Hutchison China MediTech Ltd at Deutsche Bank Depositary Receipts Virtual Investor Conference

Nov 13, 2019 PM UTC 查看原文
HCM.L - Hutchison China MediTech Ltd
Hutchison China MediTech Ltd at Deutsche Bank Depositary Receipts Virtual Investor Conference
Nov 13, 2019 / 01:30PM GMT 

Corporate Participants
   *  Christian Hogg
      Hutchison China MediTech Limited - CEO & Executive Director

Conference Call Participants
   *  Zafar Aziz
      Deutsche Bank Aktiengesellschaft - Director of Depositary Receipts IR Advisory Group

 Zafar Aziz,  Deutsche Bank Aktiengesellschaft - Director of Depositary Receipts IR Advisory Group   [1]
 Hello, this is Zafar Aziz, and welcome to the Deutsche Bank Depositary Receipts Virtual Investor Conference, dbVIC. I'm pleased to announce that our next presentation will be from Hutchison China MediTech from Hong Kong. Before I introduce our speaker, a few points to note. Please submit your questions in the Question Box below the slides. Once the Q&A session is ended, don't log out. You will automatically be transferred to the HCM booth, where you can continue the conversation by the chat facility and access additional investor material.

 On a final note, all today's presentations will be accessed -- will be recorded and can be accessed via the Deutsche Bank website, At this point, I'm very pleased to welcome Christian Hogg, CEO at Hutchison China MediTech, which trades on the LSE and NASDAQ under the symbol HCM. Welcome, Christian.

 Christian Hogg,  Hutchison China MediTech Limited - CEO & Executive Director   [2]
 Thanks very much. So welcome, everybody, to the Hutchison China MediTech dbVIC. I will try, over the next 20, maybe 25 minutes, to give an update on the latest stages of all of our major programs. I won't be covering the entire business, rather focusing on the major steps that have been taken over the last several months.

 So if we move onto Page #5 in the presentation, just a high level summary, top level, what Hutchison China MediTech is and what we're trying to achieve on Page #5. I mean we are in the 20th year now almost of building a global science-focused biopharmaceutical company from a base or from an established base in China. We focus on 3 key areas. Global innovation, we now have leading 5 small molecule-targeted therapies drug candidates in clinical development in the United States and Europe. We're building a large clinical and regulatory team in the U.S. and Europe to help manage those clinical programs. And at home in China, we now have a team of well over 470 people on our scientific team. Actually, it's now approaching 500 people. So this is one of the larger innovation organizations of our type in oncology in China today.

 The second area we are focused is the blossoming China oncology market. What we're seeing is enormous regulatory reform in China, driving down the price of generic drugs, increasing access to innovative therapies, and that's where our portfolio fits in very nicely. So we're seeing a terrific evolution of the Chinese biotech and pharma market towards helping patients with innovative therapies. Last year, as many of you know, we were the first Chinese company to bring a small molecule-targeted therapy in oncology from discovery all the way through to unconditional launch and approval -- or unconditional approval and launch. And we have 8 assets in the clinic in China. We just, a couple of days ago, submitted our second NDA on surufatinib in China in neuroendocrine tumors, and I'll talk about that in some detail in a moment.

 And then the third area is our existing China business, cash generative, continuing to make good progress and grow and help fund a lot of our innovation.

 Moving onto Page #6. Just, again, very high level to give us an understanding of the scope and scale of our operations. A large management team that's been in place for many years, very, very stable, has been growing recently as we've built up our U.S. team on certain aspects of our operation, the 470-plus people on our scientific team and under the innovation platform and then the commercial organization. Adding it all up, including subsidiaries and JVs, we have -- closing in on 5,000 people, covering over 320 cities and towns in China, commercially.

 The next slide shows the portfolio summary. I think really, there's a few key points here on Page #7 to highlight. The most important studies at the moment, the registration intent studies. So the second column from the right, you see the boxes in red are global studies, the boxes in blue are China studies. Focusing in on the registration intent studies, the savolitinib/Tagrisso combination is progressing quite rapidly towards an interim analysis mid next year. We're hoping that, that would be a positive outcome. And if so, we could potentially look at BTD, Breakthrough Therapy Designation, but obviously, that would be subject to the efficacy.

 The second box down, savolitinib and MET Exon 14 skipping. We've announced that we have completed enrollment of that registration study. It's now very close to being fully matured. And if all goes to plan, we would hope to be able to submit that NDA on savolitinib in China sometime in March or April of next year.

 The fruquintinib/Taxol combination of the big Phase III with -- called the FRUTIGA study in gastric cancer -- second-line gastric cancer continues to progress. We have another interim analysis late -- early next year, and we'd expect to be completing enrollment in that study maybe sometime mid-year with a readout late next year.

 The 2 surufatinib/SANET studies. The SANET-ep study, which I'll talk about more in detail in a moment, led to the NDA submission this week. And then SANET-p is a study in pancreatic neuroendocrine tumors that will have a readout -- interim readout late this year, probably early next year, first month or 2 of next year.

 And then surufatinib's biliary tract cancer study is a Phase II/III study. I won't go through all the earlier-stage studies, but we have a lot going on. Many of those programs are now progressing into registration studies. And as you go all the way to the left-hand side of this chart on Page 7, you see all the PD-1 combination studies that we're working on with multiple partners for both fruquintinib and surufatinib. So this -- the PD-1/VEGFR combinations are genuinely changing the way many solid tumor settings are treated.

 So moving onto Page #9. You can see the highlights which I'll center on in today's call. Surufatinib, the positive Phase III, the NDA has been accepted. Now we work towards getting an NDA cleared and, hopefully, seeing approval on the back end of next year. Surufatinib is the first unpartnered oncology drug that Chi-Med has brought through. Obviously, we have partnerships with Eli Lilly and with AstraZeneca on fruquintinib and savolitinib. But on surufatinib, we will be commercializing the drug in China. So we're in the process of building up our commercial team. I think by the middle of next year, we would expect to be at a level of between 300 and 350 medical reps on the ground in China ready for the launch of surufatinib in the back end of the year.

 Elunate or fruquintinib capsules, we've had a full year now almost since our launch. And Eli Lilly has been commercializing Elunate. The progress has been stable throughout. The biggest step for us now will be potential inclusion on the National Reimbursement Drug List, which is potentially a big step-up as far as access to patients in China, and that will play out over the next few weeks.

 Moving down to savolitinib. We reached the goal on MET Exon 14 deletion study, and the collaboration with AstraZeneca is really taking great shape at the moment with the Tagrisso combination with EGFR-TKI resistant non-small cell lung cancer moving quickly. And also, significant progress is being made in renal cell carcinoma. We can talk about that another time.

 So moving on to Page 11. We talk about surufatinib and neuroendocrine tumors. Now NET is a rapidly growing solid tumor type. It's essentially hormone cancer. As you can see in the chart on the top right-hand side of Page 11, the incidence of NET has grown dramatically over the last 30, 40 years from 1 patient per 100,000 people population to 7, so a sevenfold increase. And the reason for that is better diagnosis and better understanding. So it's -- today, in the United States, you've got 170,000 patients living with neuroendocrine tumors and an incidence of about 20,000 per year. Quite a complex disease.

 If you go onto Page #12, you can see neuroendocrine tumors, it's a type of solid tumor that patients can live with for many years. So if patients are diagnosed early with grade 1 NET, they have a median overall survival of 16 years. So it's a slow-growing tumor. Fortunately, for some patients, approximately between 10% and 30% of them, they exhibit hormone-related symptoms, so flushing and heavy diarrhea, and that allows for early diagnosis and early treatment. And so that's why early-stage NET patients with functional NET tend to live a long time because they're caught early.

 Where we focus development on surufatinib is in the advanced NET patient. You can see in the middle of the chart on Page #12, grade 1/2 advanced NET. These are patients that are mostly nonfunctional. So they tend to be diagnosed later in their disease. And by the time they're diagnosed, the disease is moving much more rapidly. And you can see the median overall survival is only 8.3 years. There's one stage further, which is Grade 3 NET or neuroendocrine cancer or neuroendocrine carcinoma. By that point, patients are moving -- progressing very rapidly to the median overall survival of about 10 months. So surufatinib has been developed very much in the center section, the grade 1/2 advanced NET patient population.

 If you go to Page #13, you can see a very detailed chart, which lays out that grade 1/2 advanced NET treatment landscape. And what you can see is there are many treatments, 2, 4, 6, 7 therapies that are used in these advanced NET patients. But what you tend to see is they're approved in various subcategories. There are no therapies that are approved in all of extrapancreatic NET and pancreatic NET, for that matter. And so from this chart on Page #13, you can see how surufatinib intends to become the first oral therapy that will be potentially approved across all NET subtypes. That's our intention. That's our objective, and that was what the design of the SANET-ep study was all about.

 You see one gap on the far right-hand side of this chart on Page 13 that says SANET-p, this pink gap is a Phase III study that isn't complete yet. As I said, the SANET-p study for surufatinib will complete early next year -- well, the interim analysis will complete early next year. And we would hope, as we saw with the SANET-ep study, that we would be able to terminate that study early and submit for approval. So the intention is to get surufatinib approved across the entire NET patient population in this advanced setting, and that will give it a big advantage.

 Moving onto the next page, Page #14, you can see the main competitor that is discussed in the context of surufatinib is everolimus, which is Afinitor from Novartis. And analysts and investors and observers and the scientific community will try to compare surufatinib against everolimus.

 The next 2 charts -- or 2 slides, Page 14 and 15, show that you have to be very careful in this. The 2 main registration studies, SANET-ep for surufatinib and RADIANT-4 for everolimus, are very different in their patient characteristics. SANET-ep has a far greater portion of patients that have tumors in the rectum and the stomach, which are particularly difficult patients to treat with a shorter 5-year overall survival. SANET-ep has well over 20% of patients with NET in other organs, whereas RADIANT-4 eliminated patients with NET in other organs, so limiting the scope of it or the breadth of its application. The pathology grade, the Chinese patients in SANET-ep are generally much later stage, so well over 80% grade 2 versus only 35% grade 2 in RADIANT-4. And also, the Chinese patients tended to have far more prior treatments primarily because the SANET-ep study happened several years after this RADIANT-4 study. So essentially more challenging patient population in SANET-ep.

 And if you look at Page 15, you can see the PFS Kaplan–Meier curve, you can see SANET-ep, 9.2 months versus 3.8 months on the placebo, so sicker patients. And RADIANT-4, you can see a longer median PFS for everolimus, but also a longer for the placebo. That's because those patients generally were less fragile.

 So moving onto the next page, Page 16 and 17, really what's important here in thinking about surufatinib relative to everolimus is that these are very different drugs. They have very different mechanisms of action. So when you're talking about patients to have very long treatment periods, you want to have multiple weapons to be able to treat those patients with them. So that's why this isn't about either everolimus or surufatinib. It's about physicians and clinicians having both of those drugs to be able to treat patients over a long period of time. And actually, on Page #17, this is Phase II data or Phase Ib data that we presented recently at ESMO, in the U.S., in patients that have failed on everolimus and then went onto surufatinib. But you can see on the chart on Page 17, there's very encouraging efficacy of surufatinib post everolimus failure. So this is about having another weapon to help treat NET patients, a broader group of NET patients as opposed to trying to replace everolimus as a treatment alternative.

 Last thing I'll say about surufatinib is -- on Page #18 is it's a big patient population in China. You've got about 67,000 patient incidences in China. And while there are no prevalence data, if the prevalence-to-incidence ratios that exist in the U.S. are used, you would expect that there would be a prevalence in China somewhere in the region of 400,000-plus patients. We've been conservative and estimated about 300,000 total NET. So extrapancreatic would be about 80% of that.

 I won't go through Page 19. Page 20 just shows the various activities we have underway. Obviously, SANET-ep has read out positive. SANET-p, we will have our interim analysis early next year. And you can see the table on the bottom shows the process of getting the NDA approved. So NDA has just been accepted. We expect or we hope for approval late in 2020 and launch in 2020. And in parallel, from today onwards, we expect to build up from our current commercial team of about 70 people in oncology. We expect to be up to sort of 300, 350 people by the time of launch.

 So that's surufatinib update. Since we're running short of time, I will take us to fruquintinib quickly. So on Page #24, you can see the first half year results for Elunate. Around $11.4 million U.S. in sales in the first 6 months, almost 7,000 cycles of treatment that were prescribed during that time. Second half is much the same, if not a little bit better. But at the end of the day, this is all paid for out-of-pocket. So patients are paying USD 3,300 per cycle per month in China to be on fruquintinib. Now we have a patient access program that only requires patients to pay for 3 months, so roughly $10,000, but it's still an enormous amount of money for patients to be paying for fruquintinib in China. So the primary objective for fruquintinib in 2019 has been to get established but now to get on the National Reimbursement Drug List. And we'll find out about that in the next few weeks. We obviously are optimistic that we'll get on, but the announcements will be made in the coming weeks.

 Moving on quickly to Page #27. It just shows you, we've talked about this many times, the efficacy of Elunate relative to regorafenib, the key competitor in China in third-line colorectal cancer. The efficacy is superior. And looking at the safety on Page 28, you see a vastly superior, in our opinion, safety profile. Stivarga-regorafenib from Bayer has a black box warning for liver toxicity in the United States and fruquintinib doesn't. So that's the big difference. It's tolerable and, as a result, can be used for longer periods of time and also used with combination therapy.

 So very briefly, moving onto savolitinib, just a brief update. We talk about the Tagrisso combination all the time. This 3 pie chart is one that we've shared a lot through the years. And you can see probably the biggest number on this chart is the latest update for sales of Tagrisso in the first 9 months of 2019 is roughly USD 2.3 billion. Looks like it's on track to do well over USD 3 billion, and it's just its fourth year on the market. And obviously, the good news for savolitinib is that the primary resistance pathway for Tagrisso is c-MET, and that is why AstraZeneca came to Chi-Med to work on savolitinib. So if we're able to position savolitinib as the answer to resistance to Tagrisso in 30% of those patients, we expect we can have a very big drug.

 Page 32 is Exon 14. As I've mentioned earlier, we hope to submit the NDA early next year. And I won't go through the further chart on savolitinib/Tagrisso. These are charts that are -- have been in our presentation for some time.

 The table here on Page 35 talks about the SAVANNAH study. This is the savolitinib/Tagrisso combo study, global 11 countries around the world, picking up great steam now, and we expect to be at our interim analysis on SAVANNAH by the middle of next year. So that will be critical for us.

 So I will leave it at that point. I think we've had 20 minutes. That's an update on surufatinib, it's update on fruquintinib, and it's an update on savolitinib. So maybe now I can open it up for some questions, which I see on the box here.

Questions and Answers
 Christian Hogg,  Hutchison China MediTech Limited - CEO & Executive Director   [1]
 So the first question I see is from [Jason Egman]. When do you expect Tyvyt will be available for therapeutic use?

 Tyvyt. Well, Tyvyt is sintilimab. So that's a PD-1 antibody from Innovent. We are -- this is not our drug. That's the Innovent drug, but we have a collaboration with Innovent to develop fruquintinib and surufatinib in combination with Tyvyt. Those programs are moving rapidly. We expect fruquintinib and Tyvyt to reach its recommended Phase II dose sometime around the end of the year, and we would expect next year to be identifying solid tumor indications that we want the combination to go into. So we would hope, certainly, next year and through next year and by the end of next year, you'll see a lot of combination work with Tyvyt and fruquintinib.

 [Tim Swanson]. Can you talk a bit more about the share price dynamics in the last few months? What contributed to this?

 Sorry, my -- it's very late, Tim. My eyesight is going, and so I'm reading so slowly. So the share price -- yes, we had a very turbulent year on the share price this year. It's been quite painful for us as a company. The primary driver of it was our major shareholder, CK Hutchison Holdings, moving from 60% majority share down to 49.9%. CK Hutchison is an earnings per share-driven global multinational conglomerate. We are a biotech company that is aggressively pursuing global development of our pipeline and burning cash as a result. So those 2 -- our business model doesn't really fit with an earnings per share-driven global conglomerate. So Hutchison during this year decided that it was better to deconsolidate China to get down to 49.9% so that China -- Hutchison China MediTech's investments could be taken off of that P&L. They've achieved that. They've achieved it in early October. It was painful. It was quite turbulent, but that is in the past now. And now we're focused very much on the future and refocusing people on the pipeline, which is what matters. Throughout this sort of restructuring of our share register, really, I feel that the news around surufatinib has been completely lost. And the fact that surufatinib is our first unpartnered oncology drug to be brought to market is really material. I think that as that does manifest itself into our valuation within people, you'll be rewarded.

 Third question, Tim Swanson . Can you talk -- no, that was the last one. Okay. Any updates on the Hong Kong IPO preparation?

 Chi-Med is a Hong Kong-based company, and we had intended to proceed with the Hong Kong listing, and we still feel it's the right thing for us. The Chinese biotech industry is just evolving rapidly. The Hong Kong biotech initiative from the Hong Kong Stock Exchange is very positive. We are one of the larger players in this space over here, so it would make sense for us to come home and have a Hong Kong listing as part of our equity capital market structure. So we'll get there. Part of the challenges that we faced during this year around Hutchison sailing down to 49.9% and the subsequent pressure on the share price led us to wait on the Hong Kong listing. But I expect fully the progress of our pipeline to see our share price rebound. And I think once we do rebound, we will be looking very carefully at proceeding with the Hong Kong listing. So I really look forward to that when it comes.

 What's the time line for the launch of surufatinib in China? From [Michael Dougherty].

 The time line is most likely late next year. The regulatory authorities in China are reforming rapidly. There are many things that are happening that are helping speed up the NDA clearance and approval process. Offsetting that, though, offsetting that positive is the fact that the Chinese biotech industry and pharma industry is very active. So the regulatory authorities are seeing an unprecedentedly large workload of novel therapies coming their way through approval. So I think on the one side, regulatory reforms will speed up. On the second side -- on the counter to that, you're going to see more competition for the attention of the regulatory authorities. So -- but I think if you add it all up, we hope to see maybe 12 months, 12 to 15 months later for approval. Fruquintinib or Elunate was 15 months from NDA to approval. So we'd have to be able to beat that, but obviously this is subject to the regulatory authorities and their local.

 So that's the last question, and I think we've reached the 30 minutes. So if there's nothing else, I will thank you all for your attention and look forward to giving you another update in the next dbVIC. Thanks very much.

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