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Edison issues update on Hutchison China MediTech (HCM)

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LONDON, Aug. 20, 2018 (GLOBE NEWSWIRE) -- Highlights from Hutchison China MediTech's (HCM) H118 results relate to the substantial pipeline-related newsflow expected in 2018/19, the recent expansion of its US and international operations (which will enable HCM to execute its international R&D and commercialization strategies) plus strong operational and financial performance by the China commercial platform division. Fruquintinib (third-line CRC) remains on track to launch in China by year end (approval decision expected by the CNDA in the next few months). Encouraging Phase II data so far on savolitinib (first-line NSCLC exon14m/deletion) could lead to accelerated approval in China, contingent on final data (expected in 2020) being consistent with data to date. We value HCM at $6.4bn.

Our increased valuation of $6.4bn or $48.2/ADS (from $6.4bn or $47.9/ADS) results from rolling forward our DCF and updating FX rates, offset by a lower net cash position at 30 June 2018 and higher R&D in 2018 and 2019. We value the Innovation Platform (IP) at $4,780.5m and placing the Commercial Platform's (CP) 2018e share of net profit on a 20.4x rating gives $848.2m (945p/share).  

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