Hutchmed (china) Share Discussion Threads

[dbadvn] 10/3/2021 13:07

Follow up on call with CH.

Tried to cover all your questions , but may have missed a few , anyway in no particular order.

1. Asian listing/ share price/cash flow

Share price was probably ahead of the market at end of 2017 . This was followed by 2018 setback of AZN cancelling the Savvanah ( ?) ph3 study .( which turned out to actually be wrong ). 2019 clumsy consolidation by Huchison ( learned lesson , will not sell into market again , only to large 3rd party if at all ).

Very recent falls just part of Asian Biotech sell off in general .

Even CH feels capitalisation should be around 8-10bn, pipeline not being correctly valued / recognised.

Asian listing very much at forefront and cannot say more, But later on had conversation on lining up large investors implying that listing will be within next 9 months. Conditions are aligning.

Cash in next 2years will come from large investors , sale of OCI business, improved profits as new drugs get to market . Did not rule out placing but not say would be needed either. Also made the point that large investors ( Fidelity etc) were very pleased with results and progress . Selling down has been by early investors who have lightened their positions and mainly by Far East groups ( Mitsui).

2. AZN Relationship / JUnshi deal etc

Had to really hold Azn feet to the fire but they are now responding ( Eli Lilly much worse , very relieved to be out of that deal ) especially in China. Assuming Savo approval By Q3 they will have 2000 reps selling ( what? - did not understand this ) . Should bring in $250m at 30% royalty in 2022.

Azn/ Junshi not of particular concern , not really competition as different drug market .

Tagrisso/Savo combo outside of China now moving ahead at good pace.

3. Inmagene deal.

Need to concentrate of Oncology development

Immunology is a very different market . Requires a completely different team and a long term approach ( long term ongoing treatment so drugs must have low / no toxicity , large placebo effect )

Inmagene only have options up to Ind stage so not given too much away but saved the expenditure and the distraction . Not v clear on savings but probably North of $200m) depending on success of asset.

Inmagene execs are ex HCM but almost every Biotech in China has ex HCM execs as they have been around so long. Team is very well connected to industry bodies in China ,

4 Patient access programme in US/Can ? Not possible without full approval.

In China non approved drugs can be used at Doctor's discretion , "off label", but not allowed to actively market a drug before approval ( hence large conferences = pseudo marketing)


5. Seroquel - no mention sorry.

6. Leveraging sales by doing deals with Multinationals.

Being approached all the time to sell on behalf of Multinatiuonal in China , and sell licence to Multinational outside China. Open minded , if the deal is right then may do it but so far experience with Eli Lilly and Azn has not really encouraged them in this direction.

Knows Beigene CEO very well ( partnered with Surafatinib). This was a fantastic deal for Beigene especially as they were behind in the market compared to Merck/ Pfizer/ Roche. Still it was a one time plug , gave away huge forward revenue stream .

7 Future.
Getting more and more excited by 689 , extraordinary results ( also large market).
523 and 306 also coming along better than expected .
453 - back burner due to toxicity.

8 Overall - CH recognises investor frustration but insists that barring extraordinary events next 12 months should be a "very exciting time " for investors.


Thats it.

D

[nerdofsteel] 10/3/2021 10:15

To add, given they have 400 reps now and will have 900 by 2023, you would have thought those reps could also cover other non HCM drugs for a major U.S. pharma who doesn't have a detailing Team in China. Surely these people would have enough bandwidth to do that?

[its the oxman] 10/3/2021 09:45

It might be worth asking then if hcm management has reservations about cutting deals with us majors like beigene has managed to do , and an established preference for Chinese cos. If so why?

[nerdofsteel] 10/3/2021 09:40

I've been invested here for over 10 years but made an additional 6 figure investment in 2017. I know the Company well although I also did substantial research at the time into Beigene and Genmab. Given the pipeline and management I decided this additional investment should go into HCM. If I had put it into Beigene I'd be long retired!

That particular Company has struck major deals with players like Celgene which has driven their valuation up to almost $30bn, yet they are still not forecast to generate free cashflow until 2025, a year later than HCM.

I suspect the only way this Company will start to see its mcap increase substantially is to:-

1. Get an Asian listing
2. Start striking big commercial and collab deals with U.S. Biopharma (not Chinese ones) like Beigene have done

I need to make a decision in the coming days as to whether I potentially see my investment stagnate for another 4 or 5 years or deploy my money elsewhere. For the last 3+ years it has effectively cost a lot of money to be invested in HCM with no return on that investment.

Despite all the substantial progress the CAGR return on this investment over the last 4 years has been 7.33%. Beigene would have given 72%.

[its the oxman] 10/3/2021 09:29

Tempted to add further c.400p, but will resist for now until we see what replies DBADVN can tease out. To be honest also looking at beigene again and genmab. Lots of the biotechs have had big falls so hopefully nothing too specific to hcm behind the current weakness, just very frustrating unless anyone thinks otherwise.

[nerdofsteel] 10/3/2021 08:57

It also seems to me that if you are an insider with stacks of options at different strike prices you are well placed for long term gains. However, a 3.5 year stagnant share price is another thing that will put off new investors. They will look at the growth and think the opportunity cost is simply too high and will probably put their cash elsewhere - FAANG, maybe Beigene in Biotech etc.

In other words why would anyone wish to put their money or their clients money in a Company whose value hasn't grown in nearly 4 years.

I have effectively lost money over that period being invested here but I still like the Company and it is really starting to deliver. A quandary to be addressed.

[nerdofsteel] 10/3/2021 07:08

Lauders - I can partially answer the Seroquel question. In the Annual Results note there are comments that litigation is still ongoing. In the meantime I don't know if that means they can continue to market it or not however.

[mcmather] 09/3/2021 21:45

That line - “What we have here is a failure to communicate” - was also the start of Guns N' Roses song Civil War;

[steeplejack] 09/3/2021 21:07

"What we have here is a failure to communicate",was the classic line uttered by the prison governor in the film Cool Hand Luke.When i see tonight that the Nasdaq is up some 4% but HCM are down,the same comment might well be applied to Hutchmed.The management haven't seized the opportunity to market themselves to the investor public since their erstwhile parent reduced its majority holding.The management should pull their finger out or go private.Actually,yes go private because the company actually behaves rather like a private company.

[whatja] 09/3/2021 17:20

DBADVN
How much investment spending does he expect to make in the next 3 years and how does he plan to finance it.
It seems he has committed $1bn to pipeline development, new factory, plus additional sales teams to build.

When does Hutchmed plan to create a patient access programme in the US/EU for sulanda and Elunate ahead of formal approval?

Can he set out the benefits of the INmagene deals? Eg how much additional spend has been avoided? And what % of potential profits has HM retained?

[nerdofsteel] 09/3/2021 17:17

yes please DB:-

1. Asian Listing
We have heard more than once about "market conditions" being right for a HK or Shanghai listing. Many other Biotechs have successfully listed when HCM pulled the original one in 2019. What conditions do they need to get the listing away? With markets so buoyant in Asia what is stopping the Co. issuing a prospectus now?

2. Despite all the immense progress in the past few years the Co's mcap is where is was in 2017. Does the Company have a comment or view on that?

[dbadvn] 09/3/2021 16:25

Conference call with CH tomorrow am.

Any questions ?

[nerdofsteel] 09/3/2021 15:42

God I hope so Oxman

hxxps://www.ifre.com/story/2771469/hutchmed-eyes-hong-kong-listing-this-year-y5xrwjfgk5

[its the oxman] 09/3/2021 12:28

Added today 412p, anyone else thinking this is the bottom.

[waldron] 07/3/2021 22:48

Nerdofsteel
7 Mar '21 - 12:28 - 3016 of 3017
0 1 0
Gaby Bourbara



Interestingly it appears to be an internal move/candidate

[its the oxman] 07/3/2021 22:27

Not sure if that's good or bad, but positive at least that someone is now in place. Just hope they can drive things forward.

[nerdofsteel] 07/3/2021 12:28

Gaby Bourbara

hxxps://www.linkedin.com/in/gaby-bourbara-3a935925/?originalSubdomain=ca

Interestingly it appears to be an internal move/candidate

[its the oxman] 07/3/2021 11:29

Anyone able to identify who has recruited, will become public knowledge I guess.

[nerdofsteel] 07/3/2021 11:27

hxxps://appointments.thetimes.co.uk/job/1332356/global-head-of-commercialization-ds-1062-and-savolitinib/?TrackID=16059

"This job is no longer available" so they've either ditched it or recruited someone

[nerdofsteel] 07/3/2021 11:26

DBADVN - nhx for the info
Lauders - good point

BTW you may recall I posted a few weeks ago that Astrazeneca were recruiting a Global Head of Commercialization - DS 1062 & Savolitinib20

I assume they wouldn't have done that unless they wanted to do something with Savo........eventually



Nerdofsteel13 Jan '21 - 10:27 - 2949 of 3012 Edit
0 3 0
Savo - "- its moving along as fast as Astra will allow ..."

well at least AZ have appointed someone to commercialize Savolitoinib now so let's hope they get on with it!!!!!!!!!!

Global Head of Commercialization - DS 1062 & Savolitinib20 Oct '20
AZ have posted a new role on 26th September for a Global Head of Commercialization - DS 1062 & Savolitinib



As a Head of Commercialization for new assets DS 1062 & Savolitinib, you'll play a pivotal role in channeling our scientific capabilities to further our agenda on doubling the 5-year survival rate by bringing these new assets to commercialization. The role has leadership accountabilities that are critical to the delivery of AZ business objectives and portfolio value targets.

[lauders] 07/3/2021 01:43

Slide 13 of the latest presentation would suggest that something will finally come of the AZ alliance. Why show the mock-up and mention it if there wasn't some confidence re: the outcome? I think HCM know they need to reward the long term investors with some positive news on this front.

[dbadvn] 06/3/2021 16:49

NoS,

I can answer the large molecule question. They decided that the legacy risks and investment needed to bring an existing plant up to latest standards was not worth it and decided to go it alone.

[nerdofsteel] 06/3/2021 16:36

it is worth looking at the Corporate Presentation published on Thursday as there's a lot of information in there on the addressable markets for some drugs. There is also a new section "Hutchmed Strategy"

[nerdofsteel] 06/3/2021 15:43

HK listing conditions?? They never say but we can see the success of others listing in HK over the last 2 years. There has never been any proper explanation as to why they pulled it in the first place.