HUTCHMED (China) Limited Price & Performance (HCM)

Should one of these risks materialize, then the assumption may be proven to be incorrect and actual results may vary from what was mentioned in the forward looking statement. Today, we will have a very good lineup presentation. First, our chief executive officer, chief officer, doctor Xu, will have the opening. And then our chief financial officer, Johnny Chen, will go over the 02/2024 financial review and outlook. And then our head of commercial, George Yuan, will go over the our commercial aspects, and that will be followed by our head of r and d and chief medical officer, Michael Shi. To talk about our pipeline updates and also our new ATTC platform. And then we'll be followed by closing remark by doctor Xu, and then we will have to Q and A. So without further delay, I will pass over the presentation to doctor Su.

Okay. Thank you, David. Good morning. Good evening, everyone. Welcome to, HUTCHMED results conference call. Today, we announced twenty twenty four full year results We are put we are pleased and proud to report a net profit for 2024 behind the global commercial success of Frutzacla. The management will share more details on the 2024 results, and provide an update for 2025. Overall, financially, Fruzeca did exceptionally well. With total sales of $290,600,000. On the pipeline, we saw savolitinib for approval in [indiscernible] With expansion into the first line for 14 skipping non small cell lung care. Cancer. Globally, savolitinib savannah, saffron studies progressed well. Positioning as well for potential global registration. Towards the end of 2024, we reported positive SACI interim analysis in China in second line EGFR mutation positive, MET amplified non small cell lung cancer patients. Leading to NDA submission before end of twenty twenty four. For fruquintinib, For towards the end of the year, we received approval for second line endometrial cancer in combination with cintilimab. We believe these new indications and new approval of new products will help drive China commercial. Twenty twenty five is shaping up a big year for the pipeline. Mike will go, through the the details with you.

And looking forward, we are starting to get excited about our next generation innovations and these are ATTCs, now starting to move towards clinic. The success of these programs will ensure our long term growth beyond twenty twenty thirty. With that, let me invite my colleague, Johnny, our CFO, to go through the results. Johnny, please. Thank you, doctor Hsu.

And, yes, we end the year with cash resources of over 830,000,000, which reflects a small reduction of around 50,000,000 from 02/2023. A portion of the use of the cash resources were utilized for our long term incentive plan to retain talents. Another portion was attributable for working capital to support our ex China collaboration with Takeda. Moving on to the next page, On the financial results, we recognized consolidated revenue of 630,000,000 and reported a net income of 37,000,000. Our oncology business revenue met our guidance last year. To achieve over 360,000,000 revenue. Overall, profitability was the result of strong commercial performance ongoing recognition of deferred revenue, tight control over selling and admin expenses, well as scaling down our ex China r and d operations, from the restructuring initiatives we started in 02/2023. On the right hand side of the page, as you can see, the 02/2025 revenue guidance for our oncology business 350 to 450,000,000.

As compared to last year, this guidance has taken into account the nonrecurring service and manufacturing income from Takeda to support regulatory approval and also commercial launch in various jurisdictions in 02/2024. I will now pass on to our head of commercial, George Yuan.

Thank you, Johnny. If we look at commercial side, the overall HUTCHMED oncology portfolio deliver a very solid performance with a half billion USD sales. Which is e mark sales and more than double of the sales of 02/2023. The growth mainly driven by Fuzakra as our CEO mentioned, and also Lunette and the Solenda continue to deliver a growth in a very complicated market environment. Our process is a little bit flat with more competition to the market as everyone knows there's a but now there's a five meter met inhibitor in the market nowadays. In 02/2025, we're continue to look for ambitious target with more than 30% growth [indiscernible] portfolio. Next slide. If you look at the the Ozacla, the 02/2024 is the first full year performance commercialized by Takeda outside China. Of course, US play a dominant role for the success. But within the twelve months of period, we risk the Fruzaka get approval in 12 countries. And we also believe the market in European, once we the major market in European, once we get a reversal, then growth will further be drive them. And also the guideline international guideline being supported at the brand for the growth.

For Japan, with Takeda's experience in the GI, especially with previous experience with vector pics, we have a high expectation as well. Next slide. Illuminate in China we know that China is aging population and with the lifestyle change, the CRC is now a leading cancer type. In China. And to VEGF treatment is well adopted in the later line treatment of the MCRC. Illuminate achieved the 115,000,000 US dollars in 02/2025 and still keep the third line MCIC market leader position. With very strong data and the guidelines support. Of course, the market become more and more complicate. Also, the competition becomes severe with more regular, but generic going to the market, and also the test will to get a reimbursement. And in December two thousand twenty four, Illuminate received its EMC second line approval, and this is bringing the VEGF TCAT combo with p d one into the gynecologic market and will further drive our growth in the future. Next slide. Then we shift the gear to talking about neuroendocrinology tumors. Which is a relatively neglected area in the oncology community. Due to the low incidence and the widely distributed in various organ across the body. Recent year, with, more medical education in which HUTCHMED play a quick critical role, net received a lot of attention by oncologist.

And surrender with its differentiation different shaded profile become the leader of the TK and continue to gain market share. According to the IQVIA survey. In 02/2024, Surrender continued to deliver double digit growth But, of course, on the fixed side, we see a lot of player coming to the market, especially you see the new SSA. To the market as well as a lot of a new medicine under development. Let's talk about, OPAZYS. Opacis is the first MAD inhibit being approved in China, and we are proud that opacity really changed the maturation in cancer patient's life in China. In 02/2024, there's an new player, both from local and from multinational into the market, especially when received an idea of coverage for the first line. While opacities do the second line coverage. But with the AZ's commercial capability, England cancer area and also wide coverage. Opacids Withhold The Sales Number And Continue To Penetrate In Vast China market. We believe the full approval of first line and the reimbursement listing afterwards plus the potential business opportunity to combine with Tagrisso for Manta amplification patients will regain the momentum of the brand. Thank you. Now let's talk ship to Michael.

Yeah. Thank you, George. Morning. Good evening, everyone. I'm giving you a pipeline update. So we have made tremendous progress on our late stage products. So in addition to global approval in CRC, fruquintinib is also expanding into new indications and endometrial cancer and RCC. So two other compounds, [indiscernible] Our second wave of hematology product solvoplanet and Tasmanostat, are all iNDA stage. And the registration trial for new indication development. And, also, I wanna bring attention our third wave of products [indiscernible] our FGFR inhibitor, and the ranositinib IDH one and two dual inhibitor, are also at the pivotal trial stage. To propel future growth. Next slide. On the life cycle indication development, we received the conditional approval in China for the Fruquintinib plus Sintinib in the treatment of second line endometrial cancer. EMC indicated incidence and mortality are projected to grow in China, and the patients who progress on the first line therapy remain with higher MNE And the pivotal trial for Zika-one we have presented data in ASCO twenty twenty four The combination fruquintinib and sintilimab show meaningful efficacy and manageable safety profile. The overall response rate in eighty seven efficacy evaluable patients was thirty five point six percent.

Including two complete responses And the TCR was eighty eight percent and duration of response was not reached. And, also, the median PFS was nine point five months and the median survival was twenty one months. So after now, the most common therapy option for second line endometrioid cancer is the chemotherapy. So the fruquintinib and sintilimab combo are the new chemo free regimen. This group patient is very high on my knee. Okay. Next slide. Increase the mortality rate and renal renal cancer in China also outpaced other developed nations. And the second line treatment option remained very limited in China. For Zika two, is a phase three results in the second line RCC with Fruquintinib plus entinvlimab. Versus axitinib or everolimus as a, comparator.

So I'm very pleased to report that today, earlier, we announced the positive top line results. For, FUCICA two trial. And and the NDA preparation is planned. So if proof, this will be the first immune check inhibitor and the TKI Combo In China, for the second line RCC. So we're very excited to report this in the upcoming scientific conference. Next slide. In partnership with AstraZeneca, we are making great progress on Savolitinib global and China development. These are the late stage trial as three led by AstraZeneca, four led by HUTCHMED multiple cancer types with meta aberrations, including non small cell lung cancer papillary renal cell carcinoma, and the gastric cancer. So we're excited to see the global phase two trial, SAVENNAH, will report a top line results next week at the European Lung Cancer Congress in Paris The medicine 14 non small cell lung cancer confirmatory phase 3b trial also reached the positive readout and we received the fourth approval in the second line and also expand the label to first line indication. So the updated results, OS result, were also presented at ELCC next week. China phase three randomized trial of sabalitinib plus osimertinib versus chemo after progression on EGFR TKI also reached positive top line results.

At the preplanned interim analysis. So we have submitted NDA and received the breakthrough therapy designation The NDA is currently under priority review. The global SAMHEDA trial in PRCC also completed enrollment. And, other trials led by AZ and China also currently enrolling patient in lung cancer and gastric cancer. Next slide. The Saatchi China phase three trial met the primary endpoint of PFS at the interim analysis. So we [indiscernible] and then this NDA under priority review. So Saatchi evaluated a combination of Savolitinib and Tagrisso for the treatment patient with the iliac mutant non small cell lung cancer with MAD AM amplification. After progression of first, second, and third generation TKI. And compare with the chemotherapy q amitrexed plus platinum doublet. And the results will be submitted for presentation at upcoming scientific conference. Next slide. In October 24, we announced positive results for SAMANA global phase two study, demonstrate the high clinically meaningful and durable response rate Sombet amplification were already overexpression represent about thirty four percent of Tagrisso refractory patients. In the world lung cancer twenty twenty two, AZ reported fifty two percent overall response rate. Seven point two month PFS, nine point six months duration of response, in chemo naive patients.

So despite, the MERAPOSA two, and Orient is thirty one, the second line treatment remained very limited because Saatchi and Samana data support the chemo free option for biomarker selected MET positive EGFR mutant patients progress on the EGFR TKI. So the combo have a very balanced safety, efficacy, and the quality of life profile. And also the global Saffron Phase three trial also will evaluate the efficacy and safety of this combo in meta overexpressed or amplified patient versus chemotherapy So the recruitment is expected to complete this year. Next slide. Our Next Wave product [indiscernible] is a global first in class EZH2 inhibitor and our first in licensed product from Ipsen. Tazemetostat is approved in The U. S. For certain epithelial sarcoma and follicular lymphoma. And also in Japan for EZH two gene mutated positive follicular lymphoma. We have completed China bridging study and the results are consistent with the global study. We are planning to report the top line result later this year. The NDA is currently under review, for third line follicular lymphoma, with EZH two mutation. And we expect approval made this year. And, also, China is participating the global phase three SYMPANET trial evaluating tazemetostat plus r square in the second line follicular lymphoma with the potential indication expansion.

Next slide. We report a phase the first immune autoimmune agents of our planet is a high differentiated oral SYK inhibitor. And it offered dual mechanism targeting both B cell to prevent autoantibody production, and also prevent macrophage destroying the platelet. So this is a IQVIA report on the China ITP treatment landscape. We believe Solvoplanet not only can compete in the this quarter million ITP patients who are currently on alternative treatment, but also potentially help patients with loss follow-up. Primarily due to no other alternative effective treatment. Next slide. The phase three ESLAN one result we reported the result last year at the European Hematology Association meeting. Demonstrated robust overall response rate seventy one percent and durable response rate of forty eight percent in relapsed [indiscernible] primary ITP patients. These high response rate are on par with almost all the other alternative treatment, particularly in this patient that's a highly pretreated patient. Over seventy five percent of the patient had thoroughly treated with TPO TPO RA. So update the results. We're also presented at ASH meeting last year. Showing a long term treated treatment lead to durable response risk forty one fifty one percent. And also the over response rate, eighty one percent.

So significantly better than many other treatment options. Next slide. So the Solvoplanet, I I I mentioned the NDA is currently under review. And we are very working closely with, MMPA and look forward to bring this innovative medicine to the patients. And also we have another indication autoimmune disease in development. The warm antibody autoimmune hemolytic anemia and the phase two results were also presented at EHA last year and the subsequent publishing, Lancet Hematology, The solvable planet demonstrate encouraging hemoglobin benefit compared with placebo with overall response rate of forty three percent versus zero percent in the placebo group for the first eight weeks. And they also the overall response rate of sixty seven point seven percent and the durable response rate of forty seven point six percent during the twenty four week of a solvoplanet treatment. It also demonstrates a favorable safety profile so we initiated the phase three portion of the EASLON-two study in the WIHA. And we're currently enrolling patient and on track to finish enrollment this year.

Next slide. And pancreatic cancer is a deadly disease with huge unmet need. With a five year survival rate of less than thirteen percent. It is a immune cold tumor and urinate not respond to immunotherapy. And sorafatinib, [indiscernible] is a VEGF, FGFR, and CS1R inhibitor and also show immune modulating function. So we're currently conducting a phase two three trial of Surufatinib in combination with Carrelizumab and the chemotherapy for treatment naive pancreatic cancer. And this study was informed by a investigator who initiated the trial presented at ASCO GI last year. Using Surufatinib combined with Carilizumab the HUNGRAY's PD-one inhibitor, plus the chemotherapy in the frontline setting. And the overall response rate was fifty percent versus twenty seven percent in the chemo arm. And the median PFS OS reached the nine months and thirteen months, respectively, compared with only five point eight months and eight point six months in the control group. So the phase two stage, we're already fully enrolled, and we expecting to have the phase two readout later this year. Next slide. Here, I'm gonna update you about our antibody target therapy conjugate the ATTC platform. So for the past three years, we really envision, invested significant resource into this new platform.

Which should provide multiple drug candidates in the future And compared with the traditional ADC, that the toxin payload is replaced with the target small molecule. And this ADCC has several key differentiation compared with traditional ATC platform. It could have better efficacy through antibodies, more molecule, combination that will target specific mutations. It can overcome drug resistant and potentially support combination. With target therapy, with chemo, and the immunotherapy, So particularly in the early stage early line of setting with the standard of care. On the safety side, it has improved the safety given with a lower on target and the off tumor toxicity of small molecule. It less a less less, myelosuppression compared with [indiscernible] and you really have a we can think have a better quality of life than cytotoxin based conjugate. It also has a traffic PK profile. Resulting from antibody guided delivery to target sites. [indiscernible] improve the bioavailability bioavailability and reduce drug drug interaction. Okay. So and and, also, the ATTC platform has the potential to incorporate high molecular weight drugs payload. Such as Protax or protein protein inhibitors. Okay. Next slide. Yeah. This slide is I'm gonna show you a preclinical proof of concept of our target [indiscernible] And so in this case, [indiscernible] target antibody is linked to a target therapy payload.

The t d one, with a special linker. So on the left figure here, you can see the target antibody is shown in the green here. And a small molecule payload t t one, showing red. Have a growth tumor growth inhibition. And the combination of both actually have a more synergistic effect. But it's very, importantly, a single dose of the target therapy the ATTC show a robust antitumor activity. [indiscernible] it compared with the either the antibody alone, payload alone, or combination of the antibody and payload. [indiscernible] More importantly, on the right hand side, we also show the, the small molecule t t one payload alone or a combination with antibody [indiscernible] will not tolerate very well. It show a body weight re reduction. But the ATTC dosing, does not influence the body weight. So it is a very important preclinical proof of concept of ATTC. It shows a single dose of ATTC deliver fourteen days of tumor progression. Regression than the good and and also the good tolerability So this has really demonstrate the unique feature for this ATTC platform. Next slide. So our next, ATTC generation technology leverage our expertise in target therapy and also small molecule inhibitor.

And also the payload, chemistry. And the candidate potentially have a key advantage over traditional ADCs. On the right hand side, it targets protein required for cancer growth, has a synergetic combination effect with functional antibody, and also the ability to combine with IO, chemo, or target therapy as a standard of care, particularly in the frontline siting. And they can overcome chemo resistant, which is divert by the driver mutation. So the benefit for further optimize this can also overcome the small molecule with narrow therapeutic window. So a reduction of on target and off tumor toxicity, our platform is designated to deliver high potent concentration of small molecule. So it can be those long term they improve the safety window. And will also reduce systemic toxicity of small molecule.

Okay. So the the our first ATTC will as doctor Su mentioned, we are conducting the IND enabling study and they could potentially our first global clinical study could initiate later this year. So to recover our R and D progress, HUTCHMED has a deep and broad portfolio in oncology, hematology, and recently in autoimmune disease. Our R and D team and global partners remain focused and executed well for the past year and we have multiple near term NDA approvals and also late stage development catalyst in the the next year. So in addition, our no worry TTC will also lead to multiple potentially first in class globally competitive assets into the clinical development. In next few years. So next, I'll turn to, doctor Hsu.

Okay. Thank you, Mike. Just to sum it up, we think the most important milestone for us in 2024 is that we achieved profitability ahead of our schedule. And look forward looking forward we are quite excited about the growth prospects. And you can see here in the near term, we expect a top line and a bottom line growth to accelerate behind through ZEKA launches around the world. And the new indications in China such as EMC this year, and potentially RCC next year sometime, And for savolitinib, we believe the the new indication behind the Saatchi study in China in second line EGFR mutation positive MET amplified patients once approved should give a big boost since it's targeting a much bigger patient population. Certainly more importantly for Savolitinib, we are hopeful that SAVANNAH and CEFRON studies if successful, will support registration globally and allow us to bring this important medicine to patients globally. In addition, new products launches TESMETOstat, Solvoplanet, [indiscernible] pan FGFR inhibitor HMPO four five three. Will add further to the growth. And looking ahead, midterm you know, we we plan to leverage our strong cash to explore acquisition of products or m and a, [indiscernible] in China to add further to our commercial portfolio.

And longer term, of course, we believe ATTC's will deliver. And will ensure our long term growth. Thank you very much. David, back to you.

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

Hi. This is Khalil calling in for Paul. Thank you so much for taking our question. I guess a couple quick ones from us. Apologies if you already mentioned this, but just curious about your phase three plans for sevolitinib combination with Tagrisso ex China? And then secondly, I know you mentioned M and A briefly there. How should we think about the types of assets you're looking at, and the implications for your cash balance? $20.25. Thank you so much.

Okay. Thank you for the question. With regard to the, phase three savolitinib are you talking, I'll I'll just ask Mike to to provide any details. Mike?

Yeah. So globally, know, for savolitinib, we have this, [indiscernible] It's the Tagrisso plus Savolitinib in EGFR resistant patient population. They actually Tagrisso resistant patient population. [indiscernible] So the the phase three trial is ongoing very well. Is it has 20 country participating over 200 sites, open for enrollment. So we anticipate, you know, AZ will finish recruitment this year. So we are also, you know, based on the Saatchi and, Samana data, we actually will be very interesting to see that will lead to the global potential registration. Yeah. So that it's randomized trial, it has the potential to if it is positive, it it will support a global registration, US, EU, and the Japan or so. Yeah.

Okay. Thanks, Mike. Yeah. With regard to your second question, m and a or product acquisition or in licensing of products, I mean, it's it's really to leverage our strong cash position. We have over $800,000,000 in cash now. And and as you know, we announced, we are in the process of divesting our noncore business that will add further to our cash, balance. And in terms of the type of products or acquisitions, we m and a. It's all about you know, adding products to to our portfolio, but preferably, products, in in oncology immunology area where you know, potentially with, synergy with our pipeline. So what yeah. We'll be, exploring potential opportunities. Thank you.

It. Thank you so much. Congrats on the progress.

You.

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

Okay. Thank thank you very much, Clara. Obviously, we think these ATTCs have really big potential. Obviously, targeted therapies with you know, the the first few targets we are working on are targeting major signaling pathways, and and these are know, genetic alterations known to be [indiscernible] alterations and and and with incidence rates, you know, thirty, forty percent or higher. In all tumors. And and also, you know, there is a lot of evidence that patients or tumors with these kind of, genetic alter alterations tend to, benefit less to to chemo therapies or to, IOs or to, or you know, traditional toxin based ADCs. So, these are you know, with these you know, inhibition of this this, genetic alterations, hopefully, will you know, allow these patients to benefit better. To, to the treatments. In terms of initial development plan, mean, you can think of initially late line as a as a single agent [indiscernible] Pivotal studies. But in parallel, I think the goal ultimate goal is to move move these products into front lines. I think the major advantage of these ATTCs that we don't expect overlapping toxicities with with frontline chemo based frontline therapies, including chemo based, ADCs.

So, hopefully, the know, they can be combined. With whatever frontline SOCs, so we can move these two front lines target a much bigger patient population. So that's obviously ultimately, it will all you know, it will be clinical data that will guide us where to go. And and know, hopefully, you know, if if proven in clinics, I think, you know, we we believe they have they have huge potentials. Thank you.

Thank you.

Thank you very much. I'll neck question is from Bank of America Alex Stranahan. Alex, your line is now open. Go ahead.

Okay. Great.

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

Yeah. Alec, you know, thanks for the questions. So fruquintinib is is obviously very early in in in global launches. Last year is mainly US, while approved by EU, by EMA, but it takes time to, to gain access. And so really, towards very end of the year, it was launched in in, in in Spain. So there are many more countries to go, and I'm sure our partner Takeda is highly focused on on EU. And also Japan. Finally gained access in Japan and launched in Japan, around Thanksgiving time. So a lot to go in Japan as well. I think that all these markets will certainly accelerate the growth. Same in The US as well. I think it you know, we think we think, Takeda will will do a great job as they've been, you know, very strong in in in in The In in the launches. Savolitinib in terms of Savanna and and and the saffron, SAVANNAH is a single arm study. It will only support conditional approvals in in US and maybe a few other small countries that that you know, that support, this kind of system. It is Saffron ultimately will support full approval around the world.

So so Cefran obviously is the most important study. It and and, yeah, it's it's enrolling very well, as Mike pointed out, and and you know, indicating a strong unmet medical need. With with targeted therapies in in this patient population. So you know, we are we are quite hopeful that, CEFRON study will will complete enrollment you know, very soon, and we can you know, ultimately support the the global registration. Thank you.

Thank you.

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

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

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

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

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

Lovely. Thank you. Thank you.

Thank you. Next question goes to Cavendish. Adam, McArthur. Adam, your line is now open. Go ahead. Thanks very much. Thanks for taking my questions and congratulations on the results.

So my first question really is just on subletinib again. So last month during AZ's earnings call, we heard AZ say that what they're hearing based in the menopausal study data is that utilization of J and J's drugs is likely to be most impactful in the second line in non small cell lung cancer. Based on this, I'm just interested to hear what management view is on how they see the Mariposa trial potentially affecting a Savolet in their positionings. It does feel there's going to be an impact there. Second question is on Prasatcla. I see from the announcement that PRASACLA sales primarily in the fourth line with growth potential into third line. So do you have a feel on the levels of market penetration that can be achieved for example in The U. S? Based on the sales, it seems that you've taken quite a significant contribution in the market already. So just interested to you know, how much more headroom is there and there for you to go at? And then my final question is just on r and d expenses. Obviously, those were down quite a bit over the period. Just wondering how we should think about the outlook on future R and D expenditure.

Particularly with the level of investment you're going to be putting into the ATTCs and perhaps just overall sort of OpEx in general? Thanks very much.

Okay. Thanks for the for the questions. I'll give you a a quick answer on through Zecla, and then I will ask Mike to to answer your question on salvo and also the r and d, expenses or budget. So for Zecla, yes, in in EU, Japan, it's all fourth line indication, label. So, clearly, we'll be, initially, it will be fourth line. In The United States, the label is, third line and above. Obviously, fourth line is is is the is blank, right, before the approval. So it's it's the, low hanging fruit there. I'm pretty sure, the label, you know, will covers the third line. I'm I'm pretty confident, [indiscernible] will, you know, try their best to, penetrate the third line. Really, it's a it's a very different therapy with proven efficacy and safety you know, without the chemo, without myelosuppression, certainly put patient for elderly patients, or the immunocompromised patients, mild osuppression could be, could be a a problem. You know, so salvo and r and d, I'll I'll I'll leave it to to to Mike.

Yeah. Thank you, Alan.

Yeah. So for you know, in terms of competition, right, I I mentioned the Mariposa know, is you know, is really in the unselected patient population. And also is a chemo combo. Right? So have you're gonna see it not only the the traditional chemo base that toxicity, myelosuppression, the you know, the hematology toxicity, but, also, there are some very challenging toxicity for, you know, skin toxicity and and the the big disadvantage is really the you know, the dosing. Right? So they have to do the split dosing. And very frequent infusion. So it is really per present a know, you know, certainly, it is approved, but it's a very not a very clear biomarker selected patient population. For for savolitinib and Tagrisso combination, there's really a very convenient or key or oral regimen and also have a very precision selected target patient population. I think just from with for the Saatchi, for the Savanna data, you're gonna hear next week. [indiscernible] [indiscernible] big group of patient, you know, thirty four thirty four percent of patient with metal overexcretion amplification have a it it's a larger patient population with a clear driver mutation. And this target therapy is a really being effective, very convenient, So we believe if it is I mean, if it is a proof or has an alternative, has certainly has a convenient and and the precision medicine based approach.

So I think just by looking at these therapy, this is a really high unmet need and with the dosing. So we we think even, I think, AZ is also thinking this is really the competitive advantage for the for the oral oral target therapy combination. And r and d expense. Right? So we are actually very excited about ATDC platform. Right? This this is truly the first in class We think all these assets are very globally competitive. [indiscernible] And I I think the strength also for our platform is we are very carefully selecting the antibody Doctor. Hsu alluded to these potentially very broad tumor type higher you know, higher percentage of driver to mutation with with a lot of commercial opportunity down the road. So, certainly, we do want to take a these assets as our priority to invest. My envision is really initially we're gonna do a rapid you know, global dose escalation. You know, really have as a late line expansion clinical proof concept. So we demonstrate clinical activity, so we can still leverage a lot of opportunity, not necessarily everything have to be done by ourselves. Right? Because, certainly, we have multiple assets by this platform.

We can pretty much duplicate and repeat the process. And, hopefully, when the clinical concept is demonstrated, we can bring potential partner party in. Not necessarily just really exponentially grow our r and d budget. But super potential BD opportunity we can manage the expense. But, certainly, these are potentially exciting, competitive molecule assets we certainly will be a priority for company to invest for the future growth. Yeah. [indiscernible] Thank thank you very much again, and congrats congratulations.

Thank you.

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

So it's very great to see the encouraging preliminary data of your ATTC.

I'm just wondering, like, how many ATTC candidates can move to clinical stage this year? So are you just focusing on one key candidate, or you you will focus on a like, a few can ATTC candidate.

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

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

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

Yes.

You, So, we have only been giving out this revenue guidance for our oncology business. But I think in terms of our target, we as doctor mentioned that we have in advance, achieved our self self reliance, self sustaining profitability model already in 02/2024. In fact, we we made profit 02/2023 Thanks to the up fund income that we recognized from, Takeda. And this year, we have from our ongoing business, we have been able to make breakeven and the slight profit this year. Going forward, as as we said, we will maintain this goal, and we'll continue to have this pathway. But this is not our guidance strictly to the market. But you one one can take because of the divestment of our noncore business, we will be recognizing a substantial high amount of of profit in 02/2025.

That's great. Thank you.

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

It's it's it's a lot of questions here. So certainly, structure of the TKIs, these are all novel structures, chemical structures will be protected by PET and SEM. So they they were obviously different from whatever is is available out there. I I actually don't even think you know, anything approved for, you know, against these targets. In terms of toxicity, all very potent TKIs mean, that's the whole idea. Right? This you know, they the ATTC, you know, we hope to improve clinical activities through combination with the between the antibody and and the payload, at the same time reducing toxicity, the free of free circulating small molecule payload will be extremely low. So so the, any toxicity associated with the payload will be will will hopefully be much reduced.

So yeah, that's you know, I think that's that's the that's that's the key rationale behind behind ATTCs. Certainly, you know, as Mike already explained, in detail, you know, the the the clear definition from traditional toxin based ADCs that, you know, these ATTCs they are targeted therapies. They are they are much less you know, we we, you know, we expect much less myelosuppression or overlapping toxicities with, with the chemos. And and and hence, be combined, hopefully, much better with frontline chemo based, standard of care. So really, the the the the big potential is in combination.

Okay, doctor Su. Maybe we'll have the very question of the night. HSBC's Cindy Chai Cindy, your line is now open. Please ask your question.

Hey. Thanks for taking my questions, and congrats to the achievement. I just have a quick questions. So I know we know that there are US tariffs here and just wonder as a [indiscernible] by HUTCHMED? And what's the tariff's impact in the future? And, also, what's the progress of our manufacturing transfer to Takeda and whether they will and after the manufacturing transfer finished, whether they will produce brocatinib in US or in Japan? Thanks so much.

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

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

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

Thank you, everyone. We'll now end the call.