HUTCHMED (China) Ltd Q4 FY2021 Earnings Call

Ladies and gentlemen, welcome to HUTCHMED Company Update. I will now hand the session to Mr. Christian Hogg, CEO of HUTCHMED, to begin today's presentation. Mr. Hogg, please.

Thank you very much, Anika. Welcome, everybody, to the 2021 Full Year Results and Business Update Presentation today. Today, we put out two announcements. First being our 2021 full year results, which we want to spend the vast majority of our discussion today covering. The second was an announcement that's just gone out detailing my retirement as CEO from HUTCHMED and the appointment of Dr. Weiguo as my successor and the next CEO of HUTCHMED. I'd like to just spend a few moments talking about that and then put that aside and focus on our business. As many of you will know, I've been in China for the last 27 years, and I've been the CEO of HUTCHMED effectively for 22 years. It's been a long journey. It's been a great journey for us all. And the company from a zero beginning has come an awfully long way. I've obviously been accompanied on that journey by a fantastic management team and a group of people that are on the call today, which I'll cover in a moment. Recently, in the last six months, my family have all effectively moved back to the U.K. to schools. My three young sons all went to boarding schools in the UK. My wife had to move to be close to them. And I found myself in Hong Kong all alone. With my young family, as well as our parents getting older, my wife and I decided that it was time for us to move back to Europe. About five months ago, I informed the Board and the Nominations Committee of this desire. We went through a very detailed and diligent succession process, which was already underway for some time anyway. We concluded after looking at external and internal candidates, and also asking the question, could I remain CEO based out of Europe? We concluded that the best way forward for the business was to appoint Dr. Weiguo as the next CEO of HUTCHMED. I am fully supportive of this. I think it's a great thing for the business, and Weiguo, obviously many of you are aware of Weiguo and his remarkable history and track record. It's a personal decision. It's a tough one for me because it's been a long journey that we've been on, but I have great confidence in the future of the company, the organization, the Board and our shareholders. I just want to say thank you to everybody for the support that's been given to me and the company through the years. I really look forward to seeing great things coming from Weiguo and the team. So leaving it at that, I would like to move now on to the corporate presentation. I'm sure we can answer any Q&A at the end. But hopefully, I think we all understand that the reason for this move are purely based on my family responsibility. So on Page 3, you can see - sorry, if you could go back to Page 3, please. The agenda, please. Thank you. So I'll touch on some quick opening remarks. Then, we have Chen Hong or Hong Chen, as is the convention in China, to talk about our Senior Vice President of Commercial in China to talk about our commercial results in oncology. Then, Weiguo and Marek Kania, will talk about our discovery and development programs. Our CFO, Johnny Cheng, will talk about the financial status. And our Chief Operating Officer, Dr. Karen Atkin, will talk about operations and business development. Finally, Weiguo will lay out the upcoming events and the final closing remarks, and then we'll go into Q&A. HUTCHMED has built just a fantastic platform over the last 22 years. It gives me great pride to talk from this chart. The organization now has over 4,600 personnel across the group. We have a team of 1,500 people in oncology and immunology. We have a genuinely world-class global mobile drug discovery and manufacturing operation in China. You can see that over those 20 years, led by Weiguo and the team, we have created 12 innovative small molecule drug candidates. We've built our team on the innovation side to over 800 integrated R&D staff. There are a few oncology and immunology teams of that scale anywhere and gives us enormous capability. In the pink box, obviously led by Weiguo, but also by Marek in the rest of the world, the United States, Europe, and Japan, we've built up great clinical development and regulatory operations. We're currently running over 45 clinical studies around the world. Our first three novel drugs, the novel oncology drugs have all been approved and are now closer to approval outside of China. So creating the innovation in the blue box and bringing it to patients in the pink box. Now on the right-hand side, you can see we've been investing greatly over the last three years in our commercial infrastructure led by Chen Hong. We now have a team, at the end of last year, with 630 people. Actually, now it's closer to 750 people on the ground in China, covering all the main oncology hospitals in China. Chen Hong will take you through the results of last year and very encouraging unaudited revenue results of the first two months of this year, which we've included in this presentation because of their importance. We've also built under Marek and our commercial head in the US, Tom Held, a terrific group of people in the US in commercial and medical affairs. Now, numbers over 50 people already for the launch of our first product in 2022 to HUTCHMED. 2021 was an exceptional year. It was extremely hard work by everybody on this call, and we just achieved some fantastic things. I put them into three buckets. On the commercial side, commercial results in China oncology, with the two launches, SULANDA and ORPATHYS, building the team up to 630 people. Then the clinical portfolio really enjoyed step change progress. We are running 13 registration studies and another five plus plan for this year. ORPATHYS with AstraZeneca has stepped up to being a truly global initiative. We've just received word from Astra that we've triggered our global Phase III milestone, a $15 million milestone in the last couple of days. That means that we are now moving very rapidly into a global Phase III for the savo, TAGRISSO combo. Major data presentations, a number of new assets have been put into the clinic and a good deal with Epizyme on TAZVERIK. So a lot of progress on the portfolio. The last box is the global ambition. I mean, one of the things that differentiates HUTCHMED for many China biotech is that we don't see ourselves as a China biotech. We see ourselves as a biotech company who's bringing home-grown Chinese innovations to the global market. That development organization, clinical regulatory team in New Jersey and in Europe, of now 130 or so people is allowing us to do that. We've got seven assets in clinical trials outside of China. Fruquintinib has just completed its global Phase III, the FRESCO study. We're getting hopefully a readout of that in the middle of this year, which will be an enormous step for fruquintinib. Surufatinib, the US NDA and European MAA are filed and under review and in the very late stages of those processes. We're getting ready for the launch in the second half of the year on Surufatinib. So 2021 has just been a great year for us all, and we've positioned ourselves very well for '22. I'll stop there and hand it over to Chen Hong to talk about the progress in commercial so far this year and last year. Over to you, Chen Hong.

Thank you, Christian. Next slide, please. HUTCHMED, the homegrown promotional activities for ELUNATE in Q4 2020. So 2021 was the first full year for HUTCHMED to commercialize its innovative products, both ELUNATE and SULANDA through its own commercialization platform. The first slide shows HUTCHMED commercialization capability in terms of team size, hospital pharmacy listing, hospital, and city coverage. We can see that the team size increased to 630 by the end of 2021, and we'll continue to expand along with the business growth. The growth for hospital pharmacy listing, hospital, and city coverage were 131%, 73%, and 42% respectively comparing with the end of September 2020. Next slide, please. This slide shows the market performance of ELUNATE. ELUNATE achieved $71 million in market sales in 2021 with 111% growth versus 2020. More than 22,000 third-line CRC new patients were treated with ELUNATE in 2021. Around 4,800 educational events were executed in 2021 for ELUNATE. According to the post-launch checking study implemented by Aprilia, ELUNATE achieved share leadership by exceeding our competitor who was launched two years earlier with ELUNATE capturing 39% of patient share in Q4 last year. It successfully passed the NRDL review last year with only 5% price cut versus the 2021 NRDL price. From the generally treated patient completion and unaudited the first two months sales of 2022, we can see ELUNATE continues to keep very fast growth. Next slide, please. This slide shows the market performance of SULANDA. SULANDA was launched in January 2021 and achieved $11.6 million in market sales for the first year. About 4,800 patients were treated by SULANDA, and more than 10,000 HBP were involved in SULANDA academic events in 2021. Comparing with the average 64% price cut across all oncology NRDL products, we were successful with SULANDA entering into an NRDL with 52% price cuts. We can see that treated patient number in January this year, which was SULANDA's first month for investment was sevenfold less than a year ago. The value growth increased up to 21% in January, February this year, although there was the price cut impact. Next slide, please. This slide shows the performance of ORPATHYS. ORPATHYS is the first-in-class MET inhibitor and was launched in July 2021 by our commercial partner, AstraZeneca in China. Around 1,900 new patients were treated in the second half of last year with about $60 million. There are about 13,000 new patients per year who meet the criteria for non-small cell lung cancer. Even more importantly, there are over 100,000 mass-driven patients in China across all indications. Seven registration studies are already ongoing in China to address these patients in lung, kidney, and gastric cancers. AstraZeneca is a strong commercial partner. It has a well-established and extensive commercial platform on lung cancer business. There are a lot of synergies between ORPATHYS and AstraZeneca's cancer products. We can see ORPATHYS also had a good start in the first two months of this year with $7.4 million in market sales. Overall, we have had a very good year in 2021 and are off to a strong start in 2022. We expect this momentum to continue to go from strength to strength as our commercial team continues to build over the balance of 2022. Thank you.

Thanks, Chen Hong. Now, I will hand it over to Weiguo and Marek to take us through the discovery and development programs. Weiguo and Marek? You may be on mute.

I was. Okay. Good evening, good morning, Marek and I will give you an update on the pipeline. Next slide, please. So 2021 was a year with significant progress on our pipeline, highlighted by NDA approvals for savolitinib and surufatinib in China, NDA MAA submissions for surufatinib in the U.S. and EU, and at the same time progressing our second wave of compounds, amdizalisib and surufatinib into registration studies in China. Next slide. Behind the initial approval of surufatinib in China, together with our partner, AstraZeneca, we are now shaping a very strong life cycle management strategy with seven studies with registration potential across lung, kidney, and gastric cancers. Three of these studies are in EGFR mutant non-small cell lung cancer with MET amplification or overexpression using TAGRISSO savo combo, supported by POC data from Teton ORCHARD and the ongoing SAVANNAH studies. Next slide. The SAVANNAH study is a global Phase III in MET-driven PRCC supported by strong data from the CLIPS study in combination with Imfinzi. To date, PRCC patients have a poor prognosis and very limited treatment options. Moving to surufatinib. Let me first ask my colleague, Dr. Marek Kania, Head of HUTCHMED International, to give you an update on the global activities.

Yes. Hi, everyone. On the surufatinib arm, we spent really the majority of last year progressing our regulatory process in addition to conducting our combination studies with a number of combination partners, including the PD-1 with BeiGene. As you can see on this slide, summarizing our package for regulatory commissions across U.S., EMA, and in the near future, PMDA in Japan, we progress this package through the regulatory process. Just as a reminder, this package consists of two positive Phase III studies conducted in China supported by a modest package of U.S. patients from the U.S. study. First, when we look at the beginning, we are in the late stage review process in the U.S. pending some remaining inspections in the clinical studies, as well as mandatory inspection on the manufacturing side. On the EMA side, we passed the 120-day assessment moving to late-stage review prospects. Next slide, please. While we are progressing our review process, we are also, as Christian said, aggressively preparing for a potential launch, building a very capable medical team, as well as a very strong commercial team, currently, with 54 FD and as long as was before strong effort led by Tom Held. Next slide, please.

Yes. The life cycle management program for surufatinib is currently focused on PD-1 combinations. These are toripalimab in China and tisolizumab globally. Based on encouraging POC Phase II data, we initiated a Phase III, the Satori-01 study in second-line neuroendocrine carcinoma, and we are preparing to initiate another Phase III in second-line esophageal cancer later this year. Other indications we will consider if more mature data would support. Now moving to fruquintinib, next slide, Dr. Marek.

Yes. Let me correctly summarize huge efforts in 2021 progressing on the fruquintinib program, which in addition to conducting our combination studies, our majority of effort was focusing on successful execution of fruquintinib to a global study. As a reminder, this is the truly first Phase III global study conducted in 14 countries across 115 sites. I'm pleased to share that as of December, we reached full enrollment, and it just happened in 15 months. The size of pandemics and limitations with huge effort on teams, and we are grateful for physicians and patients willing to join this study. This really highlights high unmet medical need, which was assumed before starting the study that also concerned and gave us high confidence. This study will complement our robust international package, which will be based on our upcoming NDA, LAA, and PND submissions. Just an important statement to make, this package was fully aligned with U.S. FDA and EMA to scientific consultation, as well as participation of Japan will assure us our good start with PND commissions. Next slide, please.

In China, we continue to expand life cycle management programs for fruquintinib. The FRUTIGA study in second-line gastric cancer, in combination with paclitaxel, is expected to complete enrollment in the second half of 2022 and top-line results mid-next year. Combination with the PD-1 inhibitor, sintilimab currently second-line endometrial cancer is already in a registration study with HCC and RCC registration studies to follow during 2022. Moving on to our second wave compounds, amdizalisib, the PI3K delta inhibitor and savolitinib, the SYK inhibitor both with applications for hematologic malignancies. Next slide? Speaking of the hematologic malignancies, we are building a very strong portfolio. To date, six compounds are already in clinics with several more in discovery. Together, the portfolio provides a broad coverage of three subtypes, lymphoma, leukemia, and multiple myeloma with diverse types of mechanisms of action, a strong potential for combination. The two lead compounds, amdizalisib and savolitinib progressing into registration studies in China and making good progress as well in global studies. Next slide? The China multi-cohort Phase Ib study continues to enroll in MCL, CLL, and PTCL. Follicular and marginal zone have moved into Phase II registration studies last year based on the favorable efficacy and safety profile data in follicular published at ESMO 2021. China CD granted amdizalisib a breakthrough therapeutic designation for follicular. We expect to complete enrollment for both indications this year and NDA - potential NDA submissions during 2023. Additional indications will be considered for registration studies if data support. Several exploratory studies, including combination with tazemetostat, are preparing to start this year. Next slide? Back to you, Marek.

Yes. On the global side, we are conducting parallel development for amdizalisib, and based on our initial promising results in the early phase of our development, we expanded significantly our ongoing study into more than 200 patients and other several cohorts, as you can see. We believe in the second half of the year, we'll be in a very good position to not only having a more robust data set but also longer follow-ups, which will inform our next phase development decision. At the same time, we are also embarking on a combination of studies as we speak with several potential combination partners. Next slide, please?

Continuing on to our second inhibitor, savolitinib or HMPL-523, in addition to lymphoma, we completed a Phase I/II study in ITP last year. SYK is a validated target for ITP. As you know, fostamatinib was approved in 2018. Savo is a much more selective SYK inhibitor and demonstrated a favorable safety profile with an improved GI and hypotension safety profile. The level of efficacy seen in this Phase I/II study was also very promising, ORR 80% and durable ORR, 40%, albeit with small sample sizes. Based on the favorable efficacy and safety, CD granted savolitinib Breakthrough Therapy Designation for ITP. The Phase III study is now ongoing. We expect to complete enrollment by the end of 2022 and top-line results in 2023. Next slide?

On the global side for savolitinib, as you can see, we are conducting a really parallel development as well. This expansion cohort study in lymphoma is conducting as we speak. We hope to report more data by the end of the year, which will inform our next phase development in lymphoma. At the same time, we are preparing IND for our non-malignant indication in ITP, again, as Weiguo mentioned, based on a promising signal from our China studies. This part will be a parallel development. Next slide, please?

Just a quick update on tazemetostat. Tazemetostat is a first-in-class EZH2 inhibitor approved in the U.S. We believe EZH2 is an important target with potential for both solid and blood tumors. Last year, we entered into a collaboration with Epizyme and obtained rights for Greater China. Obviously, our top priority is to bring it to registration in China quickly. Currently, the bridging study, the bridging study IND in follicular has been cleared and this study is ready to go. A second registration study, the global Symphony 1 in second-line follicular will be starting off shortly as well. In addition, we are interested in exploring a broad range of indications, including in combination with amdizalisib, fruquintinib, and surufatinib. Globally, we are also in discussion with Epizyme to potentially explore combination with amdizalisib in lymphoma. Next slide? To sum it up, we are expanding our registration studies with our late-stage compounds, both in China and globally. We anticipate this to continue with more compounds reaching registration and approvals. Next slide? At the same time, our portfolio continued to grow; four new compounds entered the clinics recently. Our goal is to build a pipeline that can provide good coverage of various tumor types with diverse mechanisms of action that allows science-based combinations of our products to further improve efficacy and maximize the value of our products.

Thank you, Weiguo, and thank you, Marek. Now we'll hand it over to Johnny Cheng, our CFO, to cover, at a high level, the financial results that were published today. Johnny?

Okay. Thank you, Christian. So next slide. We have a strong balance sheet at the end of last year, with cash resources over $1 billion, contributed by cash proceeds from various sources, the IPO, the PIPE, and the divestment of our non-core OTC business. Moving on to our operating results in the next slide. Group revenues were up more than 50% to over $350 million. The oncology revenue was in line with our guidance, approximately four times of 2020 revenues. Our R&D investments were up over 70% to around $300 million. Investment in the U.S. and EU has increased significantly and is now at a scale similar to China. The divestment of the OTC business, together with the income from other ventures have helped to offset the R&D investment. As a result, the overall net loss of the group was $195 million. Next slide, please? On this slide, we can see there are still a lot of value within our other ventures. Looking at a high level, those businesses have delivered over $0.5 billion of net income in the last 20 years. If we divest further the non-core business, we can help to fund our R&D investment in oncology. Moving on to the next slide. You all heard from Chen Hong, talk about the commercial progress that's been made and the momentum that continues into this year. We also see strong initial results in January and February. As a result, our guidance for 2022 is $160 million to $190 million in revenues from the oncology business. This is China only. We will incorporate the global revenues in deal cost when we see the approval coming outside of China.

Thank you, Johnny. Next slide, please. We're building a world-class leadership team at HUTCHMED in line with our ambition to be a global, innovative oncology biopharma company operating to international standards. What's really notable about our team's leaders is their long tenure and their track record at HUTCHMED but also in other major multinational pharmaceutical companies. Tom Held, our U.S. Commercial Head, and Selina Zhang, who joined us recently as our new Head of Global HR, and myself, as the Chief Operating Officer, have all joined more recently to fill in new roles in the company. There are many more highly experienced leaders who have joined us beyond the few that you can see in this white box on the slide. Next slide, please. We've doubled the number of people in the oncology team in the last two years, and we've got plans to grow further. We currently have 1,500 people. Last year, we added more, particularly in clinical and regulatory, so that we can run our China clinical trial programs with an in-house team for better speed and quality, as well as building out our international clinical and regulatory team to ensure we can run truly global development programs. As you heard before, we've been expanding our oncology commercial team, and at the end of last year, we had 25 people in U.S. commercial, and this has now expanded to over 50 people in U.S. medical and commercial in anticipation of the launch of surufatinib this year. Next slide, please. We've had clear success with our in-house R&D pipeline as evidenced by the three innovative medicine approvals in China, but scientific partnerships are also very important to us. From a business development perspective, we engaged in four key activities. Firstly, we have long-term strategic partnerships with multinational pharmaceutical companies, such as AstraZeneca and Eli Lilly. Secondly, pipeline synergy collaborations as we really seek out the best novel combinations, for example, with Epizyme, Tyvyt, Innovent, and BeiGene. We're also looking to partnerships to increase our bandwidth and finally, to gain new capabilities in oncology, for example, in the biologics area potentially through strategic acquisitions. Next slide, please. We have a clear strategy from a geographical perspective. In the largest two markets, the U.S. and China, we will launch with our in-house team, whilst partnering out elsewhere. We have the cash and the resources to be able to commercialize ourselves in China and the U.S., which makes sense as we can retain the maximum economic value from our innovations. We already have a strong commercial track record in China, and our U.S. team is moving forward now with seven clinical stage assets, whilst also setting up our surufatinib launch team. For the three late-stage products in the international team, we have clear registration plans in place for the U.S., EU, and Japan with clinical studies underway, and we have the capability to self-develop from those regions. However, for commercialization in Europe, Japan, and the rest of the world, we recognize the complexity with more than 100 different countries, each requiring in-depth local knowledge to be successful. So we've chosen to look for strategic commercial partners outside the U.S. and China, starting with surufatinib and fruquintinib this year. I'd now like to hand over to Weiguo.

Thank you, Karen. Next slide. Yes. So quick update on the upcoming events. In China, we expect 2022 to be a year of work with so many studies ongoing and 2023 a year of results and potential regulatory submissions. Obviously, we will be publishing scientific data throughout the year. Next slide. Globally, 2022 will be a transformative year with important milestones to hit, including potential surufatinib approval and launch and fruquintinib with FRESCO-2 to read out and potentially file. Next slide. To conclude, we expect the momentum to continue in 2022. China's commercial will continue to grow and the U.S. setup will stack. Development programs continue to expand with potentially multiple NDAs lined up for the coming years. Our organization is set to grow to support the execution of our goals in the next few years. 2021 was a busy and fulfilling year, and we expect 2022 to be equally busy and exciting. Next slide. Thank you, and I think we are ready now to take questions.

Thank you. Our first question comes from Alec Stranahan from Bank of America. Please go ahead.

Hey, everyone. Thanks for taking our questions. Christian wanted to offer congratulations on your move. Obviously, quite a legacy you leave behind at HUTCHMED. I guess two questions from us. First, could you maybe talk about choosing toripalimab for the SURTORI-02 study versus some of the other PD-1s, such as tislelizumab? Is there anything emerging from the clinical data that would suggest that these assets synergized differently with SULANDA or any of your other assets? As a follow-up to that, when you think about the combination strategies going forward, how much of your approach will be on top of the approved therapies like PD-1s versus rational combinations in-house together with some of your earlier-stage assets? And then secondly, could you talk a bit about what led to declining the NRDL inclusion for savo? I'm guessing this was about the balance of access, pricing concessions, but any color on your thoughts for Astra's position would be great? Thanks.

Maybe, Weiguo. I think during the Q&A, Weiguo will lead it. Thank you, Alec, for your kind words, and maybe Weiguo can handle the PD-1 questions, and I can maybe give a couple of comments on savolitinib and NRDL.

Yes, sure. So yes, thanks for the question, Alec. SURTORI-02 is the registration study in esophageal cancer being planned, and we anticipate the start sometime this year. Now the combination with tisle is actually in the exploratory stage. Maybe Marek can give you some more details.

Yes, Alec, thanks for the question. We're going to go into details, that both across fruquintinib and other combinations. We have multi-cohort combination studies going on with tisle. Obviously, we hope by the end of the year, we'll be in a position of formulating some good product concept data across several cohorts. We have colorectal, we have small cell, NET, and so on. So we'll be definitely focusing very eagerly on signals from those, probably a good question. From a U.S. perspective, obviously, that's our first priority.

Thanks, Marek. Regarding your second question on our kind of preference for combinations, approved versus our own novel drugs, the PD-1s are really a win of opportunity that we pursued and really generated very promising data that now resulted in multiple registration studies. But going forward, obviously, we would love to combine with our own products in our pipeline and our ability to address strong unmet medical needs. Obviously, all these combos will be a signed space as I was walking through our pipeline chart. Our goal is really to design and build a pipeline with diverse mechanisms of action that can cover the tumor types and that offers the highest potential for science-based combinations. Going forward, you will see a lot more such combinations. Maybe Christian can touch on the NRDL for savolitinib.

Thanks, Weiguo. Yes, it was a tough decision. AstraZeneca and HUTCHMED have agreed on our strategy going into the negotiations for savolitinib. The gap was just too wide. The regulatory authorities wanted a deeper discount than we were willing to accept. One of the reasons that we didn't accept it is because savolitinib is a first-in-class asset in China. We're the only selective MET inhibitor in China. Until such time as that changes, I think we're happy to go self-pay with big patient access programs to help those lower-income patients access the drug. My sense is that from a competition standpoint, it's unlikely we'll see anything coming to market anytime soon. I imagine we'll go back to the discussions with the regulatory authorities for the NRDL discussion this year. We'll go into it with an open mind, but it will be dependent on the competitive environment and a reasonable discount versus an extensive discount.

Got it. Thank you.

The next question comes from the line of Rajan Sharma from Deutsche Bank. Please go ahead.

Hi. Thanks for the questions. And Christian, congratulations on your time at HUTCHMED and best of luck for the future. My first question actually relates to the change in CEO. You mentioned that you informed the Board about five months ago. I just wonder why the kind of immediate change in CEO as of tomorrow and why there's no kind of longer transition period? Maybe I'll follow up with a second one afterwards.

Yeah. Thanks, Rajan. I'll answer that, Weiguo. None of these things happen overnight. I've been away from my home for 34 years. I, as I said, spent 27 years in China. I'm not sure there are too many Western executives that have spent 27 years in China. As my family and my children have been growing up, it's been in the back of my mind. But I have to say, the move of my entire family to the U.K. just for their education was the event that pushed me to realize that staying in Hong Kong and Shanghai for myself was not sustainable. We approached the Nominations Committee and the Board in September, or I did. We had an ongoing process, but we just sort of escalated the intensity of that process. It does seem, I’m sure to everybody that hears this news today as quite a surprise. But obviously, it's a sensitive matter that we couldn't signal to the market until we were ready. As we worked through as a Board and concluded that Weiguo was head and shoulders the best candidate for their succession, we've now come to this as quickly as we could. The reason for no extended transition is we feel that, first of all, you don't want to have the old CEO hanging around. It's even hard enough in an analyst call today, right? You certainly don't want it in the long term. But Weiguo has been deeply involved in all aspects of the business over the last 16 years. There's no need for a transition as it were other than in my role as a strategic adviser to be there for Weiguo to help him in any way I can with the areas that I've been managing independently over the last few years. To help the Board and Simon and the Hutchison Group to keep the momentum going. I'll be there as a strategic adviser, and as a result, there's no need for some sort of extended transition. Hopefully, that answers your question.

Yes. That's helpful. Thank you. And then just maybe one on operations and on Hutchison side of things. Just you've flagged in the release that you would look at obviously non-core asset divestments as a potential for future financing, but then also potentially a second or forward listing in Shanghai. Could you just perhaps talk about your preference for either of those? And if you do choose to go for a Shanghai listing, would that mean that you would list from another exchange?

Maybe I'll ask Simon Toe, to answer that question, maybe John to supplement. Weiguo, if that makes sense to you?

Yes. I was going to suggest.

Thank you. This is Simon Toe. As you know, we sold the Baiyunshan company, which provided a strong return on our investment. We still have our PBM business in Shanghai, particularly one called HSPL, which specializes in cardiovascular prescription medicine. This is a thriving company, and there is significant interest from potential buyers. If we receive a very attractive offer, we will take it into account, as it could be beneficial for HUTCHMED's shareholders by raising substantial funds. This would be non-dilutive financing, putting us in a strong cash position, and we currently have $1 billion on hand. This would allow us to pursue a listing in Shanghai. That is what we are evaluating at this moment.

Johnny, any additional comment?

Yes. I think we will continue to discuss and explore with interested parties. As our Chairman, Mr. Toe said, that this HSPL is a very attractive business. So there are many parties who are interested, and we will be very selective. As far as the listing in Shanghai, I think we understand the process has been extended previously, but now it seems that authorities in China have been able to speed up the reviewing process. We will again go back and review the plan, and then, if the timing is right, then we will initiate some of this initiative that we have looked into earlier.

Thanks. Hello, everyone. Thanks for taking my questions. The first, Christian, congratulations on everything you achieved with HUTCHMED and also congratulations to Weiguo for assuming the leadership role. I just wondered on that point, given that both the CEO and CFO will soon be taken on by you, Weiguo. Are there any organizational changes that have been made in R&D specifically to further support the CSO role? I mean, clearly, it's been a dedicated sole responsibility for Weiguo to date. I just wondered how that will potentially change organizationally?

Thanks for the question. We are actively evaluating several options, both internally and externally, with regard to our CSO role. I think there will be organizational changes in the future.

Understood. Okay. Thanks, Weiguo. I think between the lines there. Also, I just wanted to follow on from Roger's question actually. I'm just wondering what the optimal global capital markets presence looks like for HUTCHMED. I'm just thinking about the proposed Shanghai listing given the listings already in the U.K., U.S., and Hong Kong. Is supporting four global listings a realistic expectation on your side over the future?

Maybe I could say... Weiguo and Johnny maybe... Yes, and I'll also let Simon and Johnny mention as well. But I think three listings is a lot. Obviously, we've mentioned during this call that we are evaluating other opportunities as well. I think it's not realistic to go higher than three listings. But I'll hand it over to Johnny and Simon to say a couple of things.

Christian and Johnny.

Yes. As you know, at the moment, we don't really see an urgency to apply for a Shanghai listing. I was in Shanghai recently. I went to the stock exchange. They did mention that we probably don't like to see forward listing. But at the moment, we have plenty of cash. We also have alternative financing possibilities, non-dilutive financing possibilities. So there's no new urgency that we must go and get a Shanghai listing. Of course, we will look at which is the best for the shareholders. So yes, that’s by answer at the moment. Johnny, do you want to say something?

Understood. That's great. Thanks for your response there. And congratulations once again.

We're now going to take the last two questions. And the next question comes from the line of John Newman from Canaccord. Please go ahead.

Hi, good morning. Thanks for taking my question. I also wanted to add my congratulations to you, Christian. You've truly built one of the leading biotechnology companies in China. Also, congrats to yourself and obviously to the whole team. I just had one quick question really on the SYK inhibitor. Just curious if you could talk a little bit more about the timeline for global development? The reason I ask is we obviously have a few SYK inhibitors approved in the United States, but your asset has a very interesting safety profile, as well as efficacy. So curious about the timeline for global development? Thanks.

Yes, I'll first give you my thoughts, and Marek can chime in as well. We are all very excited about the proof-of-concept data. Now China is in Phase III. We are considering the U.S. and global development activities for the SYK inhibitor. We believe the data is very, very competitive. Regarding the timeline, operationally, we are mobilizing. Maybe, Marek, you can chime in and provide some more details.

Yes. Thanks, Weiguo. As Weiguo said, we are very encouraged by the profile, and we believe it can really stand out. Having said that, we are aggressively focusing on execution of the expansion cohorts, which - this study was a little bit impacted by our limitations in the Phase I. Now, we are catching up momentum. In the second half or maybe by late this year, we'll have our cohort expansion forward completed. While we just perform data assessment, we need to look carefully at our data, both in China and the U.S. holistically, but also separate, we have some exposure differences. But from a regulatory strategy perspective, we have different doses in the U.S. and China. We are having a careful look into late-stage development. But as you said, we are encouraged to present data. At the same time, we also are taking forward our development for ITP indication as well. Overall, this program has quite significant potential.

Hi. Thanks for taking my question. I just got a quick one for surufatinib. I understand that the Phase II trial readout likely to come by the second half this year. I wonder how we see the probability of that result? It causes - supporting an NDA filing overseas? Or is this more likely you'd like to follow and give it after the Phase III trials spectrum? That's my question. Thanks.

Are you talking about - sorry, are you talking about Phase II gastric cancer?

No, he's talking about SAVANNAH...

Yes, obviously, SAVANNAH is ongoing, and it's still - but we believe that data is very compelling, and it will certainly warrant discussion with the regulatory authorities for potential registration for conditional approval. The data is obviously - the data continues to mature, and we'll evaluate if the warrant discussion with regulatory authorities. We are very happy with the level of efficacy. That's why we are working with AstraZeneca to initiate the Phase III - the global Phase III in this patient population. As I mentioned during my presentation that together with the data from Teton, ORCHARD, and SAVANNAH, it forms a great base for a strong base for the study globally. Particularly, we see the opportunity in China for - I mean, in the U.S. for conditional approval. We think SAVANNAH is very strong, and we're just following the data very closely as it matures.

Okay, understood. Thank you very much.

As there are no further questions from the line. I will hand the session now back to the host.

Well, thank you very much, all, for attending the call, and I look forward to working with you all in the future. Christian, do you have anything else to add?

Weiguo, just other than to say thanks, everybody, for your support through the years. I wish all the very best of luck to Weiguo and the team going forward. Thank you all. Thank you very much.

Thank you. Thanks. Bye-bye.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.