Shanghai Pharmaceuticals Holding Co., Ltd.

Hutchison China MediTech Limited announced on January 1 that it has reached two agreements to sell 45% of its equity in Shanghai Hutchison Pharmaceuticals for $608 million (approximately 44.78 billion yuan) in cash to Shanghai Jinfeng Health Investment Management Co., Ltd. and Shanghai Pharmaceuticals Holding Co., Ltd. This transaction marks an important step for Hutchison China MediTech in exploring the potential value of its non-core, non-consolidated joint venture, Shanghai Hutchison Pharmaceuticals, into actual value. Through this transaction, Hutchison China MediTech will be able to focus more on its core business, which is discovering, developing, and commercializing innovative therapies for treating cancer and immune diseases. This move will also facilitate the advancement of Hutchison China MediTech’s next-generation antibody-drug conjugate projects. Shanghai Hutchison Pharmaceuticals is primarily responsible for the production, sales, and distribution of its proprietary prescription drugs in China, with its main products being cardiovascular disease medications. The company was established as a joint venture between Hutchison China MediTech and Shanghai Pharmaceuticals in 2001 on a 50:50 basis. In 2023, Hutchison China MediTech's share of Shanghai Hutchison Pharmaceuticals' net profit was $47.4 million. It is noteworthy that Hutchison China MediTech has not consolidated the revenue of Shanghai Hutchison Pharmaceuticals.

— HUTCHMED continues to deliver on its strategy outlined in November 2022 to create value, prioritize its portfolio and bring innovative medicines to patients globally — — Divestment proceeds to advance HUTCHMED’s pipeline and core innovative medicines business — — Focused R&D investment includes HUTCHMED’s proprietary antibody-targeted therapy conjugate platform, with first candidates expected to enter clinical trials in the second half of 2025 — Jan. 01, 2025 -- HUTCHMED (China) Limited (“HUTCHMED”) (Nasdaq/AIM:HCM; HKEX:13) announces that it has entered into two agreements to divest its 45% equity interest in Shanghai Hutchison Pharmaceuticals Limited (“SHPL”) for approximately US$608 million (RMB4,478 million) in cash, to GP Health Service Capital Co., Ltd (“GP Health Service Capital”) and Shanghai Pharmaceuticals Holding Co., Ltd. (“Shanghai Pharma”) (HKEX:02607; SSE:601607). HUTCHMED has been exploring opportunities to monetize the underlying value of SHPL, a non-core, non-consolidated joint venture. These transactions would allow HUTCHMED to focus on its core business of discovering, developing and commercializing novel therapies for the treatment of cancers and immunological diseases, including advancing its next-generation antibody-targeted-therapy conjugate programs. HUTCHMED will host a short update call on Tuesday, January 7, 2025. Details will be available at www.hutch-med.com/event in due course. SHPL primarily manufactures, sells and distributes its own-brand prescription medicines in China, predominantly for cardiovascular diseases. SHPL is a 50:50 joint venture established between HUTCHMED and Shanghai Pharma in 2001. In 2023, the consolidated net income attributable to HUTCHMED from SHPL was US$47.4 million. HUTCHMED does not consolidate revenue from SHPL. HUTCHMED plans to invest the proceeds from these transactions to further develop its internal pipeline and drive its core business strategy forward. This pipeline and strategy includes its next-generation antibody drug conjugate (“ADC”) platform, which builds on HUTCHMED’s extensive knowledge from pursuing oncological pathways and proven expertise in small molecule targeted therapeutics. By combining antibodies with targeted therapeutics instead of cytotoxins, these antibody-targeted therapy conjugates (“ATTCs”) offer dual mechanisms for addressing a target. Pre-clinical research has shown robust anti-tumor activity with durable response following a single administration, and stronger anti-tumor activity compared to administration with the individual antibody and targeted therapy components, improving tolerability associated with targeted therapy. HUTCHMED plans to move the first of these ATTCs into clinical trials in the second half of 2025. “This transaction to divest most of our holding in SHPL is another example of HUTCHMED delivering on the strategy outlined in 2022, accelerating our path to profitability and focusing on core operations. SHPL is a well-established business, having delivered over US$370 million in dividends to HUTCHMED throughout the years, and we are confident that it continues to have promising future growth prospects,” said Dr Dan Eldar, Chairman and Non-executive Director of HUTCHMED. “We are focused on capitalizing on our two decades of deep research into oncogenic drivers of disease and discovering and developing highly optimized therapies, through our unique ATTC platform.” GP Health Service Capital is a China-based private-equity firm with no prior interest in SHPL. Prior to the transactions, HUTCHMED and Shanghai Pharma each holds a 50% equity interest in SHPL. Under the terms of the agreements, GP Health Service Capital has agreed to acquire a 35% equity interest in SHPL from HUTCHMED for approximately US$473 million in cash, and Shanghai Pharma has agreed to acquire a 10% equity interest from HUTCHMED for approximately US$135 million in cash and will hold a total of 60% equity interest in SHPL after the transactions. Out of its 35%, GP Health Service Capital retains the right to designate a third party investment fund to acquire up to a 10% equity interest in SHPL. HUTCHMED will retain a 5% equity interest in SHPL after the transactions. HUTCHMED expects to record a gain on disposal of approximately US$477 million before taxation. The actual gain to be recorded is subject to review and audit. The proceeds are subject to deduction of withholding tax, which will be determined before Closing. There will be a three-year transition period in which HUTCHMED will propose the General Manager of SHPL, and will guarantee to GP Health Service Capital a minimum net profit growth of SHPL of at least approximately 5% annually, subject to total compensation not exceeding approximately US$95 million. Further details are contained in the HUTCHMED announcement entitled “Major Transaction in Relation to the Disposal of 45% Equity Interest in Shanghai Hutchison Pharmaceuticals Limited”. HUTCHMED expects to convene an Extraordinary General Meeting (EGM) for its shareholders to consider and, if thought fit, to approve the transactions. The transactions are expected to close by the end of the first quarter of 2025, conditional upon the satisfaction (or, where applicable, waiver) of certain conditions including approval by HUTCHMED shareholders and regulatory approvals. Closing of both transactions are also conditional upon the simultaneous closing of each other. Dr Weiguo Su, Chief Executive Officer and Chief Scientific Officer of HUTCHMED, said: “We continue to invest in our prolific in-house R&D platform, including our new ATTC programs that we believe have significant potential impact on the treatment of cancers. This divestment brings us additional resources and further focus.” “Our continual approach to engineer our own innovative, highly selective drug candidates has delivered several medicines with enhanced selectivity and limited off-target activity, allowing sustained target inhibition and flexibility for use as part of combination therapies. We also gained substantial knowledge of these oncogenic pathways, and the issues involved in addressing them. In contrast to traditional cytotoxin-based ADCs, we believe that our antibody-targeted therapy synergistic approach may also be combinable with immunotherapy- or chemotherapy-based frontline standards of care, could overcome chemotherapy resistance, and could avoid cytotoxin-related toxicities that limit long-term administration. This platform also maximizes on our long history of addressing patients with genetic drivers, who benefit less from traditional ADC therapies.” All transaction-related figures stated in US dollars (US$) are included for illustrative purposes only, and are based on an assumed exchange rate of US$1:RMB7.36. All cash considerations will be denominated in Renminbi (RMB). HUTCHMED (Nasdaq/AIM:​HCM; HKEX:​13) is an innovative, commercial-stage, biopharmaceutical company. It is committed to the discovery and global development and commercialization of targeted therapies and immunotherapies for the treatment of cancer and immunological diseases. Since inception it has focused on bringing drug candidates from in-house discovery to patients around the world, with its first three medicines marketed in China, the first of which is also approved in the US, Europe and Japan. For more information, please visit: www.hutch-med.com or follow us on LinkedIn. Shanghai Pharma (www.sphchina.com) is a national integrated pharmaceutical company in the PRC that has leading positions in both pharmaceutical production and distribution markets. Shanghai Pharma’s business mainly covers two segments, namely, pharmaceutical industry and pharmaceutical business. The A shares and H shares of Shanghai Pharma are listed on the Shanghai Stock Exchange (stock code:601607) and the Hong Kong Stock Exchange (stock code:02607), respectively. GP Health Service Capital is a professional fund management company committed to industrial investment, mergers and acquisitions and integrations in the medical and health field. Its largest shareholder is GP Capital. 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The combination is aimed at treating patients with locally advanced or metastatic non-small cell lung cancer. Credit: JOURNEY STUDIO7/Shutterstock. China National Medical Products Administration (NMPA) has granted acceptance and priority review for the new drug application (NDA) for HUTCHMED’s ORPATHYS (savolitinib) and TAGRISSO (osimertinib) combination for patients with locally advanced or metastatic non-small cell lung cancer. This is specifically indicated for individuals positive for epidermal growth factor receptor (EGFR) mutations and MET amplification following disease progression on first-line EGFR inhibitor therapy. The NDA is underpinned by outcomes from the Phase III SACHI trial that assessed the safety and efficacy of the combination versus the standard platinum-based doublet-chemotherapy. HUTCHMED is now set to gain a milestone payment from AstraZeneca. Progression-free survival (PFS) was the primary endpoint as evaluated by investigators. Secondary endpoints include PFS by independent review, and overall survival. The Independent Data Monitoring Committee for the trial determined that the primary endpoint of the pre-defined primary endpoint of PFS was met during a planned interim analysis, leading to the conclusion of subject enrolment in the study. In December 2024 the NMPA awarded breakthrough therapy designation to the combination. HUTCHMED research and development head and chief medical officer Dr Michael Shi stated: “This marks the first regulatory filing for the ORPATHYS and TAGRISSO combination. “We and our partner AstraZeneca have been exploring this combination globally, through an array of late-stage clinical trials including the TATTON, SAVANNAH, SAFFRON and ORCHARD studies, and we hope to bring this all-oral, chemotherapy-free treatment option to patients with MET-driven lung cancer in the near future.” The collaboration between HUTCHMED and AstraZeneca, which began in 2011, facilitates the joint development and commercialisation of ORPATHYS. HUTCHMED oversees the drug’s development in China, while AstraZeneca oversees its global development. Additionally, HUTCHMED is tasked with the marketing authorisation, manufacture and supply of ORPATHYS in China, with AstraZeneca handling its commercialisation there and internationally. HUTCHMED previously agreed to sell a 45% equity interest in Shanghai Hutchison Pharmaceuticals, a non-core, non-consolidated joint venture, for $608m to GP Health Service Capital and Shanghai Pharmaceuticals Holding.