According to the report released by swhy on the Intelligent Finance APP, first coverage of hutchmed (china) (00013), with a 'buy' rating, considering the commercialization of the company's core products, is expected to achieve profitability in 2025, with a target price of 35.4 Hong Kong dollars. Currently, the company has obtained domestic market approval for three small molecule innovative drugs, including fruquintinib (Elunate), surufatinib (Sutent), and savolitinib (Volishta), with fruquintinib successfully entering the international market and receiving FDA approval for listing in November 2023. In addition, there are 13 oncology drugs in the pipeline currently in clinical stages.

Shenwan Hongyuan's main points are as follows:

Fruquintinib was approved for listing in the USA, accelerating commercialization overseas.

Fruquintinib, a small molecule VEGFR1, 2, and 3 oral inhibitor self-developed by the company, obtained NMPA approval for listing in September 2018 for the treatment of third-line mCRC patients. In terms of overseas markets, fruquintinib (Fruzaqla) received FDA approval for listing in November 2023, becoming the first and only approved highly selective inhibitor targeting three VEGF receptors for the treatment of refractory metastatic colorectal cancer in the USA. Additionally, fruquintinib obtained EU approval for listing in June 2024. In January 2023, the company reached a collaboration agreement with Takeda for the development, commercialization, and production of fruquintinib globally (excluding mainland China, Hong Kong, and Macau), whereby Takeda will be responsible. Hutchmed (china) received an initial payment of 0.4 billion USD, up to 0.73 billion USD potential milestone payments, and sales royalties. The overseas sales of fruquintinib in 2023 were approximately 15 million USD, with sales in 1H24 rapidly increasing to 0.131 billion USD. The bank believes that with the overseas approval of fruquintinib, there is hope for further sales growth.

Savolitinib is expected to submit a market application to the FDA.

Savolitinib was conditionally approved by NMPA in 2021 for the treatment of locally advanced or metastatic NSCLC patients with MET exon 14 skipping mutation, becoming the first domestically approved selective MET inhibitor. Currently, the marketing and promotion of savolitinib in the Chinese market is handled by the partner Astrazeneca. Based on the confirmation study of savolitinib in Phase IIIb, the new indication for the first-line and second-line treatment of MET exon 14 skipping NSCLC was accepted by NMPA in March 2024 for listing, with the potential to expand to first-line patients upon successful approval. In addition, the global Phase II SAVANNAH study completed patient enrollment in February 2024 for the treatment of refractory EGFRm/MET+ NSCLC patients in the second/third-line setting. If progress is smooth, the partner Astrazeneca is expected to submit a marketing application to the FDA by the end of 2024. If approved, it is expected to become the company's second product to be listed overseas. The company is conducting seven registration studies on savolitinib, including three global studies and four China studies, mainly covering non-small cell lung cancer, gastric cancer, and renal cancer.

Actively laying out other innovative pipeline.

Sulopiclib, a self-developed oral spleen tyrosine kinase (Syk) inhibitor by the company. In January this year, the second-line treatment of immune thrombocytopenia (ITP) with sulopiclib was accepted by the NMPA. In addition, the company acquired the Greater China rights of tazemetostat (EZH2 inhibitor) in 2021. Currently, the new drug application for tazemetostat (third-line follicular lymphoma) was accepted by the NMPA in July 2024. Moreover, the company initiated the RAPHEL Phase III clinical trial of HMPL-306 (IDH1/2) in May 2024 for the treatment of relapsed/refractory acute myeloid leukemia (AML) patients with IDH1 and/or IDH2 mutations. The industry believes that with other pipelines entering the late stage, there is potential to further enrich the company's product portfolio.

Risk Warning: Overseas commercialization of core products lower than expected; intensified industry competition, commercialized product pricing lower than expected; slower-than-expected progress in core pipeline product research and development.