Hutchison China MediTech (HCM) presented robust SANET-ep Phase III China data at ESMO 2019 on surufatinib in non-pancreatic neuroendocrine tumours (NET). The data support a China NDA submission (imminent), with surufatinib likely to be the first of HCM’s non-partnered assets to reach the market (late 2020). NET tumours are highly prevalent, fragmented in primary origin and are an unmet medical need. Surufatinib could be the first universal drug to treat NET in all patients regardless of tumour subtype; the SANET-p Phase III data in (pancreatic NET H120), is critical to widening its market potential. The global (US and Europe) registration Phase III study is planned for H120. CK Hutchison Holdings (CKHH) reduced its holding by 1.3% to below 50% (49.9%). We see this as a significant positive as it removes the significant overhang on the shares. We value HCM at $5.7bn.
Positive Phase III surufatinib data unveiled at the interim analysis of SANET-ep (advanced extra-pancreatic NET) led to trial cessation, as recommended by IDMC, a year ahead of schedule. Surufatinib met superiority criteria in meeting its primary endpoint of progression-free survival (PFS) (9.2 months vs placebo 3.8 months, HR=0.334, p<0.0001). Data published at ESMO 2019 highlighted utility across all subtypes of non-pancreatic NET regardless of primary origin and efficacy in resistant patients who had received multiple lines of therapy. Furthermore, data from the Phase Ib US study showed consistency with data to date in Chinese patients. Efficacy was demonstrated across a range of solid tumours in patients who had endured multiple prior lines of therapy.
We continue to forecast global peak sales for surufatinib of $953m across the NET and biliary tract cancer (BTC) indications. We now forecast China launch in late 2020 (previously 2021) due to clearer regulatory timelines and US/EU launch in 2024. HCM has accelerated global (ex-China) development of its non-partnered assets (fruquintinib, surufatinib, HMPL-523 and HMPL-689) as evidenced by a leap in R&D expense in 2018/19. In the rapidly changing landscape that is oncology, timeliness is critical and investment in surufatinib is coming to fruition.
We value HCM at $5.7bn (£7.01/share) vs $5.7bn (£6.99/share) previously. We now forecast surufatinib launch in China in late 2020 (previously early 2021) based on an October 2019 China NDA submission. We have increased 2020 R&D expenses and rolled forward our model in time.