Hutchmed (China) announced on June 22 that Takeda has been approved by the European Commission to launch FRUZAQLA (fruquintinib) as a monotherapy for the treatment of adult patients with metastatic colorectal cancer who have been previously treated with fluoropyrimidine-based, oxaliplatin-based, and irinotecan-based chemotherapy regimens, anti-vascular endothelial growth factor (VEGF) therapy, and anti-epidermal growth factor receptor (EGFR) therapy, as well as those with disease progression or intolerance after treatment with fluorouracil, leucovorin, and irinotecan or refractory to or intolerant of regorafenib, regardless of biomarkers. It is the first innovative targeted therapy approved for the treatment of metastatic colorectal cancer in the European Union in over a decade.
The bank pointed out that the company is expected to have many catalytic events in the future, and the innovation pipeline has entered a period of harvest. Overseas sales of fruquintinib are expected to continue to exceed expectations, and a market application has been submitted in Japan as of September 2023, with approval expected in the second half of 2024. The application for the indication of 2L gastric cancer for fruquintinib was accepted by the NMPA in April 2023, and approval is expected in the second half of 2024, bringing new sales growth momentum.
The bank stated that the company's comprehensive revenue from the tumor/immunology business guidance for 2024 is between USD 300 million and 400 million (thanks to the target sales growth of already marketed tumor products and 30%-50% of franchise royalties). In addition, the company had cash on hand of USD 886 million as of the end of 2023. The bank expects the company's total revenue to be USD 705 million, USD 912 million, and USD 1.185 billion from 2024 to 2026. Through DCF calculations, assuming a perpetual growth rate of 2% and a WACC of 8.94%, the company's fair equity value is HKD 40.9 billion (exchange rate of 1 USD = 7.81 HKD). With a rich innovative product pipeline and smooth global progress, the bank maintains a Buy rating on the company.