HUTCHMED Reports 2023 Interim Results and Provides Business Updates

Rhea-AI Summary

HUTCHMED (China) Limited (HCM; 13) Reports 164% Revenue Growth, Net Income of US$169 million, and Strategic Progress in Global Partnership with Takeda

Positive

• Revenue grew 164% (173% CER) to US$533 million
• Net income to HUTCHMED of US$169 million, including US$259 million of upfront payment recognized from Takeda
• Total revenues up 164% (173% at CER) to $532.9 million for the first half of 2023

Negative

• None.

Strong execution on strategic direction, delivering near-term value while charting a path for growth, exemplified by global partnership with Takeda

Revenue grew 164% (173% CER) to US$533 million, with net income to HUTCHMED of US$169 million (which include US$259 million of the upfront recognized from Takeda)

Company to Host Interim Results Call & Webcast Today at 8 p.m. HKT / 1 p.m. BST / 8 a.m. EDT

Company to host a Capital Markets Day in Q4 this year

HONG KONG and SHANGHAI, China and FLORHAM PARK, N.J., July 31, 2023 (GLOBE NEWSWIRE) -- HUTCHMED (China) Limited (“HUTCHMED”, the “Company” or “we”) (Nasdaq/AIM:​HCM; HKEX:​13), the innovative, commercial-stage biopharmaceutical company, today reports its unaudited financial results for the six months ended June 30, 2023 and provides updates on key clinical and commercial developments.

All amounts are expressed in U.S. dollars unless otherwise stated.

Strategic: clinical, financial, and regulatory progress demonstrates strong delivery on the strategy

• Focusing on driving near-term value creation and establishing a self-sustaining business over the long term, with the goal of bringing innovative medicines to patients around the world.
• Significant progress towards bringing medicines to patients outside China through global partnerships: closed fruquintinib license agreement with Takeda¹ in March, which can potentially bring in up to $1.13 billion in payments including $400 million upfront payment received, plus royalties on net sales.

Product & pipeline: fruquintinib advancing to global launches, with continued progress across portfolio

• NDA² for fruquintinib granted priority review by the U.S. FDA³, with a PDUFA⁴ goal date of November 30, 2023. Takeda preparing for fruquintinib launches worldwide with MAA⁵ validated by the EMA⁶ in June and the Japan NDA submission planned this year. Global regulatory filings supported by results from FRESCO-2, recently published in The Lancet, and data from FRESCO.
• Fruquintinib NDA for second-line gastric cancer accepted in China, where fruquintinib is available and reimbursed under the brand name ELUNATE^® for the treatment of metastatic CRC⁷; Breakthrough Therapy Designation in endometrial cancer.
• All three HUTCHMED medicines marketed in China now included in the NRDL⁸.
• Registration study readouts expected in the second half for two potential new medicines in China, sovleplenib and amdizalisib. New registration studies initiated for savolitinib in gastric cancer and HMPL-453 for IHCC⁹; over 15 registration studies ongoing, across seven drug candidates.
• Productive discovery research continues, with another novel drug candidate in clinical development (SHP2¹⁰ inhibitor HMPL-415).

Financial: HUTCHMED remains on track to become self-sustaining in 2025

• Total revenues up 164% (173% at CER¹¹) to $532.9 million for the first half of 2023, with Oncology/​Immunology consolidated revenues up 294% (301% at CER) to $359.2 million.
• Strategy has allowed HUTCHMED to conserve cash and significantly reduce costs, with a substantial cash balance of $856.2 million on June 30, 2023 including $400 million received from Takeda.
• $258.7 million of the Takeda upfront payment recognized as revenue in the first half of 2023, resulting in net income of $168.6 million; we expect to recognize approximately $280 million of this payment for the full year.
• R&D¹² expenses decreased primarily due to our portfolio optimization efforts, while the reduction in SG&A expenses¹³ was mainly due to decreased administrative expenses after restructuring our U.S. operations.

2023 INTERIM RESULTS & BUSINESS UPDATES

Mr Simon To, Executive Chairman of HUTCHMED, said, “The first half of 2023 has been successful for HUTCHMED. In late 2022, we announced our pipeline prioritization plan and intention to seek global partners to bring our medicines to help patients outside of China. Six months later, this strategy is already delivering significant results to our operations. We are successfully navigating the current challenging capital markets, while making significant progress towards our goal of becoming a self-sustaining, truly global biopharma company. Crucially, it means that we are well positioned to reach more patients than ever with our medicines.”

“In March, we closed a licensing deal for fruquintinib with Takeda and we are confident that they have the commitment, expertise, and commercial infrastructure to successfully roll out this innovative medicine to patients across the globe. The FDA Priority Review PDUFA date for fruquintinib is now set for November 30 this year, reflecting its potential to deliver significant improvement over currently available treatments.”

Dr Weiguo Su, Chief Executive Officer and Chief Scientific Officer of HUTCHMED, said, “With the sharpening of our goals and priorities, we now have more resources to advance our assets and drive near-term value, and we are pleased to report on the important progress made so far this year. We have over 15 registration/​registration-intent studies ongoing with seven drug candidates. Alongside this, our team has presented data at a number of leading medical conferences, including AACR¹⁴, ASCO¹⁵, ASCO GI¹⁶, EHA¹⁷ and ICML¹⁸, showcasing the productivity of our world class R&D engine. Furthermore, commercial performance has remained strong this year, with robust sales growth of our in-house developed oncology products in China. All three marketed medicines are now included on the NRDL, in line with our commitment to patient access. Moreover, our strategy means we are in a strong financial position as we look to continue developing our clinical programs. We started the second half of 2023 with $856 million in cash resources, including the $400 million received from Takeda.”

“HUTCHMED is now well placed for further successful product launches and life cycle extensions. In particular, we look forward to continuing the positive momentum with fruquintinib regulatory reviews around the world, and readouts from our registration studies for sovleplenib and amdizalisib later this year. As the last six months have shown, HUTCHMED clearly has the right strategy, leadership team, and vision to become a truly global biopharma, and I am confident that HUTCHMED will continue to deliver on this potential.”

I. COMMERCIAL OPERATIONS

Total revenues increased 164% (173% at CER) to $532.9 million in the first half of 2023 (H1-22: $202.0m), driven by Oncology/Immunology partnering, its strong commercial progress in China, and growth in third-party distribution sales.

Oncology/Immunology consolidated revenues were up 294% (301% at CER) to $359.2 million (H1-22: $91.1m); driven by recognition of $258.7 million in partnering revenue for the upfront payment from Takeda, and our strong product sales growth resulting from in-market sales¹⁹ up 16% (25% at CER) to $101.3 million (H1-22: $87.4m);

• ELUNATE^® (fruquintinib) in-market sales in the first half of 2023 increased 12% (20% at CER) to $56.3 million (H1-22: $50.4m), reflecting its continued lead in market share;
• SULANDA^® (surufatinib) in-market sales in the first half of 2023 increased 66% (79% at CER) to $22.6 million (H1-22: $13.6m), reflecting the build-up in patients on treatment over 18 months on the NRDL;
• ORPATHYS^® (savolitinib) in-market sales in the first half of 2023 decreased 5% (increased 2% at CER) to $22.0 million (H1-22: $23.3m). Sales in the first quarter were impacted by customary channel fluctuations ahead of its NRDL inclusion on March 1, subsequently followed by an increase in sales volume, with the second quarter of 2023 up 84% compared to the second quarter of 2022;
• R&D services income up 62% (66% at CER) to $20.4 million (H1-22: $12.6m), 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 $250.1 million (62%) attributable to the license was recognized immediately. The remaining balance will be recognized when ongoing services and performance obligations are completed. Up to June 2023, we have recognized an aggregate of $258.7 million to revenue and expect around $280 million by year end; and
• Successful management of commercial operations to expand coverage of oncology hospitals and physicians despite challenges of pandemic-related disruptions around the start of the year.

$’millions	In-market Sales*							Consolidated Revenues**
	H1 2023		H1 2022		%Δ		(CER)	H1 2023		H1 2022		%Δ		(CER)
	Unaudited							Unaudited
ELUNATE®	$56.3		$50.4		+12	%	(+20%)	$42.0		$36.0		+16	%	(+25%)
SULANDA®	$22.6		$13.6		+66	%	(+79%)	$22.6		$13.6		+66	%	(+79%)
ORPATHYS®	$22.0		$23.3		-5	%	(+2%)	$15.1		$13.8		+10	%	(+17%)
TAZVERIK®	$0.4		$0.1		+560	%	(+583%)	$0.4		$0.1		+560	%	(+583%)
Products Sales	$101.3		$87.4		+16	%	(+25%)	$80.1		$63.5		+26	%	(+35%)
Other R&D services income								$20.4		$12.6		+62	%	(+66%)
Upfront and milestone income								$258.7		$15.0
Total Oncology/​Immunology								$359.2		$91.1		+294	%	(+301%)
Other Ventures								$173.7		$110.9		+57	%	(+67%)
Total revenues								$532.9		$202.0		+164	%	(+173%)
* = For ELUNATE® and ORPATHYS®, represents total sales to third parties as provided by Lilly20 and AstraZeneca, respectively; and their sales to other third parties as invoiced by HUTCHMED. ** = For ELUNATE®, represents manufacturing fees, commercial service fees and royalties paid by Lilly, to HUTCHMED, and sales to other third parties invoiced by HUTCHMED; for ORPATHYS® represents manufacturing fees 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

• NDA accepted in China in second-line gastric cancer for fruquintinib in combination with paclitaxel in April 2023;
• Designated Breakthrough Therapy in China for fruquintinib in combination with sintilimab in July 2023 for the treatment of advanced endometrial cancer;
• Consulted with NMPA²¹ on the registration study plan of HMPL-453 for IHCC in March 2023;
• Consulted with NMPA on registration study plan of savolitinib for gastric cancer in March 2023; and
• Received Macau approvals for tazemetostat and savolitinib in March 2023.

Ex-China

• Fruquintinib submission to U.S. FDA accepted in May 2023 and granted Priority Review for previously treated metastatic CRC. The PDUFA goal date assigned by the FDA is November 30, 2023;
• Fruquintinib submission to the EMA was validated in June 2023;
• Fruquintinib submission to the Japanese PMDA²² expected to be completed in 2023;
• Savolitinib, in combination with TAGRISSO^®, designated a U.S. FDA Fast Track program in January 2023 for the treatment of patients with NSCLC²³ with MET²⁴ overexpression and/or amplification, and who have had disease progression during or following prior TAGRISSO^®; and
• Following dialogue with the PMDA regarding surufatinib, we have decided not to file a Japanese NDA on the basis of the clinical trial data available.

III. 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

• Aligned with FDA and enrolling the pivotal Phase II study SAVANNAH for potential accelerated approval of the TAGRISSO^® combination for NSCLC MET patients following progression on TAGRISSO^® (NCT03778229);
• Completed enrollment of the confirmatory China Phase IIIb study in MET exon 14 skipping alteration NSCLC in both first-line and second-line and above patients (NCT04923945);
• After consultation with NMPA, initiated the registration stage of a China Phase II study in second-line gastric cancer patients with MET amplification (NCT04923932); and
• Continued enrolling five other registration studies, including SAFFRON, the global, pivotal Phase III study of the TAGRISSO^® combination supporting SAVANNAH (NCT05261399); SACHI, a pivotal Phase III study of the TAGRISSO^® combination in China for NSCLC patients with MET amplification following progression on EGFR²⁵ inhibitor treatment (NCT05015608); SANOVO, a pivotal Phase III study of the TAGRISSO^® combination in China in first-line NSCLC patients harboring EGFR mutation and MET overexpression (NCT05009836); and SAMETA, a global Phase III study in MET-driven PRCC²⁶ (NCT05043090).
  
  Potential upcoming clinical and regulatory milestones for savolitinib:

• Complete enrollment of SAVANNAH pivotal Phase II study in 2023;
• Complete enrollment of SOUND, a China Phase II study of the IMFINZI^® combination in EGFR wild-type NSCLC patients with MET alterations (NCT05374603) around year end 2023; and
• Complete recruitment of SACHI, a pivotal Phase III study of the TAGRISSO^® combination in China for NSCLC patients with MET amplification following progression on EGFR inhibitor treatment (NCT05015608) in mid-2024.

Fruquintinib (ELUNATE^® in China), a highly selective oral inhibitor of VEGFR²⁷ 1/2/3 designed to improve kinase selectivity to minimize off-target toxicity and thereby improve tolerability

• Completed recruitment of the endometrial cancer cohort of a China Phase II study of fruquintinib in combination with PD-1²⁸ inhibitor sintilimab in July 2023 for potential registration (NCT03903705);
• 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; and
• Updated results from the clear cell RCC²⁹ cohort of a China Phase II study of fruquintinib in combination with PD-1 inhibitor sintilimab at ASCO 2023, these results led to the Phase II/III trial (NCT05522231).
  
  Potential upcoming clinical and regulatory milestones for fruquintinib:

• Complete NDA submission to the Japanese PMDA in 2023;
• Submit FRUTIGA results for presentation at a scientific conference (NCT03223376);
• Consult with NMPA on the results of the ongoing endometrial cancer sintilimab combination Phase II study, which may lead to NDA submission in the first half of 2024; and
• Complete enrollment of China Phase II/III study of combination with PD-1 inhibitor sintilimab in clear cell RCC (NCT05522231) around year end 2023.

Surufatinib (SULANDA^® in China), an oral inhibitor of VEGFR, FGFR³⁰ and CSF-1R³¹ 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 combination study at the 2023 AACR and ASCO annual meetings (NCT04169672).

Sovleplenib (HMPL-523), an investigative and highly selective oral inhibitor of Syk³², an important component of the Fc receptor and B-cell receptor signaling pathway

• Completed enrollment of a Phase II Proof-of-Concept study in warm AIHA³³ in China (NCT05535933).
  
  Potential upcoming clinical milestones for sovleplenib:

• Report top-line results from ESLIM-01 China Phase III in primary ITP³⁴ (NCT03951623) in 2023;
• Decide whether to proceed into Phase I in ITP in US depending on the outcome of China Phase III; and
• Decide whether to proceed into Phase III in warm AIHA in China or continue dose escalation, depending on the outcome of an upcoming analysis of a Phase II Proof-of-Concept study in warm AIHA.

Amdizalisib (HMPL-689), an investigative and highly selective oral inhibitor of PI3Kδ³⁵ designed to address the gastrointestinal and hepatotoxicity associated with currently approved and clinical-stage PI3Kδ inhibitors

• Completed recruitment of patients for China registration Phase II study for the treatment of follicular lymphoma (with Breakthrough Therapy Designation) in February 2023 (NCT04849351); and
• Initiated combination trial with tazemetostat in China in February 2023 (NCT05713110).
  
  Potential upcoming clinical and regulatory milestones for amdizalisib:

• Report top-line results from the China registration Phase II study for the treatment of follicular lymphoma in late 2023.

Tazemetostat (TAZVERIK^® in Macau and the Hainan Pilot Zone), a first-in-class, oral inhibitor of EZH2 licensed from Ipsen³⁶ subsidiary Epizyme³⁷ in China

• Approved and launched in the Macau Special Administrative Region in March 2023.
  
  Potential upcoming clinical and regulatory milestones for tazemetostat:

• Complete recruitment of a China bridging study in follicular lymphoma for conditional registration based on U.S. approvals in H2 2023 (NCT05467943).

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 IHCC patients with FGFR 2 fusion (NCT04353375).

Earlier stage investigational drug candidates

In addition to the seven drug candidates being developed in over 15 registration studies above, HUTCHMED is developing six further oncology candidates in early-stage clinical trials. These are HMPL-306, a highly selective oral inhibitor of IDH1/2³⁸ designed to address resistance to currently marketed IDH inhibitors; HMPL-760, a highly selective, third-generation oral inhibitor of BTK³⁹ with improved potency versus first generation BTK inhibitors against both wild type & C481S mutant enzymes; HMPL-295, a highly selective oral inhibitor of ERK⁴⁰ in the MAPK pathway⁴¹ with the potential to address intrinsic or acquired resistance from upstream mechanisms such as RAS-RAF-MEK; HMPL-653, an oral, highly selective, and potent CSF-1R inhibitor designed to target CSF-1R driven tumors as a monotherapy or in combinations; HMPL-A83, a differentiated, red blood cell sparing anti-CD47 antibody; and HMPL-415, a novel SHP2 allosteric inhibitor that entered clinical trials in July 2023.

Subject to data and consultation with the CDE⁴², several of these earlier stage drug candidates have potential to move into registration trials in the next 12 months.

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, as well as royalties on net sales.

Further clinical progress by Inmagene with two candidates discovered by HUTCHMED

• Inmagene initiating a global, Phase II trial in adults with moderate-to-severe atopic dermatitis with IMG-007, an anti-OX40 antibody. 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 BTK 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.

V. OTHER VENTURES

Other Ventures include our profitable prescription drug marketing and distribution platforms

• Other Ventures consolidated revenues increased by 57% (67% at CER) to $173.7 million (H1-22: $110.9m);
• SHPL⁴³ non-consolidated joint venture revenues increased by 11% (19% at CER) to $235.3 million (H1-22: $212.4m);
• Consolidated net income attributable to HUTCHMED from our Other Ventures increased by 5% (12% at CER) to $37.2 million (H1-22: $35.4m), which was primarily due to the net income contributed from SHPL of $35.1 million (H1-22: $33.6m); and
• We are exploring opportunities to monetize the underlying value of our SHPL joint venture including various divestment and equity capital market alternatives.

VI. 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 months of 2023. Measures were put in place to reduce the impact and, in the second quarter of 2023, these activities normalized.

VII. SUSTAINABILITY

At HUTCHMED, we are committed to a progressive journey as we continue to grow. This includes embedding sustainability into all aspects of our operations and creating long-term value for our stakeholders, including our staff, our communities and our shareholders. In April 2023, we published our 2022 Sustainability Report alongside our 2022 Annual Report. This year we continue to make progress in line with the commitments and outcomes outlined in the report, including achieving satisfactory progress to date towards the 11 short- to long-term sustainability goals and targets and following the recommended disclosure framework of the Task Force on Climate-related Financial Disclosures (TCFD) in line with the risks assessment. In the second half of 2023, we continue enhancing our climate risks action by conducting scope 3 emissions screening, introducing a digital data collection platform, and further strengthening our sustainability-related disclosures.

FINANCIAL HIGHLIGHTS

Foreign exchange impact: The RMB depreciated against the U.S. dollar on average by approximately 7% during the six months ended June 30, 2023, which has impacted our consolidated financial results as highlighted below.

Cash, Cash Equivalents and Short-Term Investments were $856.2 million as of June 30, 2023 compared to $631.0 million as of December 31, 2022.

• Adjusted Group (non-GAAP⁴⁴) net cash flows excluding financing activities in the first half of 2023 were $219.3 million (H1-22: -$110.9m) mainly due to receipt of a $400 million payment from Takeda; and
• Net cash generated from financing activities in the first half of 2023 totaled $5.8 million mainly due to the proceeds of bank borrowings (H1-22: net cash used in financing activities of $74.6m mainly due to the repayment of bank borrowings and purchases of ADSs⁴⁵ by a trustee for the settlement of equity awards).

Revenues for the six months ended June 30, 2023 were $532.9 million compared to $202.0 million in the six months ended June 30, 2022.

• Oncology/Immunology consolidated revenues increased 294% (301% at CER) to $359.2 million (H1-22: $91.1m) resulting from:
  • ELUNATE^® revenues increased 16% (25% at CER) to $42.0 million (H1-22: $36.0m) due to continued market share gain, comprising of manufacturing revenues, promotion and marketing service revenues and royalties;
  • SULANDA^® revenues increased 66% (79% at CER) to $22.6 million (H1-22: $13.6m) from our continuing marketing activities, increasing patient access after inclusion on the NRDL in January 2022 and long duration of treatment;
  • ORPATHYS^® revenues increased 10% (17% at CER) to $15.1 million (H1-22: $13.8m) after inclusion in the NRDL effective from March 2023 and comprises of manufacturing revenues and royalties;
  • TAZVERIK^® revenues were $0.4 million (H1-22: $0.1m) from further sales in the Hainan Pilot Zone;
  • Partnering revenue of $258.7 million was the first half recognized portion of the $400 million upfront payment from Takeda; and
  • Other R&D services income of $20.4 million (H1-22: $12.6m), primarily related to fees from AstraZeneca, Lilly and Takeda for the management of development and regulatory activities.
• Other Ventures consolidated revenues increased 57% (67% at CER) to $173.7 million (H1-22: $110.9m), mainly due to higher sales of prescription drugs. This excludes 11% (19% at CER) growth in non-consolidated revenues at SHPL of $235.3 million (H1-22: $212.4m).

Net Expenses for the six months ended June 30, 2023 were $364.3 million compared to $364.9 million for the six months ended June 30, 2022.

• Costs of Revenues increased by 52% to $208.3 million (H1-22: $137.3m), of which cost of revenues from our Other Ventures increased by 63% to $164.8 million (H1-22: $101.0m) due to the increasing sales of third-party prescription drug products, and cost of revenues from Oncology/Immunology increased by 20% to $43.5 million (H1-22: $36.3m) due to the increasing sales of ELUNATE^®, SULANDA^® and ORPATHYS^®;
• R&D Expenses reduced 20% to $144.6 million (H1-22: $181.7m), mainly as a result of the strategic prioritization of our pipeline. Our international clinical and regulatory operations in the U.S. and Europe incurred expenses of $55.6 million (H1-22: $83.6m), while R&D expenses in China were $89.0 million (H1-22: $98.1m);
• SG&A Expenses were $68.3 million (H1-22: $79.8m), 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 generated net income of $56.9 million (H1-22: $33.9m), which increased primarily due to higher interest income earned after receiving the $400 million Takeda upfront payment in April 2023 and foreign currency exchange gains.

Net Income attributable to HUTCHMED for the six months ended June 30, 2023 was $168.6 million (which include $258.7 million of the upfront payment recognized from Takeda) compared to Net Loss attributable to HUTCHMED of $162.9 million for the six months ended June 30, 2022.

• The net income attributable to HUTCHMED for the six months ended June 30, 2023 was $0.20 per ordinary share / $1.00 per ADS, compared to net loss attributable to HUTCHMED of $0.19 per ordinary share / $0.96 per ADS for the six months ended June 30, 2022.

FINANCIAL SUMMARY

Condensed Consolidated Balance Sheets Data

(in $’000)

	As of June 30, 2023		As of December 31, 2022
	(Unaudited)
Assets
Cash and cash equivalents and short-term investments	856,168		630,996
Accounts receivable	129,203		97,988
Other current assets	105,114		110,904
Property, plant and equipment	96,829		75,947
Investments in equity investees	37,740		73,777
Other non-current assets	72,443		39,833
Total assets	1,297,497		1,029,445
Liabilities and shareholders’ equity
Accounts payable	54,575		71,115
Other payables, accruals and advance receipts	227,212		264,621
Deferred revenue	149,440		13,537
Bank borrowings	40,147		18,104
Other liabilities	26,106		25,198
Total liabilities	497,480		392,575
Company’s shareholders’ equity	782,039		610,367
Non-controlling interests	17,978		26,503
Total liabilities and shareholders’ equity	1,297,497		1,029,445

Condensed Consolidated Statements of Operations Data

(Unaudited, in $’000, except share and per share data)

	Six Months Ended June 30
	2023			2022
Revenues:
Oncology/Immunology – Marketed Products	80,149			63,517
Oncology/Immunology – R&D	279,034			27,552
Oncology/Immunology consolidated revenues	359,183			91,069
Other Ventures	173,691			110,978
Total revenues	532,874			202,047
Operating expenses:
Costs of revenues	(208,324	)		(137,318	)
Research and development expenses	(144,633	)		(181,741	)
Selling and general administrative expenses	(68,263	)		(79,742	)
Total operating expenses	(421,220	)		(398,801	)
	111,654			(196,754	)
Other income/(expense), net	25,434			(3,882	)
Income/(loss) before income taxes and equity in earnings of equity investees	137,088			(200,636	)
Income tax (expense)/benefit	(2,730	)		4,215
Equity in earnings of equity investees, net of tax	35,110			33,549
Net income/(loss)	169,468			(162,872	)
Less: Net (income)/loss attributable to non-controlling interests	(917	)		11
Net income/(loss) attributable to HUTCHMED	168,551			(162,861	)
Earnings/(losses) per share attributable to HUTCHMED (US$ per share)
– basic	0.20			(0.19	)
– diluted	0.19			(0.19	)
Number of shares used in per share calculation
– basic	846,928,863			849,283,553
– diluted	866,990,610			849,283,553
Earnings/(losses) per ADS attributable to HUTCHMED (US$ per ADS)
– basic	1.00			(0.96	)
– diluted	0.97			(0.96	)
Number of ADSs used in per share calculation
– basic	169,385,773			169,856,711
– diluted	173,398,122			169,856,711

FINANCIAL GUIDANCE

Following the closing of the license with Takeda and having received from them the upfront payment of $400 million, we currently expect to recognize approximately $280 million in 2023.

We provide financial guidance for Oncology/Immunology consolidated revenues, reflecting expected revenue growth of our oncology products in China; R&D services income from our partners AstraZeneca, Lilly and Takeda; potential milestone payments on fruquintinib U.S. regulatory approval; and the above-mentioned recognition of the upfront payment from Takeda. We believe that we remain on track to meet the 2023 guidance provided in the announcement of our 2022 full year results on February 28, 2023.

	H1 2022 Actual	H1 2023 Actual	FY 2022 Actual	FY 2023 Guidance	Adjustments vs. Previous Guidance
Oncology/​Immunology consolidated revenues	$91.1 million	$359.2 million	$163.8 million	$450 – $550 million	Nil

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 call and audio webcast presentation scheduled today at 8 p.m. HKT / 1 p.m. BST / 8 a.m. EDT. 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.

HUTCHMED intends to host a Capital Markets Day in the fourth quarter of this year to further update the market on its progress following the strategy change, and to showcase the exciting pipeline of drug candidates.

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 and marketed in China. For more information, please visit: www.hutch-med.com or follow us on LinkedIn.

Contacts

Investor Enquiries
Mark Lee, Senior Vice President	+852 2121 8200
Annie Cheng, Vice President	+1 (973) 306-4490
Media Enquiries
Americas – Brad Miles, Solebury Strategic Communications	+1 (917) 570 7340 (Mobile) / bmiles@soleburystrat.com
Europe – Ben Atwell / Alex Shaw, FTI Consulting	+44 20 3727 1030 / +44 7771 913 902 (Mobile) / +44 7779 545 055 (Mobile) / HUTCHMED@fticonsulting.com
Asia – 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 are obtained will be obtained at any particular time, 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; 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 COVID-19. For further discussion of these and other risks, see HUTCHMED’s filings with the U.S. Securities and Exchange Commission, on AIM and on HKEX⁴⁶. 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).

This announcement in its entirety is available at: 

http://ml.globenewswire.com/Resource/Download/4a6834bd-1a7d-4ed8-83de-c19ac2fd523c

____________________

REFERENCES AND ABBREVIATIONS
1	Takeda = Takeda Pharmaceuticals International AG.
2	NDA = New Drug Application.
3	FDA = Food and Drug Administration.
4	PDUFA = U.S. Prescription Drug User Fee Act.
5	MAA = Marketing Authorization Application.
6	EMA = European Medicines Agency.
7	CRC = Colorectal cancer.
8	NRDL = National Reimbursement Drug List.
9	IHCC = Intrahepatic cholangiocarcinoma.
10	SHP2 = Src homology-2 domain-containing protein tyrosine phosphatase-2.
11	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.
12	R&D = Research and development.
13	SG&A expenses = Selling, general and administrative expenses.
14	AACR = American Association for Cancer Research.
15	ASCO = American Society of Clinical Oncology.
16	ASCO GI = ASCO (American Society of Clinical Oncology) Gastrointestinal Cancers Symposium.
17	EHA = European Hematology Association.
18	ICML = International Conference on Malignant Lymphoma.
19	In-market sales = total sales to third parties provided by Eli Lilly (ELUNATE®), AstraZeneca (ORPATHYS®) and HUTCHMED (ELUNATE®, SULANDA®, ORPATHYS® and TAZVERIK®).
20	Lilly = Eli Lilly and Company.
21	NMPA = National Medical Products Administration.
22	PMDA = Pharmaceuticals and Medical Devices Agency.
23	NSCLC = Non-small cell lung cancer.
24	MET = Mesenchymal epithelial transition factor.
25	EGFR = Epidermal growth factor receptor.
26	PRCC = Papillary renal cell carcinoma.
27	VEGFR = Vascular endothelial growth factor receptor.
28	PD-1 = Programmed cell death protein-1.
29	RCC = Renal cell carcinoma.
30	FGFR = Fibroblast growth factor receptor.
31	CSF-1R = Colony-stimulating factor 1 receptor.
32	Syk = Spleen tyrosine kinase.
33	AIHA = Autoimmune hemolytic anemia.
34	ITP = Immune thrombocytopenia purpura.
35	PI3Kδ = Phosphoinositide 3-kinase delta.
36	Ipsen = Ipsen SA, parent of Epizyme Inc.
37	Epizyme = Epizyme Inc., a wholly owned subsidiary of Ipsen SA.
38	IDH = Isocitrate dehydrogenase.
39	BTK = Bruton’s tyrosine kinase.
40	ERK = Extracellular signal-regulated kinase.
41	MAPK pathway = RAS-RAF-MEK-ERK signaling cascade.
42	CDE = Center for Drug Evaluation.
43	SHPL = Shanghai Hutchison Pharmaceuticals Limited.
44	GAAP = Generally Accepted Accounting Principles.
45	ADS = American depositary share.
46	HKEX = The Main Board of The Stock Exchange of Hong Kong Limited.

FAQ

What is the ticker symbol for HUTCHMED?

The ticker symbol for HUTCHMED is HCM on Nasdaq and 13 on HKEX.

What is the revenue growth reported by HUTCHMED?

HUTCHMED reported a 164% revenue growth (173% CER), reaching US$533 million.

What is the net income of HUTCHMED?

HUTCHMED reported a net income of US$169 million, which includes US$259 million of the upfront payment recognized from Takeda.

What strategic progress did HUTCHMED make with Takeda?

HUTCHMED made strategic progress with Takeda through a global partnership, closing an exclusive worldwide license for fruquintinib outside China.

What are the upcoming milestones for HUTCHMED?

HUTCHMED is expecting to complete the NDA submission to the Japanese PMDA for fruquintinib in 2023 and report top-line results from the China registration Phase II study for the treatment of follicular lymphoma for tazemetostat in late 2023.