On November 15, Biotech and Huang Pharmaceutical, the "richest man in Hong Kong" Li Ka-shing, announced the company's strategic adjustments: 1) giving priority to promoting the registration of late-stage pipelines and promoting the listing of near-commercialization pipelines, especially the global registration of fruquintinib; 2) Some early pipelines will not be prioritized for internal development, and some projects will seek external business opportunities; 3) Seek potential external partners to commercialize
their drugs outside of China.
In the context that the capital winter of biomedicine has not yet passed, many media regard it as a signal
of "no money".
From the perspective of the value of Hutchison Pharmaceutical, this view may be too one-sided, on the contrary, it can reflect that the company is "taking precautions" and is currently at a critical node
At a time when the industry is increasingly considering Biotech's overseas expansion and performance as an important indicator to judge its strength, the internationalization and commercialization results of Hutchison Pharma are worth looking forward to
01 The next big item that is expected to go to sea - fruquintinib01 The next big item that is expected to go to sea - fruquintinib
The most notable pipeline in Hutchison's hands is fruquintinib, a VEGFR inhibitor with the best potential in its class, which is likely to become another blockbuster product after BeiGene's zebratinib
In September 2022, Hutchison announced the clinical results of international multicenter phase III of fruquintinib in the treatment of refractory metastatic colorectal cancer, and compared with placebo, fruquintinib therapy achieved a statistically significant and clinically significant prolongation
in OS (overall survival) and PFS (progression-free survival).
From the perspective of the clinical design of FRESCO-2, it laid a solid foundation for fruquintinib to be approved by the FDA: 1) the tumor gold standard OS index was used as the primary endpoint, and the clinical data showed significant efficacy; 2) The 691 patients enrolled were mainly from European and American countries (18% in the United States), with rich population diversity; 3) Fruquintinib has been eligible for fast-track in the United States and has initiated full preclinical communication
with regulatory agencies.
At present, fruquintinib for the treatment of third-line colorectal cancer has been approved in China in November 2018 (covered by medical insurance in 2020), and it and regorafenib are the only second-line drugs
approved and included in medical insurance for the treatment of colorectal cancer.
Although fruquintinib was launched later than regorafenib, it surpassed regorafenib
in the market share of 30 large domestic third-class hospitals with better efficacy and safety.
How to foresee the sales potential of fruquintinib? Regorafenib is believed to be a good reference
At present, regorafenib is the standard third-line therapy for colorectal cancer recommended by major guidelines at home and abroad, and about 50% of patients in clinical practice have used regorafenib
in third-line therapy.
In 2012, Bayer's regorafenib for the treatment of metastatic colorectal cancer was approved by the FDA; In April 2017, regorafenib was approved as a second-line treatment
for liver cancer.
From 2017 to 2018, the sales revenue of regorafenib was 357 million US dollars, and from 2019 to 2021, the sales revenue of regorafenib was 458 million and 556 million US dollars
Since the domestic listing, regorafenib has burst out of strong potential, and the bidding database of Pharmarong Cloud shows that the sales of regorafenib in 2019-2020 are 400 million and 600 million yuan, respectively, and 713 million yuan in the first three quarters of 2021, and nearly 1 billion yuan in 2021, which is still on the rise
Fruquintinib, as the Me-Better of regorafenib, is expected to surpass regorafenib
in terms of peak sales.
in terms of peak sales.
Regorafenib's Me-Better is expected to surpass regorafenib
in terms of peak sales.
In terms of clinical layout, in addition to the third-line colorectal cancer indications, second-line gastric cancer and second-line endometrial cancer have entered the third clinical phase, and there are also many solid tumor indications clinical; In addition, fruquintinib has a good market potential in the United States, according to the American Cancer Society estimates, in 2022, there will be about 106,200 new cases of colorectal cancer in the United States, and colorectal cancer is the second leading cause
of cancer death in the United States.
It is also worth noting that as a new generation of VEGFR inhibitors, fruquintinib solves the toxicity of the first generation of products, so that it can be combined with PD-1 to deploy multiple solid tumor cancers, and is expected to hit a peak
of 7-800 million US dollars in the future with breakthroughs in overseas markets.
02 Hutchison Pharmaceutical's pipeline support02 Hutchison Pharmaceutical's pipeline support
Hutchison Pharmaceutical's pipeline has differentiated characteristics, especially in the field of hematological tumors
In addition to fruquintinib, the company also has two innovative drugs commercialized in China, namely the multi-target inhibitor sulfatinib (VEGFR1/2/3, FGFR1, CSF-1R), and the MET inhibitor sevotinib, which avoids the potential risk
of single product to a certain extent.
Sulfatinib is currently a multiplex target inhibitor for the treatment of neuroendocrine tumors (NETs), which can be divided into pancreatic (10%) and non-pancreatic (90%), and there are currently fewer non-chemotherapy drug options available for NETs, and sulfatinib is the only drug
that can treat all types of advanced NETs.
Neuroendocrine tumors are different from general tumors (the incidence is low, 71,300 new cases in 2020), and their patients have a longer course of disease (some up to 20 years), so neuroendocrine tumors have a lot of existing patients
According to JAMA
A 2017 retrospective study by Oncology showed a significant increase in the incidence of neuroendocrine tumors in the United States; According to Sullivan, the global market size of NETs therapeutics will increase from $6 billion to $11.
At present, the only cure for neuroendocrine tumors is still surgical resection, and there are fewer non-chemotherapy drugs to choose from for unresectable tumors, including growth hormone analogues, molecularly targeted drugs, and radiation therapy
There are only two classes of drugs in targeted therapy, namely MKIs inhibitors (sulfatinib, sunitinib) and mTOR inhibitors (everolimus).
Compared with the clinical data of everolimus, sunitinib and sulfatinib, it can be found that the median progression-free survival (mPFS) of the sulfatinib control group is shorter, which means that the advanced patients enrolled are more serious, and the mPFS excellent data similar to everolimus and suvatinib are still obtained; At the same time, sulfatinib has better performance
in terms of safety.
Competing sunitinib peaked at $1.
236 billion in global sales in 2012 and is mainly used to treat adult patients
with gastrointestinal stromal tumors, renal cell carcinoma and pancreatic neuroendocrine tumors.
At present, sulfatinib has been approved for two indications for pancreatic and non-pancreatic neuroendocrine tumors in China, and is also carrying out clinical trials for multiple indications; In terms of internationalization, although it was rejected by the FDA due to the diversity of the clinical enrollment population, it is still possible to obtain clinical approval for supplementary clinical trials in the future, and it is not impossible to surpass sunitinib
in the future.
Servotinib is a MET (interstitial epithelial conversion factor) inhibitor, and abnormal activation of MET has been found in the industry to be highly associated with a variety of solid tumors, including kidney cancer, lung cancer, gastric cancer, colorectal cancer, etc
At present, Hutchison Pharmaceutical's sevotinib is the only approved MET inhibitor in China, and similar competing products tepotinib and capmatinib are only listed overseas, and sevotinib has been approved for MET exon 14 jumping non-small cell lung cancer
It is worth noting that the market potential of MET inhibitors represented by sevotinib is good, which targets the huge lung cancer market, and 4-6% of new non-small cell lung cancer patients have MET gene mutations, and a considerable number of EGFR-resistant patients also have MET mutations, Sullivan data indicates that the MET inhibitor market will increase from $230 million in 2020 to $4.
In 2011, Hutchison Pharma reached an agreement with AstraZeneca to grant the global rights of sevotinib, and as of April 2022, Hutchison Pharma has obtained an authorization of US$85 million (total transaction amount of US$140 million).
Savotinib has shown slightly inferior efficacy to terpotinib and capmatinib in clinical practice in China, but the company explained that the patients it enrolled are older and worse, and the efficacy can be comparable to competing products under balance (head-to-head or more clinical proofs may be required overseas in the future); However, the advantage of sevotinib is its excellent safety (nephrotoxicity), and at the same time, it has a certain first-mover advantage in China and is bound to AstraZeneca, and there is still a chance to obtain good performance
Competing tepotinib and capmatinib are close to or entering the commercialization stage, and are expected to pose a certain threat or impact
on sevotinib in the future.
Although the company has formulated a strategy to focus on the late-stage pipeline, it should not be overlooked that in addition to three commercial products that have been listed, Hutchison Pharma actively deploys in the field of hematological tumors, and also has 6 clinical-stage small molecule targeted drugs, which reflects its R&D capabilities
to a certain extent.
03 The increase in losses cannot cover up the gradual improvement of commercialization03 The increase in losses cannot cover up the gradual improvement of commercialization
In the first half of 2022, Hutchison Pharmaceutical's total revenue was US$202 million, an increase of 28%
4 million in the first half of 2021.
Among them, product sales revenue is mainly contributed by three commercialized innovative drug products:
● Fruquintinib market sales were $50.
4 million, up 26% from $40.
1 million in the first half of last year;
● Salvatinib market sales of US$13.
6 million (included in medical insurance in January 2022).
69% increase from last year's $8 million;
● Servotinib market sales of $23.
3 million (sales starting in the second half of 2021);
Compared with the revenue situation in 2021 (fruquintinib US$ 71 million, sulfatinib US$ 11.
6 million, and sevotinib US$ 15.
9 million), all innovative drug products showed strong growth momentum
Despite the rapid progress of commercialization, it is still difficult for Hutchison Pharma to break even
in the past two years.
This is because the expenditure of Hutchison Pharma continues to increase, mainly due to R&D expenditure
From 2019 to 2021, the company's R&D expenditure was US$138 million, US$175 million and US$299 million, respectively, and the proportion of R&D investment in revenue increased from 76.
75% in 2020 to 84%
The market began to worry
about Hutchison's cash flow.
In the first half of 2022, Hutchison Pharmaceutical's cash and equivalents were US$826 million, and if the R&D intensity in 2021 is maintained, it is expected to support another two and a half
He Jun, CEO of Hutchison Pharmaceutical, has publicly stated: "In the future, the company's R&D investment will continue to increase, and it hopes to achieve breakeven
" ” There is undoubtedly a time lag
between the timing of the slogan and the above speculation of running out of cash.
But in fact, the situation of Hehuang Medicine is not as "dangerous"
as the media portrays.
as the media portrays.
Among the three current innovative drugs, the domestic commercialization rights of fruquintinib are cooperated with Eli Lilly (Eli Lilly pays 70% of the commercial sales), the full global rights and interests of sulfatinib are retained, and the global commercialization rights of sevotinib are granted to AstraZeneca.
These three drugs are all laid out overseas clinical, especially fruquintinib is the most expected to be the first to achieve overseas and is expected to be licensed
OUT can bring huge benefits
to the company.
Servotinib has worked with AstraZeneca early on, and will be able to recover more milestones and post-marketing sales share
in the future under overseas clinical norms and smooth conditions.
Sulfatinib was rejected by the FDA in the early stage, and subsequent supplementation of phase III clinical trials may take some time
At the same time, it is worth noting that the three drugs have opened a number of clinical trials in China, and a number of major indications have been in the registration clinical stage, and the future domestic sales revenue can be verified
● Behind Hutchison is Li Ka-shing, Hong Kong's richest man, and in addition to cash equivalents, the company has an untapped bank credit line of US$177.
● In the past, Hutchison Pharma has completed three listings, and does not rule out subsequent fundraising through its return to the Science and Technology Innovation Board;
In the future, if furquintinib goes smoothly at sea, it will become a high probability event
for Huang Medicine to achieve breakeven in advance.