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Edison Issues ADR Outlook on Hutchison China MediTech (HCM)

Monday, 06 July 2020 12:55 PM

Edison Investment Research Limited

LONDON, UK / ACCESSWIRE / July 6, 2020 / Hutchison China MediTech (NASDAQ:HCM) is on the brink of global launches of two assets from its internally developed oncology portfolio. In 2022 we expect US launches of surufatinib (broad NET indication) two years earlier than forecast as well as savolitinib (NSCLC). Recently the FDA granted fast-track designation to fruquintinib in mCRC and we forecast global launch in 2023. In China, HCM has laid the foundations to capitalize on the slew of additional novel oncology drugs (expected by end 2021). HCM is well funded (following the recent $100m equity investment from General Atlantic, plus warrants granted for an additional $100m in 18 months) as it accelerates the global development of its unpartnered assets and expands its global commercial outreach. Beyond 2024 we expect sustainable profitability and margin expansion. Our increased valuation is $6.3bn.

We value HCM at $6.3bn ($44.49/ADS) vs $5.9bn previously. The material changes to our valuation are the surufatinib and savolitinib peak forecast upgrades. We have adjusted our product timelines across the broader pipeline to reflect current progress and revisited our R&D and S&M costs accordingly.

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SOURCE: Hutchison China MediTech

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