HUTCHMED(HCM.US)：FRUQUINTINIB MET OS ENDPOINT; 1H22 RESULTS ON TRACK

HCM announced fruquintinib global ph3 FRESCO-2 study has met primary endpoint in metastatic colorectal cancer
1H22 Onco/Immu rev up 113% yoy to USD91.1mn, in line w/ our est.; FY22E China Onco/Immu guidance of USD160-190mn is intact
We maintain BUY on Co.’s attractive valuation and overseas catalyst still in play. SOTP TP revised to USD42
　　Fruquintinib succeeded in MRCT study for 3L CRC
　　HCM on Aug 8th reported fruquintinib has met OS endpoint in a ph3 MRCT study for 3L CRC. The positive topline result is from FRESCO-2 study (n=691, o/w 116 pts in U.S.) across 14 countries. Co. added that the study also showed statistically-significant improvement in PFS. The safety profile was consistent with prior study. Co. plans to present the full results at an upcoming medical meeting. Co. noted that it will discuss the data with regulatory agencies in the U.S., Europe and Japan with the intent to complete filings in 2023E (fruquintinib has received FDA’s fast track designation for CRC in Jun 2020). In addition, Co. announced its savolitinib/Tagrisso combo also yielded positive results in ph2 SAVANNAH study (n=294) for MET+ NSCLC after progression on prior Tagrisso treatment. The study showed 32% ORR and found positive correlation between efficacy and MET expression (49% ORR in high MET+ pts while only 9% ORR in low MET).
　　Solid 1H22 results
　　Total revenue up 28% yoy to USD202mn, mainly driven by Onco/Immu sales. ELUNATE in-market sales up 26% yoy to USD50.4mn, reflecting greater penetration in tier2/3 cities. SULANDA in-market sales up ~70% yoy to USD13.6mn, thanks to rapid ramp-up after inclusion into NRDL.ORPATHYS in-market sales grew to USD23.3mn (vs. nil in 1H21), reflecting fast uptake as the FIC MET inhibitor in China. Other ventures consolidated revenue down 3% yoy due to lower sales of consumer products. Adj. loss-making expanded to USD135mn in 1H22 (vs.USD84mn in 1H21) due to hefty R&D expenses (USD182mn, +48% yoy) and increased SG&A as a result of scaling commercial infrastructure in China and the U.S.
　　We maintain BUY, SOTP-based TP revised to USD42
　　We cut FY22E/23E revenue by 1%/5% to reflect lower revenue on non- core assets. We revised SOTP TP to USD42 to as we use higher WACC (from 9.6% to 10.4%) to reflect tighter financing conditions. Key 2H22E catalyst includes full results of fruquintinib’s FRESCO-2 study. For HKEx shrs, we assume same methodology to arrive TP at HKD65.3/shr (1 ADR shr = 5 HKEx shrs, USD/HKD FX rate at 7.77). Investment risks: clinical delay/failure, lower-than-expected sales, regulatory risks, NRDL- driven price cut risk.
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   【免责声明】本文仅代表第三方观点，不代表和讯网立场。投资者据此操作，风险请自担。