Hutchison China MediTech (HCM) wants its investors to view the company in two newly renamed halves. The first - the 'Innovation Platform' - encompasses all research and development (R&D) activity, while the second - known as the 'Commercial Platform' - comprises all of Chi-Med's existing healthcare and consumer products divisions. Chief executive Christian Hogg says it's Chi-Med's goal to retain the commercial rights to as many drugs developed in-house as possible.
The amount spent on clinical trials continues to ramp up. In the first six months of 2015 the group poured $30m (£19m) into drug development, compared with $22m in the same period last year. That explains why, despite more than doubling group revenues, Chi-Med reported a big drop in half-year profits. And the trend will continue: Mr Hogg concedes the amount spent in the second half "will accelerate".
The company has 17 clinical trials under way and intends to kick off another seven before the year-end. Four of those include phase III trials for oncology drugs fruquintinib and sulfatinib, the former being co-developed with US giant Eli Lilly (US:LLY).
Analysts at Panmure Gordon are reviewing their forecasts, but previously expected pre-tax profits of $23.7m for the full year, giving EPS of 22.9ȼ. That compares with $12.3m and 10.2ȼ for 2014.
HUTCHISON CHINA MEDITECH (HCM) | ||||
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ORD PRICE: | 1,635p | MARKET VALUE: | £871m | |
TOUCH: | 1,610-1,660p | 12-MONTH HIGH: | 2,003p | LOW: 958p |
DIVIDEND YIELD: | NIL | PE RATIO: | 1315 | |
NET ASSET VALUE: | 185ȼ | NET DEBT: | 1.5% |
Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
---|---|---|---|---|
2014 | 30.3 | 7.3 | 10.7 | nil |
2015 | 65.7 | 3.9 | 4.3 | nil |
% change | +117 | -47 | -60 | - |
Ex-div: n/a Payment: n/a £1 = $1.56 |