Chi-Med revenue ahead, but investments kill most income

Hutchison China MediTech reported its interim results for the six months to 30 June on Tuesday, with group revenue up 27% to $104.5m, from $82.5m.

The AIM-traded firm said net income attributable to Chi‑Med was $0.5m, significantly down from $15.9m a year ago, reflecting a sharp increase in clinical investment.

During the period, Chi-Med had seven drug candidates in 25 clinical trials, up from 27, including four pivotal Phase III studies.

Its board said it is planning to publish proof-of-concept or pivotal trial data on four drug candidates at scientific meetings through Q1 2017.

Total consolidated sales on its commercial platform were up 48% to $82.3m, from $55.6m, with total sales of non-consolidated joint ventures up 9% to $249.6m from $229.8m.

Chi-Med’s total net income attributable to itself from the commercial platform was up 12% to $22.1m, from $19.8m, and a significant property-related payment is expected to come in H2 2016.

During the half the company also completed its Nasdaq listing, raising net proceeds of $95.9m.

Available cash resources stood at $197.5m at group level as of 30 June, which the board said includes cash and cash equivalents, short-term investments and unutilised bank facilities.

Post-period end. Chi-Med also amended its collaboration with AstraZeneca and will now be investing $50m, mainly over three years, to accelerate savolitinib global development in return for a 5% point increase in tiered royalty range.

"Chi-Med has once again made very considerable progress at both the operating and strategic levels,” said Chi-Med chairman Simon To.

“All aspects of our innovation platform's risk-balanced, innovative drug pipeline have moved forward, including progress in aligning with US and European regulatory authorities in end-of-Phase II meetings on savolitinib and completing enrollment of our first Phase III study on fruquintinib.

“We have also made great progress in the clinic on sulfatinib, epitinib, HMPL-523, HMPL-689 and theliatinib, all of which are also potential global first-in-class or best-in-class drug candidates,” To added.

He said the company’s pragmatic approach to finance and risk management has enabled it to build its drug pipeline over twelve years.

“We now have multiple shots at success with four pivotal studies underway today, and three more likely to initiate by H1 2017, on a diversified group of drug candidates.

“The results of these pivotal studies will emerge during 2017-2019, and we believe that if they prove successful, substantial benefits can be created for patients and shareholders alike,” To explained.

“Consequently, we view the future with great confidence."