Hutchison China MediTech Limited's (HCM) CEO Christian Hogg on Q4 2020 Results - Earnings Call Transcript

Hutchison China MediTech Limited (NASDAQ:HCM) Q4 2020 Earnings Conference Call March 4, 2021 8:00 AM ET

Company Participants

Christian Hogg - CEO

Wei-guo Su - CSO & Head, R&D

Marek Kania - CMO

Johnny Cheng - CFO

Conference Call Participants

Louise Chen - Cantor

Ethan Ding - Morgan Stanley

Alec Stranahan - Bank of America

Paul Choi - Goldman Sachs

John Newman - Canaccord Genuity

Tony Ren - CLSA

Rajan Sharma - Deutsche Bank

Christian Hogg

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 Dr. Wei-guo Su, our Chief Scientific Officer and Head of Research & 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 that you might have.

So if we go to Page number 3 of the presentation, I just touched 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 two 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 two entities under a single ubiquitous corporate identity.

And so, you can see from Page three, the sort of the thinking behind it is really coming to a name that 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 years. So HUTCHMED it is and that is the corporate identity that we will be going for the foreseeable future. We'll be formally changing the company name at our Annual Shareholder Vote of our Annual General Meeting in April. So we'll move from Hutchison China MediTech to HUTCHMED (China Limited) and we'll 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 number 5, it's the chart that we always talk about our overriding global strategy and objective is to become a global science focused biopharmaceutical 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'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 three 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 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, HMPL295 we plan to start Phase I in China on the ERK inhibitor, middle of this year sometime. 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're now moving rapidly to try to realize the value of those global rights.

Down at the bottom of the chart, you can see the three blue lines. These are the next three assets or oncology drug candidates that we see coming through. One of them is a large molecule; two 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 six 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 four registration in 10 studies, three Phase IIIs and one 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're 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 sometime 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 IDH 1/2 dual inhibitor, the Phase I 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 eight 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 two Phase III 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 combo to 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 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 interim analysis late -- mid to late last year. We're 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 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's 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'll 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're 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, is relatively early stage, but the FGFR inhibitor now in Phase II in intrahepatic cholangiocarcinoma and then the IDH and 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 of the process -- of the progress rather than 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 that commercial organization in China covers all functional areas of commercial and 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 finally 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. I know 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. Three novel drug launches, obviously two have launched and one is in late review, that being savolitinib. We've put out guidance for 2021 on oncology consolidated revenues of $110 million to $130 million U.S. 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 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 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 two or three 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 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 end-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 two months of the year and March moving very rapidly as well. I think there's a chance that in Q1 2021, we do at least close to the level of sales that Lilly did in the first three 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 or since we took over. The team is up to over 420 people and coverage is terrific, over 325 cities have been 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 seven weeks. The unaudited sales in January, February were US$4.9 million. Our first order was shipped on January 14. Our first prescription was written on January 19. And by January 29, we'd 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 but the Slide, Page 18, summarizes it quite well. Obviously, surufatinib getting the NDA approved on extra pancreatic 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 designation, 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, it's a chart many of you have already seen before summarizing 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 Asia and occasion 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 pre-treated 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 -- that's exciting in that patients have failed 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 sort of 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 eight or nine indications that we're looking at on the TUOYI combination in a large group of patients and we plan to select one, two, three 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. Is the Phase IB data from our U.S. study? Again here you saw great efficacy in patients that have been heavily pre-treated. 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.

On 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 Geno.

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 Savo 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 our scientific events 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 its terrific data that supported the NDA submission.

Page 35 is the final TATTON data that's leading up to Page 36, which is the SAVANNAH study, which is now fairly well enrolled, was only 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're 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 efficacy and safety profile data from our dose escalation study that's now been expanded. And we're 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 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 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 these 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 mid-year, 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 20 times larger. And I think we're going to see some fantastic take-up on savolitinib in China. And then the Phase IIIs 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 you know this facility will increase our capacity fivefold in the small molecules space and 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 as you know, these are good people. It's a good company and we're working out closely with them to progress our four 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, movable, both the [ph] 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 US$112 million which is fairly stable and versus year before, it'll 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, 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 five 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 planned launch.

Savolitinib is the second big thing this year. So savolitinib progress initiating three 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 in 10 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, 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. And 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 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'll 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 will leave it now for Q&A and hopefully we can get Wei-guo, Marek, and Johnny involved in the discussion. Thank you.

Question-and-Answer Session

Operator

Thank you, management. We'll now begin our question-and-answer session. [Operator Instructions].

Our first question is Louise Chen from Cantor.

Louise Chen

Hi, congratulations on all the progress this year. And thanks for taking my questions. I've 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 for 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? Thank you.

Christian Hogg

Okay, thanks, Louise. So the $110 million to $130 million, you just have to look at what we're doing on for 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 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%, 80% 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 US$25 million first sale milestone it’s non-approval, it's actually first sale so that that would be a significant piece of this revenue. And then in terms of the royalties that we'll receive, we 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 earned 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'll 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 will be in this $110 million to $130 range.

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

Wei-guo Su

Sure. Thanks, Christian. I think between dose escalation and 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're seeing really good efficacy in several subtypes of non-Hodgkins Lymphoma. And we actually plan to move into registration intense studies in China first, but perhaps will be followed by the international or global development as well. So not only actually a more indolent subtitle, but also we are seeing some interesting activities in some of the more aggressive subtypes as well. So we’re wrapping up -- we probably will wrap up the China dose expansion cohorts this year and look to publish some of the data from there on. And more importantly, we want to focus on the registration intense studies and hope to bring 689 to registration in the near future.

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

Christian Hogg

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?

Marek Kania

Yes, thank you, Louise. This is Marek. So good question. Obviously, broad question. I would say this way, our success will be led by obviously continue building on our foundation of our deep and large portfolio and the success we build in the wake of discovery for development efforts in China.

Obviously, our priority first is to address some of the most high unmet medical needs, through our late-stage assets, our single-agent registration strategies, obviously going to build our foundational portfolio. But obviously, as Christian described, our strategy is building our combination efforts and driving innovation across multiple assets, right now we have five and soon to be seven active programs in clinical development. That is the way we're doing this. We're also building high capability and highly talented team of very seasoned individuals across BRAC and science drug developers as well as the very strong commercial team led by Tom Held.

So, this will be ongoing journey. But if you're looking for common theme, how we're doing this, we're really targeting high unmet medical needs. And we're truly looking for this meaningful difference for patients. And I think, if anything can be testimony, what kind of science investigators, academic centers are collaborating with us, in the United States, U.S., Europe, and Japan. I think it's also kind of common sense what reflections on this 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 within next 12 to 24 months in the world to be in a very advanced registration of faith across at least couple of assets. But as Wei-guo said, our lymphoma development with PI3K-delta are very complex and crowded market, but there's still high unmet medical needs on our portfolio, and our profile will definitely distinguish itself. Obviously has worked for everyone, but we're extremely encouraged.

Christian Hogg

Great. Thanks, Marek.

Operator

Our next question is from Ethan Ding from Morgan Stanley.

Ethan Ding

Hi. Can you hear me?

Christian Hogg

Hi, yes, can Ethan.

Ethan Ding

Hi, hi, thank you, Christian for taking our question and congratulations on such a solid year. I would like to ask two questions on [indiscernible] perhaps. First, could you just provide some color on the pricing for surufatinib and 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. 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? Thank you.

Christian Hogg

Okay, great. Thanks, Ethan. So yes, obviously pricing strategies, 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 US$3,000, say US$3,800 a month, we're 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 fruquintinib accessible to patients during the period that we have to spend, negotiate and get on the NRDL.

Savolitinib, is a bit different, savolitinib has been 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, two 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 six 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 is 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 renegotiation to renew our reimbursement on ELUNATE. And we'll 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 has 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 wouldn't be too significant. So that's really -- that's as much as I can say on that, Ethan.

Sorry, the R&D. Well 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?

Johnny Cheng

Yes, okay. So appropriately, we haven't given out a clear guidance on R&D spending but doing of our spending in 2020, I think we'll ramp-up the R&D spending likely to be close to double of 2020.

Christian Hogg

Yes, that's a fair assessment. I think what you're 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 so many -- up to eight to 10 registration studies over the back of this year in China. And 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, I could imagine that could easily double this year, potentially more. So yes, those are the kind of numbers we're looking at.

Operator

Our next question is Alec Stranahan from Bank of America.

Alec Stranahan

Hey, guys, thanks for taking my questions 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 up tick following the transition from ELUNATE 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?

Christian Hogg

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 what's the biggest difference on the commercial progress of ELUNATE since we took over. While the NRDL -- the NRDL kicked in for ELUNATE on January 1, 2020. So Eli Lilly had three quarters with reimbursement on ELUNATE. And as you can see from our presentation, the sales increase, end-market sales increase for those three 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 listings. 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 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 towards 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.

Wei-guo Su

So I'm not sure if the question was about 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 market size. But in terms of different PD-1s that we've been working with we've been working with -- we're working with TUOYI, TYVYT, and also Genor's PD-1. Obviously we've not done any head-to-head comparisons to compare the different PD-1s but we don't have a lot of data to make any conclusions, reduce the different safety profiles, obviously that's quite, quite normal, consistent with the PD-1 single agent, safety profile.

The only thing may be relevant in terms of efficacy, it's the fruquintinib in combination with TYVYT, Innovent and also fruquintinib in combination with Genor's PD-1 in the same patient population in late-stage, 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're seeing similar data there 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 VGFR in combination with checkpoint PD-1 or PD-L1 I think this obviously already a lot of data available and a clear evidence of synergy as well. It's really about for us anyway to zoning of landscape in China, and also outside China, how indications we think we can take advantage of particularly in terms of differentiated VGFR compounds, as I said in PD-1s are quite similar. But VGFR compounds are quite different in terms of for instance of vandetanib versus regorafenib versus cabozantinib and now we have fruquintinib and surufatinib clear difference in efficacy and safety.

So, we're 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 have seen quite really encouraging emerging data. And obviously, we will examine against for instance the Pembro fruquintinib combo, where in terms of safety and efficacy profile, and we'll select certain indications to move forward with.

So we basically, we're very early in the Phase II, as I mentioned, the Basket study is data emerging really quite encouraged, and the world will need to wait a bit to, for the data to mature and we're quite optimistic that we'll move forward with some of the indications that we're seeing with a very encouraging data. And these can be both in China and outside as well. Sorry, I can't comment on Whampoa.

Marek Kania

Wei-guo, you currently answered just from the international development perspective. Christian shown on the slide, we have also, as you know there are active collaboration with BeiGene and tislelizumab and so actually combination found is starting across fruquintinib and surufatinib across multiple cohorts, which will be obviously building on the signals we have across multiple partnerships that with this specific late-stage development PD-1 in U.S. with large presence, BeiGene has in U.S. that's going to be very fruitful collaboration, leading to potential great signal.

Operator

Next question is for Paul Choi from Goldman Sachs.

Paul Choi

Thank you very much, 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 from the combination of surufatinib plus BeiGene and tislelizumab can you remind us is there any reason that the recommended Phase II dose wouldn't be 250 milligrams given your prior experience in prior work with the Junshi PD-1?

Christian Hogg

Maybe I'll leave that to Wei-guo, Wei-guo and Marek to comment. I don't think that should be any difference but unless I'm missing something.

Wei-guo Su

Yes, I can make a comment. As I mentioned, I don't see a lot difference in terms of efficacy, but safety profiles can 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 --

Paul Choi

Sorry I'm asking on surufatinib?

Wei-guo Su

Yes, I know. So whether surufatinib in combination with tislelizumab will be 250, I don't know it may be 300 who knows? But I assume it is too far from 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 it should be published fairly soon at the ASCO that fruquintinib recommended dose regimen is different between TYVYT combo and also Genor's PD-1 combo. So I think as I say the different PD-1s, in terms of efficacy this was a mechanism of action, very similar, but 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.

Marek Kania

And Paul, we'll answer this very quickly as part of the standard design, you have the escalation phase, also simplified safe delivery which exactly we will answer this question in our ongoing studies.

Paul Choi

Great, okay. Very helpful, thank you. And then on the 689 registrational trout, can you maybe provide any sort of preliminary feedback or guidance that you received from the USFDA with regard to the trial population? And do you think the 13 mg dose that you identified at ASH last year would also be the dose used for that study?

Christian Hogg

Maybe I'll let -- I'll let -- well, I think the question is with regarding our U.S. strategies that what you're saying, Paul.

Paul Choi

Yes.

Christian Hogg

So maybe Marek, you can go ahead.

Marek Kania

Thank you. Thank you, Paul. So just to clarify, Christian says we’re preparing discussions with the USFDA. So as of today, we're obviously still in the final stages of escalation. While we see very encouraging profile, including a very encouraging activity in escalation phase of the U.S. study, obviously we'll 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 USFDA. So it's still to be completed in the second part of this year. But we’re very encouraged by signals we see in our China Study and as well as the U.S. escalation phase.

As you know, we'll definitely build on our past practice that U.S. regulatory is totally open for considering data generated in China or elsewhere, as long as, as I've said, obviously high unmet medical needs and bring innovation, and we've done this through surufatinib in pre-NDA discussions as well. We'll take the similar approach of open and transparent discussion with USFDA, looking at the data in this clinical setting. So stay tuned on this.

Christian Hogg

Thanks, Marek.

Paul Choi

Okay. Thank you.

Marek Kania

To your second part, hang on Paul, second part of your question was, do we expect those similar correct to China published data. We're 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 growth will be in a similar range, we still not be approaching 30 milligram cohorts which will complete within a couple of months or less, depending on the DBLP observation method. So I expect that those will be highly likely to think.

Paul Choi

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

Christian Hogg

Thanks, Paul. Yes, I mean we're in a mode right now, where we're just moving aggressively, as aggressively as we can to maximize 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 but the proof of concept data that that's being developed PD-1 combo, whether it be 689, 523, et cetera is compelling. So, as we said earlier, as far as the burn, it'll 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're 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 in a 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 a Shanghai listing.

So I think from a financial standpoint, we're 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.

Operator

Next question is John Newman, Canaccord Genuity.

John Newman

Hi, team. Thanks for taking my question and also, congrats on the progress in 2020. I think you guys must be working in your sleep around the clock a whole lot going on which is excellent. Just had two 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 with 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.

Christian Hogg

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 milligrams TAGRISSO QD. And now we're enrolling the 300 milligrams 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'll -- 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 the first line TAGRISSO failure, off the 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.

Marek Kania

Sure, thank you. So, submission is afforded in a high intensity mode. We're under Fast Track designation. Therefore, for 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.

Just to clarify, we're not -- our strategy is not accelerated approval, which would be based on the surrogate endpoint and then the requiring complementary standard. We are within full approval strategy. So, obviously, it would be up to FDA to design type 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 a letter assigning the type of review. So obviously, open questioning this will be priority review or normal review time. It's to be seen honestly, based on the FDA decision.

So we're very excited, how it's working, our team is working very hard, but it's progressing on track. As you know, it's time that we feel good about it.

Operator

Next question is Tony Ren, CLSA.

Tony Ren

Hey, yes, thank you for taking my question, and again, congratulations on the solid progress. Just the 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 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 SAVANNAH study. But that's at ASCO GU; we also had the SWAG 1500 study in PRCC, in which it didn't do too well. How do you guys make sense of the results from these two studies? Thanks.

Christian Hogg

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'll double but I think it'll, may be 50% increase. That's more likely the outcome on the R&D.

The study you mentioned from ASCO GU, that was the Pap MET study, right, Pap MET study that study Cabozantinib, sunitinib, savolitinib and Zubrod, somebody else right. But 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, VGFR inhibitors are obviously in clear cell renal cell carcinoma, they've been a standard of care for many years and still are in combination with the PD-1s. But and so you would expect the VGFR inhibitors to do Cabozantinib, for example, in this case to do better in PRCC relative to the broader PRCC patient population on biomarkers 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.

Operator

And our last question is Rajan Sharma from Deutsche Bank.

Rajan Sharma

Hi, thanks. Thanks for the question. 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 [indiscernible] three asset and J&J’s Bispecific and just potentially how savolitinib fits within that and perhaps how it compares 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 and in non-small cell lung cancer space, given the competitive dynamic now?

Christian Hogg

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

Wei-guo Su

Yes. So J&J’s Bispecific, they're 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're not really selecting for the MET status. So we'll 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're in the same patient population, but in terms of in the future, when we're talking about market competition, I think we will be very different products, obviously we're 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 were quite skeptical about first-line IV products for many, many years. So obviously, efficacy is number one. We're all in same boat at this point, getting -- just getting started in the Phase III. So we'll see in terms of efficacy, I think if both remedies are efficacious, then it comes down to patient population and how these treatments will be delivered.

Christian Hogg

Okay. Does that answer your question?

Rajan Sharma

Yes, yes, it's helpful. Thanks.

Christian Hogg

Great. Thanks, Rajan.

Operator

And this is the end of the Q&A session and apologies for the one who still queue 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.

Christian Hogg

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'll be one where we will have a lot to talk about. So thanks very much everybody and take care.

Operator

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