Hutchison China Meditech: Jewels In The Crown
Edison | Jun 01, 2018 02:10AM ET
Key near-term value drivers include newsflow from partnered assets savolitinib (AZN globally) and fruquintinib (LLY in China). By year end, we anticipate the China FDA to approve fruquintinib (3L CRC). The molecular epidemiology study (MES) data on savolitinib in PRCC could support a US NDA submission (possible breakthrough therapy designation, BTD). Both products have blockbuster potential; as combination therapies in cancer drive overall uptake of targeted therapies. Beyond this we expect progression in Hutchison China MediTech Ltd (NASDAQ:HCM) wholly owned late stage oncology assets to reach value inflection points over the next few years. We have extensively reviewed our financial forecasts and increase our valuation to £71.0/share or $6.4bn.
Innovation platform approaching commercialisation
We expect fruquintinib to be approved and launched in China (Colorectal Cancer) late 2018. Savolitinib’s potential US approval for PRCC and launch by partner AstraZeneca would be of great significance as the first internally developed HCM asset to launch worldwide. We have increased our peak sales forecasts for both; driven by the opportunities in non-small cell lung cancer (NSCLC) where multiple positive combination data readouts from savolitinib and fruquintinib highlight a widening of the eligible patient population that can receive these treatments.
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