Sphere No.46 (Mar 2019)

>> Sphere #46 2019 11 hi-Med, more formally known as Hutchison China MediTech Limited, has been on a long journey with no guarantee of success. In the late 1990s, a whiteboard and a new CEO were the beginning. From that audacious start, a beautiful win has arrived: a new drug that brings hope to patients fighting one of the most pervasive variants of cancer, with over 1.8 million new cases diagnosed globally every year. A first in fighting cancer In mid-2018, Chi-Med joined an elite group of pharmaceutical companies which had succeeded to “home-grow, discover and develop a drug … to be unconditionally approved …”, according to Simon To, Chairman of Chi-Med. Fruquintinib, now selling under the brand name Elunate®, is being prescribed to late colorectal cancer patients in China for whom other front-line treatments against colorectal cancer have failed. This is a big deal. Modern pharma research almost exclusively sees drugs brought to market by European and American pharmaceutical giants. They scour the world, hoovering up the rights to single- molecule drugs that they shepherd through the expensive and uncertain world of regulatory approval. Support for such drugs is based on their potential for financial success in the best paying economies – the US, Japan, Europe and other rich countries. Mass trials are conducted in those markets and best serve those populations. In the world of Big Pharma, Chi-Med is the upstart, challenging the status quo as a result of a sustained effort that started almost two decades ago. Vision “It’s been 18 years of effort,” says Christian Hogg, CEO of Chi-Med. It began as a vision in the late 1990s and took form in 2000 with the acquisition of formerly state-owned assets with the aim of turning them around to create a modern consumer healthcare business based on existing Traditional Chinese Medicine (TCM) products. This is very, very different from the Big Pharma names that you know. Most of the Eli Lillys and Pfizers of the world carry the name of a 19th-century chemist who founded their business in a completely unregulated world of consumer pharmaceuticals (e.g. Eli Lilly in 1876 and Charles Pfizer in 1849). Mr Hogg was there at the beginning, in 2000. The business acquired to launch Chi-Med was achieving only around US$20 million in annual sales and was losing money. The first order of business was to improve the product line and marketing and, especially, overhaul the sales force. This was done in short order and the business began to grow – and became profitable. Today it generates over US$700 million of top-line sales. More importantly, it has provided the funds and stability needed for Chi-Med to branch out into a relatively risky new direction: developing single-molecule drugs to be potent weapons in the war against cancer. Over the years, the profits from the consumer business gave Chi-Med Global Reach pharmaceutical grade and consumer healthcare products. The firm’s first public listing was on the London Stock Exchange’s AIM in 2006. A successful NASDAQ listing in 2016 was a further validation from the global capital markets. Chi-Med’s strong R&D and manufacturing base in Central China is going to be buttressed with new clinical trial capabilities in the Greater Bay Area, encompassing the area around Hong Kong, Macau and neighbouring Guangdong Province. Chi-Med is currently building the ability to conduct clinical trials for its portfolio in Canada, Australia, the US and Europe. As Mr To says, “Chi-Med is consistently making significant progress towards its goal of being an innovative global biopharmaceutical company, and our achievements last year amply demonstrate this.” The international biopharmaceutical company was founded in 1999 from an initial investment from CK Hutchison. Since then, Chi-Med has expanded and elevated its sales force and manufacturing capabilities for its wide range of C Chi-Med is the upstart, challenging the status quo.