Trinity Delta Lighthouse: HUTCHMED

Trinity Delta view: Sceptics once argued that HUTCHMED’s plans were too ambitious, however consistent delivery and professional execution has transitioned a promising discovery company into a global commercial organisation. The success of the China Oncology sales platform, now marketing two products across various indications, highlights the expected path for global development. The impressive historic success of the in-house discovery platform appears set to continue, with the creation of anoth

HUTCHMED - Termination of coverage

Edison Investment Research is terminating coverage on Xintela (XINT), TXT e-solutions (TXT), HUTCHMED (HCM) and Schaltbau Holding (SLT). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.

Strategic collaboration for Tazverik in Greater China

▪ HUTCHMED has announced a strategic collaboration with Epizyme (NASDAQ: EPZM) to develop and commercialise Tazverik (tazemetostat) for the Greater China area. HUTCHMED will pay Epizyme $25m upfront, up to $110m in clinical and regulatory milestones (across up to eight oncology indications), and up to $175m in commercialisation milestones. Royalties on net sales in Greater China (mainland China, Hong Kong, Macau, and Taiwan) are tiered, ranging from a midteens to low-twenties percentage. HUTCHME

Hong Kong listing number 13 is a potent symbol

HUTCHMED has successfully raised c US$537m (or HK$4.17bn) through its Hong Kong IPO and global offering. The new funds enable management to execute their ambitious near- and medium-term growth plans. As well as progressing the second and third wave of innovative programmes through clinical trials, the proceeds will be used to bolster the China Oncology commercial organisation and further develop the equivalent global infrastructure. A sister note detailing the recent clinical data for the key la

≥$600m Hong Kong IPO and global offer (104m shares)

▪ HUTCHMED has announced its long-anticipated Hong Kong IPO. This forms part of a global offering of 104m new shares. The offer provisionally consists of 13m shares (12.5%) being directed to the Hong Kong public offering and 91m (87.5%) for the International offer. An over-allotment option for up to an additional 15.6m shares, subject to a maximum of 15% of the offer, is also available. The shares may be re-allocated between the Hong Kong and International offers to reflect demand. The Hong Kong

Baring Private Equity Asia invests $100m

Baring Private Equity Asia (BPEA) has invested $100m in HUTCHMED (Hutchison China MediTech) via a private placement. The new shares, in the form of 3.28m ADS (each equivalent to five ordinary shares), are priced at $30.50 per ADS, a 7% premium over the prior close. HUTCHMED will receive the full proceeds of the placing, which will be employed for the continued development of its clinical pipeline and building the commercial infrastructure both in China and globally.

Breaking new ground in China and globally

HUTCHMED is transitioning from a development stage company into a global commercial organisation. Successful creation of a dedicated China Oncology sales platform, now marketing two products, reveals the path for global development. FY21 guidance for Oncology/Immunology revenues of $110m-130m (FY20 $30.2m) highlights the magnitude and trajectory of this shift, with approval of further products and indications on the near-term horizon. The impressive success of the discovery platform has generate

Transitioning to a global oncology player

Hutchison China MediTech’s name change to HUTCHMED unifies its corporate identity and better reflect its increasing global focus. FY20 results and pipeline update shows product and clinical momentum is maintained.

China approval clears Sulanda in epNET

The China regulator has approved Hutchison China MediTech’s (Chi-Med’s) second internally discovered cancer drug, surufatinib (brand name Sulanda) for the treatment of epNET (non-pancreatic [extra-pancreatic] neuroendocrine tumours). Sulanda will be Chi-Med’s first unpartnered oncology drug launch in China, with potential for a label extension in pancreatic NET (pNET) later in 2021. Surufatinib is also on track to become Chi-Med’s first marketed drug in the US with the recent initiation of a rol

Hutchison China MediTech - A rolling stone gathers no moss

Hutchison China MediTech (HCM) is on the cusp of multiple drug launches of its internally developed oncology portfolio. In China we anticipate the imminent approval for surufatinib (epNET by year end, followed by pNET in H221), and savolitinib for MET exon 14 skipping non-small cell lung cancer (NSCLC). Following the amended Elunate deal terms with Eli Lilly, HCM can realize synergies in marketing additional assets alongside Elunate, using its newly established China oncology commercial team (ai

Hutchison China MediTech - A rolling stone gathers no moss

Hutchison China MediTech (HCM) is on the cusp of multiple drug launches of its internally developed oncology portfolio. In China we anticipate the imminent approval for surufatinib (epNET by year end, followed by pNET in H221), and savolitinib for MET exon 14 skipping non-small cell lung cancer (NSCLC). Following the amended Elunate deal terms with Eli Lilly, HCM can realise synergies in marketing additional assets alongside Elunate, using its newly established China oncology commercial team (ai

Canada Pension Plan invests $100m at $30 per ADS

Canada Pension Plan Investments (CPP), a globally invested pension fund for c 20m Canadians, has invested $100m in Hutchison China MediTech (ChiMed) via a private placement. CPP takes a long-term and strategic investment view, seeking to identify the future industry leaders in high growth sectors and supporting them in their development plans.

ESMO 2020: SANET-p delivers further positive suru data

Data from China Phase III SANET-p study of surufatinib in pancreatic neuroendocrine tumours (pNET) was presented at the European Society of Medical Oncology (ESMO) 2020 virtual meeting. SANET-p was terminated early (January 2020) having already met its progression-free survival (PFS) primary endpoint at the planned interim analysis. At ESMO this was revealed to be an investigator assessed PFS of 10.9 months for surufatinib vs 3.7 months for placebo (hazard ratio = 0.49, p=0.0011). The China NDA

Innovative pipeline closer to realising its potential

Hutchison China MediTech (Chi-Med) continues to gather momentum as its pipeline gets closer to unlocking its potential. Increased visibility for the three lead assets with multiple catalysts in the next 6 to 18 months suggest significant upside potential. In China, Chi-Med is leveraging its established base to build a fully integrated oncology business, with its c 320-strong China Oncology commercial team set to take over Elunate marketing from October and execute its first unpartnered China lau

Hutchison China MediTech - To China and beyond

Hutchison China MediTech (HCM) continues to move swiftly towards its goal of globalization of its innovative oncology assets and building a fully integrated oncology business in China. Regarding the latter, the amended deal terms with Eli Lilly on fruquintinib is a huge positive, which will enable HCM to fully leverage its existing China oncology sales and marketing infrastructure across two assets: Elunate for CRC and surufatinib for NET. The recently reported interim results highlight further

Strong growth in core underpins FY expectations

EKF has reported a strong H1, with revenues of £37.5m and double-digit growth in underlying non-Covid related business. Management reports it is trading in line with expectations for the full year and we make no change to our profit forecasts at this stage. New growth initiatives are proceeding to plan and should lead to accelerated core growth from FY23 onwards. We continue to see substantial upside on successful execution with the shares trading on an FY23 P/E of 13.1x and an EV/EBITDA of just

Kromek - FY 2022 results

Kromek reported full-year results to 30 April that were in line with the trading update of 16 May. Record visibility over our FY 2023 revenue forecast of £18m (c.53% of which is already contracted and 37% “Awarded not Contracted”, with the balance from its normal monthly run rate) is a great start for FY 2023 on which the company can build further. We are leaving forecasts unchanged for the moment, despite additional contract wins, and expect to introduce FY 2024 forecasts at the time of its int

Kromek - Fundraise – £1.7m convertible loan note

Kromek announced a £1.7m fundraise by way of the issue of convertible loan notes (8% coupon, 18-month conversion period at 15p per share), which will allow the company to minimise any potential supply-chain disruption to the delivery of contracts during the year. We make only minor changes to forecasts to reflect the additional interest (c.£0.1m) accrued, with adjusted pre-tax loss increasing to £5.0m. We leave our target valuation of £118m (27p) unchanged, with near-term catalysts (e.g. a secon

Morning Note – 3 August 2022

Hybridan Small Cap Feast 21-07-2022

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen? Unigel Group, intends to join the Aquis Growth Market. Unigel Group is a pioneer in the field of thixotropic gels for the fibre optic cable industry. The Company is also a supplier of laminated steel tapes to the fibre optic cable industry in the US. Thixotropic gels and laminated steel tapes are essential components to the rapidly growing global fibre optic cable market. The Group export

Morning Note – 2 August 2022

Q2 21: Internal problems amplify the external headwinds

Smith & Nephew reported mostly in-line Q2 22 numbers, missing the top-line estimates (-0.6%) but beating on the trading profit (+0.5%), albeit marginally. The Q2 performance was overshadowed by a 100bp margin downgrade for FY22 (-50bps Y-o-Y vs +50bps previously), which sent the stock ~9% lower in the session following the update. The reiteration of the top-line growth outlook of 4-5% was no help either. We will cut our estimates, largely to reflect the soft margin guidance.

Strong top-line drives another decent quarter

In Q2, Astra sustained its solid top-line momentum. Like in the past few quarters, this outperformance was again driven by higher COVID-19 business sales and solid growth in Diabetes drug Farxiga. Moreover, the recovering Oncology and much-needed green shoots in Rare Diseases were the icing on the cake. Although, profitability again came under the scanner but should improve in the coming quarters/years as the company completes its ‘growth phase’. Overall, a decent set of results and our positive

LIBERUM: SourceBio International* - Update shows evolution to core

Hybridan Small Cap Feast 01-08-2022

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Inteliqo Limited, intends to join the Aquis Growth Market. Inteliqo Limited provides sales, marketing and distribution services to technology product owners under long-term distribution agreements. The Company has agreed its first such agreement in respect of the Ipedia iQ product range. The iQ product is a smart translation earphone (earbuds) system which offers integrated real time speech

Supply agreement with VGM Group

Belluscura has announced that it has entered into a Group Purchasing Organisation Product Supply Agreement with VGM Group which further expands its distribution network across the US.

Morning Note – 5 August 2022

The Hardman & Co Monthly: August 2022

Feature article: Utility regulation – Changes afoot - Patching up a tainted model While the gas supply crisis – and its price implications – have dominated the UK price regulated sectors in recent months, other issues have arisen that have seriously tainted the price regulation system itself. Indeed, it is fair to ask whether it is ‘’fit for purpose’’. Back in 1984, price regulation, via an unsophisticated RPI-x formula, was introduced to prevent the privatised British Telecom (BT) from abusin

FY22 results and a highly visible outlook

For the year to 30 April 2022 Kromek reported results in line with the Trading Update of 16 May: revenue of £12.1m, +16.5%YoY, and an EBITDA (adj.) loss of £1.2m. We estimate revenue in the Advanced Imaging division grew 28% YoY to £4.6m, whilst the CBRN segment grew 1.5x to £5.4m. Kromek reports that it expects growth to accelerate in both its core segments – security-related CBRN and advanced imaging – with the prospect of “a substantial year-on-year increase in revenue”. The CBRN segment in

Growth on an accelerating path

Smith & Nephew’s growth acceleration and margin expansion in Q2 should continue in H215, more reflecting internal changes than improvements in market fundamentals. Its c 13% premium on 2015 P/E to its global ortho peers is supported by its brisker growth and strategic value.