David Ng
Management
Hello, everyone. Welcome to HUTCHMED 2025 Full Year Results and Business Update. Today, we're going to go through our results in a formal presentation by our senior management, and then it will be followed by Q&A. My name is David. I'm the Head of IR of HUTCHMED. We are very happy that we're going to have our senior management to present the results. Let me hand off the time to our acting Chief Executive Officer and Chief Financial Officer, Johnny Cheng. Johnny? Johnny Cheng: Thank you, David, and thank you, everyone, for attending HUTCHMED's 2025 results webcast. Joining me today is our Deputy CFO, Lorenso Chiu, who will give us an overview of our financial performance. Our Head of Commercial, George Yuan, who will share with you our commercial performance. And our Head of Discovery, Dr. Guangxiu Dai, who will provide an update on our R&D pipeline progress. A quick highlight of our 2025 achievements. We are pleased with our ex-China FRUZAQLA sales, which had 26% growth versus last year, resulting in $366 million in in-market sales. FRUZAQLA has now rolled out to over 38 countries. As for our China sales, it has rebounded in the second half of the year, achieving 21% in-market sales growth versus our first half interim results. In terms of our cash position, we have about $1.4 billion, which allows us to accelerate our global ATTC development and provide resources to explore potential in-licensing and M&A opportunities. We have now advanced 2 of our ATTC programs into the clinic, which we believe will have huge market potential. In addition, we are pursuing potential business development opportunities with multinational companies. I will now turn it over to Lorenso for the financial review and outlook. Lorenso Chiu: Yes. Thanks, Johnny. Let me give an overview of our key financial highlights for 2025. Total oncology revenue was $286 million. This includes $71 million R&D-related upfront and milestone revenues. For oncology products revenue, there was a rebound from our China oncology products, which recorded 21% growth in in-market sales in the second half, while FRUZAQLA continues its global expansion. On net income, we recorded a profit of $457 million for 2025, mainly due to the SHPL divestment gain of $416 million. Excluding this onetime gain, our core operations remain profitable. Our R&D expenses for 2025 were $148 million. Expenses were lower versus 2024 as many of our late-stage trials are in the completion stage with multiple NDAs now awaiting approvals. In addition, we began shifting our investments into our early-stage ATTC assets with 2 candidates already in the clinic. Our cash position has been further strengthened to about $1.4 billion. That positions us well to accelerate both investments and developments of our ATTC programs. Looking forward to 2026, our oncology revenue guidance is in the range of $330 million to $450 million. This reflects solid growth from 2025, driven by strong growth in our China commercial products with contributions from new indications as well as FRUZAQLA continued scope expansions. In addition, let's consider the potential partnership opportunities for our new drug candidates, including ATTC. Now I'd like to hand over to George to give an overview of the China commercial. George Yuan: Thanks, Lorenso. First, let's look at FRUZAQLA, our business partner Takeda's performance. They delivered a very strong 2025 with 26% growth, and if you look at the second half, the growth actually accelerated mainly due to market expansion — we launched some new markets like Portugal, Belgium and South Korea. Also, strong Japanese performance and some European performance uptake also contributed to that second half strong growth. This reflects a market need for safe and effective medicine in the later-line mCRC treatment. Also, physician experience enhancement and reimbursement progress contributed to that growth. In the U.S., we do see some headwind, mainly due to the Medicare Part D redesign. For China performance under the brand name ELUNATE — in China, we posted minus 13% growth, mainly due to soft performance in the first half as we scaled back some of the sales force after our GC second-line setback and also some productivity improvement programs. But we successfully turned around the business with a more efficient approach to focus on the top-tier cities and hospitals. In the second half, we delivered 33% growth and successfully renewed our NRDL deal with no price cut and include our EMC second line. Also, we submitted NDA for RCC — all contributing to our future growth. If you look at ORPATHYS and SULANDA, which is 11% of our total 2025 in-market sales, they are relatively soft due to fierce competition. For SULANDA, we also face multiple PRRT nuclear medicine options moving to the clinical stage with limited patient pool. Although we have some headwinds, we do see some progress. For ORPATHYS, we have first-line METex skipping added to the NRDL, and we have SACHI approval to drive future growth. Our SAFFRON/SANOVO readout is expected this year. For SULANDA, we maintain our market leader position in NET performance in the TKI market, and we have renewed our NRDL with no price cut. Our Phase III PDAC study is on track. We are building our hematology portfolio. We got our first medicine — first-in-class treatment for EZH2 mutation and follicular lymphoma — approved. This is our first hematology product launched in China and gives us a beachhead in the hematology space. TAZVERIK was also included in China's first commercial insurance drug list, and we are one of 19 medicines on that list. This gives us a future growth opportunity to explore commercial insurance. Sovleplenib is prepared to launch in early 2027, and our ITP is already resubmitted while wAIHA indication will potentially submit in the first half of 2026. We also have additional pipeline in hematology — the IDH1 and 2 inhibitor for AML and the BTK in DLBCL also starting Phase III. In the long run, we're aiming to build a very strong hematology portfolio. Now let's turn over to Dr. Dai. Guangxiu Dai: Thank you, George. I'll provide an update on our R&D pipeline progress. 2025 proved to be a great year for our pipeline, featured by fast regulatory movement and high-impact clinical data. We have achieved major progress across our core areas — oncology, hematology and our next-generation technology platforms. In oncology, savolitinib has reached critical regulatory and clinical milestones in both China and global markets. SACHI was approved in China at speed record for second-line EGFR mutant, MET-amplified non-small cell lung cancer. SANOVO and SAFFRON completed Phase III enrollment and third-line gastric cancer filed NDA in China in late December 2025. In hematology, sovleplenib, our Syk inhibitor, has solidified its position with ITP NDA resubmission and robust positive Phase III data readout in wAIHA. Perhaps most excitingly, our antibody target therapy conjugate ATTC platform is now a clinical reality with our lead assets, A251 and 580, moving into global clinical development. A251 has started patient enrollment in China and in the U.S., closely followed by our second ATTC drug candidate 580, which was first dosed in patients just yesterday. With savolitinib, we have dual focuses — maintaining leadership in China and expanding the global footprint. In non-small cell lung cancer, savolitinib has been approved in China for first- and second-line METex14 alteration as a single agent. For second line, the combination of savolitinib and osimertinib represents a promising chemo-free oral treatment strategy to address mechanisms of resistance due to MET alteration following EGFR TKI treatment. SACHI has been approved in China and SAFFRON is expected to have a readout in mid-2026. For first line, SANOVO Phase III study of savolitinib and osimertinib will read out in the second half of 2026 or early 2027. We also reached an important milestone in gastric cancer with China NDA for third-line MET-amplified gastric cancer being accepted and priority review granted. The data from SACHI is compelling. In a 2026 Lancet publication, SACHI study demonstrated a clinically meaningful OS benefit — 22.9 months versus 7.9 months in ITT patients who didn't receive subsequent MET inhibitor treatment. The hazard ratio of 0.32 is a clear indicator of OS benefit. Earlier, we presented at ASCO that combination of savolitinib and osimertinib shows a clinically meaningful improvement in overall response rate and duration of response versus chemotherapy as second-line treatment. SACHI demonstrated clinically and statistically meaningful PFS improvement in ITT patients as well as in patients who failed third-generation EGFR TKI treatment. Turning to sovleplenib, a Syk inhibitor. Our focus is on addressing the large unmet medical needs in immune-mediated hematological disorders. In ITP, we have resubmitted our NDA in China, which has been accepted and granted with breakthrough therapy designation and priority review. The clinical profile is highly competitive — in the 3-year follow-up study, the median duration of exposure is over 86 weeks. The cumulative durable response reaches over 66 weeks. Over 51% of patients achieved durable response, highly consistent with 48.4% durable response rate in the double-blind phase of ESLIM-01. Sovleplenib shows a superior durable response rate compared to many existing ITP therapies, including fostamatinib and rilzabrutinib as well as efgartigimod and FcRn drugs approved for ITP in Japan. Sovleplenib's durable response rate is comparable to or better than TPO/TPO-RA drugs. A key differentiation is its safety, particularly regarding vascular risks — TPO/TPO-RA drugs have been associated with thromboembolic and thrombotic complications, while sovleplenib clearly demonstrates a highly competitive clinical profile in safety and efficacy. The ITP market potential in China alone has over 250,000 actively treated ITP patients, representing an addressable market of USD 500 million to USD 700 million. Now our innovation engine, the ATTC platform. This platform is designed to combine the precise delivery of antibodies with the potency of target inhibitors. A251 is a first-in-class ATTC consisting of a potent PI3K/PIKK inhibitor conjugated to an HER2 antibody with DAR 4 through a cleavable linker. A251 targets a massive global market across several HER2-expressing solid tumors, including breast cancer, gastric, gynecologic cancer and many other HER2-expressing cancer types. The scientific and strategic importance of targeting the PAM pathway cannot be overstated. The PAM pathway is the most frequently altered pathway in solid tumors, appearing in 38% to 50% of all tumor cases, much higher than other major drivers like RAS, HER2, EGFR and ALK. PAM alterations are often seen in breast cancer, gastric, ovarian, prostate cancers. This gives A251 and other assets from this platform a massive total addressable market. While small molecule inhibitors targeting the PAM and PIKK pathways have historically faced issues with high toxicities and poor PK properties, the ATTC platform is designed to reduce these on-target off-tumor toxicities by delivering the payload directly to the tumors. The A251 payload is a potent inhibitor targeting multiple nodes in the PAM pathway and PI3K pathway. It demonstrates high kinase specificity in a broad kinase panel, hitting targets in 2 families only. A251 demonstrates strong HER2-dependent inhibitory activities, with IC50 in the range of 0.2 nanomolar in HER2-positive cells and crucially, A251 exhibits a bystander effect that allows it to overcome HER2 heterogeneity by killing neighboring HER2 non cells. A251 has started a global Phase I study in the U.S. and in China. The dose escalation and dose expansion and optimization is essentially one study in China and U.S. following the same protocol — we believe this is the fastest way to define a global dose. The trial targets HER2-expressing solid tumors with PAM status being tested retrospectively. The strategy includes utilizing A251 as a monotherapy for late-line treatment and exploring combination therapies in frontline setting. We are accelerating discovery and development of ATTC and ADCs. Our second ATTC asset 580 has started Phase I, opening sites and recruiting patients in China and the U.S. The third ATTC asset 830 is anticipated to enter global Phase I this year. Looking ahead over the next 15 months — for savolitinib, we expect readouts for both SAFFRON and SANOVO. We anticipate label expansion with China NDA approval for third-line gastric cancer. For sovleplenib, our Phase III trial in wAIHA successfully met its primary endpoint, and the NDA filing will happen in the coming months. Our next major milestone will be the China NDA approval for ITP. For the innovation platform, 3 ATTCs will all be in clinical development in 2026. Beyond these highlights, we expect China NDA approvals for Fruquintinib RCC and Fanregratinib in IHCC as well as Surufatinib PDAC enrollment completion within the next 15 months. We look forward to another great year. With that, I'll turn back to our acting CEO, Johnny. Johnny Cheng: Thank you, Dr. Dai. So in summary, we are very excited about our outlook for 2026 and beyond. We have multiple potential NDA filings upcoming, including from SAFFRON and SANOVO readouts later this year. Our new hematology products are expected to drive future sales growth in China. On the innovation side, our strategic efforts will be focused on accelerating global development of our ATTC programs and exploring business development opportunities to further validate and add value to this platform. Finally, our oncology revenue guidance of $330 million to $450 million factors in our FRUZAQLA ex-China commercial growth and the positive impact of adding new indications for Elunate. With that, I will turn it over to David to start our Q&A session. David Ng: Thank you, Johnny. Thank you, everyone, for the presentation. We will now do the Q&A session. The first question comes from CLSA, Matthew. Yonglin Yan: Congrats on the results. I've got a few questions. First is regarding the oncology guidance in '26. In '25, with the sales team restructuring and similar actions, growth was actually a decrease. The '26 guidance seems to imply something like 15% to 16% year-over-year oncology growth. Can you elaborate a little bit more about how I should be modeling the key drug sales? Second, can you give any color on why the SAFFRON top line readout has been delayed from first half to second half? And third, can you elaborate more on the indications of the ATTC platform first 2 candidates in the clinic, for example A251 — is it more like a post-HER2 refractory breast cancer setting, or what kind of setting are we looking at in the future? Johnny Cheng: Thank you, Matthew. For the first question, I will defer to Lorenso, and the second and third questions are for Dr. Dai. Lorenso Chiu: About the guidance, Matthew — for 2025, there was a decline in the product sales, but as you can see, in the second half we saw strong momentum of recovery. We expect that to continue in 2026. We'd also like to highlight that we're expecting more growth coming from new indications. The Elunate RCC is currently under review, and we believe that with that approval, that will bring in more revenue and growth. For FRUZAQLA, strong growth is expected in '26 due to continued expansions by Takeda — more and more countries are now in the market, and with full year penetration in 2026, that will continue the growth. Guangxiu Dai: The SAFFRON readout is expected to happen in mid-2026. And for the third question, A251 is now enrolling HER2-expressing solid tumor patients — not restricted to post-HER2 patients. David Ng: The next question comes from Matthew Guggenbiller. Matthew Guggenbiller: This is Matthew, on for Alec Stranahan from Bank of America. On the SAFFRON readout — you said expected May 2026. Can you maybe clarify expected location, medical meeting versus company event? And for ATTC readouts, can you clarify expected patient number and sort of follow-up we can expect? Guangxiu Dai: The SAFFRON readout will be in, like I said, mid-2026. We'll share the data as soon as the team informs us of the results. On the ATTC assets, the trials are still at early stage. We don't have a definitive timeline for the data readout. Matthew Guggenbiller: Got you. And maybe one on commercial dynamics as well. I think first half had some headwinds from off-label sales, increased generic competition and sales force turnover. Can you speak to how those trends are looking in the second half and whether you expect those to stabilize throughout '26? Johnny Cheng: Matthew, we invite our Head of Commercial, George, to answer this question. George Yuan: Because we couldn't pursue GC indication last year as it was not yet approved, the original field force sizing was built for GC — so it was overcapacity when we lost that indication. That's why we rationalized the team and focused more on the top hospitals. That led to some performance issues in Q1 and the first half. But everything is moving in the right direction. The turnover is significantly reduced, the vacancy is already filled, and we have a very strong team now. That momentum will carry over to 2026. David Ng: Next question is from Cavendish, Adam. Adam McCarter: In today's announcement, you mentioned that AstraZeneca continues its efforts to increase MET testing as a standard of care in late-stage non-small cell lung cancer. Could you comment on how the pace of MET testing adoption might influence the potential uptake of savolitinib in that setting in China and then globally if SAFFRON is successful? Guangxiu Dai: We do not have additional information on this question. Adam McCarter: On the ATTC platform, could you elaborate on your partnering strategy with multinational pharmaceutical companies? Are you considering out-licensing certain assets earlier in development to accelerate validation of the platform while potentially retaining greater control over other assets to maximize longer-term value? Johnny Cheng: In terms of our strategy for partnering with the ATTC program — as you can see, we have a strong pipeline already building up for this platform. We now have positive responses from potential partners, many of which are multinational companies, and we have ongoing discussions with all those potential partners. With our large portfolio that we anticipate building on, we want to advance and accelerate this development. Hence, we have considered potentially licensing out some of these programs. We also have AI capability which we can use to develop more candidates into our platform. This is why we also consider potential partnering opportunities. Furthermore, as this platform is really one of our next waves, we would also like to validate this through our partnering strategy. Adam McCarter: As we think about the HUTCHMED story going forward, how should investors balance the contribution of the existing commercial portfolio against the emerging opportunity from the ATTC platform? Do you see the next phase of value creation increasingly driven by pipeline and platform assets rather than marketed products? Johnny Cheng: We see our second wave of hematology assets going into the commercial side, which will add to our existing commercialized portfolio. So that would increase our ability to balance our investment in R&D. We will continue to ramp up our R&D expenditure. In 2025, our R&D investment was probably the lowest in recent years, mainly because many programs were pending for approval and we were at the early stage of ATTC development. But going forward, we do want to accelerate our global development strategy for ATTC. At the same time, with the expanded commercial assets, we will be able to generate more income so we can balance out that ATTC investment. David Ng: The next question is coming from UBS, Chen Chen. Chen Chen: My first question is on surufatinib. We see that it has started Phase III patient enrollment. I'm interested in the partner strategy — are you considering BD after data readout? Or are you in talks with potential partners now, because the Phase III will enroll a few hundred people and will be very expensive? Johnny Cheng: I will answer from a strategic side and then invite Dr. Dai to comment further. We have no intention at the moment to partner this program out. But Dr. Dai, perhaps you can comment on the status of development. Guangxiu Dai: Sure. The Phase III first patient-in was achieved in December 2025, and we hope to finish the Phase III enrollment in the next 15 months. We hope that surufatinib can provide another therapeutic option for first-line PDAC patients. And I agree with Johnny that currently we don't have our licensing plan. Chen Chen: My second question is on R&D guidance this year. We noticed you have started a few Phase III trials such as surufatinib and BTK in DLBCL and also a few early-stage trials such as the ATTC candidates. What's your guidance for R&D expense this year? Johnny Cheng: Just to clarify, we do not give out public guidance on R&D expenditure. But as we mentioned, 2025 was the lowest level. We do intend to ramp up, as you mentioned, with a number of programs advancing and our strategy on accelerating the ATTC program. Going forward over the next few years, we want to ramp up to a reasonable higher level of R&D investment in the range of $250 million to $300 million — that would be the ideal level. Of course, we will stick to our commitment to investors that we will be profitable in a sustainable situation. So we will be investing as we are able to generate sufficient commercial income to cover our R&D investment. Chen Chen: You have a very strong cash position by the end of 2025 and you mentioned plans for in-licensing and M&A. Can you please elaborate a bit more on that? Johnny Cheng: Yes — $1.4 billion of cash on hand. Our priority is, of course, accelerating our global development for the ATTC program. We are open, because with these cash resources, if the opportunity arises for in-licensing late-stage commercial assets or potentially some assets that are complementary to our portfolio. But for M&A and in-licensing opportunities, we are open-minded because we are in a good financial position, but we have no fixed target at this stage. David Ng: The next question comes from Panmure, Julie Simmonds. Julie Simmonds: I was wondering on the move into hematology products, whether this changes what you're investing in sales and marketing and what changes to the sales infrastructure it requires. George Yuan: Because hematology is a very specialized area, we have already started a new business unit with dedicated sales, marketing and medical capability to address this market opportunity. With the future pipeline adding to the business, we will expand the team. Julie Simmonds: And secondly, on the impact in the U.S. of the Medicare Part D changes — how much impact do you expect that to have on sales in 2026? Johnny Cheng: We have received no new changes so far. The impact factors into 2025 have been reflected. Despite that impact for the U.S., we still achieved 26% growth for our FRUZAQLA through our partners. We do anticipate that in 2026, we will be expanding rolling out of all the ex-U.S. countries — so far, 38 countries have been commercialized. We continue to see that NRDL in those countries will be expanded. So the total impact for ex-China sales — we see that the U.S. will continue to grow, but outside of the U.S. is also a key driver. David Ng: Next question coming from Daiwa, Wilfred Yuen. Wai Chak Yuen: I want to follow up on the revenue guidance range of $330 million to $450 million, which is a wide range. Can you give us more color on the breakdown between oncology product sales and R&D milestone payments? Are you expecting some additional milestone to hit the high end of $450 million? Johnny Cheng: Lorenso, would you like to tackle this question? I will add to it. Lorenso Chiu: We do not give guidance on particular items within this revenue guidance. But for your information, it's worth noting that in 2025, our revenue included some upfront and milestones, so if you exclude those, the base would be lower. For 2026, the guidance reflects solid growth from 2025. In addition, some of the factors — growth from China products with new label expansions and new indications — will drive further growth. Johnny Cheng: So Wilfred, basically, you should take the guidance as the middle of this range. The lower end of the guidance is where we are very confident, and we are also very confident about achieving the high end. $330 million has factored in many organic growth elements. We also factored in a conservative baseline for our ex-China sales, which is run by our partner. The midrange of $330 million to $450 million is about 36% growth versus 2025 performance. This guidance reflects business growth as well as the potential — if we have licensing, we won't take all the upfront income, but we will potentially apportion part of the upfront income and factor it into the upside. David Ng: Next question coming from Goldman Sachs, Paul Choi. Kyuwon Choi: My question is on savolitinib. Assuming clinical success with SAFFRON, can you comment on how you think the Tagrisso/savolitinib combination would be sequenced in the treatment paradigm given the recent launch of J&J's RYBREVANT bispecific? And how do you think about guidelines evolving directing oral options versus bispecific options? George Yuan: I think this provides an oral — two oral products — for those EGFR-resistant MET amplification patients. This is efficacious and also convenient. We do know the J&J bispecific antibody provides another option, but it all depends on doctors' perception of how the treatment paradigm shifts — whether precision medicine wins the game or not, whether secondary testing wins the game or not. So it depends on how AstraZeneca is shaping the market. David Ng: There's a question from the chat box — what is the thought about the need to appoint a permanent CEO, or are we happy with the current situation? Johnny Cheng: The company made an announcement in August and there is no status change yet regarding that announcement. Dr. SU is focusing on his health right now. We have this interim arrangement, and as you can see, we have a lot of talents within our management team. The company has been running for 20-odd years and we have a very loyal and capable talent pool. Everything has been running very smoothly and progressing in terms of our pipeline as well as our commercial strategy — everything is now working as per plan. David Ng: There's another question about the SAFFRON readout delay from first half to second half, but as Dr. Dai has mentioned, the most likely scenario will be around mid-'26. If no further questions, Johnny, would you like to do a concluding remark? Johnny Cheng: Thank you again, everyone, for spending the time to attend this webcast. And if you have further questions, please by all means feed through our IR colleagues. Thank you. David Ng: Thank you, everyone. This concludes our results presentation. Thank you very much.