Hello ladies and gentlemen, and welcome to the China 2017 Half Year Results Call. My name is Courtney and I'll be your coordinator for today's event. For the duration of the call, you will be on listen-only. However at the end of the call you will have the opportunity ask questions. [Operator Instructions] I will now hand you over to your host Mr. Christian Hogg to begin today's conference. Thank you.

Okay, thank you, Courtney. Welcome to our half year results presentation analyst call with the U.S. What I'm planning on doing is taking you through the presentation, but on a high level just sort of identifying areas of change or progress, or things that have developed over the last four months or so since our last analyst call. I am intending to do that over about maybe 40 minutes and then we'll have 20 minutes or 15-20 minutes at the end for Q&A. I'm also assuming that you've got the presentation in front of you. I will try and mention the page numbers as I go through. So if we go to page 4 and 5, you can see the financial results. Basically page 4 the - on a high revenues at the Group were up 21% to $126.6 million in the first half of the year. A lot of that was driven by our prescription drug commercial business in China. We saw overall net income attributable to Chi-Med of $1.7 million. I mean not really that relevant in the big picture as to what we're trying to achieve as a company. I think the most important number is probably that we're able to invest or burn around $37.5 million in our pipeline in the first half. So at the end there is a lot of activity moving our pipeline forward. I'll take you through that in due course. On page 5 you can see overall we are sitting on about $192.5 million of cash and available resources. About $80 million of that are unutilized banking facility. So cash wide we have about $110 million in available cash. And then also on page 5 you can see our commercial platform continues to progress first half $25.2 million after-tax was the…

Good morning, congratulations on all the progress. So you had a couple of minutes to breathe now, Christian. So actually I have just one very high level question and then one very detail question. But so you are getting close to your first approval, and you have a sales force. Is that enough? Is this the same sales force? Do we expect any additional spend? Will these sales be kind of free from an SGA point of view? Just your thoughts there if there is an expense when we would start to see it? I don't think any of us have any experience on building a sales force in China. So whatever detail you can give us would be great?

Okay, well that one's relatively easy. I mean fruquintinib is going to be brought to market by Eli Lilly. We partnered with Lilly on these things. So we are working really closely with Eli Lilly on this at the moment and planning for the launch. I think that if we are able to see an approval around the end of this year, the actual launch itself would happen probably three or four months after approval. So maybe in the first half of next year. And Lilly has already tooled up its commercial team to launch fruiquintinib. Fruiquintinib is the first major drug launch that Lilly will have launched into China in the last 10 years. So it's a big deal for Lilly and I think, I feel very comfortable that the full resources of Eli Lilly China are being put again the launch of fruiquintinib. So for us, from a Chi-Med standpoint we don't have to build any infrastructure around this. Lilly does it all at their expense. We've built the infrastructure on manufacturing. So we will producing the drug and then Lilly will be bringing it to market. But the scale of the commercial team, it's a bit early to say but it will be several 100 dedicated reps that will be working on fruiquintinib.

Okay perfect. And then the second question is on theliatinib, you are treating more and more patients. Where is the - what's the rash situation, look like? Is that, looking a viable drug or just any thoughts you can give. I think most of us find it surprising it is as safe as it is?

I'll let Weiguo answer that question. He's right here.

Yes, thanks for the question Tom. So basically it's - we are seeing some rash but it's not - it's very similar to what we reported earlier, mostly grade one, grade 2, very tolerable and manageable rash. So it's quite surprising to us, as well with regard to level and severity of rash that we have - on that boxes we are seeing with Theliatinib to-date..

So this does look like a drug to you, it's in - within the tolerable window?

Yeah I feel pretty good. I am actually quite positive.

Okay, terrific, thanks a lot. Thanks again for all the details.

Thanks Tom.

The next question comes in from the line of Andrew Peters. Andrew, please go ahead.

Hi, thanks for taking my questions and congrats on all the progress. So two quick ones for me. So the first on Savolitinib. Do you have an internal cut off for what would be considered good enough to apply for breakthrough therapy status, as we await data later this year. And then with National drug reimbursement list updated earlier this month how does this impact your view of the commercial market in China, especially the potential for you. So other kind of targeted cancer drugs may be off-label and how does that impact both fruiquintinib and some of the other drugs that you are developing? Thank you.

Good question. Thanks Andrew. So what's our internal - and actually probably more appropriate what is AstraZeneca's internal benchmark for what would be considered an acceptable level of response to lead to breakthrough therapy dialogue with the regulators in the U.S.? I think the way we have always talked about this is the kind of the starting threshold is somewhere in the region of 40% response rate with a durable response. I think if you below that you are probably going to struggle to get traction around breakthrough therapy designation. I don't think it's impossible but that's the kind of the rule of thumb threshold that we have always looked at, and to some extent Astra has also. So I think that so for us we look at that and we probably - we presented in this presentation a very small patient population, sort of 60% odd, 80% odd, I mean obviously this is very small snapshot of what we will be presenting in - later in this year, but I think anything I will report to you would be - we certainly would be interested in about 40%, 45%, would be interested in a dialogue with the U.S. FDA on breakthrough therapy designation. On the national drug reimbursement list, this is really interesting development in China and actually it's one of many things that the government, the State Council and SFDA are doing to try to expand access to break the - it's a really innovative therapy for the people in China to sort of improve, speed, registration to get rid of the backlog of all the applications that have been submitted in China, getting - so weeding all the garbage submissions that have been made through the years and they have done a really job on this. Now…

It does. Thank you.

The next question comes in from the line of John Newman. John, please go ahead.

Hey good morning, Christian. Congrats on all the progress with very deep pipeline. I just have a couple questions. I wonder if you could talk to us just a bit more about what type of data we might see for the Savolitinib combinations later this year, if there any specific things that you will be highlighting or perhaps anything on the safety side that we should be watch for as we saw with fruiquitinib? Thanks.

Okay, well on the data, that will come in, call it October, yeah it's basically an expansion of what that snip is or snapshot of data that we show in this presentation. It's just going to be more and more detailed and more mature as well. I think the thing that is going to be quite exciting about it is that you are going to get data pretty much from every angle. You get the Savolitinib/Iressa, you going to get in the second line setting. You are going to get Savolitinib/Tagrisso, in the second line setting. And you are going to get really exciting Savolitinib/Tagrisso in the third line setting as well. With this, as I said this Harvard study and Massachusetts General as we are talking about 30% of Tagrisso resistance being MET driven. It's just - we, I think we will be presenting the most information ever presented in this patient population, MET driven resistance in non-small lung cancer. So I think it will be very illuminating data for anybody interested in this subject. Duration response, important also, because you can see with crizotinib, with Xalkori in MET driven non-small cell lung cancer, they published or presented some pretty interesting data at ASCO but you see that the responses are not durable, or you see - if you are going to get - if you are getting 10 responses in the first tumor assessment, maybe only 60%, 70% of them are durable and still in response in the second tumors assessment. So that's because Xalkori doesn't cover the target very well. And because of all the off-target toxicities et cetera. So I think that's what you're going to get out of this. You're going to get the full understanding across all settings, Iressa combo, Tagrisso combo, second line, third line setting, and you're going to get a sense of the safety. You have seen the initial dose finding study we published, presented that data previously and Tagrisso and Savolitinib together, there is nothing significant on the tox side that would concern us. And there is also the PRCC data showing very low levels of grade 3 and above AEs. Savolitinib's a very clean drug, it's great. So I just think all of that will be laid bare and I think that will be terrific for Savolitinib and the program in general.

Definitely looking forward to that. That's Christian.

Thanks John.

Our final question comes in from the line of Ying Huang. Please go ahead.

This is Cheng Xin [ph] from Bank of America Merrill Lynch. So just two questions. The first one is the talk about the Savolitinib data. I am just wondering, you talked about the durability like what kind of threshold that you think is compelling? And can we see some like OS data as well, and when we would see the top line data, and would they be present data at the World Lung conference. And secondly on the commercial side, you reported approximate $104 million in first half but you maintain your sales guidance for the year. Does that mean that the second half seems to be some decline and what is causing that? Thank you very much.

Okay, on the Savolitinib durability response, yeah we - you'll get a sense of it, I am sure from the October presentation on all of the Phase II data. It's - the data is maturing at the moment so it's difficult for me to comment on it, and obviously it will be premature for me to talk any details. But I think we will have a very good sense of durability. I mean I think you go to look at what would these patients otherwise be being exposed to and it would be basically chemotherapy in that setting. If they fail on Tagrisso, what's their alternative. It's in the third line setting, it's just chemo, and if they fail on Iressa and c-MET positive, T790M negative again it's chemo. So if you look, it's difficult, I am sure we will give - be able to give some context as to what would be the types of response and PFS and OS for those types of patients. We will come with that later, but I won't comment on it just now. But I think when we do present all of this information in October - and when I say in October you can probably just assume at what scientific conference that is. You are going to get as much information as you can. I doubt you get a lot on OS. These are Phase II studies that are not structured for OS. It's very much a response as well as PFS and durability response that we will be looking at. On the guidance, I think that what we tend not to do is change our guidance for a few million here or there. So really the only material change I would say would be either the property compensation Guangzhou's land would…

Thank you.

Okay thanks.

Okay we have no further questions. So I shall hand it back over to you sir, for any concluding remarks.

Okay thanks very much, Courtney. No, I have no further comments. But thanks everybody for joining and if you have any further questions please feel free to reach out to the company. We will obviously be very happy to answer any further questions. So thanks for attending and look forward to seeing you all soon. Bye.

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