Hutchison China MediTech Ltd (HCM) Q2 2021 Earnings Call Transcript

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Hutchison China MediTech Ltd (HCM 0.86%)
Q2 2021 Earnings Call
Jul 28, 2021, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, welcome to this conference. I now hand over to Christian Hogg, CEO of HUTCHMED. Sir, please go ahead.

Christian Hogg -- Executive Director and Chief Executive Officer

Thank you very much, Greg. Welcome, everybody, to the first half results presentation for HUTCHMED for H1 2021. I'm joined on this call by my colleagues, Dr. Wei-guo Su, our Chief Scientific Officer; Dr. Marek Kania, our Managing Director for HUTCHMED International, our Chief Medical Officer in the United States; Johnny Cheng, our Chief Financial Officer; and Mark Lee, our Senior Vice President of Corporate Finance and Development.

So I'm looking forward to taking you through the presentation today. So if you could move to the next slide, please, Slide 3. The agenda today, what I'm going to do is I'll take you through this presentation, hopefully, in about 35 minutes. It will be relatively rapid fire, updating on everything. And then we'll open up for maybe half an hour of Q&A, at which point I'll involve the broader team in answering some of your questions.

So the agenda today, we have, first of all, overview and highlights of what's happened in the first half, some focus on our regulatory achievements and our commercial operation progress, some key pipeline updates, a brief summary of the upcoming events over the balance of the year and into 2022 and then a brief look at the financial picture for the company. Slide 4, please.

So now on to Slide 5. This is a slide that gives a high level sort of summary of what we're trying to do as a company. HUTCHMED is very focused on trying to build a global science-focused biopharmaceutical company. We are a very proud China-based company but our vision and our ambition is very much global. You can see the four kind of key areas that we're working in. The first in blue there, is drug discovery and manufacturing. We base all of our drug discovery and manufacturing operations in China at this time with world-class people and world-class facilities that are able to create novel drug innovation for the global market and then supply that novel drug innovation to the global market. So our base in China of discovery and manufacturing, I think, is very central to our global strategy.

The second line there you see in red is the clinical development and regulatory operations that we've built out. We've always been well positioned in China but over the last 3 to 4 years now, we've built out a very strong team in the United States that's able to cover Europe and Japan and manage clinical development of our assets and regulatory operations of our assets in these ex-China markets. So that's a critical aspect to our ability to bring our innovation to the global market is to be able to effectively develop those programs and interact with the regulatory authorities in each of those international markets.

In the green line there, you see we prioritized building out our own in-house commercial operations in key markets. Really, the two key markets for HUTCHMED are China and the United States. These markets represent about half of the global pharmaceutical market. And we want to determine our own success in those markets in terms of commercialization. So we're building our commercial teams very rapidly in both of those markets. And outside of China and the United States, you can see in Line 4 there, we'll build partnerships to bring our products to those, what we would classify as noncore markets today. So that's our vision, our ambition, our platform; really globally facing with very strong foundations in our core markets.

Slide 6 please. Next slide please. Thank you. So the pipeline as it sits today is increasingly broad. The first three products on Slide 6, you can see surufatinib, fruquintinib, savolitinib, all of which now are approved in China and are being commercialized. Coming quickly behind them are kind of mid-stage programs, 689 and 523 in hematological malignancies. We're very excited on 689 to bring it into registration studies this year already in follicular lymphoma and marginal zone lymphoma and 523 is not far behind.

Behind those mid-stage or entering into late-stage assets, we have seven programs that are in earlier stage development.

So our FGFR inhibitor, the IDH1/2 dual inhibitor in development inside China and outside of China. Our ERK inhibitors just started development in China this year. And recently, actually within the last week, we got clearance for our IND on our third-generation BTK inhibitor, which will start development hopefully in the United States later this year and in China also. And then coming behind that, two programs where we target to submit INDs later this year, the CSF-1R selected CSF-1R small molecule and our first large molecule, our CD47 antibody that we intend to use in combinations with many of our other assets.

So it's a broad portfolio. It's moving quite quickly. And it's really one of the broader portfolios in oncology for most Chinese biotechs. And certainly, probably the biggest advantage that we have is the third column from the right, which details the rights, who owns the rights of these assets. And as you can see, HUTCHMED owns the worldwide rights to almost everything aside from savolitinib, where AstraZeneca has the commercial rights worldwide.

So moving on to the next slide, Slide 7. So the first half highlights, on the regulatory commercial side, our first half revenues in oncology/immunology were up 161% to USD42.9 million, which is encouraging given our commercial team, really that was the first 6-month period that our commercial team had been in place marketing SULANDA and ELUNATE. ORPATHYS, as everybody knows, was very recently approved and 3 weeks after approval was launched in China.

ELUNATE sales up 186% in market sales. That is to a little bit over USD40 million. SULANDA approved in extra-pancreatic and pancreatic NET. So now it's a therapy in China that's available to patients with any type of neuroendocrine tumor, which is a first. And then finally, the US NDA acceptance and the European MAA acceptance were pretty big steps that were achieved by a terrific international organization that is managing both of those programs in the US and Europe.

On the pipeline, in the center, we've got savolitinib, preparation has been underway to start five new global and China registration studies this year. We just announced today the start of our gastric cancer Phase II. We hope, subject to the first part of that study being positive that, that could be moved into -- be used as a registration study but that's all to be determined. But five registration studies moving now, hopefully, over this year to build off of the first approval for savo.

We've announced some terrific PD-1 combo data for surufatinib and fruquintinib at ASCO this year, and we'll be entering into registration studies for combos with both of those assets later this year. The hematological malignancy portfolio is transitioning now. So 689 is now in late stage in China in two indications. And that early stage pipeline is moving really rapidly and getting us all quite excited about the potential of those assets, not just on their own but also in combination with our existing programs.

So this pipeline approach we have of building a portfolio of targeted therapies that can be combined with each other is really starting to play out now. On the organizational progress, the international R&D organization and US commercial team continue to build out preparing for surufatinib launch, hopefully, next year, early next year. But it's not just surufatinib, we've got fruquintinib following in 2023 and also 689 we believe has great potential for a rapid pathway to approval in the US.

So we're building that team for a number of assets. The China commercial team is scaling rapidly up to now 540 people, by the end of this year it'll be over 600 people. We're building a flagship manufacturing facility. It's going to increase our small molecule capability by five-fold, over fivefold and also establish our large molecule CMC platform. And finally, on the cash side, we're currently sitting on cash and resources of about USD1.2 billion as a result of our Hong Kong listing recently and also the divestment of our over-the-counter drug business. Next Slide, please, 8.

Number 9. Thank you. So regulatory achievements, I won't repeat myself, but you can see here two approvals for SULANDA, one in early '21, one just recently in June; ORPATHYS' approval in June and the NDA submission in the US and the MAA submission in Europe all happened really in the first half of this year. So a lot of activity.

Next slide, please, Slide 10. So a brief update on the commercial side. On the left-hand side of Slide 10, you can see that the oncology team really has built up rapidly in the last 18 months. I mean, 18 months ago, we had 70 people in our oncology commercial team. Now it's 540. So it's a young organization. It's been growing very rapidly. It is operated by some very high-quality individuals with deep experience in operating large commercial teams across China. We're now covering 2,500-plus oncology hospitals and clinics and over 29,000 oncology physicians. So it's a deep pool of commercial capability. It is supported by two of our other affiliates, which have deep commercial infrastructure in China as well. So HUTCHMED has always been a capable commercial operator in China, and now oncology being our focus is really coming to the fore. On the right-hand side of the slide, you can see there the scale up, we'll scale up even quicker than is shown in that bar chart if the business justifies it. There's no limitations as to how fast we can grow. If the business is growing, we'll build out the team to support it. But we have high expectations on productivity. So the last bullet point there, you can see we're targeting to reach about USD400,000 productivity per year by 2023 for our sales reps. So we're not just blindly expanding. There are productivity targets involved.

Next slide, please, Slide 11. So fruquintinib, yes, it's been a terrific first half for fruquintinib. We took over last October. You can see the red bars here are HUTCHMED involvement. So on the left there, you can see in 2020, the sales of ELUNATE were $33 million. We took over the last quarter did about $10.2 million in sales. So relatively modest growth last year until we took over. But if you look at the first half there, we've seen almost a tripling of the business, 186% growth from $14 million in the first half last year to $40.1 million in in-market sales this year, of which we consolidate $29.8 million, so about 75% roughly of the sales, as we've always indicated. The sales team is doing a great job. We've run over 5,000 educational or scientific events in the colorectal cancer space in the first half of this year. It's a big patient population, 83,000 new patients in third line. And we estimate that we treated about 9,000 patients in the first half. So that's probably a little bit over 20% -- 22%, 23% penetration. So there's still a lot of upside, yes, but it is a competitive space, but I think we are well positioned to compete.

Slide 12, please. You can see the reason for that growth is driven by increasing our hospital pharmacy listings to now 400 in China. That's over double from when we took over from Eli Lilly last October 1. The commercial team has tripled or quadrupled in size covering over twice as many oncology hospitals and a much broader geographical footprint as well. So looking forward, ELUNATE does have some pretty important potential. There's a lot of colorectal cancer patients in China, over 500,000 and third-line patient population is increasing quickly. We're very excited about the PD-1 combo data that's starting to get emerged. And we're running a lot of investigator-initiated studies to explore expanding fruquintinib or ELUNATE into other patient populations. And finally, our Phase III in second-line gastric cancer is still ongoing, should complete enrollment around the end of this year. So there's a lot of opportunities for ELUNATE still.

Next slide, please, Page 13. SULANDA, a very brief update. It's very early. We've only really been commercializing SULANDA in China for a little bit over 5, 5.5 months. We did about USD8 million of sales in the first half, treated about 2,000 patients. We conducted -- launched activities on the local, regional, national level involving over 12,000 healthcare professionals. So, yes, it's still early, but we remain really quite optimistic about SULANDA. Now you have to remember that SULANDA current pricing is around 2,000 -- well, it's around RMB17,000 a month, and that's paid all out of pocket. So we're not on the NRDL yet. We are considering NRDL negotiations later this year. We will determine based on how those negotiations go, whether we're going to go ahead and take whatever is the necessary price reduction to get on the NRDL or potentially continue using our early access and patient access programs into next year. So we'll see how that plays out over the balance of this year. But I think it's a good start for SULANDA and we'll see this momentum continue to build as our team gets stronger.

Next slide, please, Slide 14. So ORPATHYS is the first selective MET inhibitor approved in China. It's been a terrific month or two. We received approval in late June, which was very important because that allows us to get into negotiations and eligibility for the 2022 NRDL for ORPATHYS. So we're hopeful that if we can negotiate a fair situation with the regulatory authorities that ORPATHYS can be included next year in January. 16 days after approval, we shipped our first product and have since prescribed 40 patients on Day 1, which is no mean feat given that the price of ORPATHYS is quite high at around USD5,300 per month. So it's a great program. We're relying on AstraZeneca to commercialize ORPATHYS in China. As you can see from the right-hand side of this slide, they're very big in China, Number 1 MNC in China and ORPATHYS fits really well into their lung cancer franchise. So we're very optimistic. Obviously, the first sale triggered a $25 million milestone. So that's very helpful as well.

Next slide, please, Slide 15. ORPATHYS has extensive publications across many tumor types with really high-quality data in each of them, whether it's kidney cancer, lung cancer or gastric cancer. And as I've said earlier, we have five studies now on the right-hand side of this chart that -- registration studies that should be kicking off over the second half of the year with the gastric cancer study having started just in the last couple of days, actually today, yesterday it was. So this is not a drug that has a limited treatment history. It's been studied in many, many patient settings, and we're quite optimistic as to its potential in the market.

We'll talk more about that on the next slide, Slide 16. This is the building block slide that shows all the MET-driven patients across many solid tumor settings. You can see in the brown box in China, MET Exon 14 deletion non-small cell lung cancer, about 13,000 new patients a year. This is just a fraction of the broad MET-driven patient population. And so this chart, I think, does a very high-level job of identifying what are the patient populations of most interest. You can see in the red boxes, these are patient populations that we are initiating registration studies in. The pink boxes, most likely these are patient populations that might benefit from ORPATHYS if their physicians are prescribing off label. But, obviously, that's up to the physician to determine if that patient is appropriate for this therapy. So really a big patient population for ORPATHYS in China and outside.

Next slide, please, Slide 17. Okay. Finally, on the commercial side, just some update on the US commercial organization. It continues to build out in preparation for the launch of suru next year and fruquintinib the year after. We've really built out the senior management team ready to set the strategy for launch. And it's not just on the sales side. It's all the other ancillary functions that are now in place, regulatory affairs, medical affairs, quality safety, you can see there down in the second -- on the bottom side of this chart. So our US commercial organization and clinical regulatory team are really making great progress. Now close to 100 people on the ground in the United States and a satellite organization in Europe as well.

Next slide please. So clinical development update, Page 19, a brief update on surufatinib. Just to reiterate its unique mechanism of action, the VEGFR, FGFR1, CSF-1R inhibition. So that's what makes surufatinib unique.

Next slide please. Great data on Slide 20 that was presented at ASCO for the surufatinib toripalimab combo in neck and gastric. These are strong data that are leading us to make decisions as to registration studies, particularly in neck. But there are multiple other indications we are studying at the moment in a Phase II, and we'll publish more data on that later in the year.

Next slide, please. I'm going to have to go quite quickly here because we're running short of time. So I won't go through this slide in detail, but China very active on the PD-1 combos and the IIT studies. And then globally, the team working very hard on the European and the US NDAs and also the PD-1 combos with tislelizumab, the BeiGene PD-1 in a number of indications.

Next slide, please. Fruquintinib, mechanism of action highly selective VEGFR inhibitor, potent against VEGFR1, 2 and 3 and designed really to be used in combinations because of that unique safety profile, its ability to be combined with chemo, other targeted therapies or immunotherapies is really, in our view, difficult to beat.

Next slide, please, Slide 23. The FRESCO-2 study is probably our biggest global Phase III that we are running at the moment, the US team and European team and also through partners in Japan, managing this very big global Phase III. The regulatory interaction we've had in Europe, the US and Japan gives us a high degree of confidence if this FRESCO-2 study is successful, it should support a good label of third line and above metastatic colorectal cancer. So a very important global study for us, over 680 patients should be completing enrollment in those 14 countries and 150 sites by the end of this year.

Slide 24 please. Next slide. The data we shared at ASCO for fruquintinib and the PD-1s in colorectal cancer was very encouraging. And we are now moving forward to consider next steps for this encouraging combination in colorectal cancer. Also looking at some of the other indications, endometrial cancer being one where we've seen terrific synergy between fruquintinib and the PD-1 antibodies. So we'll be moving forward into registration in that area.

Next slide please, Slide 25. Again, I'll touch on this very briefly. China, it's the FRUTIGA study completing enrollment late this year, continuing work on the PD-1 combos and a lot of exploratory studies ongoing on fruquintinib in China and then globally completing the FRESCO Phase II enrollment and expanding the PD-1 combo with -- again, with tislelizumab and BeiGene for fruquintinib.

Next slide, please. So savolitinib, I won't go into a lot of detail here, other than to say we've treated over 1,200 patients with savolitinib over the last 10 years. That's a lot of patients. We're now first-in-class selective c-MET inhibitor in China. And as I've said before, we are expanding into multiple global registration study.

Next slide, please, Slide 27. The big one will be the savolitinib-TAGRISSO combination. The TATTON study has published its final publication at World Conference on lung cancer earlier this year. That's terrific data and very broadly understood and the oncology lung cancer community are very aware of this data. The SAVANNAH study will come to its conclusion, at least we'll be able to determine our Phase III design for the savo/TAGRISSO global Phase III study in the next month or two, where we'll focus on the dose regimen, the target patient population, the diagnostic tools, sort of the biomarker strategy. And I think we're in a very strong position working with AstraZeneca to conclude what is the optimal design for this global Phase III.

Next slide, Page 28, please. I am personally very excited about the MET-driven papillary renal cell carcinoma data we presented at ASCO, 57% response rate. The current standard of care is sunitinib and that has about a 7% response rate in these patients. So this is really step-change efficacy improvement for patients with MET-driven papillary renal cell carcinoma. In our CALYPSO study, you can see there a median overall survival for these difficult patients of 27.4 months. That's relative to just over a year for patients today with sunitinib. So it's a big step, and we'll start a global Phase III in MET-driven PRCC very shortly, hopefully, in the next month or two.

Next slide, please, Page 29. Savo development summary. I won't go through this in detail, but the approval of Exon 14, the start of two big Phase IIIs with the TAGRISSO combination in China, the SACHI Study, the SANOVO Study, the gastric study that just started this week. And then globally, a global MET positive PRCC Phase III, the SAMETA Study and then the Phase III that comes off of SAVANNAH, which is the big registration, global registration study, hoping we can start that later this year.

Next slide, please, Slide 30. 689, just PI3K delta. We include this because it really has now moved into late stage. It's unique in its isoform selectivity, its potency on a whole blood level, and its really unique and improved pharmacokinetic profile. So this is really, in our view, a really unique therapy in this PI3K delta space that should be able to differentiate itself versus everything that's there today.

Next slide please. So this is just the Phase I dose escalation data, is about 56 patients. We've published as stated before, what's important though is since this data was published at ASH last year, we've enrolled well over 100 patients at the recommended Phase II dose. We also in the US and Europe have now almost reached our recommended Phase II dose and are just about ready to move into expansion outside of China. So things are moving very quickly on 689. And we intend to publish more data hopefully at ASH later this year and that should be a meaningful data set that we present at ASH later this year.

Next slide, please. So, yes, Page 32. I've just already mentioned this, I mean, in China, for 689, we've moved into registration studies in Q2 of this year in follicular lymphoma and marginal zone lymphoma. These studies have potential for NDA submissions late next year or early '23. So that will be our -- hopefully, our next major novel drug NDA submission in China. And we're looking at a bunch of combinations. These B-cell signaling pathway targets are all related in one way or another. And we have a superb portfolio now with the third-generation BTK, the PI3K delta, the Syk inhibitor and a number of other assets that can also create synergy. And then outside of China, we will engage, Marek and his team will engage with the FDA later this year, bringing together all the China data, our international dose escalation data. And we'll go talk to the FDA about how to move this asset as quickly as possible in the markets outside of China. So we're very excited about this.

Next slide, please, Slide 33. So the next wave of innovation, 523, our Syk inhibitor moving into a Phase III in ITP and on the indolent non-Hodgkin's lymphoma side, making great progress outside of China, looking at patients that are BTK inhibitor refractory. Those seem to be the patients who do best on a Syk inhibitor. The IDH inhibitor moving quickly, the third generation BTK inhibitor 760 just got the IND cleared over the last week or so. So that will move into the clinic later this year. The ERK inhibitor moving nicely and don't forget the FGFR inhibitor 453 continues to enroll in intrahepatic cholangiocarcinoma. And we've just submitted INDs to look into combinations of this FGFR inhibitor in certain areas. So a lot going on, on the early side.

Next slide, please, Slide 34 -- 35. Again, I won't go through all of these upcoming events on Page 35. You can see the most important ones are highlighted in red there. So, obviously, on surufatinib, it's been the NDA submission and the European ultimately, next year, the European launch and the US launch. Fruquintinib, FRESCO-2 readout next year, but completing enrollment late this year. Savo, there's a lot going on, on savo this year with data from CALYPSO and then kicking off the global Phase IIIs in papillary renal cell carcinoma and the savo/TAGRISSO combo. And then going down the list, it's just the general progression of the broader pipeline with probably the regulatory dialogue on 689 being the most important for us.

Next slide, Page 36, is the China upcoming events. Many of them have happened already with the suru launch, the savo launch, but still a lot going on. So in surufatinib, the neuroendocrine carcinoma and gastric PD-1 combos. That data was published, as I mentioned. Now we're starting to look at, OK, how can we start registration studies in these areas or some of these areas. The same can be said for fruquintinib. The enrollment of FRUTIGA completing late this year and then savo, 3 registration studies kicking off this year, gastric and SACHI and SANOVA. And then 689, starting these registration studies in China; 523 also hoping to start Phase III late this year as well. So a lot happening.

Next slide, please, Slide 37. I'll pass over Slide 37, just to say this summarizes it, 10 Phase III starting and three new drugs coming in.

On the -- if you can go to Page 39, yes. So on a cash standpoint, consolidated balance sheet. At the end of June, we had $950 million. That didn't include the over-allotment from the Hong Kong IPO, the $25 million milestone on ORPATHYS and it didn't include the $150-million-or-so we should receive in the next few months for the divestment of our OTC business. So that puts us up to around $1.2 billion in cash and resources. We've had an important first half in terms of equity financing. The strategy to bring in some key strategic investors such as Baring Private Equity Asia. And last year, the Canadian Pension Plan Investment Board and General Atlantic and then Carlyle around the Hong Kong IPO. These investors are really important to the company and are supporting us in our activities.

Next slide, please. Slide 40. I'm on Slide 39. If you can move to Slide 40, Mark. Okay. Well, I'll just -- it's not in front of me, so I'll just sort of speak from memory. So Slide 40 just talks about our guidance for the year, USD110 million to USD130 million guidance, oncology revenues. Obviously, that comes from fruquintinib, surufatinib and savo. We've got the first sale milestone in there of $25 million on savo as well. Yes, I think we're on track for that guidance this year and expect to deliver.

Next slide, please, Slide 41. I also can't see Slide 41, so I'll have to go from memory as well, -- there you go, I've got it now. So you can see, yes, R&D expenses increasing, oncology revenues increasing. So it's just a reflection of our strategy of bringing our oncology assets to market, building out profitability from those oncology assets and helping fund all that profit into broader R&D investment against our broad pipeline. So you can see -- we've talked a lot about sales, so I won't talk any more about that. But on the R&D expenses side, you can see around $123 million of R&D investment in the first half of this year, around 50/50 China versus outside China. And so the investment in our US/Europe R&D activities is really increasing. It's tripled in the last year. And that's because we're now developing 6 assets actually now with the BTK and over the 7 assets outside of China. So the net loss attributable to HUTCHMED around $102 million, that still is contained because we have our other ventures that in the first half of this year, we're able to generate around $43 million in equity and earnings from our equity investees or other ventures business. So we've always been able to increase our R&D spend and offset it by the profits of our commercial businesses.

Next slide, please. Slide 42. I think this is the final slide. It's stuck again, I think, Mark. But anyway, the final slide just looks about the ambitions of the company, lays out the kind of numbers we expect to be delivering. We expect by '25 to have 9 therapies launched in China. We've already got three launched. We expect five to be launched outside of China, and we expect another 6 therapies to be in registration studies by '25 outside of China and nine inside of China. So that if we're able to deliver these kinds of numbers, HUTCHMED will be a very big company by 2025. And I'm fully of the view that we will be able to deliver these kinds of numbers.

So I took a bit longer than expected, but let's open it up for questions. And Greg, if you could direct the questions, and I will either answer them or involve my team or the team to answer.

Questions and Answers:

Operator

[Operator Instructions] We have the first question from Alec Stranahan from Bank of America. Please go ahead.

Alec Stranahan -- BofA Merrill Lynch -- Analyst

Hey, guys. Thanks so much for taking our questions. First one from me. You recently got the IND clearance for your BTK and your ERK program is starting Phase I. So I guess given these are increasingly crowded areas of development, could you help frame the thought process that went into these programs in terms of what you think it could take to be best-in-class and whether you think monotherapy will be enough? Or will your focus really be more on the combos?

And then secondly, on the catalyst road map that you presented, it looks like quite a few PD-1 combo data should be expected later this year. So do you have any more granularity on timing or venue for that data? Thanks.

Christian Hogg -- Executive Director and Chief Executive Officer

Thanks, Alex. Maybe I'll ask Wei-guo to talk about the sort of the differentiation and the mono combo question with regards to BTK and ERK. And then maybe Marek could pitch in around how he's thinking about developing, for example, the BTK inhibitor in a relatively busy field. So go ahead, Wei-guo.

Wei-guo Su -- Executive Director and Chief Scientific Officer

Yes, thanks for the question. And first off, it's a third-generation BTK, and it's targeting BTK-resistant mutations as well in addition to wild type. So it is clearly different from our first generation ibrutinib and second-generation of Calquence[Phonetic]. This is a completely new generation and relatively exceed actually molecules of this type in clinic at this point. It's designed to overcome the resistance, particularly the C49S[Phonetic] mutations.

Obviously, we are a pipeline approach company, and we are investing heavily in the B-cell signaling. So in addition to BTK, we already have P13K delta and Syk and we're also working on our CD47 antibody and also a CD20-based bispecific. So this BTK inhibitor will be really a part of a very valuable portfolio for compounds targeting -- covering broadly in hematological malignancy space. So for instance, we already generated in-house data combining this BTK inhibitor with our P13K delta data, for instance, in DLBCL and others. So yes, obviously, we have high hopes for this compound in terms of both as a monotherapy and also in combination with our own portfolio.

As Christian Hogg pointed out, it's just clear that the IND in the US will initiate the dose escalation very soon. And in China, it's relatively at the same kind of same time line.

Christian Hogg -- Executive Director and Chief Executive Officer

Thanks, Wei-guo. Maybe, Marek, could you talk about the --

Marek Kania -- Managing Director and Chief Medical Officer, International

Yes. So just to add, Alex, thank you for your question. Building on what Wei-guo said, based on the strong differentiation factors based on preclinical data, obviously, we have very ambitious plans to explore scientific data driving our future plans. We're taking broad map to really translate into clinic what Wei-guo said based on our hypothesis. And it's really a meeting with high interest from global thought leaders engaging in this program, two of the KPIs are world-renowned class.

And so we are taking over the first step first establishing safe dose in escalation phase and trial will have multiple cohorts of specific setting as Wei-guo highlighted, a number of plus[Phonetic] BTK-resistant subsets and multiple subsets of lymphoma. And as Wei-guo said, we are also in parallel going to think about combining and creating signals from our own assets, which mechanistically and scientifically makes sense, P13K delta is one of them.

But we are looking at many other possibilities as well. So we are very excited. Despite of the crowdedness of the space, there's still significant unmet need and the fact that top-notch scientists are very interested to explore it is one of the factors proving that. So obviously, it will be driven by data. So stay tuned.

Christian Hogg -- Executive Director and Chief Executive Officer

Thanks, Marek. I will kind of finish off the first part of your question, Alex, around ERK and how do we think about the MAP kinase pathway and mono, combo, etc. We intend to do for the MAP kinase pathway, what we've done for the B-cell signaling pathway, which is build a portfolio of assets that can influence those pathways in combinations or in regimens one after the other, etc. And so to build a toolbox to attack the MAP kinase pathway, the same way that we built a toolbox to attack the B-cell signaling pathway.

So the ERK inhibitor is the first asset coming through, and there will be multiple other novel therapies that Wei-guo and the team are working on that will add to that. And I think that's what's most exciting about the ERK inhibitor is just the first of many assets that we plan to develop and discover and develop in that pathway.

In terms of the last part of your question on the kind of catalyst rich second half and early next year and the PD-1 combo data. I mean, we've only put out relatively limited PD-1 combo data to this point. We have a lot more in a lot of other indications that's all maturing. Some of those indications are very exciting, some less so. But I'm sure that we will -- as that data matures and as we formulate our registration strategies, we'll find the right scientific events to put that data out. So I'd expect a steady stream of PD-1 combo data to play out over the next 6 to 9 months basically.

Alec Stranahan -- BofA Merrill Lynch -- Analyst

Great. Thanks a lot and congrats on all the progress.

Operator

Thank you. Next question from Louise Chen from Cantor. Please go ahead.

Louise Chen -- Cantor Fitzgerald -- Analyst

Hi. Congrats on all the progress this quarter and thanks for taking my questions here. So I had a few. First question I had for you is, how do you plan to differentiate yourselves in the US market as you roll out your business there, especially compared to other oncology and biotech companies here in the States.

And then second question is, how should we think about the peak sales, the global peak sales potential, for savolitinib in non-small cell lung cancer, kidney cancer and other important indications.

And then last question is, what are your thoughts on the new draft guidance for oncology drug development in China? Do you see this as a tailwind or a headwind and why? Thank you.

Christian Hogg -- Executive Director and Chief Executive Officer

Thanks, Louise. Maybe I'll take the first couple, and then I'll ask Wei-guo to talk about the guidance in China. So how are we going to differentiate ourselves in the market? And Marek, please add to this if you have any additional comments. But my view is we're quite differentiated on a number of levels.

Number one is each of our assets that we're bringing to the market is differentiated in its own way. So surufatinib is the first therapy of its type in neuroendocrine tumors. Fruquintinib will be differentiated by virtue of its -- hopefully of its safety profile and efficacy. And 689, well, that, again, is differentiation based on a really quite different safety profile from the other PI3K delta. So, yes, on a compound by compound level, each of these assets has been designed to be differentiated. But I think relative to other US-based biotechs, which generally are companies with single asset portfolios, that's the difference for HUTCHMED.

We're building our commercial team in the US. Yes, hopefully, surufatinib will be the first approval. But 12 months behind that, maybe 12, 18 months behind that will come fruquintinib. And maybe another 12 months behind that will come 689. So we differentiate ourselves by having that portfolio of assets that hopefully will come just as we've done in China with surufatinib, fruquintinib, savolitinib.

This is not about a one product company. This is about bringing multiple assets to the market, and that's how we will differentiate ourselves and compete in the United States is by having that broad group of assets.

On the peak sales for savolitinib, this is on a very high level. I think, obviously, savolitinib is going to be a multibillion dollar global drug if it's successful, in combination with TAGRISSO it's probably the biggest indication globally. But I think the secondary indications of papillary renal cell carcinoma and gastric cancer and all the other MET-driven patient populations are really important.

But clearly, the TAGRISSO combination in EGFR mutation-positive non-small cell lung cancer is going to be the big one for us. And we're working very hard to try and figure out how to bring savo, TAGRISSO to patients as early in the treatment paradigm as possible to first of all give those patients access to that combination early and second of all, to have them beyond that combination for as long a period of time as possible. So that's what will drive the multibillion dollar growth. And then Wei-guo maybe you could give a few comments on the guidance in China.

Wei-guo Su -- Executive Director and Chief Scientific Officer

Yes. I think the recently issued so-called guiding principles for oncology joint development in China by CDE, it's really meant to discourage irrational and repeated investment in certain targets. As you know, for instance, PD-1 in China, a total of 80, 90 different PD-1s were put into clinics. And, obviously, this is the initial 1, 2, 3 may have long clinical value, but it won't get up to beyond 20%. All those compounds will have diminished clinical value basically.

Also recently now in the news as well, the CD19-based CAR T, there are over 150 programs targeting basically the same technology CD-19 based CAR T. So CDE issued that guideline really to discourage this kind of approach in China because of the diminished clinical value for latecomers. And how we view it, we think it is a major positive for us because these repeated programs take up so much clinical resources and slow down a lot of innovative programs, programs that we do.

Everything we do, we have a very clear differentiation strategy behind our programs. And everything is guided by clinical value and by science basically. So by cleaning up some of these very overheated investment in certain targets, I think we'll free up space and resources for truly innovative programs, programs like what we are investing in today. So we really think it's a positive for us.

Christian Hogg -- Executive Director and Chief Executive Officer

Right. Thanks, Wei-guo. Marek, did you have anything to add on the US market differentiation?

Marek Kania -- Managing Director and Chief Medical Officer, International

Yes, Christian. So I would add to building on what you said about the robustness and size of the portfolio, which is very well differentiated, and I believe strongly can really act and create value to everyone. Obviously, this cannot happen without an amazing team and the team, which was being built with the long term and a very robust portfolio in mind.

So we are building a team of seasoned individuals with multinational, large midsized companies, long history of excellent track record and that culture would sustain us across this multiplicity of assets we expect to bring to the market. And the last part, obviously, we are very ruthless looking at what and how we can create value to, first of all, patients and then physicians and payers. And if we continue doing this across our portfolio, which can compete, I think value can be significantly accretive[Phonetic] here.

Christian Hogg -- Executive Director and Chief Executive Officer

Thanks, Marek. Okay. Thanks, Louise.

Operator

Thanks. Next question from David Ng from Macquarie. Please go ahead.

David Ng -- Macquarie -- Analyst

Thank you very much. Congratulation, Christian, for a very impressive first half. It's been many years, and the first half of this year really has so many positive news. So I guess for a lot of investors, one question is how can second half of this year top it off?

Can it be even more exciting than first half? And what will be the key things that we should highlight on in the upcoming 4 to 5 months to continue to drive the excitement of the company?

And one thing that I would think of is, of course, along the business development area, anything you can share with us in terms of maybe in the last few months, with a stronger balance sheet, any new initiatives in the BD team? What will be the focus of the potential products, the bite sizes that you are comfortable with and maybe the challenges that you have encountered so far in the last few months as you ramp up your BD activities?

And I have two more questions after this. Thanks, Christian.

Christian Hogg -- Executive Director and Chief Executive Officer

Okay. Thanks, David. Well, I mean, yes, it's been a great 6 months, but you only have success that we've seen in the last 6 months because of the work of many years before that and the great work of the team. But I have to say, over the second half of this year, as we talked about a little when we laid out on Page 35 and 36 the upcoming events, there's just a lot going on. Our teams are working flat out at the moment to deliver clinical progress on these assets. And I think as we do that, you're going to see the real value of this company is our ability to create genuinely differentiated assets on a global level. And as our clinical regulatory teams throughout the world keep moving and our CMC teams and everybody supporting that keeps moving, you're going to see the value of these assets play out. So that's what I think is going to really take us to a completely different level is our pipeline.

On the BD side, we are in discussions on a number of possible BD transactions. Obviously, now from a cash standpoint, we're in a position to be able to do some of these transactions. But we're being very discriminating. There are some fundamental boxes that need to be ticked for us to engage on potential in-licensing, for example. Those would be, look, we've got -- Wei-guo has got an absolutely clearly thought-out portfolio strategy here of trying to build tool boxes of weapons to go after specific areas.

So we're not going to partner or license in any asset that isn't synergistic with our portfolio. And it is not very closely linked into the therapeutic areas and the indications that we're going after. So that sort of pipeline synergy is critical. I think the second thing is we've seen a pretty significant inflation in the prices being paid for these in-licensing opportunities for China recently. And so I think we're quite disciplined in that context. We certainly won't be going out and paying over the market, and we'll be disciplined there.

I think the third area that we'll have to -- the box we'll have to take is synergy also with the commercial, but it makes sense that if there's synergy with the pipeline, there should be synergy with our commercial portfolio. But there may be some oncology assets maybe that are not necessarily directly linked with our portfolio that our commercial team could do well with. So we're looking at some of those as well. Yes, it's -- ultimately it's about synergy and creating value. I think also if we are going to partner, it's really not just about China, it's about trying to create value through combinations globally.

And so that's another thing we'll look at. So yes, we have a number that we're looking at, but we're being very disciplined about it. And I don't think -- we will not proceed with any of these licensing deals if they're not right for the company. I think if they are right for us, we'll do them. If they're not, we won't. We'll focus on our own activities. But we've got a lot of discussions kind of underway at the moment.

David Ng -- Macquarie -- Analyst

Okay. Thank you, Christian. And if I may, just two more quick questions. Question 2 is, it's quite interesting that, of course, you have done a great work in launching fruquintinib and suru. But now with Astra helping out in savo, what have you learned, right? I mean like for you guys it's ramping up sales, penetrating hospital, KOI education, but basically AstraZeneca have done quite a bit of that last few years in China already.

So as you learn from Astra launching savo, like how would you contrast you guys again, Astra, anything that you can learn from Astra in maybe even ramping up fruquintinib and surufatinib even faster than what you have already done. So that's question two.

Question 3 is very simple. Will your next three in-house products be developed much faster than your first three innovative products, which you, of course, have already launched? And how do you compare the speed against other domestic players in terms of the speed of clinical development and the smartest of the clinical strategy? Thank you.

Christian Hogg -- Executive Director and Chief Executive Officer

Great. Thanks. Okay. I will answer the Astra question, and I'll ask Wei-guo to answer the next three assets to approval question. And maybe Marek can give a comment on that with regards to outside China, not just inside China.

So Astra is just an amazing operator in China. They're the biggest multinational pharmaceutical company in China. Their commercial presence is so deep. They've done a tremendous job over the last 10 years building up their business in China, and it's led by some very, very capable people. I think in oncology, their big advantage is TAGRISSO that they've been able to launch and really kind of take control of that market. And that's very much related to savolitinib and the clinicians that are prescribing savolitinib and the platform that savolitinib needs to be maximized.

So I have very high expectations from AstraZeneca. I think we can learn a lot from Astra. Astra do a terrific job of sort of bridging the gap between multinational mindset and local mindset and really using science and good discipline and great execution to make the most of their business.

So we are learning a lot day in, day out in our interaction with AstraZeneca. But we also have high expectations for their performance. So I'll be able to give you a little bit more perspective on that maybe about 6 months from now, once I've got 6 months of watching the actually commercialized fruquintinib or savolitinib. But I have to say their decision-making to this point, they haven't made any decisions that I've disagreed with. So I really rate AstraZeneca, and I think we can learn a lot from them. Wei-guo, Marek, any comments on the next three drugs faster in China, faster outside of China?

Marek Kania -- Managing Director and Chief Medical Officer, International

Sure. Wei-guo, maybe you can start and I can build on this.

Wei-guo Su -- Executive Director and Chief Scientific Officer

Yes. So I think you can look at our portfolio, right? I think 689 is already in registration studies, 523 will be there as well. I think looking at our earlier portfolio, I think our IDH 1/2 inhibitor has a chance to be very -- to go to move very fast. It's very clearly differentiated and has a lot of unique features built into the molecule. And we're already seeing exciting activity in clinic. 453, our FGFR inhibitor, again, showing really interesting activity.

And also, we are initiating combos to the earlier lines. We believe this is the best strategy for the FGFR compound. So all in all, I think we have the next four compounds, obviously, 689 may lead the way. But every other compound has great opportunities to really move across the finish line in the next few years.

Marek Kania -- Managing Director and Chief Medical Officer, International

Yes. So just to add to this, from a global expansion perspective, if we apply 2018 as kind of starting point for even our late-phase assets, when you look at the surufatinib and fruquintinib, development is moving very fast into global development, and we are doing this despite of all pandemic limitations. So even in that late space, we are going very aggressive. On -- as Wei-guo said, with our new asset, IDH dual inhibitor, our 689, 523 and our BTK, those are all in spaces with high unmet medical needs and pretty much with all potential for each of them going through accelerated approval path.

And, obviously, we will be aggressively looking at the signal of activity and benefit and as Christian alluded to, we are engaging with the FDA on our 689 PI3K delta inhibitor in the second half of this year. And that will be our kind of mode of speeding up and looking for best space where we can trade the best clinical benefit for patients and succeed through fast approval. So it's all in our rather strength to do it as fast as we can in the right value creation mindset.

David Ng -- Macquarie -- Analyst

Thanks, Marek.

Operator

Next question from Paul Choi from Goldman Sachs. Please go ahead.

Paul Choi -- Goldman Sachs -- Analyst

Hi, thank you and good morning everyone. Two questions from us please. First, Christian, with regard to your earlier comments that you'll decide on the Phase III trial for TAGRISSO plus savolitinib in the next month, have you and Astra looked at updated data from the SAVANNAH trial since it's open label? And can you maybe just confirm if you've seen any differences with regard to the 300 dose -- either 300 mg dose either on efficacy or tolerability?

And then my second question is, you mentioned you'll have a rather fulsome update on 689 at the ASH meeting at year-end. Can you maybe just frame the expectations for us? Are you largely positioning this as initial safety or -- safety or are you largely looking for clear evidence of efficacy differentiation versus the other drugs in the class? Thank you very much.

Christian Hogg -- Executive Director and Chief Executive Officer

Thanks, Paul. I'll take the first one on TAGRISSO combo and then I'll ask Wei-guo and Marek to talk about ASH and 689. So on SAVANNAH, the answer to your direct question of have we seen any further data? The answer to that is no. We have a cut off that I think was in July we'll be seeing -- or AstraZeneca will be seeing sufficient data in August, maybe late August, to inform the design of the Phase III. That will include further data around the 300 milligram BID, the 600 milligram QD and, obviously, the 300 milligram QD dose cohorts.

I think what's going to be really important also is we'll get a first look at mature PFS. We haven't seen mature PFS really at all from SAVANNAH and it's very important. And I think also the biomarker analysis that's being done because it's a big patient population now, I don't know if you add it all up, it's going to be closing in on maybe 170 to 200 patients. So the final biomarker analysis or combined with the TATTON data and the biomarker analysis from TATTON to inform the biomarker strategy for the Phase III. So, yes, in the next couple of months, we should have all of that and then Astra will go through its own internal processes to finalize protocols and to finalize internal governance.

And we're hoping that we could see the global pace would be kicking off late in the year. That's the latest on the savo/TAGRISSO combo. But meanwhile, Wei-guo and the team are moving very rapidly on the SACHI Study and the SUNOVO Study, both combos with TAGRISSO and savo to start registration studies in China, Phase III registration studies in China, that should kick off in September/October time frame, maybe October time frame.

So I'll hand it off to Wei-guo to talk about 689 sort of expectations for potential data at ASH? And maybe Marek to add to that because of the global study he's got underway.

Wei-guo Su -- Executive Director and Chief Scientific Officer

Well, OK, Paul, I think the short answer for the key differentiation of 689 is actually, it's superior both in terms of efficacy and safety. So as you know, we already published dose escalation data at 2020 ASH across all dose levels and all subtypes of lymphoma, we saw 48% overall. And now post that, we've been doing the dose expansion. We have now dosed well over 100 patients as a recommended Phase II dose, and we are obviously seeing much better -- even more improved efficacy.

We have to wait until we publish it, of course, to know the details. By the way, I guess, I think Christian mentioned that 2021 ASH, it actually will be earlier than that. We have the menus[Phonetic] of it, the presentation has been accepted by ESMO and it will be an oral talk at ESMO this year. Just a couple of months, you will see the data. Also in terms of safety profile, 689 can be used to behave differently from other P13K delta inhibitors, particularly in terms of the GI tox as well as the liver tox profile.

We think that this drug will be used in the patient population for really long duration. So the safety profile is extremely important, and we are really happy with the safety and the tolerability of 689. And what we saw in the Chinese patient population and what America is seeing with our international program is very consistent both across the board in terms of PK safety and efficacy. So maybe America and China again.

Marek Kania -- Managing Director and Chief Medical Officer, International

Yes. So I would just only add, I totally agree with Wei-guo, that data is consistent and we believe that we can differentiate based on both safety and efficacy and what we see is very encouraging. And as far as program, Christian kind of alluded to entire package, we are looking at both China the historic data, which is still ongoing and now in the registration Phase II in China. We are expanding also our ongoing international studies.

So between three studies, we'll have a very robust package as it continues to mature. And, obviously, every possibility where we can provide meaningful analysis, we'll be doing that and -- while we are discussing with regulatory agencies. So we are extremely encouraged. That's what I can say.

Paul Choi -- Goldman Sachs -- Analyst

Thank you very much for taking our questions.

Operator

Thank you. Next question from Mike Mitchell from Panmure Gordon. Please go ahead.

Mike Mitchell -- Panmure Gordon -- Analyst

Thank you. Thanks, Christian. I've just got one question relating to pipeline strategy, which perhaps flips the earlier BD question on its head. I thought the Inmagene collaboration is a particularly interesting relationship to advance a number of your earlier-stage assets. So I'm just wondering now that your increased financial resources perhaps allow you to think about supporting more complicated but potentially more interesting and more valuable programs focused on combinations of molecules where you might have otherwise looked at monotherapy. So perhaps deprioritizing the monotherapy strategy across the pipeline.

Might you take an Inmagene type approach for what would otherwise have been both[Phonetic] monotherapy programs, especially if you're seeing inflated prices in licensing in China.

Christian Hogg -- Executive Director and Chief Executive Officer

Thanks, Mike. No, I mean, basically, you've got to get your monotherapy approved for every one of our assets. Ultimately, that's the first step as you've got to find the monotherapy indication to get it approved. And once you've derisked an asset through a monotherapy approval, then combinations that you can explore and go into all kinds of areas. I mean, in some cases like savolitinib, the combos kind of kick in [Technical Issues].

So I don't believe that we would ever deprioritize getting our monotherapies approved. I think the financial platform that we've built now with the Hong Kong listing and the cash resources have available really are sufficient to allow us to do pretty much whatever we want to do with our portfolio of assets. And the pipeline that's laid out on, I think, Slide 3 or 4, it's a deep pipeline now of 11, 12, 13 assets that we'll be developing very broadly.

We have, as you mentioned, decided on the immunology side to kind of make the line in the sand and say, OK, we are creating immunology innovations. But with regards to developing those assets, it's not the financial limitations, it's more the fact that immunology is quite different from oncology in terms of development. And we believe that Inmagene brings focus and the ability to really harness KOLs in the immunology space globally that are going to be able to move those programs possibly quicker than we could given that we're focused strongly on oncology. So I hope that answers your question. I mean, we certainly wouldn't be deprioritizing monotherapy development of any of these assets.

Mike Mitchell -- Panmure Gordon -- Analyst

No. That's fantastic. Thanks, Christian.

Operator

Thank you, and that is all for question from the telephone. We will take a final question from the web. The question will be read by Mark Lee, SVP, Corporate Finance and Development. Sir, please go ahead.

Mark Lee -- Senior Vice President, Corporate Finance and Development

Thanks, Greg. We have a question from Sean Wu of Morgan Stanley. And so I'll just read it out. Right now, your fruquintinib and PD-1 combos are exploratory. Moving forward, do you intend to tighten the screws and rework collaboration agreements? Are you free to proceed global collaboration of savolitinib with PD-1?

Christian Hogg -- Executive Director and Chief Executive Officer

Okay. Thanks, Mark. Thanks, Sean, for listening. So for the fruquintinib and PD-1 combos and also for savolitinib PD-1 combos, yes, it's exploratory. But as you can see, these are actually relatively robust size Phase II studies with multiple cohorts and multiple indications, maybe 20, 30 patients to identify signals of efficacy and, obviously, tolerability of the combos.

And now Wei-guo and the team are moving those rapidly into registration studies. The way all of our collaborations are set up is that in the early stages of development, sort of Phase II and proof-of-concept, these are nonexclusive relationships. But when we do go into registration studies, they become exclusive and cost sharing in one way or another.

So we're making that change or that step change as far as the way we work with Innovent and with Junshi at the moment and are discussing how to structure these registration studies and who pays for what and who does what. So yes, the answer to your question is, yes, those collaborations do evolve from this exploratory sort of nonexclusive exploratory structure into a more exclusive structure around registration studies.

And the answer on savolitinib is, no. We're not free to combine savolitinib with PD-1s outside China. But that said, AstraZeneca has IMFINZI, the PD-L1 antibody. And you can see that we're aggressively moving that combination of savo and IMFINZI into global Phase III in papillary renal cell carcinoma. And we do see, as I showed earlier, on the CALYPSO data, the 57% response rate in MET-positive PRCC patients, we do see a very high degree of synergy between those 2 assets.

So it's not 1 plus 1 equals 2. It's 1 plus 1 equals probably 4. And that synergy, as it plays out in PRCC, I'm sure we'll look to other opportunities to develop savolitinib and IMFINZI together in other indications. But we'll do that in partnership with Astra and we won't do anything sort of separately on our own. Hopefully, that answers your question. Okay. I think then, Greg, is that all of the questions?

Operator

Yes, we don't have any more questions by phone.

Christian Hogg -- Executive Director and Chief Executive Officer

Okay. Great. Well, then on behalf of the entire HUTCHMED team, Marek, Wei-guo, Johnny, Mark and myself, thank you all very much for joining our call. And we look forward to engaging with you all in the coming months. But the next 6 months should be very important 6 months for HUTCHMED. And I think we're all feeling very positive about the future. So thanks very much for listening in.

Mark Lee -- Senior Vice President, Corporate Finance and Development

Thank you very much.

Duration: 83 minutes

Call participants:

Christian Hogg -- Executive Director and Chief Executive Officer

Wei-guo Su -- Executive Director and Chief Scientific Officer

Marek Kania -- Managing Director and Chief Medical Officer, International

Mark Lee -- Senior Vice President, Corporate Finance and Development

Alec Stranahan -- BofA Merrill Lynch -- Analyst

Louise Chen -- Cantor Fitzgerald -- Analyst

David Ng -- Macquarie -- Analyst

Paul Choi -- Goldman Sachs -- Analyst

Mike Mitchell -- Panmure Gordon -- Analyst

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