Hutchmed (China) (HKEX:13) — Hutchison China-Meditech Investor Presentation

0:02 Good morning, ladies and gentlemen, and welcome to the HUTCHMED Investor Presentation. Of your screen. The The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via the Investor Me company dashboard. Before I begin, I would like to submit

0:33 the following poll. I'd now like to hand you over to Mark Lee, Senior Vice President of Corporate Finance and Development and Johnny Cheng, CFO of CHIMED. Mark, good morning. Thanks, Paul. Thank you, everyone. Welcome to this, virtual half year. I'll see some of you perhaps next year. But, I'll what we'll do is Johnny and I will run through the slides over the next twenty to thirty minutes just to give an update on where things have gone in the last six months, and then we can open it up for questions. Just So moving forward, just as a reminder on who we are and what we're up to, we're focused on building this global science focused biopharma from our base in China, but as you can see in the red stripe, our primary focus has always been on the discovery and development of novel drugs primarily for cancer with global differentiation and an outlook to commercialize worldwide.

1:36 But of course, we are also in China and having conducted commercial commercialization of products and pharmaceuticals in China for the last twenty years, we are working towards building a fully integrated oncology business here in China. In terms of our brief rundown on their aspects, a reminder of what we have here at CHIMED starting from the top left and moving clockwise, We've always been focused on this world class discovery and development capability. We now have over five fifty scientists and staff conducting research and development in cancer as well as autoimmune disease. We were one of the first biotech companies to be in China since the early 2000s and indeed even today when it comes to actual discovery of drugs and then develop and commercialization from in China, we are still one of the leaders. We're one of the top two or three in terms of what's coming from in house and in terms of what's coming from in China to the world, we are only one of maybe two companies.

2:48 Going clockwise, we have this highly differentiated portfolio of drugs derived from that discovery from our labs. At the moment, we have nine drugs in clinical development, including one already on the market. We have another of those nine, three have their NDAs already filed and indeed one is about to have a US NDA filed. And we have many more in preclinical development. Going clockwise you see the blue segment we have a deep pan China commercial platform we've been running what is on the cardiovascular side what is now over 2,300 sales reps covering three twenty cities across China.

3:35 And so clearly we've got a very deep infrastructure, but on top of that we also have built a commercial team of three twenty new people focused on oncology, and Johnny will tell you a bit more about that shortly. So all in, we have a very seasoned management team that's had very strong corporate governance over the past few years, and indeed we've been listed in London since 2006. Going to the pipeline, this is across two pages. This page shows our lead assets, the three lead assets: savolitinib, surufatinib, and fruquintinib. You see looking at savolitinib, our selective cMA inhibitor partnered with AstraZeneca, You can see on the right some lead trials particularly in non small cell lung cancer in the blue box, which are blue signifying China.

4:34 That blue box with an NDA was filed in May and so we're expecting AstraZeneca to launch that middle of next year, which we're very excited about. As well as the under registration intent you see work ongoing globally in kidney cancer. We're expecting to kick off this phase three in kidney cancer at the end of the year based on the Savlar data, as well as Savanna which is an ongoing non small cell lung cancer trial combined with Tagrisso. For Surufatinib you see we filed an NDA this is our first unpartnered product to be launched. In China we have an NDA file we're expecting to launch this at the end of the year for non pancreatic NET, but you also see that for pancreatic NET, that is the NDA is being submitted and we expect that to be submitted in the next few weeks accepted in the next few weeks. And You so also see that red box also moving into NDA filing in The US.

5:41 On the third row you see Elunate which is our inhibitor, highly selective VGFR inhibitor which has been partnered in collaboration with Eli Lilly that was launched at the end of twenty eighteen and as of January is now on the NRDL, the National Reimbursement Drug List and we're very excited to have some recent news on the commercialization plan for that. You also see under registration intent the FRESCO-two study, this is a colorectal study in the rest of the world, in Europe, in The US, and Japan. That is initiating where we should be getting our first patients in that over the next few weeks.

6:27 That study should be a couple years, and so we hope that within, call it, thirty months we'll be submitting our second NDA in The US based on this trial. You also see in the blue box Frutiger gastric cancer trial that we went through an interim analysis early about two months ago, passed through for futility and so we expect that to finish enrolling around the end of the year and have data on that. That, to give you a sense of what that is, for second line gastric, the market potential for that, if it's positive, is maybe three or four times that of third line colorectal, so a very potent possibility should we succeed.

7:16 On the left side, maybe I'll just touch on the fact that see both for Surufatinib and Elunate, you see many PD-one combos being tested in clinical trials. These are next generation combinations with immunotherapies where we're able to use the power of these two highly selective EGFR compounds to complement the PD-one activity or vice versa, the PD-one activity complementing the EGFR compounds and to double up the mechanism of action in patients. Now, historically combining cancer drugs has been difficult because of the toxicity, but given how clean our drugs are we feel there's a lot of potential, and I'll show you some data in a moment that shows at least some preliminary data on how well that's doing with Surufatinib.

8:04 You can also see that we also, in addition to Innovent and Juncia, we also signed a deal with Beigene for PD-one combinations with their tislelizumab, and that in particular we're very excited by because while the other two have been focused more on China, this Beijing one is much more globally focused.

8:28 On the second slide I won't go into detail but you see HMP0.523, 6A9, these are our blood cancer drugs, moving along proof of concept and we hope to get at least one of them into registration trials to decide to move into registration trials around the end of the year. We also have our FGFR compound HMPR-four fifty three it's in phase two for mesothelioma but we will also move another start another phase two trial in the next few months which is why you see another blue box there where it says other solid tumours. HMPL306 is a very interesting compound because it's interesting because it's an IDH onetwo inhibitor. I doubt too many of you are familiar with IDH but it's a relatively novel mechanism of action addressing specific disease problems, cancer mutations, one of them being IDH, one of them being IDH2.

9:31 The drugs in the market today only inhibit one of them, and indeed, when one fails it's usually because of a risk resistant mechanism of the other. So an IDH1 inhibitor will fail to stop the cancer because eventually an IDH2 mechanism will develop. By creating an IDH12 inhibitor we hope to address both of those and significantly extend the usage of the drug. So those are the on a high level those are the compounds. These are the compounds in detail I won't talk about them I've talked about these briefly. All I'll highlight on this slide is you see at the bottom another three or four yellow rows more drugs that are in preclinical development than we've declared. One of them here is a monoclonal antibody, so we've really branched out, developed, come up with a our labs have produced more new novel compounds both small molecules and large molecules and we're expecting to have them filed for clinical trials in the next eighteen months or so.

10:45 And now lastly, just going back to that point I mentioned earlier, this management team has been together for a very long time. You can see if you look at the red numbers on this slide, of us have been around for ten, eleven, twelve years on average on median, and really the only new faces you see there are the ones when new positions have been created, such as our Chief Medical Officer for International as we built out our New Jersey office, as well as our new head of strategic HR from Merck and our head of government affairs. These are all new positions that we that we've created over the last few years. So other than those, you see that it's a very cohesive and highly skilled management team. And and indeed, if you if we're if I'm gonna highlight one person here, now you can see, on the second row, Hong Chen, he's our chief commercial officer and and is now in charge of launching these oncology products into the China market.

11:42 We, of course, have had a long standing partnership with AstraZeneca and Lilly and Merck. We've had a solid shareholder base and clearly good governance over the past decade and a bit. So I'll just go quickly on the three lead assets. On Savolitinib, the strategy, as with all three of them, is for fast approval with monotherapy but where combination opportunities can indeed can actually be the larger market opportunity in some cases. This is one of those cases. Perhaps more I'll move on to that. In terms of lung cancer, I've showed you this slide before but it always helps to come back to it.

12:34 You see that first pie chart where one point eight million new lung cancer patients per year can be segmented by what is driving those mutations that is driving the lung cancer and to give you a sense of scale ALK at the bottom is only 5% of the pie chart and yet there's almost $2,000,000,000 in sales there. So the first NDA that we filed in China is for this red segment up there, this 6% segment and that is the segment that we expect once the assuming the NDA is approved in the middle of next year that AstraZeneca will launch in China on our behalf. Those of you that don't remember the deal with AstraZeneca is a global deal, but indeed in China it is actually more favorable to us economically.

13:25 Royalties are at 30% and with AstraZeneca, if you don't know, AstraZeneca is one of the largest

13:37 companies in China especially focused on novel oncology medicines. In the first half of this year you might have seen last week the first half of this year they did put $2,600,000,000 in sales in China and a lot of it is lot of the growth is based on Tagrisso. So with AstraZeneca's dominant franchise in lung cancer, this is very much focused on two drugs, Arresa and Tagrisso, and you see here after about thirty percent of patients, actually about fifty percent of patients in China, they are driven by what's known as an EGFR mutation. With an EGFR mutation you need an EGFR inhibitor like one of these three.

14:25 After that fails,

14:29 an eighth of these patients require a MET inhibitor, about half these patients require a T790M inhibitor of which there's only Tagrisso, approved worldwide. But most importantly and interestingly for us, after Tagrisso, about a third of those patients are driven by MET and savolitinib is a MET inhibitor, a selective MET inhibitor, so the work that we've been doing with savolitinib globally has been on two fronts: one is on the monotherapy focusing on those mutation patients in that red box red red slice on the left but also on the orange blue and pink segments where you combine savolitinib with Tagrisso and as you can imagine AstraZeneca are very aggressive and very focused on this given that, Tagrisso is on its way to do $6.07, $8,000,000,000 in in peak sales now, per per analyst forecast, and we hope to get a 30% chunk of that.

15:35 So, and just to give you very briefly the data that's backed some of this up, the data that was used in the new drug application in China is this trial. This is in med exon skipping NSCLC. It's basically most mutations of lung cancer that are MET related are this type. In our 61 or 70 patient trials we had forty nine percent response rates, ninety three percent disease control rates, and with a progression free survival of almost ten months you'll note that we highlight PSC here which is a particularly aggressive and difficult to treat form of MET mutation lung cancer We had a lot more of this PSC type in our trial and if you look at the standard of care for PSC chemotherapy sixteen point five percent response rates only two months median progression free survival. So all of this data I've shown you is a massive step up in efficacy.

16:45 You can see on the left also in terms of safety we perhaps look at the middle only forty one percent grade three and above adverse events only fourteen percent discontinuations from adverse events that is a tremendously clean cancer drug profile and it's a testament to all the work that's done in the lab to create savolitinib in the first place. Moving along on the combination, as I said before the SAVANNAH trial it's a combination of Tagrisso and Savolitinib and that is continuing to enroll in 13 countries around the world and we expect that to finish enrollment at the end of the year and have a data readout next year.

17:34 Lastly on savolitinib in kidney cancer, this was presented in June, a 60 patient trial comparing savolitinib versus Sutent, the standard of care in this particular set of patients. Again, you know, a step change difference in efficacy: twenty seven percent response rate versus seven percent all responders were still in response at the time of disease cut off Hazard ratio overall survival here this is not statistically significant given that it's only about sixty patients but essentially forty nine percent lower risk death with savolitinib versus Sutent and again here looking at these AEs only forty two percent greater than above AEs versus with Sutent of eighty one percent.

18:23 So again a step change in safety and efficacy. Okay so that's savolitinib. Moving on to our lead unpartnered asset Surufatinib Surufatinib has a dual mechanism of action it both cuts off blood flow to the tumour and has this immunotherapy

18:46 mechanism where a cancer cell secretes what these tumour associated macrophages effectively cloaking it from our white blood cells. This drug removes that cloak and allows the white blood cells to attack. Again, the strategy here is faster monotherapy approval but following up with combinations. The exciting things here are we're about to launch in China, we're about to file an NDA in The US and the combinations that we've got with PD-1s. And of course we retain rights worldwide so the economics for us should be very high.

19:33 Perhaps I'll skip along to explain the first monotherapy indication. This is in neuroendocrine tumors which is shown to NET. You can see NET patients unlike most cancer patients that we read about before like colorectal cancer patients they actually live a very long time sixteen years with early NET, eight years with advanced NET which is the

19:57 target population that we're going for with monotherapy. With grade three NET it's still only about ten months and there are no approved treatments. Nothing has ever worked in this space. But here, just looking at this, you can see that not only do these people live longer, but as a result there's a fair bit of time it's almost like a chronic disease when it comes to prescriptions. What's also interesting about this market is that there's very, very little competition. Unfortunately for patients today before Surufatinib gets approved there are only two drugs, two targeted therapies for advanced NET. You see on the right the second last and third last column Sutent and Sunitinib and Evolimus.

20:48 Sunitinib is only approved for pancreatic NET, so there's a large portion of the NET population that cannot be treated with Sutent. And then you have everolimus as the second last column it's approved for more based on this RADIAN4 trial but even then it's only approved for non functional NET and as you can see that's about half the patients. Surufatinib, through our two Phase III trials SANET EP and SANET P, we've had two successful phase 3s for the whole gamut. And this treatment landscape that I'm showing you here, you see with the red and the blue it doesn't matter because in red, whether it's The US and Europe or in blue and China, the standard of care is the same.

21:37 And as a result, when we went to the US FDA to talk about NDA options and we showed them all of that Phase III clinical data, we showed them The US data that we've got already showing that it's efficacious in US patients, even patients that have taken Sutent or Revolimus beforehand, and so that's what all these each one of these bars is a patient and how many months they remain on the drug.

22:03 On the right side, there's a whole bunch of data here, but there's two takeaways. The pharmacokinetic profile is the same in The US patients versus Chinese patients, and the toxicity profile is the same or better for US patients versus China patients. So if we talked about this three months ago, we would have been talking about spending $40,000,000 doing a two point five year trial and then waiting for the NDA to be reviewed for another year, with three years, three and a half years before approval. Now, having gone to the US FDA with the data and gotten an acceptance from them, we're expecting to start submitting the NDA for this at the end of this year and potentially launching this drug, assuming the NDA is approved, in eighteen months.

22:54 So we've now

22:57 had a step change in the commercial aspect and potential for our drug in The US. Lastly, I talked about grade three patients. Grade three very difficult, untreatable today. This data is some early phase one data we've shown combining with PD-1s. Now each one of these bars is a patient and what happens to their tumour at treatment. With other treatments, other chemotherapies, all of these bars would be plus 20%, 40%, 100%, 200%, the drugs wouldn't be able to work. But through our combination, we've got well over half the patients responding, we've got disease control rates particularly in our recommended phase two dose of one hundred percent.

23:52 So while this is early data, this is extremely encouraging and we've been running a phase two throughout 2020, it will run till the end of twenty twenty likely in eight tumor settings, and we think there'll be some pretty exciting data in these really difficult to treat populations next year. Okay, so that's surfactant. Lastly, I'll just talk briefly about the strategy for Fruquintinib ELEVATE before I hand over to Johnny. Again, monotherapy first, combinations next.

24:25 Johnny will talk more about this but we've had color we launched at the end of twenty eighteen. We got on the NRDL, the National Reimbursement, at the beginning of the year, and now we've got new news on the commercialization plans. So we're very excited about. In The US, we've had our interactions with the FDA, the EMA and the Japanese authorities, the PMDA. We've got fast track designation in The US, so we're kicking off a phase three for this,

24:56 well, now. So I expect the first patients to come in in the next few weeks. That'll be a two year study, then we can have that potentially in three and a bit years we could be launching this drug in The US and Europe if it all goes according to plan. And then with combinations, whether it's with chemotherapy like Tadzol you see here for gastric in the Frutigas study or in combination with PD-1s. And you know I'll just I have to say this again: Fruquintinib is such a specific selective and clean drug that all these PD-one companies, whether it's Innovent or Beijing or Geno, have come to us saying let's combine with your drug because it's just so selective, so clean, this is the best one to combine with. We're doing multiple PD-one combinations in China and The US to bring this drug up to earlier lines of therapy and of course increase the market size.

26:01 Okay. So maybe I'll hand over to Johnny to talk about some of the numbers. Okay. Thanks, Mark. As Mark mentioned that that we have been entered into this national reimbursement drop list from this beginning of this year. So you can all see that on the right hand side, the right hand column that we our out of pocket for the our patients for l and a is about 500.

26:27 So the NLDR DL price is actually around 1,200 versus our competitors, they actually, the out of pocket for the patients is around 1,000. So we are basically, our competitor is is double of our price. Where on the left hand side, you can see since the beginning of the launch from end of two thousand and eighteen till now, we have managed really have been doing through through the commercial effort. They have been able to penetrate around 15% of the market. As you can see in the next chart,

27:06 we have recently announced that with Lee with Eli Lilly that we have expanded our commercial collaboration so that ChimeNet now will be involving in all the local mathematical detailing as well as promotion. The economics that we will be able to obtain is around 70 to 80% of the net sales of the throughout throughout China. So on the left hand side, you can see, as we mentioned that Lili have now managed to able to penetrate around 15% of the market. So we anticipate this this would actually go up. So for six months in the first half, that 50 15% equates to around 14,000,000. So we expect that once we we are able to start our team able to start at the end of this quarter and full year next year and onwards, will be able to ramp up this 15% penetration to hopefully, we can, over the next couple of years, to reach around 50% of the penetration.

28:18 With that target, also mentioned by Mark earlier that we have now built a team of 320. Basically, we will be targeting to cover 1,300 hospitals across China, and they are the key focus oncology specialist hospital. So that would cover around 95% of the initial market opportunity, and we will continue to expand our team. So these 320 people, by the end of this year, we probably we'll we'll be going to three fifty to 400 people, and we will we'll be utilizing this team, of course, to market our super fattening, which we anticipate to be able to to be admitted into the NDA. We'll be able to launch this product hopefully by the end of this year or early next year.

29:14 Now with our exciting new pipeline coming through, we just also announced that our number nine in house discovered asset, HMPL three zero six, which is a IDH inhibitor, which inhibits IDH one and two. And this, we are now putting that into a clinical program. So on the financial side, basically, in the first half, we have invested around 74,000,000 into our r r and d versus last year's of 67. I think COVID nineteen has had a little impact. Overall, in general, May May may most of our program have been progressing well. And especially our commercial platform, in the first half, we have achieved constant exchange rate growth of 19%.

30:01 Overall, the group net loss accumulated to amounted to about 50,000,000. So on the cash side, we have 280,000,000 cash on hand, also 120,000,000 of unutilized banking facilities. Plus the joint venture, we have about 100,000,000. And then so together, that is around 400,000,000. Not not to mention that about this General Analytics that we have another 100,000,000 that that we have basically recognized it in July. So total, we have around 500,000,000. So at the moment, we have only outstanding bank loan of about 27,000,000. On the right column, right hand side, you can see the total investment for r and d we expect is around 180,000,000 to $210,000,000 for the full year.

30:54 In the first half, we only incurred about $32,000,000 in terms of cash outflow, mainly because we have a lot of cash dividend from our joint venture. In the second half, we expect to ramp up a lot of this spending because we are building up our commercial team in US in anticipation for the launch of Surufatinib in US next year. Also, we we will be investing into our CapEx expenditure. So, basically, we are building up a large Shanghai manufacturing facility that would enable us to continue to supply our pipeline going forward in the next three to four years. So overall, in summary, our exciting program, Surufatinib launch, we anticipate hopefully by the end of this year or early next year. And Savolitinib, we hope to start our PRCC registrations study sometime towards the end of this year, if not early next year.

31:58 LNA, we we are hoping to broaden the China access through our 320 people commercial team. US and Japan, Survetinib NDA submission, we are hoping to start with our submission by the end of this year. And as we admitted it to this fast track approval process, so there will be a rolling submission process. So we hope to complete all the submission by early next year so that in anticipation for, if possible, an approval by by second half of next year. Finally, the m and a activity, we continue to explore opportunity regarding our noncore commercial assets. So that is on the OTC side. We're looking for potential buyer to so that we we have a divestment so that we can more focus on our key molecule large molecule as well as a small molecule development.

32:55 Thank you, Mark. Johnny, thank you very much for a very comprehensive run through the business and some of the very exciting opportunities you have ahead of you. Ladies and gentlemen, please continue to submit your questions using the Q and A tab situated on the right hand side of your screen. But just while the company take a few moments to review those investor questions submitted already, I'd just like to remind you the recording of the presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard on the Investor Meet company platform. Lastly, before I hand back to Mark and Johnny, I'd like to remind you that your feedback is important to the company. Immediately after the presentation has ended, you will be redirected for the opportunity to provide feedback in order the company can better understand your views and expectations. Mark, Johnny, I know I haven't given you a great amount of time to review some of the questions that we've had in today, but perhaps I could hand back to you to respond to those questions where it's appropriate to do so. Could I just ask that you read out the question and answer where applicable, if that's okay? If I can hand back to you there, please.

33:55 Okay. Sure. Thanks, Paul. Okay. The first question is why are we listed on the AIM market as opposed to the main market?

34:08 The short answer, I'm sure Johnny can contribute as well, but the short answer is it's historical. We were a £100,000,000 company when we first listed in 2006, that we were a dynamic company, a £100,000,000 company. It made sense to list on AIM. We have since, of course, grown. We're now more now a 3,000,000,000 company. But I think the so the the second part of the question is why are we on the main mark? Why are we not on the main market? And really, the the question the the point is we've remained on aim for this time because it it made sense. It was good. We what we did was actually we added a listing. But rather than moving to the main market, we added to the Nasdaq market because we felt it was important to to add the specialist American biotech investor base and the liquidity aspects of of listing on Nasdaq. So for the moment, what we've done is to to remain on on this Nasdaq market and the AIM market to cater to both sides of the pond, if you will. And, and that is seems to have been sufficient for us.

35:24 Okay. Does having such a large shareholder of 46% of the shares restrict our ability to attract new investors or impact liquidity? I I I'd say briefly, it doesn't and it does. There are investors of all types that look for different kinds of investments, but I think broadly speaking, a lot of investors are very hardened by having such a long term, shareholder in in in CK Hutchison. CK Hutchison has incubated the company twenty twenty years ago and as such has has remained in the company, intends to remain a significant shareholder for the long term as stated so.

36:17 They have brought their holding down to to the forties in order to deconsolidate as they are a large conglomerate, but, that is that's been very good for us. As far as liquidity goes, I mean, it's liquidity is is not so much driven by having a large shareholder as how as having how much, how many shares you've sold in the market. And and from that point of view, we've been we've taken a very measured and frugal approach on when to come to the market for equity raising. We are a biotech company, so there will always be, until you're profitable, there will always be the chance of of further equity raises, but, that, you know, and that and that can drive, liquidity.

37:04 Right. Johnny, do you wanna take the next one? Revenues at the half were around 100,000,000. I highlighted 30% royalties and some large numbers coming through. When do we them to come through? Do you want me to do this, or shall I do this? Yeah. I can I can try to answer this one? So Yeah. I our first half, 100,000,000, I think that we have to understand, basically, quite a lot of that is still with the legacy of the distribution business. And going forward, as we are able to launch many of our innovative pipeline into onto the market, basically, we will be getting royalty income as well as we we mentioned that we will be receiving royalty, manufacturing, as well as share of some of the economics with Lilly on the on our commercial effort with the L and A. So we will be expanding our base of revenue from all kind of sources.

38:12 So on this 30%, Mark mentioned, is related to AstraZeneca. So basically, it's Exon 14 skipping launch that we anticipate maybe second half of next year. So sometime next year, we will be starting to recognizing some of this royalty. And continuing going forward, we will see quite a huge ramp up as we mentioned that exon fourteen skipping, it is one small indication of the non small cell lung cancer, but it complements Tagrisso, and Tagrisso is doing well in China. So we anticipate that there there will be a quite good market response in terms of when this product is launching into market. Okay.

38:57 Thanks, Johnny. The next one, I think I'm going to try and interpret it. How do we see the regulatory approval process changing post COVID-nineteen? I don't so I'll try and answer this as best as I can. COVID-nineteen before, during, and after COVID-nineteen, I don't actually see the regulatory process changing a lot. And in some ways, could say we're already past all of this. Remember that our China business, China in general, really come out of the COVID epidemic. There's clearly still flare ups here and there. But in general, China is back to normal. I read a statistic the other day, for example, that domestic flights in China are back up to 80% of normal, 80% of normal. So everything is back to general working in China. But even before that was the case, the regulatory approval process, which involves, you know, regulator staff at the regulator being submitted huge files and reviewing a lot of files, a lot of desktop research and a lot of checks and inspections.

40:14 Those are the kinds of activities most of those activities are ones that can be performed even during an epidemic. I believe we filed the savolitinib NDA about three months ago. We went to the office just as we've been doing for the past four months. We printed it all out, put it in boxes, put it in a truck, and sent it out to Beijing. So that really has not changed, and I don't expect that to change clearly after. In The US, in Europe, and Japan, where COVID is still ongoing, it's actually strange enough being beneficial for us because we've had to do we happen to have in 2020 a lot of regulatory interactions planned with the pre NDA meeting that we had with the FDA, similar meetings with the EMA and the PMDA in Japan. Normally, we'd be putting a team together and then flying them over to Japan or somewhere else to have those meetings. And actually, all the work has been done like this on video, on audio. It's been very productive. The US FDA, if you've been following it, have been very productive themselves, approving a lot of products. So I'd say that the regulatory process itself has been efficient.

41:45 The only part of the regulatory process I can see that might be a little slower, might have slowed down a tiny bit earlier this year, is when they spot check a few clinical sites to make sure that the trials are done correctly and one or two of those sites of course at one point in time it was a bit difficult to get to them but now that is no longer the case. Okay? So moving on to the next one. Can you explain why AstraZeneca discontinued the Cereco distribution business? Johnny, do you want to do that one? Yeah. Okay. So basically, AstraZeneca did not discontinue Circle. They sold the business to a Chinese company, which listed in Hong Kong is by the name of Liu Ye.

42:35 And Liu Ye, last year in May, they have a unilateral discontinued this business because they have other portfolio that they have synergy with. So they they basically, they did not comply to the terms of the contract, and they just discontinued. So we are now in arbitration with. So the case still hasn't been gone through hearing yet. So we anticipate the case would be coming to some kind of results by by first half of next year. So we will report that to the public when we know the results of the arbitration. Yeah. So they AstraZeneca basically sold the entire business to somebody else who had different designs for over a large a large sum of money.

43:29 Okay. Do we still have plans to float on in Hong Kong stock exchange? In general, we're we're a China based business, and we're only become we're gonna grow significantly in commercial operations in China over the next few years. So as far as a Hong Kong listing is, it it makes sense. Hong Kong's our home. Johnny and I are in the office right now in Hong Kong. So we that is certainly in the plans. As to when that happens, that's the obvious question. And I think what our thinking is evolving and we're keeping an eye on it. I think one of the couple of things that makes sense to to really think carefully about it in that context, I'll tell you that maybe I call it two things that we think about.

44:26 One is in The US, I told you that, you know, we're listed on Nasdaq. Actually, a large majority of the trading volume is on Nasdaq. There is this Kennedy bill moving through moving through Congress at the moment, which may or may not make it very difficult for Chinese companies to remain listed on Nasdaq about three years from now. If that is the case, then clearly that we would end up accelerating our plans. And so, you know, if that ends up, we will the fact that we have two listings already, of course, is a bit of a hedge for any negative outcome from that in the short term. The second thing I'd say is, a lot of companies, the successful biotechs, while they may not be profitable when they when they IPO in Hong Kong, they do demonstrate a runway to profitability over the next few years. And I think we've got a lot of products that we Johnny and I have presented to you in the last half hour that are going to be delivering delivering significant sales and royalties next year. And I think once we once we have some of that data to show you and and present to you, and other investors, it makes a lot more sense for us to to consider that Hong Kong listing. Johnny, do you have anything to add? No. I think that's exactly our plan. Yeah.

45:55 Okay. Maybe we tack on this question until the end of this and you can answer, Johnny. When do we expect to move into profitability? Yep. So basically, we are planning to with with all the programs that we have on hand, we have our partners are giving us milestone royalties. We do anticipate that we will be in a breakeven situation by around 2024, very close to breakeven if if not already making some small small profits there. Yeah. So around 2024. Okay. Are we planning on building a direct sales force to sell in The US?

46:42 So this this topic has been under review. Clearly, we had we had an upside surprise where we went from being three and a half years away from selling drug in The US to eighteen months away. It is one that is still under review but you know we're leaning you know Johnny talked about our taking on more of the commercial capabilities with our partner Eli Lilly in China. And so the idea of fully licensing out a drug in The US is with some trepidation, I'd say. And with Surufatinib in particular, this net landscape, if I reiterate what I said earlier, it's one where are these patients live a long time, but they're not necessarily as many patients a year.

47:37 And as a result, you look at those other two drugs that are being sold for this indication, they really don't extremely large sales force. They don't need 300 people on the ground to hit everywhere in The US. They only need about although they have less than 50, I think, you know, we we're projecting to need a bit more, but those guys have less than 50. And so it's actually a good opportunity for us to, if there's any drug, to develop our own commercial US operations, this indication is a decent opportunity. We're not, we haven't really said no, and, of course, we we are remaining interested in potential co promotion options where you do it together.

48:26 So there's that I'd I'd say that's where we are. Outside of The US, for example, in Japan, we're we're not looking to build commercial operations. We we will, at the right point in time, decide to license that out in exchange for royalties. But within The US, while it's not a cinch, it's a it's a manageable market opportunity, one that makes sense for us to to sort of use as a springboard. Because remember, we've got Elenet coming down the road in in two years' time, and so having a Salesforce in place and we're operating by that by the time that comes around would actually be very beneficial. Okay.

49:11 Johnny, do you have anything else to add to that? Or No. I think that's just a Okay. I think that's coming to the end. Oh, have we considered a vaccine for COVID-nineteen? That would certainly be it's clearly an area that's that's that's, very well funded around the world. It that doesn't mean it doesn't hurt to to get involved. I think if if we can work in something like that, perhaps, where it doesn't distract the management team, just don't distract our capital and productivity is one that, you know, in certain specific areas we may consider. But in general, there's a lot of work and a lot of lot of focus being put into it. So so I'd say broadly speaking, we wouldn't be charging ahead full speed into something like that.

50:09 Although if there's a a small opportunity here and there to help benefit the the world, then we could look into that. Thanks, Mark, Johnny. I think you've answered those questions you can from investors. And of course, the company will review all of the questions submitted by investors today and we'll publish those answered on the Investor Meet company platform. Mark, Johnny, perhaps before I direct investors for feedback, would you like just a couple of seconds just to wrap up ChaiMed and then we'll move to that feedback? Yeah, no, obviously, what are you the next time we speak, what are going be looking for? And I think this slide that we've had the whole time during this Q and A session I think is very pertinent. The launch of Surufatinib, the filing of Surufatinib at the end of the year, I'm actually very excited by it. I think there's so much news going on at the beginning of June that that was missed, that we'll be filing a U. S. NDA.

51:09 It's to me is a very big deal. Savolitinib, the progress in China launching next year and the start of multiple registration trials globally and of course the LNA sales. And I think with our blood cancer products like six eighty nine and five twenty three, moving one of those into global development would be pretty exciting. It'd be the next it's the tip of the first of the next wave moving into late stage, which is, you know, it's a it's a good it's a big step and one that which I suspect will will allow us to multiply the the scale of this company in a few years' time. That's great. Thank you very much for both updating investors today and especially taking the time out and coming on to investors from Hong Kong. Could I ask investors not to close the session as you'll be automatically redirected to provide your feedback. If you've accessed the meeting from the website, the feedback page will appear in front of you. If you've accessed the meeting via the link sent to in the email, you'll be asked to log in to submit your feedback.

52:18 So I'd like to say on behalf of CHIMAD, an investor meet company, we thank you very much for attending today's webinar and thank you very much to the team for presenting today. Thank you guys. Thank you. Thank you.