Company event: On July 31, 2024, Hutchison Pharmaceutical released its 2024 interim financial report. The comprehensive revenue guideline for the full year of 2024 is 0.3 billion to 0.4 billion US dollars, of which 0.1687 billion US dollars were in the first half of 2024, and oncology product revenue increased 59% (64% at a fixed exchange rate). Revenue costs fell 14% to $0.18 billion, R&D expenses decreased 34% to $95.3 million, sales and administrative expenses were $57.8 million ($68.3 million in the first half of 2023), and net revenue for the first half of 2024 was $25.8 million. The cash balance is approximately $0.8 billion.

Revenue split: Fruquintinib's sales in the US market in the first half of 2024 were $0.13 billion, a strong increase since launch. Sales of furoquintinib in China increased 8% (13% at a fixed exchange rate) to $61 million.

Surufatinib increased 12% (17% at a fixed exchange rate) to $25.4 million. Sales of sevotinib increased 18% (22% at a fixed exchange rate) to $25.9 million. $33.8 million in down payment, milestone, and R&D service revenue from Takeda.

Fruquintinib sales are strong, overseas space is large, and new domestic indications are expected to be approved.

1) In January 2023, Hehuang Pharmaceutical authorized Takeda Pharmaceuticals' overseas interest in fruquintinib. A listing application was submitted in Japan in September 2023, and we expect approval this year. In November 2023, the FDA approved it for listing in the US. Approved by the European Commission in June 2024. Listing applications have been submitted in more than a dozen countries and regions.

2) Many domestic indications are being expanded, and major indications are expected to be approved. In April 2023, a supplementary application for new indications for second-line gastric cancer was accepted; in early 2024, the marketing application for a new Chinese drug with cindilizumab for the treatment of advanced endometrial cancer was accepted and included in priority review; registered clinical enrollment with PD-1 for second-line renal cell carcinoma has been completed, and it is expected that the top-line results of the phase II/III registration study FRUSICA-2 (NCT05522231) will be announced around the end of the year.

The company's catalytic events are intense, and the innovation pipeline ushered in a harvest period.

1) Sevotinib (c-Met inhibitor): 7 registered studies, 3 of which are global. In March 2024, supplementary applications for the treatment of primary treatment and treatment of MET exon 14 non-small cell lung cancer were accepted by the CDE. For NSCLC indications of second-line MET amplifying EGFR-TKI resistance, it is expected that the recruitment of patients for the SACHI study (China Phase III) will be completed by the end of 2024; around the end of 2024, a new drug marketing application will be submitted to the US FDA based on the SAVANNAH study (global, if positive results are obtained).

2) Solepinib (SYK inhibitor): The results of the ESLIM-01 study were presented simultaneously at the “Lancet Hematology” and EHA [38] annual meetings. It is expected that a dose exploration study (NCT06291415) for the treatment of immune thrombocytopenia () will be initiated in mid-2024; and the review of the new drug marketing application by the National Drug Administration based on the ESLIM-01 study will be completed around the end of the year.

3) Tazepastat (EZH2 inhibitor): In May 2024, tazepam was approved for the treatment of relapsed/refractory follicular lymphoma in Hong Kong, China; in July 2024, the new drug marketing application was accepted by the State Drug Administration and included in priority review. It is expected that the review of China's new drug marketing application will be completed in mid-2025.

4) HMPL-306 (IDH1/IDH2 oral dual inhibitor): Initiate the RAPHAEL China Phase III study to treat relapsed/ refractory acute myeloid leukemia (NCT06387069) with IDH1 and/or IDH2 mutations.

5) Surufatinib (Suteda): A phase II/III study to treat primary metastatic pancreatic ductal adenocarcinoma has been initiated.

Reviews and profit forecast: We believe that as the company's strong cost control and overseas furoquintinib sales continue to exceed expectations, the company's profit prospects are gradually becoming clear. At the same time, the company has many catalysts and multiple registered clinical trials for multiple products. At the same time, new products such as Syk and EZH2 are expected to be approved. The company's oncology/immunity business revenue for 24-26 is 0.388, 0.57, 0.774 billion US dollars, and the total estimated revenue is 0.636, 0.805, 0.997 billion US dollars, and the growth rate is -24%. 26.7%, 23.8%, 24-26 net profit of -0.01, 0.058, 0.17 billion US dollars; maintaining the “buy” rating

Risk warning: risk of clinical development failure, risk of deteriorating competitive landscape, risk of sales falling short of expectations, industry policies, etc.