HUTCHMED (China) Limited (“HUTCHMED”, the “Company” or “we”)
(Nasdaq/AIM:
HCM; HKEX:
13), the
innovative, commercial-stage biopharmaceutical company, today
reports its financial results for the year ended December 31, 2023
and provides updates on key clinical and commercial developments.
HUTCHMED to host results call and webcasts today at
7:30 a.m. EST / 12:30 p.m. GMT / 8:30 p.m.
HKT in English, and at 8:30 a.m. HKT in Chinese
(Putonghua) on Thursday, February 29, 2024.
All amounts are expressed in U.S. dollars unless
otherwise stated.
Strategic: global vision, commitment to
patients and path to self-sustainability
- Executed
our global vision of bringing our innovative medicines
worldwide, as demonstrated through the Takeda1 partnership
which brought $435 million in upfront and milestone payments plus
manufacturing income and royalties on net sales, setting a
strategic example for the rest of our pipeline.
- On track to
be self-sustaining with a disciplined approach to
leveraging our R&D2 expertise and creating value through
licensing and commercialization.
Pipeline: fruquintinib global and China
expansion, sovleplenib China NDA3
review, savolitinib NSCLC4
enrolled
-
Fruquintinib U.S. FDA5 approval three
weeks ahead of PDUFA6 date for third-line
CRC7, leading to a swift launch by Takeda,
inclusion in NCCN8 guidelines and U.S. in-market
sales9 of $15.1 million. Global
regulatory progress with MAA10 filing to the EMA11 validated in
June 2023 and NDA submitted to PMDA12 in September 2023.
-
Fruquintinib NDA for second-line gastric cancer accepted
for review in China. Registrations studies in China for 2L
EMC13 and 2L RCC14 completed enrollment during 2023 for
fruquintinib in combination with sintilimab, expecting NDA filing
to the NMPA15 for EMC in early 2024 and topline results for RCC by
end of 2024.
- NDA for
sovleplenib, a novel Syk16 inhibitor, for primary
ITP17 accepted and granted
priority review in China, supported by data from Phase III
trial (ESLIM-01), meeting all endpoints.
- SAVANNAH,
the pivotal global Phase II trial for savolitinib in NSCLC,
completed enrollment, to be followed by potential NDA
filing to the U.S. FDA by AstraZeneca18 around the end of
2024.
Outlook and financial: expecting strong
product revenue growth and reduced expenses; substantial
cash
- Total
revenue up 97% (102% at CER19) to $838.0
million for 2023, with Oncology/Immunology consolidated
revenue up 223% (228% at CER) to $528.6 million at high end of
guidance, including recognition of $280 million of the upfront
payment from Takeda. Net income attributable to HUTCHMED of
$100.8 million.
- 2024
Oncology/Immunology consolidated revenue guidance of $300 million
to $400 million, driven by 30% to 50% growth target in
marketed product sales and royalties.
- R&D
expenses focused in line with strategy targeting key
projects.
-
Strengthened cash balance, with $886.3
million at year end (2022: $631.0m), ensures HUTCHMED is
well placed to deliver on its objective of
becoming a self-sustaining
business.
2023 FULL YEAR RESULTS & BUSINESS
UPDATES
Mr Simon To, Executive Chairman of
HUTCHMED, said, “We have made significant progress
throughout 2023. We executed against our commitment to bring our
innovative medicines to patients worldwide with the U.S. FDA
approval of FRUZAQLA™ in November 2023, while remaining dedicated
to becoming a self-sustaining business. The Takeda partnership,
which is one of the biggest small-molecule overseas licensing deals
in the history of China biotech, strengthened our cash position by
$435 million. Takeda delivered a successful U.S. launch within 48
hours of approval, and has subsequently seen strong early patient
uptake.”
“We will continue to deliver on our strategy in
2024. We will stay focused on our target of becoming sustainable
through our balanced strategy of growing sales of our novel
medicines in China, and advancing our medicines overseas with our
partners. This, when combined with our other goals on pipeline
progression and further business development, means that while the
global macroeconomic environment remains uncertain, HUTCHMED is
positioned to thrive and continue to deliver innovative medicines
to ever more patients around the world.”
Dr Weiguo Su, Chief Executive Officer
and Chief Scientific Officer of HUTCHMED, said, “HUTCHMED
delivered impressive financial results in 2023, with revenue up 97%
to $838 million. This, alongside our significantly strengthened
cash balance of $886 million, will enable us to continue advancing
our pipeline and successfully executing our strategy.”
“2023 was an important year for HUTCHMED,
particularly for fruquintinib, for which we filed market
authorization applications in the U.S., EU and Japan, based on the
successful FRESCO-2 study. Following the U.S. FDA approval for
third-line patients with advanced CRC, we continue to work together
with Takeda to pursue additional launches in new markets worldwide.
In China, we also filed an NDA for second-line gastric cancer based
on the FRUTIGA study.”
“Another milestone was the successful ESLIM-01
registration study in China in ITP patients for sovleplenib, our
first potential novel medicine in immunological diseases. The NDA
was accepted and granted priority review by the NMPA in January
2024. There are over 250,000 new and existing adult ITP patients in
China20. The treatment options are limited to steroids and
TPO/TPO-RAs21, representing an unmet medical need that sovleplenib
could help address, with its new mechanism of action and favorable
safety profile. Syk inhibition has the potential to target other
major diseases such as rheumatoid arthritis. We are also planning
to initiate clinical development of sovleplenib outside China in
2024.”
“For savolitinib, we completed the confirmatory
trial in NSCLC patients with MET22 exon 14 skipping alterations. An
NDA submission is expected in the first quarter of 2024, with
potential to expand the label indication to include first-line
patients in China. Outside China, we will continue our work with
AstraZeneca on the pivotal global savolitinib lung cancer trial
SAVANNAH, which, subject to favorable data, can support a filing to
the U.S. FDA for approval. This study completed enrollment with a
potential NDA submission towards the end of 2024 in EGFR23 mutant
NSCLC patients who progressed on TAGRISSO® treatment, which
received U.S. FDA Fast Track designation in January 2023. We
believe the convenient dosing, targeted efficacy and safety profile
of savolitinib as an oral medicine in combination with TAGRISSO®,
the leading oral third-generation EGFR TKI24, should position it
well in a competitive market and address the unmet needs of MET+
NSCLC patients.”
"Our China commercialization efforts progressed
well, as we successfully renewed NRDL25 coverage for both
fruquintinib and surufatinib without further price reduction. Their
in-market sales saw strong growth in 2023. Over the next two years,
we plan to continue growth in China through expanded indications
and the launch of new products together with revenue from FRUZAQLA™
overseas commercialization.”
I. COMMERCIAL OPERATIONS
Total revenue increased 97% (102% at
CER) to $838.0 million in 2023 (2022: $426.4m), driven by
the Takeda partnership, our strong commercial progress in China,
and growth in third-party distribution sales, resulting in a net
income of $101 million for 2023.
Oncology/Immunology consolidated revenue
were up 223% (228% at CER) to $528.6 million (2022:
$163.8m); towards the high end of our guidance, driven by
recognition of $280.0 million in partnering revenue for the upfront
payment, $32.0 million for U.S. FDA approval milestone payments
from Takeda, and our strong product sales growth resulting from
in-market sales up 28% (35% at CER) to $213.6 million (2022:
$167.1m);
-
ELUNATE® (fruquintinib
China) in-market sales in 2023 increased 15% (22% at CER) to $107.5
million (2022: $93.5m), reflecting its continued lead in
market share;
-
FRUZAQLA™ (fruquintinib U.S.) in-market
sales in 2023 were $15.1 million, reflecting its U.S.
launch in November 2023;
-
SULANDA® (surufatinib)
in-market sales in 2023 increased 36% (43% at CER) to $43.9
million (2022: $32.3m), reflecting its growing market
share after two years on the NRDL;
-
ORPATHYS® (savolitinib)
in-market sales in 2023 increased 12% (19% at CER) to $46.1
million (2022: $41.2m). Sales in the first quarter were
impacted by customary channel fluctuations ahead of its NRDL
inclusion on March 1, with the subsequent three quarters of 2023 up
30% compared to the same period in 2022;
- R&D
services income up 116% (119% at CER) to $52.4 million
(2022: $24.2m), now also including fees from our new partner Takeda
for the management of regulatory activities;
- Takeda
upfront payment of $400.0 million received, of which
$280.0 million recognized in revenue during 2023,
with the remainder to be recognized when services and performance
obligations are completed; and
- Successful
management of commercial operations to expand coverage of oncology
hospitals and physicians, despite challenges from COVID-19-related
disruptions around the start of the year, and from an
anti-corruption crackdown of the healthcare sector in China in the
second half of 2023. Hospital access and related activities became
more restricted, but improved starting in October 2023.
$’millions |
In-market Sales* |
Consolidated Revenue** |
|
|
2023 |
2022 |
%Δ |
(CER) |
|
2023 |
2022 |
%Δ |
(CER) |
ELUNATE® |
$107.5 |
$93.5 |
+15% |
(+22%) |
$83.2 |
$69.9 |
+19% |
(+26%) |
FRUZAQLA™ |
$15.1 |
– |
|
– |
$7.2 |
– |
|
– |
SULANDA® |
$43.9 |
$32.3 |
+36% |
(+43%) |
$43.9 |
$32.3 |
+36% |
(+43%) |
ORPATHYS® |
$46.1 |
$41.2 |
+12% |
(+19%) |
$28.9 |
$22.3 |
+30% |
(+37%) |
TAZVERIK® |
$1.0 |
$0.1 |
>700% |
$1.0 |
$0.1 |
>700% |
Products
Revenue |
$213.6 |
$167.1 |
+28% |
(+35%) |
$164.2 |
$124.6 |
+32% |
(+39%) |
Other R&D
services income |
|
|
$52.4 |
$24.2 |
+116% |
(+119%) |
Upfront and
milestone income |
|
|
$312.0 |
$15.0 |
|
|
Total Oncology/Immunology |
|
|
$528.6 |
$163.8 |
+223% |
(+228%) |
Other
Ventures |
|
|
$309.4 |
$262.6 |
+18% |
(+24%) |
Total revenue |
|
|
$838.0 |
$426.4 |
+97% |
(+102%) |
* = For ELUNATE®, FRUZAQLA™ and ORPATHYS®, mainly
represents total sales to third parties as provided by Lilly26,
Takeda and AstraZeneca,
respectively.** = For ELUNATE®, represents drug
product supply, commercial service fees and royalties paid by
Lilly, to HUTCHMED, and sales to other third parties invoiced by
HUTCHMED; for FRUZAQLA™, represents drug product supply and
royalties paid by Takeda; for ORPATHYS®, represents drug product
supply and royalties paid by AstraZeneca and sales to other third
parties invoiced by HUTCHMED; for SULANDA® and TAZVERIK®,
represents the Company’s sales of the products to third
parties. |
II. REGULATORY UPDATES
China
-
Fruquintinib NDA accepted in combination with
paclitaxel for second-line gastric cancer in April 2023;
-
Sovleplenib NDA accepted for
primary ITP in January 2024, after receiving priority review status
in 2023;
-
Fruquintinib received Breakthrough Therapy
designation in combination with sintilimab for second-line
endometrial cancer in July 2023;
-
Fruquintinib received Hong Kong approval for
third-line CRC in January 2024; and
-
ORPATHYS® (savolitinib)
and TAZVERIK®
(tazemetostat) received Macau
approvals in March 2023.
Ex-China
-
Fruquintinib U.S. FDA approved in November 2023
for previously treated metastatic CRC, after the NDA was granted
priority review in May 2023;
-
Fruquintinib NDA submitted to the Japanese PMDA in
September 2023;
-
Fruquintinib MAA submission to the EMA validated
in June 2023; and
-
Savolitinib, in combination with
TAGRISSO®, designated a U.S. FDA
Fast Track program in January 2023 for the treatment of
patients with NSCLC with MET overexpression and/or amplification,
and who have had disease progression during or following prior
TAGRISSO®.
III. LATE-STAGE CLINICAL DEVELOPMENT
ACTIVITIES
Savolitinib
(ORPATHYS® in China), a
highly selective oral inhibitor of MET being developed broadly
across MET-driven patient populations in lung, gastric and
papillary renal cell carcinomas
- Completed
enrollment of a pivotal global Phase II study SAVANNAH
(NCT03778229) for NSCLC patients who have progressed following
TAGRISSO® due to MET amplification or overexpression designated as
a Fast Track development program by the U.S. FDA, with the
possibility of accelerated approval. Continued enrolling
SAFFRON (NCT05261399), a global, pivotal Phase III study
of the TAGRISSO® combination supporting SAVANNAH;
- Reported
positive results from the confirmatory China Phase
IIIb study (NCT04923945) first-line
cohort in MET exon 14 skipping alteration NSCLC; completed
enrollment in a second-line cohort; and
- Initiated
the registration stage of a China Phase II study in third-line
gastric cancer patients with MET amplification
(NCT04923932).Potential upcoming clinical and regulatory milestones
for savolitinib:
- Submit
China NDA for first-line and second-line MET exon 14
skipping alteration NSCLC in early-2024;
- Complete
enrollment of SACHI (NCT05015608), a
pivotal Phase III study of the TAGRISSO® combination in China for
NSCLC patients with MET amplification following progression on EGFR
inhibitor treatment in late 2024;
- Complete
enrollment of SANOVO (NCT05009836), a
pivotal Phase III study of the TAGRISSO® combination in China in
first-line NSCLC patients with EGFR mutation & MET
overexpression in late 2024; and
- Engage U.S.
FDA regarding possible NDA filing on SAVANNAH, subject to
positive results, around year end 2024.
Fruquintinib
(ELUNATE® in China, FRUZAQLA™ in
the U.S.), a highly selective oral inhibitor of
VEGFR27 1/2/3 designed to have enhanced
selectivity that limits off-target kinase activity, allowing for
high drug exposure, sustained target inhibition, and flexibility
for the potential use as part of a combination therapy
-
Presented FRUTIGA (NCT03223376)
results at ASCO28 Plenary in February
2024 in second-line gastric cancer patients on
fruquintinib plus paclitaxel. PFS29, ORR30 and DCR31 endpoints
showed statistically significant improvements. Although OS32
improvement was not statistically significant overall, it was
statistically significant in a pre-specified analysis excluding
patients taking subsequent antitumor therapy;
- Completed
enrollment of FRUSICA-1 (NCT03903705), a China endometrial
cancer registration cohort of a Phase II study of fruquintinib in
combination with PD-133 antibody sintilimab in July 2023;
- Completed
enrollment of FRUSICA-2 (NCT05522231), a China Phase
II/III study of fruquintinib in combination with PD-1 antibody
sintilimab in clear cell RCC in December 2023;
- Updated
results from the clear cell RCC cohort of a China Phase II
study on fruquintinib in combination with PD-1 antibody sintilimab
at ASCO 2023 (NCT03903705); and
- Published
in peer-reviewed journal The Lancet
positive results of the global Phase III FRESCO-2
registration trial (NCT04322539) in previously treated
metastatic CRC patients in June 2023.Potential upcoming clinical
and regulatory milestones for fruquintinib:
- Completion
of EMA MAA review for previously-treated metastatic CRC in
mid-2024;
- Completion
of PMDA NDA review for previously-treated metastatic CRC
in late-2024;
-
Registration filing to the NMPA for second-line
endometrial cancer in early 2024; and
- Top-line
results from Phase II/III registration trial in clear cell
RCC around year end 2024.
Surufatinib
(SULANDA® in China), an
oral inhibitor of VEGFR, FGFR34 and
CSF-1R35 designed to inhibit tumor angiogenesis
and promote immune response against tumor cells via tumor
associated macrophage regulation
- Reported
data from the Phase Ib/II China toripalimab (PD-1 antibody)
combination study at the 2023 AACR36 and ASCO annual
meetings (NCT04169672); and
- Reported
encouraging early results at ASCO 2023 of an
investigator-initiated trial of surufatinib in combination with a
PD-1 antibody and chemotherapy in first-line treatment for
pancreatic ductal adenocarcinoma.
Sovleplenib (HMPL-523), an
investigative and highly selective oral inhibitor of Syk, an
important component of the Fc receptor and B-cell receptor
signaling pathway
- Met primary
endpoint and all secondary endpoints for a pivotal Phase III
study (NCT05029635) in adult patients with primary ITP in
China; and
- Met primary
endpoint for a Phase II Proof-of-Concept study in warm
AIHA37 in China (NCT05535933) with Phase III registration
study being planned.Potential upcoming clinical milestones for
sovleplenib:
- Submit
ESLIM-01 results for publication and/or presentation in
mid-2024; and
- Initiate a
dose-finding study in ITP in the U.S./EU in mid-2024.
Tazemetostat
(TAZVERIK® in Macau and the China
Hainan Pilot Zone), a first-in-class, oral inhibitor of
EZH2 licensed from Ipsen38
- Completed
recruitment of a China bridging study in follicular
lymphoma for conditional registration based on U.S.
approvals in September 2023 (NCT05467943);
- Approved
and launched in the Macau Special Administrative Region in
March 2023; and
- Published
promising results from the Phase Ib portion of SYMPHONY-1,
a global Phase 1b/III combination study in relapsed/refractory
follicular lymphoma patients after at least two prior therapies
(NCT04224493). ORR was 90.9%, and in the recommended Phase III dose
cohort, 18-month PFS and DoR39 estimates were 94.4% and 100% with
no dose-limiting toxicities.Potential upcoming clinical and
regulatory milestones for tazemetostat:
- China NDA
filing for relapsed/refractory 3L+ follicular lymphoma
expected in mid-2024.
HMPL-453, a novel, highly
selective and potent inhibitor targeting FGFR 1, 2 and 3
- Reported
human data for the first time at the 2023 ASCO annual
meeting; and
- After
consultation with NMPA, initiated the registration phase of the
ongoing Phase II trial for IHCC40 patients with FGFR 2
fusion (NCT04353375).
Amdizalisib (HMPL-689), an
investigative and highly selective oral inhibitor of
PI3Kδ41 designed to address the gastrointestinal
and hepatotoxicity associated with currently approved and
clinical-stage PI3Kδ inhibitors
- Met primary
endpoint of ORR in the follicular lymphoma cohort of a
China registration Phase II study with Breakthrough Therapy
designation (NCT04849351). However, in recent discussions with
China NMPA, it is clear that a randomized study is now required to
support registration. In view of the changing regulatory
requirement, we are currently evaluating the clinical development
plan and regulatory guidance before deciding the regulatory
strategy for this indication.
IV. COLLABORATION UPDATES
Closed Exclusive Worldwide License to
Takeda for Fruquintinib Outside China
- Takeda is
responsible for development, manufacturing and
commercialization in all indications and territories
outside of mainland China, Hong Kong and Macau; and
- HUTCHMED is
eligible to receive up to $1.13 billion, including the $400 million
upfront received in April 2023, and up to $730 million in
additional potential payments relating to regulatory, development
and commercial sales milestones, of which a $35 million milestone
payment was received in December 2023 after the approval by the
U.S. FDA, as well as manufacturing income and royalties on net
sales.
Further clinical progress by
Inmagene42 with two candidates
discovered by HUTCHMED
- Inmagene
initiated two global Phase IIa trials with
IMG-007, an anti-OX40 antibody, in adults with
moderate-to-severe atopic dermatitis and in adults with alopecia
areata. It was safe and well-tolerated in the completed Phase I
study with no reports of pyrexia or chills, which are common
adverse events of rocatinlimab, another anti-OX40 treatment;
- Inmagene
completed a Phase I study with IMG-004, a
reversible, non-covalent, highly selective oral BTK43 inhibitor
designed to target immunological diseases. IMG-004 was safe and
well-tolerated in this single-ascending-dose study, with a long
half-life and sustained pharmacodynamic effects that are well above
others in its class; and
- Inmagene
exercised options for an exclusive license to further
develop, manufacture and commercialize these two drug candidates
worldwide subject to completion of a share subscription agreement
signed in February 2024 for approximately 7.5% of Inmagene shares
(fully diluted).
V. OTHER VENTURES
Other Ventures include our profitable
prescription drug marketing and distribution platforms
-
Consolidated revenue increased by 18% (24% at CER) to
$309.4 million (2022: $262.6m);
-
SHPL44 non-consolidated joint venture
revenue increased by 4% (10% at CER) to $385.5
million (2022: $370.6m);
-
Consolidated net income attributable to HUTCHMED from our
Other Ventures decreased by 8% (3% at CER) to $50.3
million (2022: $54.6m), which was primarily due to
decrease on the net income contributed from SHPL of $47.4 million
(2022: $49.9m) resulting from the impact of gradual price
adjustment from volume-based procurement;
- Disposed
interests in HHOHK45 and HSN46
for $5.1 million; and
- We continue to
explore opportunities to monetize the underlying value of our SHPL
joint venture including various divestment and equity capital
market alternatives.
VI. SUSTAINABILITY
HUTCHMED is committed to progressively embedding
sustainability into all aspects of our operations and creating
long-term value for our stakeholders. In 2023, we continued to make
progress, including:
-
Satisfactory progress made in 11 short- to long-term goals
and targets; sustainability performance on goals and
targets continued to be incorporated into management’s
performance-based remuneration;
- Enhanced
climate actions by conducting Scope 3 emissions screening
and measurement, and engaging with suppliers to gradually implement
sustainability initiatives collaboratively. Following the climate
risk assessment in 2022, regular monitoring and reviews on climate
risks and opportunities have been undertaken; our climate actions
continue to be disclosed in alignment with the recommendations of
the Task Force on Climate-related Financial Disclosures
(TCFD);
- Enhanced
data quality by introducing a digital data collection
platform to streamline collecting, managing, and reporting data,
ensuring improved data reliability, comparability and
transparency;
-
Strengthened alignment in the five key sustainability
pillars which encompassed the most relevant and material
sustainability topics for HUTCHMED, including (i) climate action;
(ii) access to healthcare; (iii) human capital; (iv) ethics and
transparency; and (v) innovation;
- Marked
improvements shown in major ESG ratings and awards,
reflecting wider recognition of HUTCHMED’s efforts in
sustainability; and
- Enhanced
disclosure by referencing the latest sustainability
disclosure standards and sector specific disclosure standards ahead
of requirement.
These efforts will continue to guide HUTCHMED
towards a more sustainable future. The 2023 Sustainability Report
will be published alongside our 2023 Annual Report in April 2024
and will include further information on HUTCHMED sustainability
initiatives and their performance.
VII. IMPACT OF COVID-19
While restrictive measures related to COVID-19
were gradually lifted in China starting from December 2022,
COVꞮD-19 had some impact on our research, clinical studies and our
commercial activities in the first few months of 2023. Measures
were put in place to reduce the impact and, in the second quarter
of 2023, these activities normalized.
FINANCIAL HIGHLIGHTS
Foreign exchange impact: The
RMB depreciated against the U.S. dollar on average by approximately
5% during 2023, which has impacted our consolidated financial
results as highlighted below.
Cash, Cash Equivalents and Short-Term
Investments were $886.3 million as of December 31, 2023 compared to
$631.0 million as of December 31, 2022.
- Adjusted Group
(non-GAAP47) net cash flows excluding financing activities in 2023
were $206.7 million (2022: -$297.9m) mainly due to the receipt of
$435 million in upfront and milestone payments from Takeda;
and
- Net cash generated
from financing activities in 2023 totaled $48.7 million mainly due
to the drawdowns of bank borrowings (2022: net cash used in
financing activities of $82.8m).
Revenue for the year ended December 31,
2023 were $838.0 million compared to $426.4 million in
2022.
-
Oncology/Immunology consolidated revenue increased 223%
(228% at CER) to $528.6 million (2022: $163.8m) resulting
from:
-
ELUNATE® revenue
increased 19% (26% at CER) to $83.2 million (2022: $69.9m)
due to continued market share gains, comprising of manufacturing
revenue, promotion and marketing service revenue and
royalties;
-
FRUZAQLA™ revenue was $7.2
million, reflecting its U.S. launch in early November
2023, comprising of manufacturing revenue and royalties;
-
SULANDA® revenue
increased 36% (43% at CER) to $43.9 million (2022: $32.3m)
from our continuing marketing activities, increasing patient access
and longer durations of treatment;
-
ORPATHYS® revenue
increased 30% (37% at CER) to $28.9 million (2022: $22.3m)
after inclusion in the NRDL effective from March 2023, comprising
of manufacturing revenue and royalties;
-
TAZVERIK® revenue was
$1.0 million (2022: $0.1m) from further sales in the
Hainan Pilot Zone;
- Partnering
revenue of $312.0 million was the $280 million recognized
portion of the $400 million upfront payment, and the $32 million
recognized portion of the US$35 million milestone payment from
Takeda; and
- Other
R&D services income of $52.4 million (2022: $24.2m),
primarily related to fees from AstraZeneca, Lilly and Takeda for
the management of development and regulatory activities.
- Other
Ventures consolidated revenue increased 18% (24% at CER) to $309.4
million (2022: $262.6m), mainly due to higher sales of
prescription drugs. This excludes 4% (10% at CER) growth in
non-consolidated revenue at SHPL of $385.5 million (2022:
$370.6m).
Net Expenses for 2023 were $737.2
million compared to $787.2 million in 2022.
- Cost of
Revenue increased by 24% to $384.4 million (2022:
$311.1m), of which cost of revenue from our Other Ventures
increased by 21% to $292.7 million (2022: $241.9m) due to the
increasing sales of third-party prescription drug products. Cost of
revenue from Oncology/Immunology increased by 33% to $91.7 million
(2022: $69.2m) due to the increase in product sales of our marketed
products and the cost of provision of promotion and marketing
services for ELUNATE® resulting from the increased sales
force;
- R&D
Expenses reduced 22% to $302.0 million (2022: $386.9m),
mainly due to the completion of several large registration-enabling
trials, the focus on ex-China development through partnerships, and
the ongoing strategic prioritization of our pipeline. Our
international clinical and regulatory operations in the U.S. and
Europe incurred expenses of $106.9 million (2022: $170.9m), while
R&D expenses in China were $195.1 million (2022: $216.0m);
-
SG&A48 Expenses were $133.2
million (2022: $136.1m), which decreased primarily due to the
restructuring of our U.S. Oncology/Immunology commercial operations
at the end of 2022 while our China commercial infrastructure was
able to support further revenue growth; and
- Other
Items mainly comprised of equity in earnings of SHPL,
interest income and expense, FX and taxes, generated net income of
$82.4 million (2022: $46.9m), which increased primarily due to
higher interest income after receiving the $400 million Takeda
upfront payment.
Net Income attributable to HUTCHMED for
2023 was $100.8 million compared to Net Loss attributable to
HUTCHMED of $360.8 million in 2022.
- The net income
attributable to HUTCHMED in 2023 was $0.12 per ordinary
share / $0.59 per ADS49, compared to net loss attributable to
HUTCHMED of $0.43 per ordinary share / $2.13 per ADS in
2022.
FINANCIAL SUMMARY
Condensed Consolidated Balance Sheets Data(in
$’000)
|
As of December 31, |
|
2023 |
|
2022 |
Assets |
|
|
|
Cash and cash equivalents and short-term investments |
886,336 |
|
630,996 |
Accounts receivable |
116,894 |
|
97,988 |
Other current assets |
93,609 |
|
110,904 |
Property, plant and equipment |
99,727 |
|
75,947 |
Investments in equity investees |
48,411 |
|
73,777 |
Other non-current assets |
34,796 |
|
39,833 |
Total
assets |
1,279,773 |
|
1,029,445 |
Liabilities and
shareholders’ equity |
|
|
|
Accounts payable |
36,327 |
|
71,115 |
Other payables, accruals and advance receipts |
271,399 |
|
264,621 |
Deferred revenue |
127,119 |
|
13,537 |
Bank borrowings |
79,344 |
|
18,104 |
Other liabilities |
22,197 |
|
25,198 |
Total
liabilities |
536,386 |
|
392,575 |
Company’s shareholders’
equity |
730,541 |
|
610,367 |
Non-controlling interests |
12,846 |
|
26,503 |
Total liabilities and
shareholders’ equity |
1,279,773 |
|
1,029,445 |
Condensed Consolidated Statements of Operations
Data(in $’000, except share and per share data)
|
Year Ended December 31, |
|
2023 |
|
2022 |
Revenue: |
|
|
|
Oncology/Immunology – Marketed Products |
164,165 |
|
|
124,642 |
|
Oncology/Immunology – R&D |
364,451 |
|
|
39,202 |
|
Oncology/Immunology consolidated revenue |
528,616 |
|
|
163,844 |
|
Other Ventures |
309,383 |
|
|
262,565 |
|
Total revenue |
837,999 |
|
|
426,409 |
|
|
|
|
|
Operating
expenses: |
|
|
|
Cost of revenue |
(384,447 |
) |
|
(311,103 |
) |
Research and development expenses |
(302,001 |
) |
|
(386,893 |
) |
Selling and general administrative expenses |
(133,176 |
) |
|
(136,106 |
) |
Total operating expenses |
(819,624 |
) |
|
(834,102 |
) |
|
|
|
|
|
|
|
|
Other income/(expense), net |
39,933 |
|
|
(2,729 |
) |
Income/(loss) before
income taxes and equity in earnings of
equity investees |
58,308 |
|
|
(410,422 |
) |
Income tax (expense)/benefit |
(4,509 |
) |
|
283 |
|
Equity in earnings of equity investees, net of tax |
47,295 |
|
|
49,753 |
|
Net
income/(loss) |
101,094 |
|
|
(360,386 |
) |
Less: Net income attributable
to non-controlling interests |
(314 |
) |
|
(449 |
) |
Net income/(loss)
attributable to HUTCHMED |
100,780 |
|
|
(360,835 |
) |
|
|
|
|
Earnings/(losses) per
share attributable to HUTCHMED
(US$ per share) |
|
|
|
– basic |
0.12 |
|
|
(0.43 |
) |
– diluted |
0.12 |
|
|
(0.43 |
) |
Number of shares used in per
share calculation |
|
|
|
– basic |
849,654,296 |
|
|
847,143,540 |
|
– diluted |
869,196,348 |
|
|
847,143,540 |
|
|
|
|
|
Earnings/(losses) per
ADS attributable to HUTCHMED (US$ per ADS) |
|
|
|
– basic |
0.59 |
|
|
(2.13 |
) |
– diluted |
0.58 |
|
|
(2.13 |
) |
Number of ADSs used in per
share calculation |
|
|
|
– basic |
169,930,859 |
|
|
169,428,708 |
|
– diluted |
173,839,270 |
|
|
169,428,708 |
|
|
|
|
|
|
|
OUTLOOK AND FINANCIAL GUIDANCE
2023 was an impressive year for HUTCHMED, in
large part due to the upfront payment of $400 million received from
Takeda, of which $280 million was recognized in revenue during
2023, with the remainder to be recognized when services and
performance obligations are completed over approximately three
years.
Full year 2024 guidance for Oncology/Immunology
consolidated revenue is $300 million to $400 million, driven by 30%
to 50% growth target in oncology marketed product revenue.
HUTCHMED’s work in 2024 and beyond will be
supported by its strong balance sheet, which grew by $255 million
to $886 million in Cash, Cash Equivalents and Short-Term
Investments as of December 31, 2023. The Company is thus well
placed to deliver against its target to become a self-sustaining
business and its goal to bring its innovative medicines to patients
globally through its own sales network in China markets and through
partners worldwide.
Shareholders and investors should note that:
- we do not provide any guarantee
that the statements contained in the financial guidance will
materialize or that the financial results contained therein will be
achieved or are likely to be achieved; and
- we have in the past revised our
financial guidance and reference should be made to any
announcements published by us regarding any updates to the
financial guidance after the date of publication of this
announcement.
Use of Non-GAAP Financial Measures and
Reconciliation – References in this announcement to
adjusted Group net cash flows excluding financing activities and
financial measures reported at CER are based on non-GAAP financial
measures. Please see the “Use of Non-GAAP Financial Measures and
Reconciliation” below for further information relevant to the
interpretation of these financial measures and reconciliations of
these financial measures to the most comparable GAAP measures,
respectively.
Conference calls and audio webcast
presentations scheduled today at 7:30 a.m. EST /
12:30 p.m. GMT / 8:30 p.m. HKT in English.
In addition to the usual English webcast, there will also be a
Chinese (Putonghua) webcast at 8:30 a.m. HKT on Thursday,
February 29, 2024. After registering, investors may access
a live audio webcast of the call via HUTCHMED’s website at
www.hutch-med.com/event/.
Participants who wish to join the call by
telephone and ask a question must register. Upon registration, each
participant will be provided with dial-in numbers and a unique
PIN.
FINANCIAL STATEMENTS
HUTCHMED will today file with the U.S.
Securities and Exchange Commission its Annual Report on Form
20-F.
About HUTCHMED
HUTCHMED (Nasdaq/AIM: HCM;
HKEX: 13) is an innovative, commercial-stage,
biopharmaceutical company. It is committed to the discovery, global
development and commercialization of targeted therapies and
immunotherapies for the treatment of cancer and immunological
diseases. It has approximately 5,000 personnel across all its
companies, at the center of which is a team of about 1,800 in
oncology/immunology. Since inception, HUTCHMED has focused on
bringing cancer drug candidates from in-house discovery to patients
around the world, with its first three oncology medicines now
approved marketed in China, the first of which is also marketed in
the U.S. For more information, please visit: www.hutch-med.com or
follow us on LinkedIn.
Contacts
Investor Enquiries |
+852 2121 8200 / +1 973 306 4490 / ir@hutch-med.com |
|
|
Media
Enquiries |
|
Ben Atwell / Alex Shaw,
FTI Consulting |
+44 20 3727 1030 /
+44 7771 913 902 (Mobile) /
+44 7779 545 055 (Mobile) /
HUTCHMED@fticonsulting.com |
Zhou Yi, Brunswick |
+852 9783 6894 (Mobile) /
HUTCHMED@brunswickgroup.com |
|
|
Nominated
Advisor |
|
Atholl Tweedie / Freddy Crossley
/ Daphne Zhang, Panmure Gordon |
+44 (20) 7886 2500 |
|
|
References
Unless the context requires otherwise,
references in this announcement to the “Group,” the “Company,”
“HUTCHMED,” “HUTCHMED Group,” “we,” “us,” and “our,” mean HUTCHMED
(China) Limited and its subsidiaries unless otherwise stated or
indicated by context.
Past Performance and Forward-Looking
Statements
The performance and results of operations of the
Group contained within this announcement are historical in nature,
and past performance is no guarantee of future results of the
Group. This announcement contains forward-looking statements within
the meaning of the “safe harbor” provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by words like “will,” “expects,”
“anticipates,” “future,” “intends,” “plans,” “believes,”
“estimates,” “pipeline,” “could,” “potential,” “first-in-class,”
“best-in-class,” “designed to,” “objective,” “guidance,” “pursue,”
or similar terms, or by express or implied discussions regarding
potential drug candidates, potential indications for drug
candidates or by discussions of strategy, plans, expectations or
intentions. You should not place undue reliance on these
statements. Such forward-looking statements are based on the
current beliefs and expectations of management regarding future
events, and are subject to significant known and unknown risks and
uncertainties. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those set forth in the
forward-looking statements. There can be no guarantee that any of
our drug candidates will be approved for sale in any market, that
any approvals which have been obtained will continue to remain
valid and effective in the future, or that the sales of products
marketed or otherwise commercialized by HUTCHMED and/or its
collaboration partners (collectively, “HUTCHMED’s Products”) will
achieve any particular revenue or net income levels. In particular,
management’s expectations could be affected by, among other things:
unexpected regulatory actions or delays or government regulation
generally, including, among others, the risk that HUTCHMED’s ADSs
could be barred from trading in the United States as a result of
the Holding Foreign Companies Accountable Act and the rules
promulgated thereunder; the uncertainties inherent in research and
development, including the inability to meet our key study
assumptions regarding enrollment rates, timing and availability of
subjects meeting a study’s inclusion and exclusion criteria and
funding requirements, changes to clinical protocols, unexpected
adverse events or safety, quality or manufacturing issues; the
inability of a drug candidate to meet the primary or secondary
endpoint of a study; the inability of a drug candidate to obtain
regulatory approval in different jurisdictions or the utilization,
market acceptance and commercial success of HUTCHMED’s Products
after obtaining regulatory approval; discovery, development and/or
commercialization of competing products and drug candidates that
may be superior to, or more cost effective than, HUTCHMED’s
Products and drug candidates; the impact of studies (whether
conducted by HUTCHMED or others and whether mandated or voluntary)
or recommendations and guidelines from governmental authorities and
other third parties on the commercial success of HUTCHMED’s
Products and drug candidates in development; the ability of
HUTCHMED to manufacture and manage supply chains for multiple
products and drug candidates; the availability and extent of
reimbursement of HUTCHMED’s Products from third-party payers,
including private payer healthcare and insurance programs and
government insurance programs; the costs of developing, producing
and selling HUTCHMED’s Products; the ability of HUTCHMED to meet
any of its financial projections or guidance and changes to the
assumptions underlying those projections or guidance; global trends
toward health care cost containment, including ongoing pricing
pressures; uncertainties regarding actual or potential legal
proceedings, including, among others, actual or potential product
liability litigation, litigation and investigations regarding sales
and marketing practices, intellectual property disputes, and
government investigations generally; and general economic and
industry conditions, including uncertainties regarding the effects
of the persistently weak economic and financial environment in many
countries, uncertainties regarding future global exchange rates and
uncertainties regarding the impact of pandemics and disease
outbreaks. For further discussion of these and other risks, see
HUTCHMED’s filings with the U.S. Securities and Exchange
Commission, on AIM and on HKEX50. HUTCHMED is providing the
information in this announcement as of this date and does not
undertake any obligation to update any forward-looking statements
as a result of new information, future events or otherwise.
In addition, this announcement contains
statistical data and estimates that HUTCHMED obtained from industry
publications and reports generated by third-party market research
firms. Although HUTCHMED believes that the publications, reports
and surveys are reliable, HUTCHMED has not independently verified
the data and cannot guarantee the accuracy or completeness of such
data. You are cautioned not to give undue weight to this data. Such
data involves risks and uncertainties and are subject to change
based on various factors, including those discussed above.
Inside Information
This announcement contains inside information
for the purposes of Article 7 of Regulation (E.U.) No 596/2014 (as
it forms part of retained E.U. law as defined in the European Union
(Withdrawal) Act 2018).
Medical Information
This announcement contains information about
products that may not be available in all countries, or may be
available under different trademarks, for different indications, in
different dosages, or in different strengths. Nothing contained
herein should be considered a solicitation, promotion or
advertisement for any prescription drugs including the ones under
development.
This announcement in its entirety is available
at:
http://ml.globenewswire.com/Resource/Download/2764a8e2-c30d-4c40-ae43-56309cc71d54
|
REFERENCES AND ABBRIVATIONS |
|
|
1. |
Takeda = Takeda Pharmaceuticals International AG, a subsidiary of
Takeda Pharmaceutical Company Limited. |
2. |
R&D = Research and development. |
3. |
NDA = New Drug Application. |
4. |
NSCLC = Non-small cell lung cancer. |
5. |
FDA = Food and Drug Administration. |
6. |
PDUFA = U.S. Prescription Drug User Fee Act. |
7. |
CRC = Colorectal cancer. |
8. |
NCCN = National Comprehensive Cancer Network. |
9. |
In-market sales = total sales to third parties provided by Eli
Lilly (ELUNATE®), Takeda (FRUZAQLA™), AstraZeneca (ORPATHYS®) and
HUTCHMED (ELUNATE®, SULANDA®, ORPATHYS® and TAZVERIK®). |
10. |
MAA = Marketing Authorization Application. |
11. |
EMA = European Medicines Agency. |
12. |
PMDA = Pharmaceuticals and Medical Devices Agency. |
13. |
EMC = Endometrial cancer. |
14. |
RCC = Renal cell carcinoma. |
15. |
NMPA = National Medical Products Administration. |
16. |
Syk = Spleen tyrosine kinase. |
17. |
ITP = Immune thrombocytopenia purpura. |
18. |
AstraZeneca = AstraZeneca AB, a subsidiary of AstraZeneca plc. |
19. |
CER = Constant exchange rate. We also report changes in performance
at CER which is a non-GAAP measure. Please refer to “Use of
Non-GAAP Financial Measures and Reconciliation” below for further
information relevant to the interpretation of these financial
measures and reconciliations of these financial measures to the
most comparable GAAP measures. |
20. |
Source: IQVIA. Report on file. |
21. |
TPO = Thrombopoietin; TPO-RAs = Thrombopoietin receptor
agonists. |
22. |
MET = Mesenchymal epithelial transition factor. |
23. |
EGFR = Epidermal growth factor receptor. |
24. |
TKI = Tyrosine kinase inhibitor. |
25. |
NRDL = National Reimbursement Drug List. |
26. |
Lilly = Eli Lilly and Company. |
27. |
VEGFR = Vascular endothelial growth factor receptor. |
28. |
ASCO = American Society of Clinical Oncology. |
29. |
PFS = Progression free survival. |
30. |
ORR = Objective response rate. |
31. |
DCR = Disease control rate. |
32. |
OS = Overall survival. |
33. |
PD-1 = Programmed cell death protein-1. |
34. |
FGFR = Fibroblast growth factor receptor. |
35. |
CSF-1R = Colony-stimulating factor 1 receptor. |
36. |
AACR = American Association for Cancer Research. |
37. |
AIHA = Autoimmune hemolytic anemia. |
38. |
Ipsen = Ipsen SA, parent of Epizyme Inc. |
39. |
DoR = Duration of response. |
40. |
IHCC = Intrahepatic cholangiocarcinoma. |
41. |
PI3Kδ = Phosphoinositide 3-kinase delta. |
42. |
Inmagene = Inmagene Biopharmaceuticals. |
43. |
BTK = Bruton tyrosine kinase. |
44. |
SHPL = Shanghai Hutchison Pharmaceuticals Limited. |
45. |
HHOHK = Hutchison Hain Organic (Hong Kong) Limited. |
46. |
HSN = HUTCHMED Science Nutrition Limited. |
47. |
GAAP = Generally Accepted Accounting Principles. |
48. |
SG&A= Selling, general, and administrative expenses. |
49. |
ADS = American depositary share. |
50. |
HKEX = The Main Board of The Stock Exchange of Hong Kong
Limited. |
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