Daily Brief Health Care: Hutchmed China Ltd, AFT Pharmaceuticals, Hugel Inc and more

• HUTCHMED’s 2023 results are relatively certain. Fruquintinib had a strong start after obtaining approval in the US, with sales of about US$13-15 million in just more than a month.
• Oncology/Immunology consolidated revenue would be in line with management’s performance guidance (US$450 to US$550 million) in 2023. There are promising data readout/NDA submission this year, which would be potential catalysts.
• HUTCHMED has sufficient cashflow and does not require external financing. From 2024 to 2026, it will enter a period of accelerated growth in product revenue. Breakeven is achievable in 2025.

AFT Pharmaceuticals has announced the first sale of its intravenous pain relief medicine, Maxigesic IV, through its US licensing partner, Hikma Pharmaceuticals, a material milestone for AFT’s portfolio expansion and geographic diversification. The NZ$6m milestone payment triggered a bump in FY24 operating profit guidance to NZ$23–25m (from NZ$22–24m previously). The upside was partially offset by slower than anticipated sales traction in Australasia. We adjust our FY24 and FY25 estimates to reflect the update and revised guidance, including the earlier than anticipated milestone payment (pulled forward to FY24 from FY25) and increased anticipated expenses (SG&A and R&D) to align with management’s portfolio and geographic growth aspirations. Our valuation resets to NZ$698m or NZ$6.65/share (from NZ$723m or NZ$6.90/share).

• Hugel Inc (145020 KS) reported 4% YoY increase in revenue to KRW89B, while operating profit grew 22% YoY to KRW37B in 4Q23. Revenue was mainly driven by strong demand filler.
• In domestic market, Hugel’s Botulax maintained the largest market share for the eight consecutive years thanks to the long-standing safety and quality track records as well as holistic value-adding services.
• Hugel has resubmitted biologics license application in the U.S. for BTX. In the coming year, Hugel plans to solidify its position in both the domestic and international BTX markets.