Greg. Welcome everybody to the First Half Results Presentation for HUTCHMED for H1 2021. I'm joined on this call by my colleagues Dr. Wei-Guo Su our Chief Scientific Officer; Dr. Marek Kania, our Managing Director for HUTCHMED International our Chief Medical Officer in the United States; Johnny Cheng, our Chief Financial Officer; and Mark Lee, our Senior Vice President Corporate Finance and Development. So I'm looking forward to taking you through the presentation today. So if you could move to the next slide please, slide number three. The agenda today, what I'm going to do is I'll take you through this presentation hopefully in about 35 minutes. It will be relatively rapid fire, updating on everything. And then, we'll open up for maybe half an hour of Q&A, at which point I'll involve the broader team in answering some of your questions. So the agenda today, we have, first of all, overview and highlights of what's happened in the first half, some focus on our regulatory achievements and our commercial operation progress, some key pipeline updates, a brief summary of the upcoming events over the balance of the year and into 2022 and then, a brief look at the financial picture for the company. Slide four, please. So now on to slide five. This is a slide that gives a high level sort of summary of what we're trying to do as a company. HUTCHMED is very focused on trying to build a global science-focused biopharmaceutical company. We are a very proud China-based company, but our vision and our ambition is very much global. You can see the four kind of key areas that we're working in. The first in blue there is drug discovery and manufacturing. We base all of our drug discovery and manufacturing operations in China at this time, with world-class people and world-class facilities that are able to create novel drug innovation for the global market and then supply that novel drug innovation to the global market. So our base in China of discovery and manufacturing, I think, is very central to our global strategy. The second line there you see in red is the clinical development and regulatory operations that we've built out. We've always been well positioned in China. But over the last three to four years now, we've built out a very strong team in the United States that's able to cover Europe and Japan and manage clinical development of our assets and regulatory operations of our assets in these ex-China markets. So that's a critical aspect to our ability to bring our innovation to the global market is to be able to effectively develop those programs and interact with the regulatory authorities in each of those international markets. In the green line there you see we prioritized building out our own in-house commercial operations in key markets. Really the two key markets for HUTCHMED are China and the United States. These markets represent about half of the global pharmaceutical market. And we want to determine our own success in those markets in terms of commercialization. So we're building our commercial teams very rapidly in both of those markets. And outside of China and the United States you can see in line number four there, we'll build partnerships to bring our products to those what we would classify as non-core markets today. So that's our vision, our ambition, our platform, really globally facing with very strong foundations in our core markets. Slide six, please. Next slide please. Thank you. So the pipeline, as it sits today, is increasingly broad. The first three products on slide six you can see surufatinib, fruquintinib, savolitinib all of which now are approved in China and are being commercialized. Coming quickly behind them are kind of mid-stage programs 689 and 523 in hematological malignancies. We're very excited on 689 to bring it into registration studies this year already, in follicular lymphoma and marginal zone lymphoma and 523 is not far behind. Behind those mid-stage or entering into late-stage assets, we have seven programs that are in earlier stage development. So our FGFR inhibitor the IDH1/2 Dual inhibitor in development inside China and outside of China. Our ERK inhibitor has just started development in China this year. And recently, actually within the last week we got clearance for our IND on our third-generation BTK inhibitor which we'll start development hopefully in the United States later this year and in China also. And then coming behind that, two programs where we target to submit INDs later this year, the CSF-1R, selected CSF-1R small molecule and our first large molecule, our CD47 antibody that we intend to use in combinations with many of our other assets. So, it's a broad portfolio. It's moving quite quickly. And it's really one of the broader portfolios in oncology for most Chinese biotechs. And certainly, probably the biggest advantage that we have is the third column from the right, which details the rights, who owns the rights of these assets. And as you can see, HUTCHMED owns the worldwide rights to almost everything aside from savolitinib, where AstraZeneca has the commercial rights worldwide. So moving on to the next slide, slide 7. So, the first half highlights. On the regulatory commercial side, our first half revenues in Oncology/Immunology were up 161% to US$42.9 million, which is encouraging, given our commercial team. Really, that was the first six-month period that our commercial team had been in place, marketing SULANDA and ELUNATE. ORPATHYS, as everybody knows, was very recently approved and three weeks after approval was launched in China. ELUNATE sales, up 186% in market sales. That is to a little bit over US$40 million. SULANDA approved in extrapancreatic and pancreatic NET. So now, it's a therapy in China that's available to patients with any type of neuroendocrine tumor, which is a first. And then finally, the US NDA acceptance and the European MAA acceptance were pretty big steps that were achieved by a terrific international organization that is managing both of those programs in the US and Europe. On the pipeline, in the center, we've got savolitinib. Preparation has been underway to start five new global and China registration studies this year. We just announced today the start of our gastric cancer Phase II. We hope, subject to the first part of that study being positive that that could be moved into -- be used as a registration study, but that's all to be determined, but five registration studies moving now hopefully over this year to build off of the first approval for savo. We've announced some terrific PD-1 combo data for surufatinib and fruquintinib at ASCO this year, and we'll be entering into registration studies for combos with both of those assets later this year. The hematological malignancy portfolio is transitioning now. So, 689 is now in late stage in China in two indications. And that early-stage pipeline is moving really rapidly and getting us all quite excited about the potential of those assets, not just on their own, but also in combination with our existing programs. So, this pipeline approach we have of building a portfolio of targeted therapies that can be combined with each other is really starting to play out now. On the organizational progress, the international R&D organization and US commercial team continue to build out, preparing for surufatinib launch, hopefully next year, early next year. But it's not just surufatinib. We've got fruquintinib following in 2023 and also 689, we believe has great potential for a rapid pathway to approval in the US, so we're building that team for a number of assets. The China commercial team is scaling rapidly up to now 540 people. By the end of this year, it'll be over 600 people. We're building a flagship manufacturing facility. It's going to increase our small molecule capability by fivefold -- over fivefold and also establish our large molecule CMC platform. And finally, on the cash side, we're currently sitting on cash and resources of about US$1.2 billion as a result of our Hong Kong listing recently and also the divestment of our over-the-counter drug business. Next slide please, number 8. Number 9, thank you. So, regulatory achievements, I won't repeat myself, but you can see here two approvals for SULANDA, one in early 2021, one just recently in June. ORPATHYS approval in June and the NDA submission in the US and EMA -- MAA submission in Europe, all happened really in the first half of this year. So, a lot of activity. Next slide please, slide 10. So a brief update on the commercial side. On the left-hand side of slide 10, you can see that the oncology team really has built up rapidly in the last 18 months. I mean 18 months ago we had 70 people in our oncology commercial team. Now it's 540. So, it's a young organization. It's been growing very rapidly. It is operated by some very high-quality individuals with deep experience in operating large commercial teams across China. We're now covering 2,500-plus oncology hospitals and clinics and over 29,000 oncology physicians. So it's a deep pool of commercial capability. It is supported by two of our other affiliates, which have deep commercial infrastructure in China as well. So, HUTCHMED has always been a capable commercial operator in China and now oncology being our focus is really coming to the fore. On the right-hand side of the slide, you can see there the scale up. We'll scale up even quicker than is shown in that bar chart, if the business justifies it. There's no limitations as to how fast we can grow. If the business is growing, we'll build out the team to support it. But we have high expectations on productivity. So, the last bullet point there you can see we're targeting to reach about US$ 400,000 productivity per year by 2023 for our sales reps. So, we're not just blindly expanding. There are productivity targets involved. Next slide please, slide 11. So fruquintinib, yes, it's been a terrific first half for fruquintinib. We took over last October. You can see the red bars here are HUTCHMED involvement. So, on the left there, you can see in 2020, the sales of Elunate were $33 million. We took over the last quarter, did about $10.2 million in sales. So, relatively modest growth last year until we took over. But if you look at the first half there, we've seen almost a tripling of the business, 186% growth from $14 million in the first half last year to $40.1 million in in-market sales this year, of which we consolidate $29.8 million, so about 75% roughly of the sales as we've always indicated. The sales team is doing a great job. We've run over 5,000 educational or scientific events in the colorectal cancer space in the first half of this year. It's a big patient population 83,000 new patients in third line. And we estimate that we treated about 9,000 patients in the first half. So, that's probably a little bit over 20% -- 22%, 23% penetration. So, there's still a lot of upside. But it is a competitive space, but I think we are well-positioned to compete. Slide 12 please. You can see the reason for that growth is driven by increasing our hospital pharmacy listings to now 400 in China. That's over double from when we took over from Eli Lilly last October 1. The commercial team has tripled or quadrupled in size, covering over twice as many oncology hospitals and a much broader geographical footprint as well. So, looking forward, Elunate does have some pretty important potential. There's a lot of colorectal cancer patients in China over 500,000. Third-line patient population is increasing quickly. We're very excited about the PD-1 combo data that's starting to get emerged. And we're running a lot of investigator-initiated studies to explore expanding fruquintinib or Elunate into other patient populations. And finally, our Phase 3 in second-line gastric cancer, it's still ongoing, should complete enrollment around the end of this year. So, there's a lot of opportunities for Elunate still. Next slide please page 13. SULANDA, a very brief update. It's very early. We've only really been commercializing SULANDA in China for a little bit over 5.5 months. We did about US$ 8 million of sales in the first half, treated about 2,000 patients. We conducted launch activities on the local regional and national level involving over 12,000 healthcare professionals. So, yes, it's still early, but we remain really quite optimistic about SULANDA. Now, you have to remember that SULANDA current pricing was around 2,000 -- was around RMB 17,000 a month and that's paid all out of pocket. So we're not on the NRDL yet. We are considering NRDL negotiations later this year. We will determine based on how those negotiations go, whether we're going to go ahead and take whatever is the necessary price reduction to get on the NRDL or potentially continue using our early access and patient access programs into next year. So, we'll see how that plays out over the balance of this year. But, I think it's a good start for SULANDA, and we'll see this momentum continue to build, as our team gets stronger. Next slide please, Slide 14. So ORPATHYS is the first selective MET inhibitor approved in China. It's been a terrific month or two. We received approval in late June, which was very important because that allows us to get into negotiations and eligibility for the 2022 NRDL for ORPATHYS. So we're hopeful that if we can negotiate a fair situation with the regulatory authorities that ORPATHYS can be included next year in January. 16 days after approval, we shipped our first product and have since prescribed 40 patients on day one, which is no mean feat given that the price of ORPATHYS is quite high at around US$5300 per month. So it's a great program. We're relying on AstraZeneca to commercialize ORPATHYS in China. As you can see from the right-hand side of this slide, they're very big in China, number one MNC, in China and ORPATHYS fits really well into their lung cancer franchise. So we're very optimistic. Obviously, the first sale triggered a $25 million milestone. So that's very helpful as well. Next slide please, Slide 15. ORPATHYS has extensive publications across many tumor types with really high-quality data in each of them, whether it's kidney cancer, lung cancer or gastric cancer. And as I said earlier, we have five studies now on the right-hand side of this chart that registration studies that should be kicking off over the second half of the year with the gastric cancer study having started just in the last couple of days, actually today – yesterday it was. So this is not a drug that has a limited treatment history. It's been studied in many, many patient settings and we're quite optimistic as to its potential in the market. We'll talk more about that. On the next slide 16. This is the building block slide that shows all the MET-driven patients across many solid tumor settings. You can see in the brown box in China, MET Exon 14 deletion non-small cell lung cancer about 13,000 new patients a year. This is just a fraction of the broad MET-driven patient population. And so this chart I think does a very high-level job of identifying what are the patient populations of most interest. You can see in the red boxes, these are patient populations that we are initiating registration studies in. The pink boxes, most likely these are patient populations that might benefit from ORPATHYS, if their physicians are prescribing off-label. But obviously that's up to the physician to determine if the patient is appropriate for this therapy. So really a big patient population for ORPATHYS in China and outside. Next slide please, Slide 17. Okay. Finally on the commercial side, just some update on the US commercial organization. It continues to build out in preparation for the launch of suru next year and fruquintinib the year after. We've really built out the senior management team ready to set the strategy for launch. And it's not just on the sales side. It's all the other ancillary functions that are now in place regulatory affairs, medical affairs, quality and safety, you can see there down in the second – on the bottom side of this chart. So our US commercial organization and clinical regulatory team are really making great progress. Now close to 100 people on the ground in the United States and a satellite organization in Europe as well. Next slide, please. So clinical development update, Page 19, a brief update on surufatinib. Just to reiterate its unique mechanism of action the VEGFR FGFR1 CSF-1R inhibition, so that's what makes surufatinib unique. Next slide, please. Great data on Slide 20, that was presented at ASCO for the surufatinib/toripalimab combo is neck and gastric. These are strong data that are leading us to make decisions as to registration studies, particularly in neck. But there are multiple other indications where we are studying at the moment in Phase II and we'll publish more data on that later in the year. Next slide, please. I'm going to have to go quite quickly here because we're running short of time. So I won't go through this slide in detail but China very active on the PD-1 combos and IIT studies. And then globally, the team working very hard on the European and the US NDAs and also the PD-1 combos with tislelizumab, the BeiGene PD-1 in a number of indications. Next slide please. Fruquintinib mechanism of action highly selective VEGFR inhibitor potent against VEGFR-1, VEGFR-2 and VEGFR-3 and designed really to be used in combinations, because of that unique safety profile, its ability to be combined with chemo other targeted therapies or immunotherapies is really in our view, difficult to beat. Next slide please, slide 23. The FRESCO-2 study is probably our biggest global Phase III that we are running at the moment, the U.S. team and European team and also through partners in Japan managing this very big global Phase III. The regulatory interaction we've had in Europe, the U.S. and Japan, gives us a high degree of confidence. If this FRESCO-2 study is successful, it should support a good label of third line and above metastatic colorectal cancer. So a very important global study for us, over 680 patients should be completing enrollment in those 14 countries and 150 sites by the end of this year. Slide 24 please, next slide. The data we shared at ASCO for fruquintinib and the PD-1s in colorectal cancer is very encouraging. And we are now moving forward to consider next steps for this encouraging combination in colorectal cancer. Also looking at, some of the other indications, endometrial cancer being one where we've seen terrific synergy between, fruquintinib and the PD-1 antibodies. So we'll be moving forward into registration in that area. Next slide please, slide 25. Again, I'll touch on this very briefly. China it's the FRUTIGA study completing enrollment late this year, continuing work on the PD-1 combos and a lot of exploratory studies ongoing on fruquintinib in China. And then, globally, completing the FRESCO Phase II enrollment and expanding the PD-1 combo again with, tislelizumab and BeiGene for fruquintinib. Next slide please. So savolitinib, I won't go into a lot of detail here other than to say, we've treated over 1200 patients with savolitinib over the last 10 years. That's a lot of patients. We're now first-in-class selective c-MET inhibitor in China. And as I've said before, we are expanding into multiple global registration studies. Next slide please, slide 27. The big one will be the savolitinib/TAGRISSO combination. The TATTON study was -- published its final publication at World Conference, On Lung Cancer earlier this year. That's terrific data and very broadly understood. And the Oncology Lung Cancer Community are very aware of this data. The SAVANNAH study will come to its conclusion at least we'll be able to determine our Phase III design for the Savo/TAGRISSO global Phase III study in the next month or two, where we'll focus on the dose regimen the target patient population the diagnostic tools, so of the biomarker strategy. And I think we're in a very strong position working with AstraZeneca to conclude, what is the optimal design for this global Phase III. Next slide, page 28 please. I am personally very excited about, the MET-driven papillary renal cell carcinoma data we presented at ASCO, 57% response rate. The current standard of care is sunitinib and that has about a 7% response rate in these patients. So this is really step-change efficacy improvement for patients with MET-driven papillary renal cell carcinoma. In our CALYPSO study, you can see there, a median overall survival for these difficult patients of 27.4 months. That's relative to just over a year, for patients today with sunitinib. So it's a big step. And we'll start a global Phase III in MET-driven PRCC very shortly hopefully, in the next month or two. Next slide please, page 29. Savo development summary, I won't go through this in detail, but the approval of Exon 14 the start of two big Phase IIIs with the TAGRISSO combination in China, the SACHI Study, the SANOVO Study, the gastric study that just started this week. And then globally, a global MET positive PRCC Phase III, the SAMETA Study. And then the Phase III that comes off of SAVANNAH which is the big registration, global registration study, hoping we can start that later this year. Next slide please, slide 30. 689 just PI3K delta, we include this, because it really has now moved into late stage. It's unique in its isoform selectivity its potency on a whole blood level. And it's really unique in improved pharmacokinetic profile. So this is really in our view unique therapy in this PI3K delta space that should be able to differentiate itself, versus everything that's there today. Next slide please. So this is just the Phase I dose escalation data, it's about 56 patients. We've published as stated before. What's important though is since this data was published at ASH last year, we've enrolled well over 100 patients at the recommended Phase II dose. We also in the US and Europe have now almost reached our recommended Phase II dose and just about ready to move into expansion outside of China. So things are moving very quickly on 689. And we intend to publish more data hopefully at ASH later this year. And that should be a meaningful data set that we present at ASH later this year. Next slide please. So yeah page 32, I've just already mentioned this. I mean in China for 689, we've moved into registration studies in Q2 of this year in follicular lymphoma and marginal zone lymphoma. These studies have potential for NDA submissions late next year or early 2023, so that will be our -- hopefully our next major novel drug NDA submission in China. And we're looking at a bunch of combinations. These B-cell signaling pathway targets are all related in one way or another. And we have a superb portfolio now with the third-generation BTK, the PI3K delta, the Syk inhibitor and a number of other assets that can also create synergy. And then outside of China we will engage. Marek and his team will engage with the FDA later this year, bringing together all the China data, our international dose escalation data. And we'll go talk to the FDA about how to move this asset as quickly as possible in the markets outside of China. So we're very excited about this. Next slide please, slide 33. So the next wave of innovation 523, our Syk inhibitor moving into a Phase III in ITP and on the indolent non-Hodgkin's lymphoma side, making great progress outside of China. Looking at patients that are BTK inhibitor refractory, those seem to be the patients who do best on a Syk inhibitor. The IDH inhibitor moving quickly, the third generation BTK inhibitor 760 just got the IND cleared over the last week or so. So that will move into the clinic later this year. The ERK inhibitor moving nicely, and don't forget the FGFR inhibitor, 453 continues to enroll in intrahepatic cholangiocarcinoma. And we've just studied -- we’ve just submitted INDs to look into combinations of this FGFR inhibitor in certain areas, so a lot going on the early side. Next slide please, slide 34 -- 35. Again I won't go through all of these upcoming events on page 35. You can see the most important ones are highlighted in red there. So, obviously, on surufatinib it's been the NDA submission and the European ultimately next year, the European launch and the US launch. Fruquintinib FRESCO-2 readout next year, but completing enrollment late this year. Savo there's a lot going on savo this year with data from CALYPSO and then kicking off the global Phase IIIs in papillary renal cell carcinoma and the savo/TAGRISSO combo. And then going down the list, it's just the general progression of the broader pipeline with probably the regulatory dialogue on 689 being the most important for us. Next slide, page 36 is the China upcoming events. Many of them have happened already with the suru launch, the savo launch, but still a lot going on. So on surufatinib, the neuroendocrine carcinoma and gastric PD-1 combos that data was published as I mentioned. Now we're starting to look at okay how can we start registration studies in these areas or some of these areas. The same can be said for fruquintinib. The enrollment of FRUTIGA completing late this year, and then savo three registration studies kicking off this year, gastric and SACHI and SANOVA. And then 689, starting these registration studies in China. 523 also hoping to start Phase III late this year as well. So a lot happening. Next slide please, slide 37. I'll pass over slide 37 just to say this summarizes it. 10 Phase IIIs starting and three new drugs coming in. On the -- if you can go to page 39, yes. So on a cash standpoint consolidated balance sheet at the end of June, we had $950 million. That didn't include the over-allotment from the Hong Kong IPO, the $25 million milestone on ORPATHYS, and it didn't include the $150 or so million we should receive in the next few months for the divestment of our OTC business. So that puts us up to around $1.2 billion in cash and resources. We've had an important first half in terms of equity financing. The strategy to bring in some key strategic investors, such as Baring Private Equity Asia, and last year, the Canadian Pension Plan Investment Board, and General Atlantic, and then Carlyle around the Hong Kong IPO these investors are really important to the company and are supporting us in our activities. Next slide please. Slide 40, I'm on slide 39. If you can move to slide 40, Mark?
