HUTCHMED (China) Limited

Hello everyone, this is David Nguyen, head of investor relation of HodgeMet. Thank you for joining HodgeMet 2025 interim result presentation. Our results and presentation slides have already been posted on our homepage, as well as on the Hong Kong Stock Exchange website. Just a quick moment on the disclaimer. The performance and results of operation of HodgeMet Group contained within this presentation are historical in nature, and past performance is no guarantee of future results, and actual result may vary materially from those set forth in the forward-looking statement. So today we are very glad to have our CEO, Dr. Su, our CFO, Mr. Chan, our CMO, Dr. Shi and our head of commercial, Mr. Yuan, to go over the results and provide the latest update on our performance. And the projects and the development. As usual, we will have a Q&A session at the very end, when you can press the raise head button to ask questions and or type in the chat box, but please make sure you have your name and your company name on the screen. So now let us welcome our chief executive officer and chief scientific officer, Dr. Wei-Wu Su to begin our presentation. Dr. Su.

Thank you, David. If we go to the next slide. So again, good evening, good morning, everyone. Welcome to the HatchMet Major Results Conference call. The highlights for the first half 2025, global commercial success for Zagla continues to grow. First half, up 25% comparing to 2024 or PASSES or Savalitinib, potentially our second global commercial product. There are filings ongoing based on Savannah in some countries and also obviously the global registration of study, CEPHRON study is recruiting. We anticipate completion of recruitment later this year. And of course, Elunate in China, new indications, endometrial cancer approved early this year and RCC already filed as well. We do have a lot going on. We expect in the next 12 months, our phase three first line non-small cell lung cancer, osmoticinib plus Savalitinib study called SANOVO should complete enrollment very, very soon. If anything, I think we already fully enrolled. CEPHRON as I mentioned should also complete recruitment. Surely, serofatinib phase two, three study in first line pancreatic cancer phase two readout and phase three transition is progressing. Or FJ4 inhibitor NDA submission is in preparation. Plan to file later this year. And the Savalitinib-Semita study for PRCC globally and gastric cancer in China NDA submissions are also planned. Frequent NDA RCC as I mentioned, NDA filed early this year and within the next 12 months, we expect approval. The CEPHRON study of course, the phase three readout should be sometime first half next year. Our next generation innovation, very exciting ATTC programs the first candidate IND filing coming up very soon in a month or so and we have more to come later this year. And we are also exploring BD activities for not only our ATTC programs, but other programs as well. Without further ado, I'll just turn it over to the next speaker, our CFO, Johnny Chan to give you a financial overview and update. Johnny.

Thank you, Dr. Su. On page six, we can see our balance sheet reflects a very strong cash position over 1.3 billion in cash resources, which includes proceeds from the partial divestment of our joint venture with Shanghai Farm. So these resources will allow us to accelerate global ATTC development and explore potential investment opportunities. Further down the balance sheet under other non-current liabilities, we have deferred approximately 18 million of divestment gains as a provision for profit guarantee to the buyers. This will be recognized over the guaranteed period subject to the joint venture's performance in the next few years. Turning over to page seven, our P&L. So overall, the revenue for the first half of 2025 was 278 million, down 10% versus same time last year. Investment in R&D amounted to 72 million, reflecting multiple NDAs under review in China. On the bottom line, we have reported a record high net income of 455 million, mainly contributed by the partial divestment of our joint venture with Shanghai Farm. Moving on to the next page, we have adjusted down our full year revenue guidance to between 270 to 350 million, mainly to reflect a revision for the facing of certain clinical and commercial milestones, and also the delay of Soflapenep commercial launch. I will now pass to our head of commercial, George Yang, to share with us on the commercial performance. Thanks, Johnny.

The first half year of our commercial results is relatively flat. For Zagla, post a very strong growth, 25%, offset by a weak China performance for three brands, Elunet, Surrender, and Opacys. Next slide. If we look at through Zagla, we know that CRC is the third most common cancer and also the second leading cancer for the fatality worldwide. And with New York Country adding to the launch market and also include reimbursement, we see for Zagla deliver a very strong, solid growth in the first half year, especially Japan with Takeda's strength and the know-how in the CRC market, as well as the benefit and the value of for Zagla in CRC being highly recognized by nice recommendation. So these products will continue to gain market share and through the expansion of the reimbursement and the new launch countries. Next slide. The China CRC market become very competitive in the later line. We see more Regufinibar generics and the TAS102 generics launched in the past 12 months. Also, there's a uptake of the combo regime in the third line. Beva combo become cross-line treatment, become more popular than before. And also we face a final push by the Regufinibar before the VBP. And so we adjust our market strategy and we get back some of the share on the Q2 this year. And we still believe we are the strong market leader in the third line CRC and we will continue to be the market leader in the CRC. And the EMC launch as well as the future RCC approval will further drive our growth. Next slide. This year the MET market went through a strong turbulence with additional four NADL listed products starting from the year beginning with all of the four with the first line indication. OPASIS actually lost some market share in the beginning of the year, but through the middle of this year, we get a full approval of first line as well as the SAAC approval before the middle of this year. OPASIS has been well positioned for this year's NADL renegotiation. Of course, SAAC is certainly the key differentiator versus others TKIs. Also, we will strongly leverage the AstraZeneca's expertise in the lung cancer. The combo treatment will be the first and the best oral dual precision medicine to offer to the lung cancer patients. Next slide. If we look at the MET market, we also have some kind of headwinds. We see the OctoRio TIDA generics launched in the market. Also, we saw this year Leno TIDA gained to the NADL and multiple nuclear medicine, the PRRT treatment is under clinical development, which is fighting for patient share in the top centers. We do see a short term hack up for our business, but if we look at the future, we still believe we are the market leader in the TK segment and we have an obligation to gain the market share for the whole segment as well as the surrender in the NADL treatment. The diagnose and the know-how of the treatment for the NADL is still growing and we believe there's a lot of educational opportunity as a leader in the TK segment, we will further drive the category. Next, I will hand over our Michael.

Yeah, thank you, George. I'm gonna give you an update about our pipeline. So we have made tremendous progress in our late stage product development in addition to the global approval of the CRC for Quinonep also expanding into the new indication in China, such as Indometrial Cancer and RCC. And then another brand, SavaLitin, have also achieved label expansion approval with multiple new indications in the late stage development. Again, with our partner AstraZeneca. Dr. Su also mentioned surfatinib is in the late phase two development with the late phase readout later this year. And our first HEM product has metastas has been approved in China with additional new indication development in the folliculinoma. Later on, I'll also give you an update on our SIC inhibitor in SavaPlanet for NDA and also the YHA development. And our third way product, RinaCitinib and Phenogradinib, also at a pivotal registration trial stage. All these products will profile our future growth. Next slide. And this slide also give you an update about our early stage pipeline advancing or will be entered into the clinical development First, 760 is our third generation BDK inhibitor. Currently still in the phase two development in the refractory DLBCL. And our new MEN inhibitor, 506, also entered a clinical development is in dose escalation stage in the AML. Also today I'm gonna give you updates some of our new class of agent. Dr. Su mentioned the ATTC and antibody target therapy conjugate product. Three early pipeline, A251, 580, and A30 will all enter clinical development later this year and also next year. Next slide. Here's our update about ATTC platform. During the last conference call, we disclosed our new platform. And so now we actually meeting pretty advanced progress in our first three molecule and all targeting enter clinical pretty soon. And so I think the ATTC have several key differences showing here because we really leverage and maximize the synergy between the target therapy antibody and also our small molecule know-how as a payload. And really through the linker optimization to really overcome some of these physical chemical property of small molecule as a payload. And so by doing that, it could have a better efficacy through antibody and small molecule combination while target specific mutation can overcome drug resistant and potentially support a combination with other target therapy, particularly in the frontline setting and also improve the safety given the low target on target and off tumor toxicity than the small molecule. And also unlike other toxin-based ATTC, it has less mild suppression and also have a better quality of life. And also have a federal pharmacokinetic profile resulting from antibody guided delivery to the target sites, improve the bioavailability and reduce drug-drug interaction compared to all small molecule TKI. Next slide. So mechanistically, the ATTC can target protein required for cancer growth. It has a synergistic effect with a combination with functional antibody and also has the ability to combine with other chemo target therapy or center of care chemotherapy. And which is particularly important in the frontline setting. And also there are numerous report the chemo-based ATC is working less effectively with the tumors with dry reputation. So this will have the opportunity to really establish a better therapeutic window and through the reduction on target and off tumor toxicity. And also it have other, less other compound induced toxicity such as liver QT, lung QT, et cetera. So it can be those long-term with improved safety window and with a reduced systemic toxicity of a small molecule. And more generally, the ATTC platform can also be expand to incorporate high molecular weight drug payload. So this is actually a platform to have multiple opportunity. Next slide. So this is the design of our first ATTC candidate, A251. So on the antibody side is use a clinically proven well established humanized and a IgG1 antibody and with a small molecule payload with a drug to antibody ratio of four. For the proof of concept of this platform and the endogen we selected is expressed in multiple tumor type and the antibodies internalize favorably. And on the payload side, it really leveraged our small molecule expertise and with a highly potent against kinase family with its broader genetic alteration and has the potential to synergize with the antibody to overcome resistance and improve the efficacy. We also show you some of the bystander effect to kill the endogen negative cells. And also on the linker side, it has a pretty stable in the plasma and it will be cleaved by the proteins highly expressed in the cancer cells. So have a very precise target delivery in the tumor cells. Next slide. And this slide shows some of the preclinical data for A251. In a panel of tumor cells, we actually see a very potent activity with a sub-none molar range of IC50 for first tumor cell lines with a high endogen expression. And in the middle figure, it shows the bystander effect. For endogen expressed tumor cells, it has the pretty good tumor killing but low or no expressed endogen, right? The A251 has no antitumor activity, but if you co-culture the endogen positive and negative cells, it actually have the activity to kill both the negative and the positive cells. So it really demonstrate the bystander effect. And also it preserve the ADCC activity, same as the naked endogen antibody showing on the right-hand figure here. Next slide. And this is a proof of concept, preclinical proof of concept for our A251. The target antibody is linked to a target therapy payload with a special linker. And the left figure show here is the target antibody showing green and the small molecule payload showing red here with a biweekly dosing. And it shows tumor growth inhibition. And also the single dose of target one and ADCC shows the robust endotumor activity compared with the antibody alone or the small molecule payload alone or the combination both payload and antibody. So this is very important proof of concept showing a single dose of ADCC deliver a sustained tumor inhibition over 14-day period of time and show good tolerability. Because on the right-hand side, we can see the payload itself or payload plus antibody although have an undertumor effect, but they also reduce the body weight. But the A251 itself, those at the 30 milligram per kilogram has no weight loss. So it's very important show not only induce that tumor regression, but also have a very good safety profile. Next slide. And also the A251 also show very good synergistic activity with a stand-up chemotherapy. The left panel here is the tumor xenograft model. The combo with chemo show a synergistic effect. And also on the right-hand side, we have seen the tumor cell line study also show the chemotherapy plus A251 have a synergistic activity. So this is quite different from the other toxin-based ADC because in the other clinical development setting, you can see most of the ADC toxin-based ADCs cannot actually combine with the stand-up cure because the toxicity. Okay, next slide. Also, I'm gonna highlight some of the progress on our key assets, salvalin and net. And both in the global and the China development really gonna drive the future growth. So at the ELCC 2025, we have reported the data, AZ reported the data for savannah study and showing the durable response, overall response rate. And in the same conference, we also show the, our salvalin and net in medicine 14, skipping non-smart cell lung cancer also show a very good response rate and also they sustain the overall survival. So this also lead to our approval, not only get a full approval for late line medicine 14 and non-smart cell lung cancer indication, but also expand the first line indication. Very importantly, George also mentioned about our second line EGFR-TKI refractory patients, opacity plus osmargenib, EMET-AMPLIFI patient. This one, we achieved the NMP approval in the June and also has been selected in the ASCO presentation during the annual ASCO meeting. Dr. Su mentioned our PRCC, the CIMIDA trial will also finish the recruitment and the readout for this trial will be completed. Early next year. And for the China side, we also achieved recruitment for the Sanovo first line trial and also we're trying to finish the Saffron trial recruitment this year. And the gastric cancer EMET-AMPLIFI patients also are preparing NDA for later this year. Next slide. This is also showing the key results for SACHI trial. And in the overall intent to treat patient population, the PFS, Oc plus salvolydinib, which is the hazard ratio was 0.34 and the PFS improvement versus chemo from 4.5 to 8.2 a month. And also regardless, the first second generation TKI treatment or prior third line TKI progress the patient, the hazard ratio is very consistent. And in particular for third generation TKI refractory patient, as you can see, the control chemo only have a PFS three months and the salvo plus Oc reach the PFS almost seven month. And also the response rate disease control rate and durability of response also has been extended by Oc plus salvo combination. Next slide. And interestingly, we also observed the publication for amybandinib in the Meris-Pozzet II trial, as you recall the amy plus chemo versus chemo trial. They also have a biomarker subgroup analysis. MET-AMPLIFI patients only identify about 14% of the patients in the Meris-Pozzet II trial. And unlike our study for SAGI, we observe about 30% of the MET-AMPLIFICATION by FISH analysis. And so in the patient population, as you can see the chemo arm actually both trial the Meris-Pozzet II and the SAGI trial are very consistent. Remember these patients have the MET-AMPLIFICATION progress on the prior third generation TKI and amybandinib trial showing that PFS of 3.1 month, but their improvement is only to 4.4 month PFS with a hazard risk of 0.51. So the patient population in this population what we can conclude, just like the SAGI, MET-AMPLIFI patients have very poor prognosis. Their PFS only three months, but the salvo lineal plus OZ reach the PFS almost seven months with a hazard ratio of 0.32. So this is quite significant difference. We believe in the biomarker selected patient population, salvo plus OZ really demonstrates superior activity, really addressing these patients with a proper prognosis. And also both the SAVANA and the SAGI trial demonstrate the combo has a very effective effect in the patient with the baseline brain metastasis. So these are the key difference between the OZ plus salvo compared with other study because this is the only biomarker selected patient population and also with the only chemo free regimen. So we believe this will have a very substantial unit in the clinical setting. Yeah, next slide. And the SAGI approval, I also wanna mention they enable us to go through the NRDL and the new negotiation this year. And also we present our salvo lineal medicine 14 trial at the ELCC and we have observed very substantial improvement of OS. So the patients with a prior treated with patients is OS of 25 month and the patient with the front line setting the treatment naive patient, the OS with the long follow up have OS with 28 months and the upper lemur has still not been reached. So among all the med TKI, the salvo lineal actually demonstrate the longest over survival repeated and so far. So we're very excited about this data. Next slide. And also for quinnanib has been extending into the other indications. So we already got an earlier approval for the in vitro trial. We have the over response rate of 35% and also the median PFS reached 9.5 month. And we're also gonna present our phase three for CICA two trial at the upcoming ESMO later this year and showcase the activity has been chosen as a meaningful oral presentation. So we'll highlight the data and the NDA has already been accepted and under review at the MMPA. Next slide. Our first hematological product test metastats also get the third line follicular lymphoma approval. It showed a high consistency with the global trial. And so at the EHA this year, we showed the patient in the third line follicular lymphoma with the RRC over response rate of .6% and the invest here are assessed the ORR with 68%. So it's very consistent with the global trial leading to the approval in the US and Japan. Next slide. Next slide. Sour fat in there is our combination study in the pancreatic cancer is going very well. Pancreatic cancer is a highly deadly disease is have a five year survival rate at less than 13%. In general, the PDAC is a cold tumor, immune cold tumor and not responsive very well with the immune therapy. From our preclinical work and the IT study, we actually demonstrate the surfein in there as a VEGF inhibitor not only inhibited the VEGF FGFR pathway, but the CS1R inhibitor pathway also has a immune modulating function. So this phase two, three trial currently ongoing combination carolizumab PD1 and the chemotherapy for the treatment of PDAC. So this will at the ASCO 2025, the investigator initiated trial also show this suroplasm carolizumab with chemotherapy in the first line demonstrate the ORR 51% versus 24% of the PMO. And also there's a significant improvement of the PFS. So the phase two portion of this trial is gonna read out later this year, what will trigger if the results good will trigger the decision making to the phase three portion of the trial. Next slide. Also, I'm gonna give you an update about the E-71 study. So we presented the data at EHA last year demonstrated robots over a response rate of 71% and the durable response 48%. So because the dual mechanism not only inhibited the macrophage digestion, but also stimulating inhibited B cell production. So this dual mechanism of sick inhibition really provide a bondage particular in patients who are refractory that T-PALT of RRA treatment. During the review of course, as you recall, we submit is NDA and MMPA is stipulated as a lower impurity limit. So this requires further CMC validation and stability test. So we target resubmit with the additional data in the first half next year, 2026. And with additional rolling data will be next later part of the next year. So here's the update of our sub-o planet in the ITP and DA status. And next slide. And we also have another trial with warm autoimmune hemolytic anemia, the phase three trial. We have shown previously that sub-o planet reached the overall response rate of 66% and the durable response of 77%. Because the Y-high is a very deadly disease and no target therapy has been approved. So represent a high need. So we are very excited that phase three registration trial has already completed recruitment. And with the data read out next year. So I think we make a very strong progress in the R&D and we're really hoping our R&D team with our novel ADTC platform will develop new treatment modality for the new development. And our late stage prop line will advance and propelled for future growth. And so with that, I'll turn to Dr. Su.

Thank you, Mike. And also thank all speakers for the update. Before we get onto the Q&A, I just wanna highlight, give you a sum up. So in the first half of 2025, we completed SHPL partial divestment with a proceeding of over 600 million US dollars. We also worked on two major products, salvalitinib and fruquinitinib in an effort to expand their indications. Salvalitinib, we obtained the SAACHI approval in second line, EGFR mutant non-small cell lung cancer with metamplification. We anticipate following the treatment with third generation EGFR TKI, about one third of patients will develop resistance due to metamplification. So this combination, the approval of this combination, salvalitinib plus osimirtinib, offers a treatment potential for these patients. And metamplification, as we know, is a driver and these patients do very poorly on standard chemo. And this combination, by precisely targeting the two drivers, EGFR mutation and metamplification, demonstrated very strong clinical benefits and also chemo-free. And additional trials are ongoing, including the first line, EGFR mutant non-small cell lung cancer with met overexpression in China, called the Sanova study, as well as the global phase three study in second line, EGFR mutant non-small cell lung cancer called Saffron study. So we look forward to data readout of these trials. We believe met activation plays a major role in driving cancer growth and proliferation. In addition to lung cancer, as Mike pointed out, we also anticipate NDA submission for salvalitinib in China in gastric cancer. And we also expect data to read out in the global PRCC study in combination with the Infinzi. Frequentinib, we obtained approval in second line endometrial cancer early this year, and we filed for RCC. So these additional indications will continue to drive the commercial performance of frequentinib in China. Outside China, Fruzakula continues to grow, deliver 25% growth in the first half. And we expect launches of this innovative product in other countries around the world in coming months. So these launches will continue to drive the growth of Fruzakula. Outside China. So midterm, strategically, we are exploring how we can leverage our cash to accelerate growth, both in commercialization and potentially R&D portfolio as well. So looking for opportunities to acquire products or commercial products or pipeline candidates. And of course, we are highly focused on our ATTC platforms, very innovative, globally first in class molecules. Really, I look forward to the first molecule initiating clinical trial later this year, and with more to follow. Longer term, we need to, if ATTCs reach clinical proof of concept as demonstrated in preclinical setting, we expect these ATTCs to position us for the longterm future growth. These programs will, as you know, right, will have potential to be positioned in earlier lines, particularly front lines, in combination with chemo, in combination with IOs, and in combination with targeted therapies. So we expect that these platforms will deliver multiple, multiple products in the future for us. Next slide. I think this, you've seen this before, we remain on course, we are committed to profitability, and we look to the future, with our next wave of innovation. Thank you, and thank you very much. I think we are now open for questions. David, you want?

Thank you, Dr. Su. So we are now open for questions. So just for the instructions, if you have a question, you can press the raise hand button at the bottom of your screen, or you can type your question in the chat box, and I will ask the question on your behalf. So for the first question, can we have Matthew Yan from Cetixir SA? Matthew, your line is now unmuted, go ahead.

Okay, thanks, David and Dr. Su, for taking my questions. Yeah, I got three questions. First is regarding our very exciting ATTC platform. I wonder, is it, am I right that we will likely to see what drug targets it is in second half this year? Firstly, regarding A251, and also the development strategy. It seems that, am I right that you go directly to the frontline combo chemo standard of care, right? So this is first question regarding ATTC. And second is still about the performance and the sales decline, because I think you mentioned in your report that there's some reason related to the transitional effects of the change in sales team and marketing strategy. Can you get more elaboration on this? And this is my second question. So question is regarding the sick inhibitor, soft love planet, because of my original expectation is that to have finished instability test by end of this year and received NDA approval. So what's the new message from CTE regarding this new change of a new submission required next year? Yeah, that's all, thank you.

Okay, thank you very much, Matthew, for your questions. I briefly touch on your questions and maybe Mike can chime in later. So regarding ATTC targets, the plan is for A251, which IND submission expected in early September, just about a month from now. We expect to, our plan is to disclose the structure, both the antibody and the payload at the upcoming EORTC conference. So you will have all the information or the preclinical development or preclinical data at EORTC. Yeah, development strategy, clearly I think they have, these molecules are very different from chemo's. They'll have a very different from chemo or toxin-based ADCs. They will have very different safety profile. And we expect that these molecules can be, will be able to be combined with a variety of therapies, as I mentioned, including chemo, SOC or IO or even other targeted therapies. So the development strategy for these molecules will obviously look for signals in the early development. Certainly they have potential to target tumors with either the genetic aberration or genetic alteration, which are payload targets or high overexpression and so forth. So as a monotherapy, however, but that might be a strategy for rapid biomarkers selected pathway for registration. But the much greater potential is in combination in first line, in combination with chemo, chemo IO or even other targeted therapies, targeting all comers without even genetic alterations. And we will explain the rationale at the ERTC conference. So that's about ATTC sales decline, team transitioning certainly had some impact, but a lot more than that, as you know, the anti-corruption activity has been going on in China for some time. So compliance is now becoming more and more important. Physicians are fully aware of compliance issues. So there is a practice change in the field or in hospitals. So there's certainly much less or much more careful off-label usage prescribed by the doctors. So that certainly will shrink the off-label contribution to the total sales. So team is in transition. I think now we are over with it. The off-label usage dropped, but now stabilized. As a matter of fact, first quarter was bottomed out and the second quarter started to grow. We are pretty much back to where we would expect in June and July. So we are very optimistic in the second half, the momentum will continue and will perform to our expectations. So we believe the sales decline in China is transitory and we are already seeing recovery and we are quite optimistic about second half. Your last question about sick. So it went through a lot of discussion. We went through a lot of discussions with CDE on this particular impurity and how we address it, both in terms of using talk studies to qualify the level and additional CMC studies to bring it all the way down to a minimum or to blow the target or allow the target level. So the activities went on in these two areas in parallel and recent communication with CDE, they guided us to focus on CMC and now we are full speed ahead in the CMC area where we have to complete the PPQ batches, accumulate the stability data, but we expect to have the data available for initial submission March or April next year and with additional or longer term stability data to be rolled in since the program is under breakthrough therapy designation in China. So that's where things are. I know we are all disappointed of the delay, but at least now we have clarity, we can drive with our activities. I also wanna mention about potential out-licensing outside China, this program, as you know, because of these issues, we pretty much stopped the outside China clinical development, even though USFDA was okay with the level of the impurity allowed us to proceed, but we felt, we wanted to explore ways to sort this out and I think this force, the issues in China forced us to look into other ways. So I think we are, we potentially have a strategy to go forward within the US with a new chemical entity with full patent life. So I think it would make a lot of sense to switch the molecule outside China completely and with a much longer LOE for the product, but potentially it could be a very short development timeline because of the non-target. And so I think outside China, it could actually present a very attractive out-licensing opportunity once we finish some clinical, early clinical development. At least now we think it's a great target for these indications. It's probably the best in ITP and YHA we have done so far and it could be potentially useful for other indications as well. So I think with regard to ATTC and SICK, maybe Mike, if you have anything to chime in.

So thanks Dr. Su, I just wanna mention for the clinical development side, I think we're very excited about this 251 development. And what we're trying to do is really the global development simultaneously with the US China development, because really not only leverage our synergy, but also take advantage some of the regulatory approach, particularly in the United States. The FDA is really kind of encouraged for the US through this project front runner, right? You can actually start the combination the earlier line setting much sooner compared with actually the CDE. So I think this is a part of the development strategy we're gonna undertake. Even when we have the dose escalation, defined the dose, we could actually move to the frontline combination earlier. So that's will be the key for our development strategy. And we think also, right? You talk about a target and we are planning to close at a future scientific conference later this year. But I think the most important, like I mentioned, our antibodies part selection is a well-known target and have a well-established drug in the clinic. But a payload is really the innovation part. And we think our target therapy payload with the linker will be developed, really leverage our in-house small molecule expertise can really deliver a lot of potential first in class molecule. If it is a clinical proof of concept is reached, this will be a very robust platform for a lot of new generation molecule to come. So I don't think I have too much to add on the SICK part, the SYK inhibitor. So thank you.

Thank you, Dr. Shi. Thank you, Dr. Su. Next question is from Chen Chen of UBS. Chen, Chen, your line is now open. You can go ahead. Chen Chen, you can now go ahead. We can't hear. Maybe we'll come back to Chen Chen. Let's take the next question first. Paul Choi of Goldman Sachs, let us unmute your line now. And Paul, please go ahead.

Hi, can you hear me now? Yes. Okay, hi, good evening. And thank you for taking our questions and congratulations on the progress. I want to maybe just address the commercial side a bit first. And Dr. Su, you talked about your confidence in the second half recovery. But I want to maybe just ask how you're thinking about potential economic sensitivity here affecting end demand for oncology products in the China market and just sort of what your thoughts are on sensitivity to the broader economic situation. And then following up on your comments on the sick inhibitor and partnering potentially for a next generation or follow on molecule here. Can you maybe just comment on how, what your timing you think could be for initial entry into the clinic there? I know that's contingent upon a partner, but just sort of what potential timeframe you're thinking about there. That would be helpful. Thank you very much.

All right, thank you, Paul. On the commercial, China commercial, as you know, it's been a bit turbulent because of the anti-corruption and compliance requirements and also for HHMED in particular, obviously the team, the whole commercial team has gone through a lot of changes as well. Overall, I think the market remains there. Competition may be up as George pointed out, particularly in CRC. But if anything, actually the unlabeled CRC, we actually saw growth over last year, first half of last year for fruquenitinib as well as for serofatinib in neuroendocrine tumors. So I think that what we need to, I think George's team now sorted out the marketing strategy and it's working and I think we just need to take, you know, to adapt, the team needs to adapt to the marketing driven strategy and help physicians understand our products and also to help patients, obviously. I think I obviously expressed the optimism for the second half and that's built on the strong performance or strong recovery of these products in China in the past three months. So it's been challenging. We just want to be transparent, but we are seeing good momentum at the moment and I believe that the momentum will continue in the second half. The demand obviously is there. On the sick, yeah, this is gonna be a very interesting approach. I think, I hope we can talk more about it. It will be very rapid. We expect the new entity will be in clinic or IND submission, maybe second quarter next year. So, you know, hopefully in the clinic before end of second quarter. And most important is that this is going to be a, we believe it's gonna be a very rapid clinical development. Mike, sometime we'll be able to share with all of you and, you know, clearly with high probability of success because this is a known target and we have a lot of data to support. So the probability of success should be very high. So I think, yeah, by the time we are ready to go to clinic, hopefully we have a partner to either co-develop or license, yeah.

Okay, great, thank you. Thank you. Thank you, Paul. Thank you, Dr. Su. We just have one last question because of time. We'll try UBS Chenchen one small time. Chenchen, your line is now open. Please go ahead.

Thank you. Can you hear me now?

Yes, yes, thank you.

Oh, that's good. So thanks to management for taking my questions. My first question is on tariff. And earlier this week, Trump said that farmer tariff is going to be imposed starting from small next week and then up to 250% ultimately. So can management please comment on the impact of your frequent NIP cells in the US? And my second question is for your sovereign NIP, when can we expect its NDA submission in third line gas to cancer in China? And also for your easy attitude, well, will you consider like an IDL negotiation or commercial insurance drug list this year? Thanks.

Okay, thank you for the questions. Tariffs, to be honest, we don't have any idea, but given the exporting or the manufacturing costs or cost for the frequent NIP is relatively low. So to be honest, I don't have any idea about the impact. I'm sure it's gonna be higher. They have to pay something to pay the tariff. But I think personally, I think the impact won't be that much. But until we actually understand the details, I think it's very difficult to estimate. Your second question on GC for salvolytinib, NDA filing is planned later this year, likely end of this year. This is for late stage gastric cancer with met amplification. EZH2 product, Tesveric, of course, we are preparing for an IDL discussion later this year. And obviously this is a very different product. At the moment, it's a still imported drug. The cost is higher. And the patient population serves, the first indication we got approved for is third line follicular cancer, the follicular lymphoma, which is a relatively rare form of lymphoma. So overall, I think we have a lot to talk about. When we go up to the, when we engage with the NLDL. But yeah, that's all planned at the moment. Thank you.

That's very clear. Thank you.

Thank you, Chenchen. Thank you, Dr. Su. Sorry, we ran over time a little bit, but I noticed that maybe some questions still outstanding. So do feel free to reach out to us and we will try to answer your questions maybe offline. So thank you everyone for supporting us and listening to the call. Thank you, Dr. Su, Dr. Shi, Johnny and George for attending the call. And that's all for the call. Thank you. Thank you.

Thank you all.