Hutchison China MediTech

US: HCM

$4753.9m market cap

$33.45 last close

Hutchison China MediTech (HCM) is an innovative China-based biopharmaceutical company targeting the global market for novel, highly selective oral oncology and immunology drugs. Its established commercial platform business continues to expand its outreach.

Investment summary

HCM has built a substantial pipeline of tyrosine kinase inhibitor drugs. The 2018 launch of Elunate (fruquintinib capsules) in China serves to validate the R&D efforts and its inclusion in China’s NRDL significantly increases the addressable market. Key late-stage asset surufatinib met the primary endpoint of PFS in non-pancreatic NET and pancreatic NET, translating into earlier than expected China NDA submissions for both indications (epNET accepted in November, pNET filed mid-2020). Surufatinib could be HCM’s first unpartnered asset to launch (late 2020). The US FDA has also granted two fast-track designations for surufatinib in epNET and pNET (NDA to file in late 2020). We forecast further product launches in 2021/22; with China launch of savolitinib in MET Exon 14 deletion NSCLC and global launch of savolitinib in MET-positive Tagrisso refractory NSCLC in combination with Tagrisso; timing depends on interim data from the SAVANNAH trial.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2018A 214.1 (89.0) (86.7) (11.3) N/A N/A
2019A 204.9 (141.3) (141.1) (15.9) N/A N/A
2020E 216.8 (194.5) (197.4) (22.9) N/A N/A
2021E 303.9 (180.8) (186.2) (21.3) N/A N/A
Industry outlook

HCM’s profitable Chinese healthcare business continues to benefit from the fast-growing domestic market, while the clinical, regulatory and technological environments are highly conducive to novel drug development. Longer term, as the oncology pipeline comes to fruition we expect HCM to become a major oncology company globally.

Last updated on 22/09/2020
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Sector
Healthcare
Share price graph
Balance sheet
Forecast net cash (US$m) 280.5
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (0.2) 37.2 65.4
Relative* 2.2 29.0 49.3
52-week high/low US$34.6/US$15.2
*% relative to local index
Key management
Simon To Chairman
Christian Hogg CEO
Johnny Cheng CFO
Dr Weiguo Su Chief Scientific Officer
Mark Lee SVP, Corporate Fin & Dev.

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