Trinity Delta Lighthouse: Hutchison China MediTech
Trinity Delta view: Inclusion of fruquintinib in the China NRDL is an important milestone for Chi-Med. It is its first novel oncology drug commercially launched in China and securing NRDL reimbursement will significantly boost market penetration in 3L CRC. NRDL listing is associated with a c64% gross (we estimate 34% net) price discount; however, this is likely to be more than offset by higher volumes, driving both manufacturing revenue and royalties from sales growth.Elunate is currently Chi-Med’s most valuable asset, contributing $9.47/ADS or £1.46/share to our company valuation. We forecast a $122m peak sales opportunity in China 3L CRC, and a potential $500m-$1bn China sales opportunity across multiple indications, with Chi-Med eligible for minimum royalties of 15%. Outside of China, Chi-Med retains full rights to the drug.
Our Chi-Med valuation is $5.14bn ($38.55/ADS) or £3.95bn (£5.93/share). We anticipate various clinical, regulatory, and commercial catalysts through 2020 which will unlock further value. For H120, these include interim analysis of the surufatinib China SANET-p Phase III study; China NDA filing for savolitinib in MET exon 14m/del 1L NSCLC; and initiation of US/Europe registration studies for surufatinib (neuroendocrine tumours) and fruquintinib (3L/4L CRC).
Eli Lilly and Company discovers, develops, manufactures, and markets products in a single business segment: human pharmaceutical products. The company's human pharmaceutical products include: diabetes and other endocrinology products, immunology products, neuroscience products, oncology products, and other products. The company's diabetes and other endocrinology products include: Baqsimi? and Basaglar?. The company's immunology products include: Olumiant? and Taltz?. The company's neuroscience products include: Cymbalta? and Emgality?. The company's oncology products include: Alimta?, Cyramza?, Erbitux? and Verzenio?. The company's other products include: Cialis?.
Hutchison China MediTech is engaged in researching, developing, manufacturing and selling pharmaceuticals and healthcare products. Co. has research and development facilities and manufacturing plants in Shanghai and Guangzhou in the People's Republic of China and sells its products mainly in the PRC and Hong Kong. Co. operates two operating segments. The Innovation Platform focuses on discovering and developing therapeutics in oncology and autoimmune diseases, and the provision of research and development services. The Commercial Platform involves the manufacture, marketing and distribution of prescription and over the counter pharmaceuticals as well as consumer health products.
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