Hutchison China Meditech (HCM) has booked its first ever in-market revenues for a drug it developed in China alongside project partner Eli Lilly. Fruquintinib was launched in November 2018 after gaining approval for the treatment of colorectal cancer – an underserved and rapidly growing disease in Asia. Early in-market sales of $11.4m (£9.37m) – of which Chi-Med claimed $6.1m in manufacturing revenues and royalties – were ahead of similar products previously launched in China. Management expects this figure to be boosted in the coming months once the drug receives more government reimbursement.
Fruquintinib’s progress is the first evidence of Chi-Med’s transition from a high-risk drug developer to a commercial biopharmaceutical company. Further new drug launches should follow in the next few months following positive clinical trial updates from Surufatinib in neuroendocrine tumours and Savolitinib in non-small cell lung cancer. There are 10 major clinical milestones due to be reached in China alone within the next year and a further seven major updates from the rest of the world.
Profits might still be a long way off, but the company offset some of the $69.3m of research and development expenditure with $27.7m of net profits from the commercial platform – 9 per cent higher than the first half of 2018, at constant currencies.
| HUTCHISON CHINA MEDITECH (HCM) | ||||
| ORD PRICE: | 322p | MARKET VALUE: | £2.14bn | |
| TOUCH: | 322-340p | 12-MONTH HIGH: | 567p | 312p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 52¢ | NET CASH: | $384m* | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
| 2018 | 102 | -50.5 | -5.0 | nil |
| 2019 | 102 | -68.3 | -7.0 | nil |
| % change | +0.01 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes short-term investments of $154m and investments in equity investees of $147m. £1=$1.22. NB: Price records adjusted for 1:10 share consolidation | ||||
