Hutchison China MediTech - To China and beyond

Hutchison China MediTech (HCM) continues to move swiftly towards its goal of globalization of its innovative oncology assets and building a fully integrated oncology business in China. Regarding the latter, the amended deal terms with Eli Lilly on fruquintinib is a huge positive, which will enable HCM to fully leverage its existing China oncology sales and marketing infrastructure across two assets: Elunate for CRC and surufatinib for NET. The recently reported interim results highlight further progress made since our recent outlook note. HCM is well funded (~$500m in available cash resources includes $119m unused debt facilities) as it accelerates the global development of its unpartnered assets and expands its China and global commercial outreach. Beyond 2024 we expect sustainable profitability and margin expansion. We value HCM at $6.69bn.