HUTCHMED (China) Ltd (HCM) 2020 Q4 法說會逐字稿

Okay. Thank you. This is Christian Hogg, CEO of HUTCHMED. And today, we welcome everybody to this 2020 -- fiscal year 2020 results and business update presentation.

On the line, I also have Dr. Wei-Guo Su, our Chief Scientific Officer and Head of Research and Development. I have Johnny Cheng, our Chief Financial Officer, and I have Dr. Marek Kania, our Chief Medical Officer in the U.S. and Head of our International Operations.

What I'm planning to do today is, given this is an hour-long session, is spend about 30 minutes, 25 to 30 minutes on the presentation. I'll go through it relatively quickly as it's all fairly well laid-out in our announcement that's just been out for an hour or so. And then I'll leave the second half of the hour for Q&A. And that's an opportunity for the broader team that we have here to answer any questions that you might have.

So if we go to Page #3 of the presentation, I'll just touch very quickly on the new name, the new corporate identity, HUTCHMED. As many of you on the phone will know here, we've been operating with 2 identities for the last, really, 15-plus years, Hutchison China MediTech or Chi-Med for short and Hutchison MediPharma. Hutchison MediPharma has been our drug research and development operation, and that is now responsible for the launch of all of our oncology assets as well as the sponsor for all of our clinical trials both in China and outside of China. So essentially, Hutchison MediPharma has been the name on the package of our products that are being marketed now. And so we felt there was a divergence between the group name and the name that was being seen in the market, and we felt it's important to bring together both of those 2 entities under a single ubiquitous corporate identity.

And so you can see from Page 3 the sort of the thinking behind it is really coming to a name that fits well with Hutchison China MediTech and with Hutchison MediPharma and incorporates all of the equity and the history that we've built through the year. So HUTCHMED it is. And that is the corporate identity that we will be going for, for the foreseeable future. We will be formally changing the company name at our annual -- shareholder vote of our Annual General Meeting in April. So we will move from Hutchison China MediTech to HUTCHMED (China) Limited. And we will use HUTCHMED throughout from here on out. So hopefully that makes sense to everybody, and I think it will lead to a lot of synergies and simplification over the coming years.

So moving on to Page #5. It's the chart that we always talk about. Our overriding global strategy and objective is to become a global science-focused biopharmaceutical from our company from our base in China, really focusing on realizing the value of our global assets and building out the integrated oncology business in China.

If you look deep into the financial report that is -- that's been presented, you'll see that we're really increasing heavily our investment in developing our assets outside of China, and that's a really important area for us, obviously as well as building out a fully integrated business in China. So -- but I'll talk more about both of those as we go through the presentation.

Page 6. The strengths that we have as a company, obviously led by Wei-Guo, a really world-class discovery and development operation. Obviously, Marek and the international team now is taking many of those terrific assets out to the global market. We've built our team now on the scientific side to over 600 people based in China, and obviously in the U.S. and Europe now.

The highly differentiated portfolio, I'll talk about that in a minute. Obviously, now we're up to 10 assets. We just got clearance for an IND on our ERK inhibitor in the MAPK pathway, and we have a number of other assets that are coming behind that. Obviously, our 3 lead assets are all either on the market now in China or, hopefully, in the case of savolitinib, about to get approved. So we're making great progress with that differentiated portfolio. Pan-China market access capability. We've built a commercial team in China now to over 420 people and are starting to see some really exciting results from our team. And finally, number four, it's a seasoned management team that has really been in position and in place for a long time.

Page 7, the differentiated portfolio. Here, you can see the ERK inhibitor, HMPL-295. We plan to start Phase I in China on the ERK inhibitor middle of this year some time. But overall, this chart, I think the most important point to make is that the ownership of the worldwide rights across -- aside from the licensing deal in China with Lilly and the deal with AstraZeneca on savolitinib, each of these assets is in-house discovered and we own the global rights on them and we are now moving rapidly to try to realize the value of those global rights. Down at the bottom of the chart, you can see the 3 blue lines. These are the next 3 assets or oncology drug candidates that we see coming through. One of them is a large molecule, 2 of them are small molecules. And we should see those play out to IND over the next 12 months.

Page 8 lays out in detail the pipeline chart for the 6 oncology drug candidates we have in global development. It's moving rapidly. Savolitinib, up on the top there. It's a big year for savolitinib this year. We'll talk more about the scope of the registration studies that are kicking off this year. But we have 4 registration intent studies, 3 Phase IIIs and 1 Phase II that has potential for registration that are all kicking off this year. So savo, it's a big year for savo.

Surufatinib, obviously, outside of China, we are in the process of submitting the NDA in the U.S., the rolling NDA and preparing for Europe as well with an MAA submission hopefully some time in the middle of the year.

Fruquintinib, Marek and his team are running an outstanding global Phase III in colorectal cancer, the FRESCO-2 study. That's now starting to enroll quite rapidly. We hope to see enrollment complete by the end of this year. And that would lead, hopefully, to submissions in the U.S., Europe and Japan for fruquintinib in colorectal.

And then 689 and 523, moving very rapidly now in the U.S. through proof of concept. I think we're very happy with what we're seeing. And we're looking to, over the second half of the year, to get really clear about how to take the steps into registration studies. 306 just started our IDH1/2 dual inhibitor. The Phase 1 is just in planning, should kick off shortly in both the U.S. and Europe in both solid tumors and hematological malignancies.

Page 9 is the China development program across 8 of those assets led by Wei-Guo and his team. Enormous progress is being made in China not just in -- on the regulatory side, getting surufatinib approved and getting savolitinib through in Exon 14 through all its inspections and hopefully towards an approval later this year, but also the preparation for the expansion in so many different areas.

Savolitinib, you can see there. The TAGRISSO combo, we intend to start 2 Phase IIIs for the TAGRISSO combo in China this year and also a potentially registrational Phase II study in gastric cancer will kick off this year.

Surufatinib, it's around the launching in NET, moving the biliary tract through a Phase II readout in that registration study that we have underway at an interim analysis. But then, really importantly, the PD-1 combos for surufatinib. The landscape is changing across many solid tumor types, particularly in China with the broad access now that patients have to PD-1 antibodies. And the work we're doing with surufatinib in combination primarily with TUOYI, which is the Junshi PD-1, is a very exciting area. We're seeing in certain solid tumor settings, we're seeing just superb efficacy and safety profile. And I think we hope to see a couple of those indications into registration studies later this year.

Fruquintinib, much the same. But before I talk about the PD-1 combos, we have the FRUTIGA study in gastric cancer that's moving very nicely. We got through an interim analysis late -- mid to late last year. We are set to complete enrollment around the end of this year. The sample size is a bit bigger now based on the IDMC and the interim analysis having a built-in mechanism to increase the size of the study. So we're going to enroll about 700 patients in FRUTIGA. And that hopefully completes enrollment late this year, somewhere around late this year.

Then below FRUTIGA, you see all the PD-1 combos. A lot of activity, obviously, in the colorectal cancer space in combination with both TYVYT, which is the Innovent PD-1 as well as geptanolimab, which is the Genor PD-1. So these things are moving along quite nicely, and I expect those to progress into registration. Certainly, some of those indications will move into registration hopefully later this year.

689 moving very rapidly now in China. We're through proof of concept. We're working on designing our registration studies. And we expect that we will initiate multiple registration studies on 689 over the balance of this year.

523, our Syk inhibitor, seeing great efficacy in certain areas of B-cell malignancies as well as a proof-of-concept study in ITP. And we are planning to move into registration, certainly on ITP, and considering certain of the B-cell malignancies for that, but definitely in ITP.

I won't go down any further. It's all relatively early stage, but the FGFR inhibitor now in Phase II in intrahepatic cholangiocarcinoma and then the IDH and the ERK inhibitors are kicking on in early development. So it's a broad pipeline. We're very active in China. We're very active outside of China. And we're very encouraged with the process or the progress rather that we've seen.

Page 11, very briefly. You can see that we ended the year in 2020 on about 400 people on our commercial team. It's up to now well over 420 people. And that commercial organization in China covers all functional areas of commercial in oncology. We're hitting the top 2,300 oncology hospitals in China and over 20,000 oncology physicians in China. So it's a deep team that is starting, and I'll -- as I'll share over the next few pages, starting to show some great results.

Page 12. Rather than going into individual people, the reason that we put this chart in is to give a sense of the type of people that are leading our oncology commercial team, where they come from, the background, the blend of multinational and local oncology backgrounds. And what you can see here is that almost 100% of our kind of key leadership team in oncology commercial are coming from multinationals in one way or another. But also, many of them have deep experience in some of the larger local oncology players like Hengrui and the like. But you can see there's a pretty strong presence of BMS in there and Bayer. And there's no surprise that, that's the case given that our Chief Commercial Officer is a former BMS person. And Chen Hong, our Chief Commercial Officer, has brought in some very capable people from that background. Chen Hong, obviously, has been with HUTCHMED for over 10 years. So it's a great team, and they're doing very well.

Page 13, just a sense of sort of the picture of what's going on at the moment, 3 novel drug launches. Obviously, 2 have launched and 1 is in late review, that being savolitinib.

We put out guidance for 2021 on oncology consolidated revenues of USD 110 million to USD 130 million. That compares to around $30 million in 2020. So you're going to see a big ramp-up in oncology drug sales and revenues in China.

The blue bar at the top of that chart shows for fruquintinib, surufatinib and savolitinib the sort of the status and the economics that we enjoy through our partnerships. So all of those assets are -- obviously, fruquintinib and surufatinib launched; savolitinib, hopefully, well on its way to launch. And the financial benefits to the company to HUTCHMED as those -- that plays out.

And then at the bottom, on the revenues sort of 2022 onwards, this is really the global activities. And you can see in each of the cases, fruquintinib, surufatinib and savolitinib, while we've launched or are about to launch in China, we have very active global programs to bring these innovations to the global market.

So fruquintinib, surufatinib and savolitinib, all will, I think over the next 2 or 3 years, will have great presence in China as well as emerging presence outside of China.

Moving on to Page 14. The results on fruquintinib or ELUNATE in China. You can see in 2020, the sales were $33.7 million. That was up 90-odd percent versus a year ago.

But more importantly is the chart on the right-hand side, you can see in-market sales since HUTCHMED sales team took over have started growing quite rapidly, particularly if you look at January, February 2021. So these are unaudited numbers, but $14 million -- $14.3 million in the first 2 months of the year and March moving very rapidly as well. I think there's a chance that in Q1 '21, we do at least close to the level of sales that Lilly did in the first 3 quarters last year. Maybe we don't quite get there, but we're going to get close to it. So it's a terrific team that's doing a great job.

Page 15, you can see the scale of the reach. We've really increased the hospital listings in the last -- well, since we took over. The team is up to over 420 people and coverage is terrific. Over 325 cities are being covered. And obviously, we're all fully aware of the benefits of fruquintinib relative to the competition, the NRDL inclusion, the clear clinical and safety benefits. So I think we feel very confident about fruquintinib going forward.

Page 16 is surufatinib. SULANDA, the launch, I mean, it's only been on the market now for roughly 7 weeks. The unaudited sales in January, February were of USD 4.9 million. Our first order was shipped on January 14. Our first prescription was written on January 19. And by January 29, we've had prescriptions written in 30 provinces across China. So this is just the beginning for SULANDA. But we're encouraged by the start, and we're already starting to see our patients seeing real benefit from SULANDA. So that's very encouraging.

So moving on to the regulatory achievements in 2020. I won't go through it in great detail with the slide. Page 18 summarizes it quite well. Obviously, surufatinib getting the NDA approved on extrapancreatic NET and accepted on pNET was very important.

The red boxes are global. The blue boxes here are China, and that's the same throughout. And so obviously, a lot of progress was made by Marek and the international organization on surufatinib outside of China. So the Fast Track designations, the pre-NDA meeting and then followed by the commencement of the rolling NDA submission in December on surufatinib. Savolitinib, Exon 14, getting the NDA accepted and all the work that Wei-Guo and his team have been putting in on bringing savolitinib through to its inspection process.

Then fruquintinib CRC getting Fast Track designation, very important. And a global regulatory -- sorry, a global Phase III study is underway, the FRESCO study. That's been a big undertaking in 14 countries around the world, close to 700 patients. And then getting the INDs cleared on the IDH inhibitor and the ERK inhibitor have also been good achievements regulatory-wise.

Since we're short, I want to get to the Q&A. I'm going to go quickly through Page 19, just so -- it's a chart many of you have already seen before summarizing the -- how we were able to take Phase III data from China, combine it with Phase Ib data from the U.S. to support our regulatory submissions outside of China. So that's important.

Page 20 talks about the process of submitting the NDA for Exon 14 and some of the scientific presentations that we've made. So that's been a successful process driven by high-quality data.

On Page 21, just a bit of background on the FRESCO-2 study. I mentioned in 14 countries around the world, over 130 clinical sites. Our team has been in deep dialogue with the U.S., European and Japanese regulatory authorities on FRESCO-2. And it has been designed to support regulatory filings in each of those jurisdictions. So a very positive step for us on fruquintinib globally.

Page 23 talks about the clinical development activities in 2020. The red boxes, again, global; blue, China. We published great data, pharmacokinetic and safety data showing surufatinib efficacy and safety profile and pharmacokinetics were consistent across Asian and Caucasian patients, then the broader Phase Ib data that we presented at ASCO. And obviously, in China, we presented great PD-1 combo data, Phase I dose escalation data as well as the pNET.

If we go to the next pages, I'll just brush through those. Page 24 is the pancreatic NET data we presented. So 10.9 months median PFS compared to a placebo of 3.7. So that's very competitive.

Moving to Page 25, the Phase Ib bridging study. I think the thing that is most exciting about this bridging study is that the Phase Ib in the U.S. treated very heavily pretreated patients, U.S. NET patients. Patients that had, had exposure to AFINITOR; had, had exposure to sunitinib. And the efficacy that we saw on surufatinib was really encouraging in terms of response rate, PFS, et cetera. So that's exciting in the patients that fail on the existing therapies today do well on surufatinib, and that bodes well for the future in the U.S. if and when we're able to launch that.

Page 26 is the promising data from the surufatinib-TUOYI Phase I dose escalation. We saw a lot of efficacy there and some very difficult patient populations in grade 3 NET and neuroendocrine carcinoma patients, neck patients.

On the right-hand side of Page 26, it gives you a sense of the scale of the Phase II clinical studies that we're running in China and outside of China. But you can see 8 or 9 indications that we're looking at on the TUOYI combination in a large group of patients. And we plan to select 1, 2, 3 of these indications to take into later development.

Page 27 is fruquintinib. I won't go through in detail. These are just the start-up of studies, the interim analysis on FRUTIGA and the combination with the PD-1 start in -- with TYVYT.

Page 28 is some data that was presented at a number of scientific events. It's the Phase Ib data from our U.S. study. Again, here, you saw great efficacy in patients that have been heavily pretreated. So fruquintinib, median duration of therapy, 19 weeks as compared to STIVARGA and LONSURF, half that level, give or take. And patients having been exposed to, in many cases, both STIVARGA and LONSURF before they were treated with fruquintinib. So very, very exciting trend there. And hopefully, that plays out in our FRESCO-2 global Phase III.

Page 29 is the FRUTIGA interim I mentioned earlier. So that's progressing. And as I said earlier, we'll complete enrollment, hopefully, around the end of this year. And Page 30, a similar chart with fruquintinib PD-1 combos. And you can see on the right-hand side, we're also very active, combining fruquintinib with TYVYT from Innovent, tislelizumab from BeiGene rather and geptanolimab from Genor.

Savo, presented a lot of data globally on Page 31, the kidney cancer data as well as the final data on TATTON. And obviously, the Exon 14 data was presented.

So briefly, on Page 32. PRCC, the 60-patient data from the SAVOIR study was great, and that's leading us now to put in place our plans to reinitiate a Phase III in papillary renal cell carcinoma. That should kick off before the middle of this year globally.

It will be a combination, as you can see on Page 33, of savolitinib plus IMFINZI. So we won't go with the monotherapy, we'll go with the combo because the data we've seen, as you can see on Page 33, is very positive in those MET-driven patient populations. And we'll be presenting more data in this MET-driven PRCC patient population with this combination probably later this year at a scientific event. That will further justify why we're moving into a Phase III on that combination.

Page 34, Exon 14. I won't talk about it in any depth other than it's a terrific data that supported the NDA submission.

Page 35 is the final TATTON data that's leading us to Page 36, which is the SAVANNAH study, which is now fairly well enrolled, was certainly fully enrolled on the 300-milligram QD dose and is currently still enrolling the 300 BID and 600 QD doses.

But what we'll do by the end of SAVANNAH or certainly by the middle of this year is we'll be able to determine the optimal biomarker strategy, dosing strategy, dose regimen and the line of treatment for a global Phase III of the combination. So we are building up to global registration study on this combination.

Next wave of innovation on 37. I've touched on it already, so I won't talk about it again. But 689, if you go to Page 38, is probably what we're most excited about right now, seeing some super, super early, early efficacy and safety profile data from our dose escalation study. That's now been expanded, and we are identifying which indications we want to take into registration studies in China and potentially outside of China.

Page 39 is the safety profile of 689, which really is it's a very important advantage relative to the very, very difficult to tolerate PI3K delta inhibitors that are out in the market today.

Page 40 and 41 give brief background on the IDH inhibitor and the ERK inhibitor. I think we'll leave that for when we have more time, but we're very encouraged by both of these assets and very eager to get them into development globally.

So Page 43, we have the upcoming events globally. You can see the red boxes are either regulatory achievements and data presentations, and the white boxes are generally the start of clinical studies. So you can see we've got a very active 2020 ahead of us with the NDA submission completion on surufatinib; the MAA submission on surufatinib in Europe; aiming to complete the FRESCO Phase III enrollment by the end of this year, that's close to 700 patients; and then kicking off PRCC Phase III for savo; kicking off, hopefully, the savo/TAGRISSO global Phase III or certainly clarifying the registration pathway and likely kicking it off during the second half of the year as well as the earlier-stage assets. So a lot going on globally for us this year.

And on Page 44, you can see what's going on in China, which is equally busy. So obviously, surufatinib will be presenting some data on the PD-1 combo later this year, hopefully getting an approval in pNET, progressing the PD-1 combos into registration studies for both fruquintinib and surufatinib, complete the FRUTIGA study enrollment later this year.

On savo, getting gastric cancer kicked off in a potential registration study; launching Exon 14 with AstraZeneca midyear, maybe July. Astrazeneca's commercial team in China is enormous and a very, very stark contrast relative to the commercial organization that Eli Lilly had on fruquintinib. It's a factor of 15 to 20x larger. And I think we're going to see some fantastic take-up on savolitinib in China. And then the Phase III is on the savo/TAGRISSO combo in China.

Okay. Moving on, since I've covered most of that. On Page 46, just a brief update on the large-scale new factory in Shanghai that we're building. You can see that picture in the top right there. You've got an office building in the front. You've got the small molecule workshop right behind it, and then the large molecule workshop behind that. So this facility will increase our capacity fivefold in the small molecules space and it will also give us large molecule capability.

Page 47, the Inmagene partnership. I'm not going to go into a lot of detail. But Inmagene is -- these are good people, it's a good company and we're working now closely with them to progress 4 immunology assets towards IND and then into the clinic. So it's really about bringing resources, both organizational resources and technical resources together, to move a broad portfolio forward quickly.

Page 49, on the financial side. We finished the year in 2020 with about $435 million in cash, another $69 million in unused banking facilities. So we're in good shape from a financial standpoint. Obviously, the financings we did during 2020 with the PIPE investments from General Atlantic and CPPIB were very helpful.

Finally, on Page 50. The statement of operations, you can see here the guidance we're giving, the $110 million to $130 million in Oncology/Immunology revenues.

The second pink line that is highlighted there, the R&D expenses, you can really see now that our China investment in R&D last year was around USD 112 million, which is fairly stable versus the year before. It will be a lot more this year because we're starting so many registration studies. But you can also see there that the investment in our U.S./Europe R&D operation or our clinical regulatory operation is really increasing significantly, up to $63 million during 2020 from about $22 million the year before.

The last chart I'll leave you with before we go into the Q&A is on Page 51, summarizes what I would say is the sort of the 5 key takeaways from our presentation today. The first being on the oncology commercial side, we're kicking off. We've worked for 15 years to bring these assets to market and we've built our commercial team. Our commercial team is doing a terrific job. And I think our ability to hit $110 million to $130 million in oncology consolidated revenues this year is a relatively straightforward exercise for us, so from ELUNATE, SULANDA and obviously the savolitinib brand launch.

Savolitinib is the second big thing this year. So savolitinib progress, initiating 3 Phase III combo studies in 2021, in parallel with our first approval as a monotherapy in Exon 14. And on top of that, potentially a registration intent Phase II in gastric cancer. So very active on savolitinib.

Hematology progress. It's been a long, hard slog to bring our PI3K delta inhibitor and our Syk inhibitor through to a point where we really feel strongly that we know where we want to take them. And now we're working to execute that. Hopefully, that will lead to registration studies initiating in the relatively near future.

Combinations, really exploring the promise of the combinability of our assets with the immunotherapies. The data, as I said, from the -- from TYVYT and TUOYI programs, we're running Phase IIs in large amounts of patients. And that data will be playing out over the balance of this year and we will be kicking off into registration studies in certain areas there.

And then finally, the international organization is very much in the ascendancy. We are investing heavily to bring our programs through as aggressively as we can globally. And we have a wonderful team of people in place in the U.S. and Europe to do this. So I expect that will increasingly add value to the company on top of what is already a terrific China operation.

So I'll leave it there. I didn't make it in 25, 30 minutes, but I'll leave it now for Q&A. And hopefully we can get Wei-Guo, Marek and Johnny involved in the discussion. Thank you.

(Operator Instructions) Our first question is Louise Chen from Cantor.

Congratulations on all the progress this year. I got a few questions here.

First question is, could you give more color on how you get to the $110 million to the $130 million, that's obviously a big step-up from 2020? How much do you have in there from potential savolitinib milestones? And then maybe more color around ELUNATE and SULANDA.

Second question is on the HMPL-689. Obviously, making some good progress here. Can you talk about where you think your competitive advantage is here? And where you would fit into the treatment paradigm if this makes it to the market?

And the last question I had is, how do you plan to build a globally competitive franchise here in the U.S.? Where do you plan to distinguish yourself?

Okay. Thanks, Louise. So the $110 million to $130 million, you just have to look at what we're doing on fruquintinib at the moment. In the first couple of months of the year, like I said, probably over $20 million in the first quarter. That should bring fruquintinib up -- easily up to sort of $75 million, $80 million as a relatively straightforward target. Now we're booking consolidated revenues of about -- between 70% and 80% of all sales based on the structure of the contract we have with Lilly. So if you're doing $75 million, $80 million on fruquintinib, you're probably booking close to $60 million in -- $55 million, $60 million in fruquintinib consolidated revenues.

On SULANDA, it's very early, but we expect somewhere in the sort of $35 million range, give or take, for SULANDA. But as I say, it's very early, but that our commercial team is confident of that.

Then you get to savolitinib. Well, savolitinib, on approval, you're going to receive a USD 25 million first-sale milestone. It's not on approval, it's actually first sale. So that would be a significant piece of this revenue. And then in terms of the royalties that we'll receive, we'll receive a 30% royalty on all savolitinib sales in China. And I would expect that would be material. I won't put a number on it at this stage of the game, but it would be material for the year.

In addition to all of that, we have a couple of other sources of revenue in oncology. One is the service fees that we earn from AstraZeneca and Lilly for running all various operations and research and development or development operations in China as well as manufacturing on savolitinib as well. That will be further revenue for us so -- because we're responsible for manufacturing savolitinib as well as the MAH holder.

So you add that all up, I think fairly conservatively, we'll be in this $110 million to $130 million range.

Then moving on to 689. I'll leave that to Wei-Guo to talk about competitive advantage of 689 relative to the sort of the current treatment paradigm. Wei-Guo, if you'd like to answer that?

Sure. Thanks, Christian. I think between dose escalation, dose expansion in China, we've now dosed over 120 patients. Outside China, Marek's team is also enrolling patients as well. So altogether, we probably have 140, 150 patients now for 689. And we are very encouraged by the emerging efficacy and safety data with this compound. We are seeing really good advocacy in several subtypes of non-Hodgkin's lymphoma, and we actually plan to move into registration intent studies in China first, but perhaps will be followed by the international or global development as well. So not only actually in more indolent subtypes, but also we are seeing some interesting activity in some of the more aggressive subtypes as well.

So we are wrapping up -- we probably will wrap up the China dose expansion cohorts this year and look to publish some of the data from thereon. And more importantly, we want to focus on the registration intent studies and hope to bring 689 to do registration in the near future.

So yes, we are looking at a few subtypes, and we're seeing very exciting data there. Some of it already published, that is the dose escalation portion already published. And if you look at dose escalation, right, across all doses, all subtypes, ORR was about 50%, and with a very interesting different safety profile compared to some of the competitive compounds.

Great. Thank you, Wei-Guo. Maybe Marek, you could take a crack at the third part of Louise's question, how do we establish a global competitive franchise basically?

Yes. Thank you, Louise. This is Marek. So good question, obviously, broad question. I would say this way, we -- our success will be led by, obviously, continued building on our foundation, our deep and large portfolio and the success we built in through Wei-Guo's discovery effort, development efforts in China. Obviously, our priority first is to address some of the most high unmet medical needs through our late-phase assets. Our single-agent registration strategy is obviously going to build our foundational portfolio. But obviously, as Christian described, our strategy is building our combination effort and driving innovation across multiple assets. Right now, we have 5 and soon to be 7 active programs in clinical development.

Obviously, while we are doing this, we are also building high capability and highly talented team of very seasoned individuals across drug and science, drug developers as well as a very strong commercial team led by Tom Held.

So this will be ongoing journey. But if you're looking for common theme, how we are doing this, we are really targeting high unmet medical needs and we are truly looking for this meaningful difference for patients. And I think if anything can be testimony, what kind of size in investigators, academic centers, collaborating with us in the United States, U.S., Europe and Japan, I think it's also kind of sense what the reflections on the science and molecules external experts have.

So it's very encouraging. Obviously, it's the beginning of the journey for international development, but we've made tremendous progress. And within next 12 to 24 months, we will be in a very advanced registrational phase across at least a couple of assets. But as Wei-Guo said, our lymphoma development with P13K delta, although very complex and crowded market, but there's still high unmet medical need in our portfolio. And how the profile runs definitely distinguish itself. Obviously, hard work for everyone, but we're extremely encouraged.

Our next question is [Ethan Ting] from Morgan Stanley.

Congratulations on such a solid year. I would like to ask two questions on Sean's behalf.

First, could you provide some color on the pricing for surufatinib and the upcoming savolitinib in China? Maybe compare with competing products, if there's any? Also both -- I think both surufatinib and savolitinib will be eligible for reimbursement negotiation this year and ELUNATE will be up for renegotiation. Could you remind us about your strategies for these drugs? What kind of price cuts can we expect? That's the first question.

And second question, could you provide some rough guidance about your R&D expenses and cash burn, total cash burn in 2021?

Okay. Great. Thanks, [Ethan]. So yes, obviously, pricing strategy is obviously very sensitive. But we've launched surufatinib pricing at a level that is similar to that of -- that we launched fruquintinib at. So it's up in the high $3,000, say, USD 3,800 a month. We are implementing an important means-tested patient access program that enables patients who are paying out of pocket to get access to surufatinib. And obviously, now, over the balance of this year, we'll be engaging on surufatinib with the regulatory authorities to work to get surufatinib on to the NRDL early next year.

So I can't really go into any more detail than that other than to say similar levels of pricing to fruquintinib, give or take. And we will try to make surufatinib accessible to patients during the period that we have to spend negotiating getting on the NRDL.

Savolitinib is a bit different. Savolitinib is an interesting one because we're obviously very keen to try to get savolitinib approved in the first half of this year in order that we can then engage in the NRDL discussions over the second half to get savolitinib on the NRDL at the beginning of 2022, right? So it's a big change. A year, 2 years ago, we would have been get approved in the middle of the year, you're looking to get on the NRDL 18 months later. Now the Chinese regulatory authorities have moved so aggressively that if you get approved in the middle of the year, there's a chance to get on in 6 months. So we're working on savo.

I think the pricing benchmark for savolitinib that you should use is probably TAGRISSO, sort of global pricing and China pricing strategy on TAGRISSO that was executed by AstraZeneca. That's all public information. I think you won't go too far wrong looking at that as a reference.

Finally, on ELUNATE, obviously, we get into the renegotiations to renew our reimbursement on ELUNATE. And we will work with the regulatory authorities on that. I mean one of the benefits of Eli Lilly kind of getting off to a relatively slow start is that we have -- generally, the discounts are bigger for drugs that have built very large franchises in a short period of time, because Lilly had such a small commercial team working on fruquintinib. Obviously, that's changed now, and we're going more aggressively. But I think we'll be in a reasonably good position to discuss and renegotiate the ELUNATE pricing. I would hope that the discount wouldn't be too significant.

So that's really -- that's as much as I can say on that, Ethan .

R&D.

Sorry, the R&D? Oh, the guide on the R&D spend. Maybe, Johnny, you'd like to give a guide on the amount of R&D spending this year.

Yes. Okay. So properly, we haven't given out a clear guidance on the R&D spending. But doing of our spending in 2020, I think we will ramp up the R&D spending likely to be close to double of 2020.

Yes. That's a fair assessment. I think what you are going to see is you're going to see China stepping up materially from this $111 million level that we saw in 2020 just because Wei-Guo and the team are working so hard to initiate some -- up to 8 to 10 registration studies over the -- over the back of this year in China. So that will be a pretty significant step-up.

And then Marek and the international organization burned around $63 million last year. But the FRESCO-2 study is kicking into full steam over the back of this year and the expansion of the organization as well as development of multiple assets. So I could imagine that could easily double this year, potentially more. So yes, those are the kind of numbers we're looking at.

Our next question is Alec Stranahan from Bank of America.

And wanted to also offer my congratulations on all the progress in 2020. First, on ELUNATE, what would you say has made the biggest difference in the increased uptake following the transition from Lilly? And I guess, how much of this year-over-year benefit is coming from NRDL inclusion versus greater efficiencies in the launch? And then I'd be curious to hear your views on the expanding presence of PD-1s from BeiGene, Innovent and others outside of China, whether you see any clear leaders among the Chinese PD-1s. And I guess how you think this may ultimately play in your go-to-market strategy for ELUNATE, suru and savo given the various combo studies ongoing.

Thanks, Alec. Yes, so maybe I'll answer the first one. And on the PD-1 side, maybe I'll ask Wei-Guo to answer that.

But on the -- what's the biggest difference on the commercial progress of ELUNATE since we took over? Well, the NRDL kicked in for ELUNATE on January 1, 2020. So Eli Lilly had, had 3 quarters with reimbursement on ELUNATE. And as you can see from our presentation, the sales increase, in-market sales increase for those 3 quarters last year relative to the year before was 37%, which I would classify as fairly tepid. Then our team took over in Q4 and we saw terrific growth. I mean the difference, the real difference was coverage. You go from 120, maybe 140 commercial people across China marketing ELUNATE to 420-plus and growing. By the end of this year, we'll have 600 people on the ground in China covering everywhere very aggressively.

I think the other thing that, that does for you is it allows you to get the hospital listing. What's most important, the big benefit of getting on the NRDL is that you can get access to the hospital pharmacies. If you're not on the NRDL, it's very hard to get listed in the hospital pharmacies in China. So you're dependent on retail pharmacies in the sort of proximity of hospitals. But getting on the hospital pharmacies is the key. And so in the last quarter of last year, we increased the hospital listings by over 40% relative to what had gone on before.

So having a bigger team, better coverage and that translating into more aggressive hospital listing activities, we -- I believe it was up to about 290 hospital listings at the end of last year and that hopefully will double over this year. So that will make a big difference, I think.

So those are the key differences relative to us, broad coverage and a real focus on getting hospital listings.

Wei-Guo, maybe you could comment on how you see the PD-1 landscape playing out and how we fit in with that, both in China and outside of China.

So I'm not sure if the question was about a clear leader PD-1 compound on the China market or just in terms of sales or revenue? Or you're talking about asking about the difference in efficacy and safety?

So I mean I can't comment on the market side, but in terms of different PD-1s that we've been working with, we've been working -- we are working with TUOYI, TYVYT and also Genor's PD-1. Obviously, we've not done any head-to-head comparison just to compare the different PD-1s. But they don't -- we don't have a lot of data to make any conclusions. We do see different safety profiles. Obviously, that's quite normal, consistent with the PD-1 single-agent safety profile.

The only thing maybe relevant in terms of efficacy, it's the fruquintinib in combination with TYVYT, this Innovent sintilimab and also fruquintinib in combination with Genor's PD-1 in the same patient population, in late-stage and advanced-stage CRC, the data will be published at the upcoming ASCO. So you may be able to make some comparison there.

But bottom line is that we are seeing similar data there. But whether it's driven by PD-1 or driven by fruquintinib, it's hard to tell at this point. But the top line data in terms of efficacy appear to be similar, and the data will be available at ASCO.

So I think in general, VEGFR in combination with checkpoint PD-1 or PD-L1, I think these -- obviously, already a lot of data available and a clear evidence of synergies as well. It's really about, for us anyways, to [value] the landscape in China, and also outside China, how we -- indications we think that we can take advantage of, particularly in terms of differentiated VEGFR compounds. As I said, PD-1s are quite similar, but VEGFR compounds are quite different in terms of, for instance, lenvatinib versus regorafenib versus cabozantinib. And now we have fruquintinib and surufatinib, clear difference in efficacy and safety.

So we are building a very large database through our basket-style Phase II study, for instance, surufatinib in combination with TUOYI, fruquintinib in combination with TYVYT. And we are seeing quite really encouraging emerging data. And obviously, we'll examine against, for instance, the pembro/lenvatinib combo in terms of safety and efficacy profile. And we'll select certain indications to go forward with.

So we -- basically, we're very early in the Phase II. As I mentioned, this basket study is data emerging is really quite encouraging and all. We'll need to wait a bit for the data to mature. And we are quite optimistic that we'll move forward with -- in some of the indications that we are seeing with a very encouraging data. And these can be both in China and outside as well. Sorry...

Well, I agree. It's not...

Sorry, I can't comment on markets.

Wei-Guo, if I may add just from the international development perspective. As Christian shown on the slides, we have also, as you know, very active collaboration with BeiGene and tislelizumab. And actually, the combination studies starting across fruquintinib and surufatinib across multiple cohorts, which will be obviously building on the signals we have across multiple partnerships. But with this specific late-stage development PD-1 in the U.S. with large prices Beijing has, obviously, that's going to be very fruitful collaboration leading to potential grade signals.

Next question is Paul Choi from Goldman Sachs.

Christian, let me also offer my congratulations on all the progress in 2020. A couple of clinical questions from us and then maybe just one strategy question.

Just on the combination of surufatinib plus BeiGene's tislelizumab. In your mind, is there any reason that the recommended Phase II dose wouldn't be 250 milligrams given your prior experience and prior work with the Junshi PD-1?

Maybe I'll leave that to Wei-Guo and Marek to comment. I don't think there should be any difference, but unless I'm thinking some.

Yes, I can make a comment. As I mentioned, I don't see a lot difference in terms of efficacy, but safety profile is going to be quite different. For instance, I mentioned fruquintinib in combination with TYVYT and also fruquintinib in combination with Genor's PD-1 and the recommended Phase II doses for fruquintinib are different.

So whether tislelizumab is...

Oh sorry, I'm asking on surufatinib.

Yes, I know. So whether surufatinib in combination with tislelizumab will be 250, I don't know. It may be 300. Who knows? But it's certainly too far from 250. So it's quite difficult to tell at this point.

For instance, you probably saw, I'm not sure if we published that, but they should be published fairly soon, at the ASCO, that fruquintinib recommended dose regimen is different pertaining to the combo and also Genor's PD-1 combo.

So I think, as I said, the different PD-1s in terms of efficacy, in terms of mechanism of action, very similar, but the safety profile can be quite different. And depending on the small molecule tox profile, whether there's any overlap or not, so it can be -- I think it's quite conceivable it can be quite different actually.

And Paul, I will answer this -- we'll answer this very quickly. As part of the standard design, you have the escalation phase of simplified safety review which exactly we'll answer this question in our ongoing studies.

Right. Okay. Very helpful. And then on the 689 registrational trial, can you maybe provide any sort of preliminary feedback or guidance that you received from the U.S. FDA with regard to the trial population? And do you think the 30 mg dose that you identified at ASH last year would also be the dose used for that study?

Well, I think the question is regarding our U.S. strategies. Is that what you're saying, Paul?

Yes.

So maybe Marek, you can...

Thank you, Paul. So just to clarify, as Christian said, we are preparing discussions with U.S. FDA for us. As of today, we are obviously filling in the final stages of escalation, while we see very encouraging profile, including a very encouraging activity in the escalation phase of the U.S. study, we will lead this to conclusion of that phase.

Now as Christian described, our quite large population of China study and our emerging data from U.S. will lead us to that discussion with U.S. FDA. So it's still to be completed in the second part of this year, but we are very encouraged by the signals we see in our China study and as well as the U.S. escalation phase.

Now we'll definitely build on our practice, but U.S. regulatory is totally open for considering data generated in China or elsewhere as long as it addresses obviously high unmet medical need than innovation, and we've done it through with surufatinib and pre-NDA discussions as well. We'll take a similar approach of open and transparent discussion with U.S. FDA looking at the data and best it in this clinical cycle. So stay tuned on this.

Second part -- hang on, Paul, second part of your question was, do we expect those similar correct to China established data? We are nearing completion of escalation. We're right now at 25 milligrams. And so far, so good.

And so if you're asking me to speculate, I expect we'll be in a similar range, but we soon will be approaching 30-milligram cohort, which will complete within a couple of months, more or less, depending on, obviously, DLT observation methods. So I expect that those will be highly likely the same.

Okay. And then one strategy question, which is with regard to capital allocation, Christian, how are you thinking about balancing that across your clinical programs, building out your commercial footprint? And when in your mind does this -- does the oncology business becomes self-sustaining?

Thanks, Paul. Yes. I mean we are in a mode right now where we are just moving aggressively, as aggressively as we can, to maximize the -- or realize the value of our assets, both inside and outside of China. Obviously, we're being very choiceful on the indications that we're moving into registration studies. We're not moving everything. And -- but the proof-of-concept data that's being developed, PD-1 combo, the 689, 523, et cetera, is compelling.

So as we said earlier, as far as the burn, it will probably double on the R&D side over this year relative to last year. And that's a level of burn that is manageable for the company at this stage. So I'm not resource-constrained at this point.

On the commercial side, I'm just seeing such terrific execution from our China commercial team. I think we are not anywhere near a point of diminishing returns. So the concept of building our team from 420 up to 600 by the end of this year is only going to deliver material incremental value to the company.

So I think we're in this phase of our evolution of a company where we're accelerating. I think we need to keep a close eye on the equity capital markets. I've mentioned from a strategic standpoint in this announcement that we continue to evaluate and observe equity capital markets in the context of potential Asian listing, so Hong Kong or Shanghai listing.

So I think from a financial standpoint, we are in a good position in that we have the resources to push everything as hard as we can, certainly for the next 12 to 24 months. And I think the value we'll create for the company during that time will really be material. So hopefully, that answers your question.

Next question is John Newman, Canaccord Genuity.

Congrats on the progress in 2020. I think you guys must be working in your sleep around-the-clock. There's still a whole lot going on which is excellent.

Just had 2 questions. The first one is, I've always been very excited about what you're doing with surufatinib in the U.S. with the NET filing, which is at the NDA -- excuse me, which is at the FDA. Just curious if you could give us an update as to how that submission is proceeding. And if you would expect that, that could be an accelerated approval.

And then the second question I had is just on the SAVANNAH study with AstraZeneca. Christian, it sounded like you were reasonably confident that the optimal Phase III dose might emerge in 2021. And I just wanted to ask about that.

Thanks, John. I'll do the SAVANNAH first, and then I'll hand it over to Marek to talk about how the NET NDA is going in the U.S. and priority review, et cetera.

So on SAVANNAH, yes, that study is a great study. It's enrolled a lot of patients. We -- as I said earlier, we've completed the enrollment of the 300-milligram QD dose in combo with 80-milligram TAGRISSO QD. And now we're enrolling the 300-milligram BID as well as the 600 -- beefing up our 600-milligram QD data. It's just a really well-run global study. We are -- I'm confident that by -- come mid-year, maybe early Q3, we and AstraZeneca will have a very clear view on the biomarker strategy, the dosing strategy, the dose regimen strategy as well as the line of treatment that is most relevant. Is it going to be everybody? Is it just going to be off of first-line TAGRISSO failure? Off of second- and third-line TAGRISSO failure? So all of that's playing out, is playing out well. And it just takes time, and -- but I think we're well ahead of the competition and we'll be in a good position. So hopefully, that answers the question.

Maybe I'll hand it to Marek to talk about U.S. NDA rolling submission for suru.

Sure. Thank you. So I mentioned the effort is in a high-intensity mode. We are under Fast Track designation. Therefore, for that rolling submission, we submitted first wave end of December. And we should be completing our NDA submission with wave 2 and 3 by end of likely April.

And just to clarify, we are not -- our strategy is not accelerated approval, which would be based on the surrogate end point and then the requiring confirmatory study. We are within full approval strategy. So obviously, it would be up to FDA to design types of review which will happen within validation period after completion of submission, last wave of submission modules. So FDA has 60 days to validate and send you that letter assigning the type of review. So obviously, open question, is this going to be priority review or normal review time. It's to be seen, obviously, based on the FDA decision. So we are very excited working -- team is working very hard, but it's progressing on track. As you know, it's [high and good] to see effort, so we feel good about it.

Next question is Tony Ren, CLSA.

Congratulations on a solid progress. Just two quick ones from me.

The first one is just a clarification. Perhaps, Christian, you can take this one about the R&D expenditure in 2021. I think I heard you said that the international portion, right, the $63 million is going to double. So is the China portion, the $112 million, is that going to double as well in 2021? That's the first question.

And then the second question is about your savo. So obviously, you guys had a good readout from SAVOIR study. But at ASCO GU, we also had the SWOG 1500 study in PRCC in which it didn't do too well. How do you guys make sense of the results from these 2 studies?

Okay. Sure. Thanks, Tony. Good questions. So on the R&D spend, yes, I think U.S. could double, if not more than double. I think China, from $111 million investment in 2020, I don't believe it will double, but I think it'll -- maybe 50% increase. That's more likely the outcome on the R&D.

The study you mentioned from ASCO GU, that was the panc NET study, right, panc NET study that studied cabozantinib, sunitinib, savolitinib and somebody else, right? Well, that wasn't a biomarker -- a biomarker-selected study. So that was basically all PRCC patients. So you don't expect a MET inhibitor to do well in a patient that is not MET-positive. And as we know, in papillary renal cell carcinoma, the proportion of patients that are MET-driven is roughly 40%, give or take. So you had 60% of the patients there in that study that were never going to respond to a MET inhibitor.

And in the field of renal cell carcinoma, VEGFR inhibitors are -- obviously, in clear cell renal cell carcinoma. They've been the standard of care for many years and still are in combination with the PD-1s. But -- and so you would expect the VEGFR inhibitors to do -- cabozantinib, for example, in this case, to do better in PRCC relative to the broader PRCC patient population on biomarker selected than you would expect for savolitinib.

But I would imagine, if you do a retrospective biomarker analysis on that study, identify the MET-positive patients, savolitinib would no doubt be the superior treatment.

And our last question is for Jan Sharma from Deutsche Bank.

I was just hoping that you could kind of give us your perspective on recent developments in the EGFR non-small cell lung cancer space, particularly kind of [to achieve HER3 asset] and J&J's bispecific. And just potentially how savolitinib fits within that and perhaps like compare it in the context. And also whether you see any kind of potential negative impact on your ability to kind of recruit into future savo trials in the non-small cell lung cancer space given the competitive dynamic now.

Sure. Maybe I'll ask Wei-Guo to answer that question.

Yes. So J&J's bispecific. They are now in the first line, basically non-small cell lung cancer. And so I don't think we will compete directly with them, not only in the first line, but also they are not really selecting for the MET status. So we will be really biomarker-driven and with a very clear patient selection strategy.

So in terms of clinical trial enrollment competition, I don't think we are in the same patient population.

But in terms of in the future, talking about market competition, I think it will be very different products. Obviously, we are oral and they are IV. And for first-line patients who have years to live, we think oral would offer a very good advantage in terms of convenience and also compliance as well. So that's our belief. And we actually talked to some of the KOLs in China. There are obviously a lot of EGFR mutant non-small cell lung cancer patients in China. And a lot of them are quite skeptical about first-line IV products for many, many years. So obviously, efficacy is number one. We are all in the same boat at this point, getting -- just getting started in the Phase III.

So we'll see in terms of efficacy. Yes, I think if both remedies are efficacious, then it comes down to what patient population and how these treatments will be delivered.

Okay. Does that answer your question?

Yes. Yes. Yes, that's helpful.

And this is the end of the Q&A sessions. And apology for the one who still queued up on the audio and the web. And I'll now pass the time to Christian and the management for the wrap-up. Thank you.

Okay. Well, thanks very much, everybody, for taking the time to join the call today. Yes, just to finish it off on a very positive note, I think 2021 will continue to be just a really important year for the company. We're making great progress, I think, as you can hear from Wei-Guo as well as Marek and the presentation. So thank you very much all for your support. And we look forward to kind of continued dialogue as the year goes by. I think it will be one where we will have a lot to talk about. So thanks very much, everybody, and take care.

This is the end of the conference. You may disconnect now. Goodbye.