Edison issues ADR update on Hutchison China MediTech (HCM)

LONDON, UK / ACCESSWIRE / August 14, 2019 / Hutchison China MediTech (NASDAQ:HCM) continues to make progress towards its global strategic aspirations. The interim results highlight the opportunities for Elunate (fruquintinib) capsules in China, with potential inclusion in China’s exclusive NRDL list in Q419, and the breadth of clinical and regulatory catalysts that lie ahead for multiple R&D assets. Surufatinib’s China NDA submission is on track (Q419) and approval in NET would seal HCM’s position as a premier, innovative, China-based oncology company. The years 2021-22 are pivotal; partner AstraZeneca (AZN) could launch savolitinib in China for NSCLC (MET exon 14) and it could become HCM’s first asset to launch globally (2022) in combination with Tagrisso for NSCLC (c-Met +ve). Given the recent underperformance of the shares and the real potential for HCM to become a global oncology player, we believe it is appropriate to revisit the shares. We value HCM at $5.7bn.

We value HCM at $5.7bn ($42.62/ADS) vs $5.6bn previously. We make no changes to our product forecasts, but have trimmed R&D costs for 2019 (phasing costs into 2020) to reflect FY19 guidance, rolled forward our model, and updated for FX and net cash of $237.3m at 30 June 2019.

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