HUTCHMED (China) Limited

Welcome everyone. Thank you for joining HatchMet 2024 full year results call. Everyone is on listen only mode at this stage. We will first start off with a presentation and then we will have a Q&A at the end when you can actually enter your question in the Q&A box at the very bottom of your screen or you can also press the raise hand button where we will call your name and then you can ask the question. This information in the presentation will be also on our homepage where you can download the PowerPoint presentation as well. Should you experience any technical difficulties, please send a chat message in the chat box. This session will also be recorded and the recorded webcast will be posted on the platform in about a day or so. And just to go over some of the safe harbors statement, the performance and results of operation of HatchMet contained within this presentation are all historical in nature and past performance is no guarantee of future results. Forward-looking statements are based on current beliefs and expectation of management regarding future event and are subject to significant known and unknown risks and uncertainty. Should one of these reasons materialize, then the assumption may be proven to be incorrect and actual results may vary from what was mentioned in the forward-looking statement. Today, we will have a very good lineup of presentation. First, our Chief Executive Officer, Chief Scientific Officer, Dr. Xu, will have the opening. And then our Chief Financial Officer, Johnny Chen, will go over the 2024 financial review and outlook. And then our head of commercial, George Yuan, will go over our commercial aspects. And that will be followed by our head of R&D and chief medical officer, Michael Shi, to talk about our pipeline updates and also our new ATTC platform. And that will be followed by a closing remark by Dr. Su, and then we will have the Q&A. So without further delay, I will pass over the presentation to Dr. Su.

Okay, thank you, David. Good morning, good evening, everyone. Welcome to Hachiman Results Conference call. Today, we announced 2024 four-year results. We are pleased and proud to report a net profit for 2024 behind the global commercial success of FruitZakla. The management will share more details on the 2024 results and provide an update for 2025. Overall, financially, Furuzakura did exceptionally well with total sales of $290.6 million. On the pipeline, we saw cefalitinib for approval in China with expansion into the first line for exon 14 skipping non-small cell lung cancer. Globally, cefalitinib Savannah-Sephron studies progressed well, positioning as well for potential global registration. Towards the end of 2024, we reported positive SACHI interim analysis in China in second line EGFR mutation positive met amplified non-small cell lung cancer patients leading to NDA submission before end of 2024. For frequentinib, towards the end of the year, we received approval for second-line endometrial cancer in combination with centilimab. We believe these new indications and new approval of new products will help drive China commercial. 2025 is shaping up a big year for the pipeline. Mike will go through the details with you. And looking forward, we are starting to get excited about our next generation innovations. And these are ATTCs now starting to move towards clinic. The success of these programs will ensure our long-term growth beyond 2030. With that, let me invite my colleague, Johnny, our CFO to go through the results. Johnny, please.

Thank you, Dr. Su. And yes, we end the year with cash resources of over 830 million, which reflects a small reduction of around 50 million from 2023. A portion of the use of the cash resources were utilized for our long-term incentive plan to retain talents. Another portion was attributable for working capital to support our ex-China collaboration with Takeda. Moving on to the next page. On the financial results, we recognized consolidated revenue of $630 million and reported a net income of $37 million. Our oncology business revenue met our guidance last year to achieve over $316 million revenue. Overall profitability was the results of strong commercial performance, ongoing recognition of deferred revenue, tight control over selling and admin expenses, as well as scaling down our ex-China R&D operations from the restructuring initiatives we started in 2023. On the right-hand side of the page, as you can see, the 2025 revenue guidance for our oncology business is 350 to 450 million. As compared to last year, this guidance has taken into account the non-recurring service and manufacturing income from Takeda to support regulatory approval and also commercial launch in various jurisdictions in 2024. I will now pass on to our head of commercial, George Yuan.

Thank you, Johnny. If we look at the commercial side, The overall Hatchiman Oncology portfolio delivered a very solid performance with a half billion USD sales, which is in-market sales, and more than double of the sales of 2023. The growth mainly driven by Fusacla, as our CEO mentioned, and also Illunet and Surrender continue to deliver growth in a very complicated market environment. Opacity is a little bit flat with more competition to the market. As everyone knows, now there's a five meta inhibitor in the market nowadays. In 2025, we'll continue to look for ambitious target with more than 30% growth for our combined portfolio. Next slide. If you look at the Fusacla, The 2024 is the first full year performance commercialized by Takeda outside of China. Of course, US play a dominant role for the success, but within the 12 months of period, the Frusaka get approval in 12 countries. And we also believe the market in European, the major market in European, once they get a reversal, the growth will further been driving them. And also the guideline, international guideline being supported the brand for the growth. For Japan, with Takeda's experience in the GI, especially with previous experience with VectorPix, we have a high expectation as well. Next slide. Illunet in China, we know that China is an aging population and with the lifestyle change, the CRC is now a leading cancer type in China. And anti-VEGF treatment is well adopted in the later line treatment of the MCRC. Illunet achieved $115 million in 2025 and still keep the third line MCRC market leader position with very strong data and the guideline support. Of course, the market becomes more and more complicated, and also the competition becomes severe with more rigafilib generics going to the market, and also the past World War II get a reimbursement. And in December 2024, Illunet received its EMC second line approval, and this is bringing the VJF-TK combo with PD-1 into the gynecology market, and it will further drive our growth in the future. Next slide. Then we shift the gear to talking about neuroendocrinology tumors, which is a relatively neglected area in the Anchorage community. due to the low incidence and widely distributed in various organs across the body. Recently, with more medical education, in which Hachimed played a critical role, NET received a lot of attention by the oncologists and Surrender, with its differentiated profile, became the leader of the TKI and continued to gain market share, according to the IQVIA survey. In 2024, Surrender continued to deliver double-digit growth. But of course, on the flip side, we see a lot of players coming to the market, especially you see the new SSA coming to the market, as well as a lot of new commodities are under development. Let's talk about Opacis. Opacis is the first meta-inhibit being approved in China, and we are proud that Opacis really changed the meta-autoration and cancer patients' lives in China. In 2024, there are four new players, both from local and from international, into the market, especially when receiving an ideal coverage for the first line, while Opacis is still the second-line coverage. but with AZ's commercial capability in Lancaster area and also wide coverage, Opacis withhold the sales number and continue to penetrate in vast China market. We believe the full approval of first line and the reimbursement listing afterwards, plus the potential business opportunity to combine with Tagreso for mental amplification patients will regain the momentum of the brand. Thank you. Now let's talk to Michael.

Yeah. Thank you, George. Good morning. Good evening, everyone. I'm giving you a pipeline update. So, we have made tremendous progress on our late-stage products. So, in addition to global approval in CRC, fuquitinib is also expanding into new indications in mitral cancer and RCC. So, two other compounds, savolidinib and surafatinib, are also in late-stage development with multiple indications. Our second wave of hematology product, Solvoplanib and Tasmetastat, are all at NDA stage, and the registration trial for new indication development. And also, I want to bring attention to our third wave of products, Franrogradinib, our FGFR inhibitor, and the Renocidinib, IDH1 and 2 dual inhibitor, are also at the paper trial stage to propel future growth. Next slide. On the life cycle indication development, we received the conditional approval in China for the fuquitinib plus centinilamab in the treatment of a second line of major cancer. EMC indicate the incidence, the mortality are projected to grow in China, and the patients who progress on the first line therapy remain with high MNE. And the pivotal trial, FUSICA-1. We have presented data in ASCO 2024. The combination for Quintenil and Syntilamide showed meaningful efficacy and manageable safety profile. The overall response rate in 87 efficacy-evaluated patients was 35.6%, including two complete responses. And the DCR was 88%, and the duration of response was not reached. And also, the median PFS was 9.5 months, and the median survival was 21 months. So up to now, the most common therapy option for second-line endometriosis cancer is the chemotherapy. So the fulcretinib and centilimab combo are the new chemo-free regimen. This group patient is very high on that need. Okay, next slide. Increased mortality rate and renal cancer in China also outpace other developed nations. And the second-line treatment option remain very limited in China. Fusica 2 is a phase 3 result in the second-line RCC with fuquinidib plus centinibumab versus axitinib or everolimus as a comparator. So I'm very pleased to report that today, earlier, we announced the positive top-line results for Fusica 2 trial, and the NDA preparation is planned. So it's proof this will be the first immune checkpoint inhibitor and the TKI combo in China for the second line RCC. So we're very excited to report this in the upcoming scientific conference. Next slide. In partnership with AstraZeneca, we are making great progress on savalidinib global and the China development. These are the late-stage trial, three led by AstraZeneca and four led by HodgeMed in multiple cancer types with meta-operations, including non-square-cell lung cancer, papillary renal cell carcinoma, and gastric cancer. So we're excited to see the global phase two trial, SAVANNAH, will report the top-line results next week at the European Lung Cancer Congress in Paris. The medicine 14, Non-smart cell lung cancer confirmatory phase 3B trial also reached the positive readout, and we received the false approval in the second line and also expanded the label to first line indication. So the updated results, OS results, were also presented at ELCC next week. China phase III randomized trial of salvalidinib plus osimertinib versus chemo after progression on EGFR-TKI also reached positive top-line results at the pre-planned interim analysis. So we have submitted NDA and received the breakthrough therapy designation. The NDA is currently under priority review. The GLOBAL-submitted trial in PRCC also completed enrollment. And other trials led by AZ and China also currently enrolling patients in lung cancer and gastric cancer. Next slide. The SAGCHI China Phase III trial met the primary endpoint of PFS at the interim analysis. So we had the breakthrough designation and then the NDA under priority review. So, SACHI evaluated a combination of savolidinib and tagrezole for the treatment patient with the EDR mutant non-small cell lung cancer with meta-amplification after progression of first, second, and third generation TKI and compared with the chemotherapy PQ, hematotrexate plus platinum doublet. And the results will be submitted for presentation at the upcoming scientific conference. Next slide. In October 24, we announced positive results for SAVANA Global Phase II study, demonstrated a high clinically meaningful and durable response rate. So MET amplification or overexpression represent about 34% of Tagrisso refractory patients. In the World Lung Cancer 2022, AZ reported 52% overall response rate, 7.2-month PFS, and 9.6-month duration of response in chemo-naive patients. So despite the MERIPOSA2 and RNF31, the second-line treatment remained very limited because SACHI and SAMANA data support the chemo-free option for biomarker-selected MAD-positive EGFR mutant patients who progress on the EGFR TKI. So the combo have a very balanced safety, efficacy, and the quality of life profile. And also the global Saffron Phase III trial also will evaluate the efficacy and safety of this combo in meta overexpressed or amplified patient versus chemotherapy. So the recruitment is expected to complete this year. Next slide. Our next wave product, Tazmetaza, is a global first-in-class EZH2 inhibitor and our first-in-license product from Ipsen. Tasmetastat is approved in the U.S. for certain epithelial sarcoma and follicular lymphoma, and also in Japan for EZH2 gene mutated positive follicular lymphoma. We have completed China bridging study, and the results are consistent with the global study. We are planning to report the top-line result later this year. The NDA is currently under review for third-line follicular lymphoma with EZH2 mutation, and we expect approval made this year. And also, China is participating in the Global Phase III Symphony Trial, evaluating TASMETASTAT plus R-squared in the second-line follicular lymphoma with the potential indication expansion. Next slide. We report the first autoimmune agent, SulfoPlanet, is a highly differentiated oral SYK inhibitor. And it offers a dual mechanism targeting both B-cell to prevent autoantibody production and also prevent macrophage destroying the platelet. So this is an IQA report on the China ATP treatment landscape. We believe Sovoplanit not only can compete in this quarter million ITP patients who are currently on alternative treatment, but also potentially help patients who lost follow-up, primarily due to no other alternative effective treatment. Next slide. The phase three ISLAN1 result, we reported the result last year at the European Hematology Association meeting, demonstrated robust ovary response rate of 71% and the durable response rate of 48% in relapsed refractory primary ITP patients. These high response rate are on par with almost all the other alternative treatment, particularly in this patient, this highly pre-treated patient. Over 75% of the patients had priorly treated with the TPO-TPO-RA. So updated results were also presented at the ASH meeting last year, showing a long-term treatment lead to durable response rate 51%, and also the overall response rate 81%. So significantly better than many other treatment options. Next slide. So the SovoPlanet, I mentioned that NDA is currently under review and we are working closely with MMPA and look forward to bring this innovative medicine to the patients. And also we have another indication autoimmune disease in development, the worm antibody autoimmune hemolytic anemia. And the phase two results were also presented at EHA last year and the subsequent published in Lancet Hematology. The several plans demonstrate encouraging hemoglobin benefit compared with placebo with an overall response rate of 43% versus 0% in the placebo group for the first eight weeks. And also the overall response rate of 67.7%. and the durable response rate of 47.6% during the 24-week of a sub-implanted treatment. It also demonstrates a favorable safety profile. So we initiated the phase 3 portion of the ISLAN2 study in the YHA, and we're currently enrolling patients and on track to finish enrollment this year. Next slide. And pancreatic cancer is a deadly disease with huge unmet need with a five-year survival rate of less than 13%. It is an immune cold tumor and usually not respond to immunotherapy. And surafetanib, already marketed in neuroendocrine tumors, is a VEGF, FGFR, and CS1R inhibitor, and also show immune-modulating function. So we're currently conducting a phase 2, 3 trial of surafetanib in combination with carinolizumab and the chemotherapy for treatment naive pancreatic cancer. And this study was informed by an investigator-initiated trial presented at OSCO GI last year. Using surafenib combined with carolizumab, the Hungry's PD-1 inhibitor, plus the chemotherapy in the frontline setting. And the overall response rate was 50% versus 27% in the chemo arm. And the median PFAS-OS reached the 9-month and 13-month respectively, compared with only 5.8-month and 8.6-month in the control group. So the phase two stage, we're already fully enrolled and we're expecting to have the phase two readout later this year. Next slide. Here, I'm gonna update you about our antibody target therapy conjugate, the ATTC platform. So for the past three years, we really invested significant resource into this new platform, which should provide multiple drug candidates in the future. And compared with the traditional ADC, the toxin payload is replaced with the target small molecule. And this ADCZ has several key differentiation compared with the traditional ADC platform. It could have better efficacy through antibody small molecule combination that will target specific mutations. It can overcome drug resistance and potentially support combination. with target therapy, with chemo and immunotherapy. So particularly in the early state, early line of setting with the standard of cure. On the safety side, it has improved the safety given with a lower on-target and off-tumor toxicity of small molecule. It has less myelosuppression compared with chemo-based ADC, and we can think have a better quality of life than cytotoxin-based conjugate. It also has a tratted PK profile resulting from antibody-guided delivery to target sites will improve the bioavailability and reduce drug-drug interaction. Okay, and also the ATTC platform has the potential to incorporate high molecular weight drugs payload, such as ProTags or protein-protein inhibitors. Okay, next slide. Yeah, this slide, I'm gonna show you a preclinical proof of concept of our target ADTC. And so in this case, and our target antibody is linked to a target therapy payload, the TT1, with a special linker. So on the left figure here, you can see the target antibody, which is shown in green here, and a small molecule payload, TT1, showing red, have a tumor growth inhibition. And the combination of both actually have a more synergistic effect. But it's very importantly, a single dose of the target therapy, the ATTC, show a robust antitumor activity. When it compared with either the antibody alone, payload alone, or combination of the antibody and the payload alone. together. More importantly, on the right-hand side, we also show the small molecule TT1 payload alone, or a combination with antibody, actually will not tolerate very well. It shows a body weight reduction. But the ATTC dosing does not influence the body weight. So it is a very important preclinical proof of concept of ATTC. It shows a single dose ATTC deliver 14 days of tumor progression, regression, and also the good tolerability. So this really demonstrates the unique feature for this ATTC platform. Next slide. So our next ATTC generation technology leverage, our expertise in target therapy and also small molecule inhibitor, and also the payload. chemistry, and the conjugate potentially have a key advantage over traditional ADCs. On the right-hand side, it targets protein required for cancer growth, has a synergistic combination effect with functional antibody, and also the ability to combine with IO, chemo, or target therapy as a standard cure, particularly in the frontline setting. and they can overcome chemoresistant, which is delivered by the driver mutation. So the benefit for further optimize this can also overcome the small molecule with a narrow therapeutic window. So a reduction of on-target and off-tumor toxicity of platform is designated to deliver high potent concentration of small molecule. So it can be those long-term where they improve the safety window and will also reduce systemic toxicity of small molecule. Okay, so our first ATTC will, as Dr. Su mentioned, we are conducting the IND enabling study and they could potentially, our first global clinical study could initiate later this year. So to recap our R&D progress, Hutch met us a deep and broad portfolio in oncology, hematology, and recently in autoimmune disease. Our R&D team and the global partners remain focused and executed well for the past year, And we have multiple near-term NDA approvals and also late-stage development catalysts in the next year. So in addition, our no-worry TTC platform will also lead to multiple potentially first-in-class globally competitive assets into the clinical development in the next few years. So next, I'll turn to Dr. Su.

Okay, thank you, Mike. Just to sum it up, we think the most important milestone for us in 2024 is that we achieved profitability ahead of our schedule. And looking forward, we're quite excited about the growth prospects. As you can see here in the near term, we expect a top line and a bottom line growth to accelerate behind through Zecla launches around the world. And the new indications in China, such as EMC this year and potentially RCC next year sometime. And for savalitinib, we believe the new indication behind the SAGI study in China, in second line EGFR mutation positive met amplified patients, once approved should give a big boost since it's targeting a much bigger patient population. Certainly more importantly for cefalitinib, we are hopeful that Savannah and Cephron studies, if successful, will support registration globally and allow us to bring this important medicine to patients globally. In addition, new products launches, Tazmetastat, Solve the Planet, and our now Pan-FGFR inhibitor HMPL453 will add further to the growth. And looking ahead midterm, we plan to leverage our strong cash. to explore acquisition of products or M&A opportunities in China to add further to our commercial portfolio. And longer term, of course, we believe ATTCs will deliver and will ensure our long-term growth. Thank you very much. David, back to you.

Thank you, Dr. Su. We will now proceed to the Q&A session. Everyone on the line, please make sure you put down your name and maybe your institute in your name. There are two methods to ask questions. You can press the raise hand button at the bottom of the screen, and then we will call your name, and then you can ask the question directly, or you can type the question in the Q&A box also at the bottom of your screen. So the first question will be Goldman Sachs, Paul Choi, or I think your line will be unmuted now. You can go ahead and ask question.

Hi, this is Khalil calling in for Paul. Thank you so much for taking our question. I guess a couple of quick ones from us. Apologies if you already mentioned this, but just curious about your phase three plans for Sevalitinib in combination with Tegresso X China. And then secondly, I know you mentioned M&A briefly there. how should we think about, you know, the types of assets you're looking at and the implications for your cash balance in 2025? Thank you so much.

Okay, thank you for the question. With regard to the phase three salvolatinib, I'll just ask Mike to provide any details. Mike?

Yeah, so globally, you know, for savalitinib, right, we have this saffron trial phase three program. is the tagrezo plus savalitinib in EGFR-resistant patient population, in the actually tagrezo-resistant patient population with the metamplification and overexpression. So the phase three trial is ongoing very well. It has 20 countries participating, over 200 sites open for enrollment. So we anticipate AZ will finish recruitment this year. So we are also, based on the Saatchi and Savannah data, we actually will be very interesting to see that will lead to the global potential registration. Yeah, so since it's a randomized trial, it has the potential to, if it is positive, it will support a global registration, including US, EU, and Japan or so.

Okay, thanks, Mike. Yeah, with regard to your second question, M&A or product acquisition or in-licensing of products, I mean, it's really to leverage our strong cash position. We have over $800 million in cash now. And as you know, we announced we are in the process of divesting our non-core business that will add further to our cash balance. And in terms of the type of products or acquisitions we, or M&A, it's all about adding products to our portfolio, but preferably products in oncology, immunology area where potentially with synergy with our pipeline, So we'll be exploring potential opportunities. Thank you.

Got it. Thank you so much. Congrats on the progress.

Thank you.

Thank you. And the next question will be from Jeffries Caradong. Carrie, your line is now open.

Hi, good morning. This is Clara for Kelly. Thanks for taking our question and congrats on the progress. So maybe can you probably talk about your strategy to integrate your ATTC programs into your portfolio, like what kind of development path or indication choice you might initially pursue as you are moving your first candidate into clinics? And also, I think you mentioned a platform has potential to generate multiple programs. Could you talk about what are your key criteria to nominate those programs? And you mentioned first global trial could be initiated this year. Are you looking to run the global trial with a partner or independently? Thank you.

Okay. Thank you very much, Clara. Obviously, we think these ATTCs have really big potential. Obviously, targeted therapies, you know, the first few targets we are working on are targeting major signaling pathways, and these are, you know, genetic alterations known to be driver alterations and with incidence rates, you know, 30, 40% or higher in all tumors. And also, you know, there is a lot of evidence that patients or tumors with these kind of genetic alterations tend to benefit less to chemotherapies or to IOs or to, you know, traditional toxin-based ADCs. So these are, you know, with these, you know, inhibition of these genetic alterations, hopefully you will, you know, allow these patients to benefit better to the treatments. In terms of initial development plan, I mean, you can think of initially late lying as a single agent, potentially single arm pivotal studies, but in parallel, I think the ultimate goal is to move move these products into front lines. I think the major advantage of these ATTCs is that we don't expect overlapping toxicities with front line, chemo-based front line therapies, including chemo-based ADCs. So hopefully they can be combined with whatever front line SOCs. So we can move these two front lines to target a much bigger patient population. So that's obviously, ultimately, it will be clinical data that will guide us where to go. And, you know, hopefully, you know, if proven in clinics, I think, you know, we believe they have huge potentials. Thank you.

Thank you.

Thank you very much. Our next question is from Bank of America, Alex Stranahan. Alex, your line is now open. Go ahead.

Okay, great. Thanks, guys, for taking our questions. And congrats on the progress last year. I guess two questions from us. First, you know, when you look at the EU opportunity for Quintinib, I guess, how do you see this adding to the top line over the course of 2025? Could this support or maybe even accelerate the already strong growth ex-China, or is it maybe more of an incremental opportunity? And then secondly, on Savo, what sort of incremental info from Savannah should we expect next week at ELCC? And, you know, as a follow-up to that, you know, what would you want to see in Saffron for you and Astra to feel confident to proceed to global submissions? Is it essentially just confirming what we've seen in Savannah or are you maybe hoping for something more there? Thank you.

Yeah, Alec, you know, thanks for the questions. So for Quintinib is obviously very early in global launches. Last year is mainly U.S., while approved by EU, by EMA, but it takes time to gain access. And so really towards very end of the year, it was launched in Spain. So there are many more countries to go and I'm sure our partner Takeda is highly focused on EU. And also Japan finally gained access in Japan and launched in Japan around Thanksgiving time. So a lot to go in Japan as well. I think all these markets will certainly accelerate the growth. Same in the US as well. I think we think Takeda will do a great job. as they've been very strong in the launches. Savalitinib, in terms of Savannah and Saffron, Savannah is a single-arm study. It will only support conditional approvals in U.S. and maybe a few other countries. small countries that, you know, that support this kind of system. It is Cephron ultimately will support for approval around the world. So Cephron obviously is the most important study. And yeah, it's enrolling very well, as Mike pointed out. And indicating a strong automatic need with targeted therapies in this patient population. So we are quite hopeful that Cephron study will complete enrollment very soon and we can ultimately support the global registration. Thank you.

Thank you. Thank you very much. Next question goes to Premier Gordon, Julie Simmons. Julie, I think your line is now open. Go ahead with your question.

Thank you very much. Yes, just following on on Frequentinib, just wondering as far as sort of you're now looking at additional indications in China and getting some data on those, wondering how that is potentially could get into global markets. markets and what's required there?

Yeah, I mean, obviously, you know, IO and VEGFR TKI combo has proven synergistic. The successful trial behind, you know, with fruquintinib and cintilimab combination in in second-line endometrial cancer and now in a randomized study in renal cell carcinoma clearly confirms the synergy. In terms of outside China, so obviously we share all the data with Takeda and this is clearly low risk and proven clinical activity. I think the only challenge is that cintilimab is not approved outside China. So if, you know, whether we can replace cintilimab with a different PD-1 or other IO, it just makes it a bit more challenging. But clearly, So PD-1 and VEGF4 combo is a proven mechanism that will result in synergy.

Excellent. Thank you. And then just wondering back on the M&A side of things, what sort of stage of programs would you be looking at? Is this wanting to add to the later stage pipeline or back at the sort of early part of what you're doing?

I think it will be open-minded, but certainly preferably late stage, you know, something that could really immediately accretive, you know, adding to our commercial portfolio.

Lovely. Thank you.

Thank you.

Thank you. Next question goes to Cavendish Adam McCarter. Adam, your line is now open. Go ahead.

Thanks very much. Thanks for taking my questions and congratulations on the results. So my first question really is just on Savalatinib again. So last month during AZ's earnings call, we heard AZ executives say that what they're hearing based on the Mariposa study data is that utilisation of J&J's drugs is likely to be most impactful in the second line in non-small cell lung cancer. So based on this, I'm just interested to hear what management view is on how they see the Mariposa trial potentially affecting Savalatinib's positionings. It does feel there's going to be an impact there. Second question is on Prasatka. I see from the announcement that Prasatka sells primarily in the fourth line with growth potential into third line. So do you have a feel on the levels of market penetration that can be achieved for Prasatka in the US? Based on the sales, it seems that you've taken quite a big, significant contribution to the market already. So just interested to know how much more headroom is there and there for you to go at? And my final question is just on R&D expenses. Obviously, those were down quite a bit over the period. Just wondering how we should think about the outlook on future R&D expenditure, particularly with the level of investment you're going to be putting into the ATTCs and perhaps just overall sort of OPEX in general. Thanks very much.

Okay, thanks for the questions. I'll give you a quick answer through Zekla, and then I will ask Mike to answer your question on Savo. and also the R&D expenses or budget. So for Zecla, yes, you know, in EU Japan, it's all fourth line indication or label. So clearly will be initially will be fourth line. In the United States, the label is third line and above. Obviously, fourth line is blank, right, before the approval. So it's the low hang through there. I'm pretty sure the label covers the third line. I'm pretty confident our partner Takeda will try their best to penetrate the third line. Really it's a very different therapy with proven efficacy and safety, you know, without the chemo, without myelosuppression. Certainly, particularly for elderly patients or the immune-compromised patients, myelosuppression could be a problem. You know, so salvo and R&D, I'll leave it to Mike.

Yeah, thank you. Yeah. So for, you know, in terms of computation, right, I mentioned the Mariposa, you know, is, you know, it's really in the unselected patient population and also is a chemo combo, right? So you're going to see it, not only the traditional chemo-based toxicity, myelosuppression, the you know, the hematology toxicity, but also there are some very challenging toxicity or, you know, skin toxicity. And the big disadvantage is really the, you know, the dosing, right? So they have to do the split dosing and very frequent infusion. So it is really present a, you know, You know, certainly it is approved, but it's not a very clear biomarker-selected patient population. For salvalinidin and tagrizol combination, there's really a... very convenient, oral regimen, and also have a very precision selected target patient population. I think just for the Saatchi, for the Savannah data you're going to hear next week, Saatchi in the future is metamplified ovary spread patient is really represented very a big group of patients you know 30 for 34 percent of patients with met over expression uh amplification have a it's a larger patient population with a clear driver mutation. And this target therapy is really being effective, very convenient. So we believe if it is, I mean, if it is approved or has an alternative, it certainly has a convenient and precision medicine-based approach. So I think just by looking at all this therapy, this is a really... uh high mn need and with the convenient dosing so we we think even i think az is also thinking this is really the competitive advantage for the for the oral target therapy combination and uh R&D expense. So we are actually very excited about our ATDC platform. This is truly the first in class. We think all these assets are very globally competitive assets. I think the strength also for our platform is we are very carefully selected the antibody. Dr. Su alluded to these potentially very broad tumor type, higher percentage driver to mutation, with a lot of commercial opportunity down the road. So certainly we do want to take these assets as our priority to invest. My envision is really initially we're going to do a rapid global dose escalation, really have as a late line expansion clinical proof concept. Once we demonstrate clinical activity, so we can still leverage a lot of opportunity, not necessarily everything has to be done by ourselves, right? Because certainly we have multiple assets by this platform. We can pretty much duplicate and repeat the process. And hopefully when the clinical concept is demonstrated, we can bring potential partners party in, not necessarily just really exponentially grow our R&D budget, but through potential BDR opportunity, we can manage the expense. But certainly these are potentially exciting, competitive molecule assets. We certainly will be a priority for company to invest for the future growth.

Okay, thanks a lot. Thank you very much again and congratulations.

Thank you. The next question goes to UBS, Chen Chen. Chen Chen, your line is now open. Go ahead with your question. Thank you.

So it's very great to see the encouraging preliminary data of your ATTC. I'm just wondering like how many ATTC candidates can move to clinical stage this year? So are you just focusing on one key candidates or you will focus on like a few ATTC candidates?

Yeah, the short answer is multiple, as you heard from Mike, right? So we have already multiple payloads targeting different genetic drivers, but every payload has the potential to to be linked to different antibodies based on the tumor antigen expression levels in various different tumors. So it's all about, you know, deliver these highly potent targeted therapies to different tumors. So, yeah, there will be multiple, but this is the year that, you know, it will get started. Maybe R&D filings, maybe one or two, maybe two this year, depending on timing and how the preclinical R&D enabling talks progress. Certainly one could be two, but there will be more to follow later next year or even beyond.

I see that's quite clear. And the second question is very quick. So previously, you guided break even in 2025. And it's very exciting that you have already achieved this in 2024. So I just want to double check, like your break even target in 2025. Is this still the guidance now?

The short answer is yes. Maybe Johnny can provide more color on this. Certainly, we think we'll be profitable from here on. We believe we reached a self-sustaining kind of mode of operation.

Yeah. Yes, thank you, Dr. Su. So Chenchen, we have only been giving out this revenue guidance for our oncology business. But I think in terms of our target, as Dr. Su mentioned that we have in advance achieved our self-reliance, self-sustaining profitability model already in 2024. In fact, we made profit 2023 thanks to the upfront income that we recognize from Takeda. And this year we have, from our ongoing business, we have been able to make breakeven and the side profit this year. And going forward, as we said, we will maintain this goal and we will continue to have this pathway. But this is not our guidance strictly to the market. But one can take because of the divestment of our non-core business, we will be recognizing a substantial high amount of profit in 2025. That's great.

Thank you.

Thank you. We have one question on the line. This is from Morgan Stanley, Jack Lin. This is questions regarding our ATTC platform. Question one is, is there any molecular difference or modification in the TKI being used in the payload of our ATTC as compared to the traditional TKI being consumed orally? So that's question one. Question two is, would it be possible to use more potent TKI payload similar to how ATC technology has allowed to use more toxic payload that would normally not be able to use systematically? That's question number two. And the final question is, what do we think about the future potential dosage or dosing frequency of our ATTC drug candidates?

Okay, thanks. It's a lot of questions here. So certainly structure of the TKIs, these are all novel structures, chemical structures will be protected by patents. And so they were obviously different from whatever is available out there. I actually don't even think anything approved against these targets. In terms of toxicity or very potent TKIs, I mean, that's the whole idea, right? This, you know, the ATTC, you know, we hope to improve clinical activity through combination between the antibody and the payload. at the same time reducing toxicity because the free circulating small molecule payload will be extremely low. So any toxicity associated with the payload will hopefully be much reduced. So yeah, I think that's the key rationale behind ATTCs. Certainly, you know, as Mike already explained in detail, you know, the clear definition from traditional toxin-based ADCs are that, you know, these ATTCs, they are targeted therapies. They are much less, you know... We expect much less myelosuppression or overlapping toxicities with the chemos and hence can be combined, hopefully, much better with frontline chemo-based standard of care. So really, the big potential is in combination.

Thank you, Dr. Su. Maybe we will have the very final question of the night. HSBC's Cindy Chai. Cindy, your line is now open. Please ask your question.

Hey, thanks for taking my questions and congrats to the achievement. I just have a quick question. So I know, we know that there are US tariffs here and just wonder as frequent TNIP is still produced by HMAT and what's the tariffs impact in the future? And also, what's the progress of our manufacturing transfer to Takeda? And after the manufacturing transfer finished, whether they will produce Procretinib in US or in Japan? Thanks so much.

Okay. Thank you for the question. Obviously, tariffs on pharmaceutical products being proposed by by President Trump, but no details at the moment in terms of a level. But as you all know, the cost of goods or cost of manufacturing for all pharmaceutical products are always relatively low. So the impact to our products, let's say, through Zecla remains to be assessed. At the moment, it's really not clear. In terms of tech transfer to Takeda, it's going very well. Both API and drug product ultimately can be sourced outside China. So China can remain as a supplier, Hachiman can remain as a supplier, but at least there will be multiple sources to support global market. Thank you.

Thank you, everyone. I think we'll wrap it up here. Thank you for all the questions. Dr. Su, would you have like one last remark?

Yeah, absolutely. I just want to thank everyone for participating in this call. And as we presented here, HutchMed is in a very good position. We have very strong cash. We have multiple products this year going through regulatory reviews and hopefully come out positive. We have Fruzecla going well and expected to continue the momentum and Savalitinib behind Savanna or Saffron. Ultimately, hopefully, we're hopeful that we can bring this important medicine to patients globally. And all these will ensure accelerated growth for us for years to come. And of course, longer term, yeah, it's all about next wave of innovation, particularly ATTCs. Thank you all for participating in the call and look forward to interacting with you.

Thank you, everyone. We will now end the call.