Ladies and gentlemen, welcome to the Chi-Med 2019 Full-Year Financial Results. My name is Maxine, and I will be coordinating your call today. [Operator Instructions].I will now hand over to your host, Mr. Christian Hogg to begin. Christian, please go ahead, when you're ready.

Thank you, Maxine. Welcome everybody to the Chi-Med 2019 results presentation. It's an hour-long session today. I'm going to try and complete the presentation in maybe 35, 40 minutes and then leave 20, 25 minutes at the end for Q&A.So if we go to Page number 3 of the presentation, you can see we've made a lot of progress in 2019, towards our aim of building a global science-focused biopharmaceutical company from our established base in China. On the global innovation side, our team is now over 500 people scientific team on the ground in China. We've built and continue to build a global development infrastructure.Our team in New Jersey, in Florham Park, New Jersey, has been built up over the last 18 months and is now really ready to go to start our global Phase III programs on Fruquintinib and Surufatinib. And obviously, as I have just said, we have multiple Phase III initiating, so that that team in the U.S. is now in place to support that -- those launches of those pivotal studies, global study.In China, the market continues to reform the expansion of the medical insurance scheme and the National Reimbursement Drug List continues at a great speed in China. And we're very well-positioned to take advantage of that and to capitalize on the broadening of availability of oncology drugs in China.Our first three NDAs are locked in at least Elunate obviously is approved and launched in 2017, Surufatinib, the NDA was submitted late last year, and we're very hopeful that savolitinib first NDA will be submitted in the next few months. So bringing our first three drugs to market in China, our first three drug candidates to market in China has been a great achievement and I think will set us apart for the next…

[Operator Instructions].We have a question from Alec Stranahan from BAML. Alex, your line is now open. Please go ahead.

It's Justin on for Alex. Thanks for taking my question. Just a couple on Savolitinib, what kind of data can we expect from SAVANNAH in the next coming months, and then what will the next steps be for the program after the trial leaves out and then a quick follow-up on that is, what do you see as the ideal combination partner in your mind for Savo? Thanks.

Okay. SAVANNAH it’s an interim analysis on the first 50 patients of that 200 patients SAVANNAH study, we will not be publishing that data. That data -- that interim analysis is really mainly to guide our regulatory dialogue. So what will happen after that interim analysis is obviously subject to it being positive is I'm sure, we will engage with the regulatory authorities and determine what's the most accelerated pathway to approval for the combination.So those are the sort of the next steps coming out of the interim analysis. I think that that regulatory dialogue and potentially the starting up of further studies on the combination will really give you over the back half of the year an understanding of the state of play on the Savolitinib Tagrisso combo, which I hope is a positive state of play, I'm quite optimistic of that.On the combination, I'm not really clear what you mean, what's the best combination obviously; the Tagrisso combo is the main focus area. We have studied Iressa Savolitinib combination in T790M negative patients. And we're recorded terrific efficacy in that patient population as well. But I think AstraZeneca's obviously prime objective is to broaden the Tagrisso franchise and Savolitinib is really a perfect bedfellows with Tagrisso to help broaden our franchise. Hopefully that answers your question.

We have another question from Paul Choi from Goldman Sachs. Paul, your line is now open. Please go ahead.

Thank you and good evening, everyone. I have a follow-up question with regard to SAVANNAH, Christian if I could, with on the interim with the first 50 patients, could you maybe just speak to what would be the level of maturity of data that you would have by that interims and specifically about a roughly how much follow-up would you have for that -- for those first 50 patients and would you just be in a position to discuss or would you have PFS data that you think, you could approach regulators with at that point?

Well, so the primary endpoint of the study is ORR. And what will have on that 50 patient data, or at least what is planned to have is 50 patients treated with the 300 milligram, 80 milligram combination. And I believe around two-thirds of them through two tumor assessments, the other third being through one tumor assessment. So obviously in the past, we've seen the efficacy of the combination come on very quickly. So the expectation would be that with maybe two-thirds of the patients with two tumor assessments, and one-third with one tumor assessment, you would get a very good idea of the objective response rate for those -- for the combination.And remember also this, this comes on the back of the TATTON data which will be it in multiple treatment arms, different types of patient with different molecular profile. That TATTON data number is up to a total of around 200 patients, I think 190 patients. So we have a very large data set now for the Savolitinib/Tagrisso combo and I think the Savo, sorry the SAVANNAH interim analysis will just sort of be the kind of bringing together all of that information.

Okay, thank you for that. And then with regard to the SAVOIR2 trial that you referenced here earlier, could you -- I know you'll have a data presentation later this year, but could you maybe just speak to what you're seeing or learnings that you've seen from the first 60 patients that I guess has reinvigorated enthusiasm for monotherapy development here?

It's difficult for me to go into detail, Paul because obviously this is subject to scientific conference presentations. But what SAVOIR2 -- what SAVOIR provided, as I say around 60 patients, one-to-one randomization of Savolitinib against Sunitinib. What we didn't have ever was a prospective view on what Sunitinib would do in MET positive patients. We had the Phase II data; we had a lot of single arm data on Savolitinib in MET positive PRCC patients. So we have a good sense or we had a good sense even before SAVOIR on what Savolitinib does in these patients. But we have no idea what Sunitinib did as the control in these patients. And we made our best guess when the SAVOIR study was designed. So what we will have coming out of SAVOIR on those first 60 patients is a much -- is a very good understanding what Sunitinib does in those MET-positive PRCC patients. And that's the big difference.So, I think that, we'll obviously have to wait until the scientific -- until this sort of conference where we present all of this data. But I think if you read between the lines and look at our announcement, which is announcement that was carefully crafted by both Chi-Med and AstraZeneca together, you can see that we're obviously quite encouraged by what we've seen on SAVOIR and we are now working closely to consider the next steps and to restart the program basically.

Okay, thank you for that. And if I could maybe just squeeze in a quick commercial one. With regards to the 25 clinical sites that you used for Savolitinib ahead of your commercial sales force expansion later this year. Are those centers in the clinical trial the primary treatment centers for NET or do you need to go into a second tier of medical centers and hospitals to expand your reach with regard to treating NET tumors? Thank you.

Yes, thanks Paul. So obviously the SANET-ep and p studies were done in sites that had probably the most -- the most high volume neuroendocrine tumor sites in China. But we see neuroendocrine tumors and the availability of patients for us to go after and to go and try and help as being far, far greater than the sites that were just in our Phase III studies, these 25 plus sites.As I say in the presentation, our commercial team is being set up to cover 1,300, the 1,300 key oncology, the clinics and hospitals across China. That's where we think 95% of the business will be located; there will be obviously diminishing returns. But based on the way we plan to cover these institutions, we think a team of 350 makes a lot of sense to cover that and we'll take out 95% of the -- we will gain access to 95% of the patients that are literally neuroendocrine tumors in China, so I don't know whether that answers your question, but it's -- that's our approach.

It does. Thank you.

Thanks.

We have another question from Rajan Sharma from Deutsche Bank. Rajan, your line is now open.

Thanks for taking my question. I just wanted to [indiscernible] actually kinase inhibitors, they look slightly exposed kind of potential favorable tolerability profile relative to competitors. So just wondering if you've done any combination work with this asset or whether it's the potential feature in the future? Thanks.

Rajan, thanks, maybe I'll ask Dr. Weiguo Su, our Chief Scientific Officer to answer that question.

Sure. Well, the brief answer is yes. Up until now it's pretty much single agent. So we do have a plan now going forward to initiate several combination exploratory studies, it could be later this year.

Okay, thanks. And then just secondly on so you kind of highlighted M&A as a potential for the innovation platform and the preference say would be on kind of single assets. So would you be looking at kind of building that platform capabilities?

So on the M&A side, what we're interested in is expanding our large molecule footprint. Weiguo and the team have been working for the last four or five years on a number of novel targets for large molecule innovation. And we've now got some things; we want to start putting into the clinic. So we're looking rather than just outsourcing production of these assets to third-parties, we're looking to potentially acquire a platform to do that. But also when we do that, we're looking for a platform that that already has some approved products, because when you're building out a commercial, you look at Chi-Med's commercial capability and sort of history in China we're very deep and we know what we're doing when it comes to commercialization. And so, now we're building out the oncology team, would be -- it certainly would be synergistic to be able to acquire some assets that we could channel through that that commercial team as well.So the large molecule M&A side for us is sort of it's a two, two pillar strategy. One is to get the manufacturing through the footprint. The second is potentially get all those for new products. But new products are expensive in China. They're not growing on trees. So we'll take our time and we'll look at this carefully.

We have a question from John Newman from Canaccord. John, your line is now open.

Hey, good morning. Thanks for taking my question. Christian, I just wondered if you could walk us through a little bit more of what we should expect this year for Fruquintinib in China. You mentioned on the call that you are on the National Reimbursement List. Just wondered if you could explain to us just the importance of that process and sort of what that does for you in terms of access?

Well, John, I don't know whether they can pull it up on the presentation. But there's some charts in the Appendices that shows the impact of getting on the reimbursement list in China. When Avastin got on the National Reimbursement List in China, three years -- two -- in mid-2017, so two-and-a-half years ago. Avastin was doing about $200 million in sales in 2017, 2019 it did $566 million in sales. So it's pretty much close to triple in terms of sales in China. And that's Avastin having been launched in China, a good decade ago. So it took many years to get to $200 million onto the reimbursement list. They took a 62% price reduction and within two years, they've almost tripled their sales. So getting on the NRDL really matters because it expands access to patients. It makes the drug much more affordable. And you go from, as I've shown you on our charts, 5% penetration on Fruquintinib at a high price to potentially really meaningful penetration. Where it ends up I don't know but you would certainly hope to see 30%, 40% penetration once you get well established.So getting on the NRDL is absolutely critical and only time will tell the impact of it but as I've shown for January/February, the results since we got on to the reimbursement and taking into account you've had a fair amount of disruption in February because of this coronavirus, we've still done very well on Fruquintinib in January/February. So we're reasonably well. So I think relative to last year, so I think that's the impact. I don't know, is that sufficient for you?

Yes, yes. Thank you. And I said one follow-up question on Surufatinib, just wondering if you could just talk a little bit more about the global strategy here for neuroendocrine tumors given that this is a very attractive and large revenue opportunity especially in the United States. You have an oral small molecule, just curious if you could talk to us a bit about, how you're thinking about perhaps some of the design aspects of the registrational study?

So this is the huge question. And our team based out of New Jersey led by our Chief Medical Officer, Marek Kania, in Florham Park is deeply in discussions with regulatory authorities on exactly this question. I'm not going to be able to give you an answer on it here. But I think over the next couple of months, we will have real clarity on what is the registration pathway for Surufatinib outside of China in neuroendocrine tumors.One of the things that we believe is that neuroendocrine tumor patients and the standard of care for those patients in China is not a whole lot different than the standard of care outside of China. So we would hope that those two very important Phase III studies in extra pancreatic and pancreatic NET in China would be data that would be of real important to the regulatory authorities outside of China. So those discussions are underway and we'll see where it takes us over the next couple of months. And we'll report back as soon as we -- as soon as we're very clear on what we need to do to get Surufatinib to patients as quickly as possible.

We have a question from Mike Mitchell from Panmure Gordon. Mike, your line is now open.

Hi, Christian, thanks for taking my questions. Just two on Savolitinib actually. Just thinking about the combination with Iressa, I might have missed the other point of thinking that that was one of the programs expected to transition into registration study level during this year. Is that still the case or is that not? How should I sort of think about the relative progress of that event program at this point? And secondly, on MET Exon 14, skipping, just thinking about the FDA has given Priority Review to manage Capmatinib. How should I think that relative positioning again Savolitinib given the rare -- the rare indication profile for this non-small cell lung cancer? And should I think about more strategically on that particular product?

Got it, Mike, thanks. So just very quickly, Savolitinib/Iressa obviously, great data from the Phase II that we've presented. We have in the past set out -- we're working with AstraZeneca to figure out the registration pathway for Savolitinib Iressa combo.To be honest, how the SAVANNAH study is moving, the speed in which is moving and level of energy around the Tagrisso combination. AstraZeneca is pouring a huge amount of effort and energy and financial resource into that combination at the moment. So the Savolitinib/Iressa combination is there as a potential pullback, but it certainly isn't a priority at the moment, the priority is Savolitinib/Tagrisso which I think everybody in the industry recognizes is a pretty important combination. So Savo/Iressa is there, it's good but I would if I were you thinking about it, I'd see it as a sort of a more of a fallback or an insurance policy in case something goes awry on Savolitinib/Tagrisso combination.On Capmatinib obviously, their submissions in, so they're ahead of this level, Savolitinib for Exon 14 is way ahead of everybody in China, with the NDA about to be submitted hopefully. So but we are behind outside of China and Weiguo and the team and the AstraZeneca team are obviously working to figure out what is the sensible and most sort of aggressive way to consider Exon 14 outside of China, leveraging the big data set we have in China, but also taking into account things like companion diagnostics, which are necessary outside of China and also taking into account Capmatinib submission now, they got BTD and they've made that submission, it'll be a conditional approval. So we're not -- we're not so far behind though. We can't -- we can't get ourselves to submission in this area. But clearly, we're way ahead in China and we're behind outside of China but we would hope to be able to catch up and I think ultimately when the Phase II data, the registration intent study Phase II registration intent study of about 70 patients is presented at a scientific conference this year, everybody will be able to look at sort of the relative efficacy and safety of Surufatinib relative to the other, the other MET inhibitors that are out there.

We have another question from Tony Ren from CLSA. Tony, your line is now open.

Thank you for answering my question, Christian. So I got two questions. One is about colorectal cancer and the other is about the situation surrounding COVID-19 in China, so in colorectal cancer, we know that Taiho's drug Lonsurf was approved in China in September last year. So just wondering if you guys see any impact from Lonsurf on Elunate. And the second question is about the current COVID-19 outbreak in China. We know that there was a lot of social distancing. There's a lot of business affected in the regulatory process still taking place. Do you expect any delay on any of your regulatory filing?

Okay, thanks, Tony. I'll let Weiguo talk about the regulatory process in a moment. But on PRCC on TAS-102 Lonsurf from Taiho in China. This is a different mechanism of action to the EGFR inhibitors. Obviously, TAS-102 Lonsurf is approved outside of China. It actually is used more often outside of China than regoragenib in third-line colorectal cancer just because regoragenib is a drug that has it's issues with liver toxicity and the blackbox warning.But what we've seen -- what we've seen in our development outside of China is that patients have had exposure to Lonsurf, they do -- it doesn't diminish the efficacy of Fruquintinib. So we don’t see Lonsurf as a major issue either inside China or outside of China for Fruquintinib.On COVID-19, there's been obviously we put a relatively simple update in our results announcement about a paragraph on COVID-19. We don't really have a lot more to say other than that in the -- obviously it was a pretty significant disruption in early February. We've seen in late February, the organization improvising and figuring out how to go. So, we've seen on our commercial business in China's not seen too much impact of COVID-19 on for example, the sales and profits of our commercial business. But maybe Weiguo you could say a couple of words on how COVID-19 may have affected the regulatory process.

Well, I mean you probably reading a news that recently multiple actually, maybe dozens of -- plenty of coronavirus clinical trials got off in China and so you could imagine that the CDE would be quite busy reviewing and approving these trials. However, we’ve been in very close contact with the CDE on our NDA both on Surufatinib and Savolitinib. It is that they’re quite; they're working on our cases, so been quite responsive as well.So I would say, I mean obviously resources within CDE, you could imagine quite limited there. So but I think COVID-19 is -- I think about a big impact, but I hope it's going to be very short lived. I think in more so, our concern would be in hospitals where we have to get all the -- get our CSRs, finalize and signoff and we may have to change the PIs and but the bottom-line, I think there could be some, some risk of delay but it would be really limited.

We have a question from Steve McGarry from HSBC. Steve, your line is now open.

Hi, there. Couple of things. Firstly, just in the R&D pipeline, you are trialing Elunate in combination with Tyvyt and genolimzumab so both PD-1 what is the rationale for doing trials, two trials -- two programs at PD-1 with the go, no-go criteria for taking either one of those into Phase II? And secondly, in terms of the sales force expansion in Chinese given that 900 plus personnel by 2023. And could you just give us some guidance in terms of will that be balanced with the revenues that you expect to generate out of January [ph] and from that point, that it won't just be -- there's going to be 900 regardless. And then finally just in terms of the non-core asset, potential divestments, we have been talking about this for a little while, we'll be moving any closer to that conclusion or not. Thanks.

Thank you, Steve. Great question. So on the R&D pipeline, the geno or genolimzumab and the Tyvyt P1 combo. We feel that this sort of early stage, the more the merrier. We partnered with Innovent, we partnered with Geno here to combine Fruquintinib with that PD-1 they both are ambitious companies that are keen to do a lot with these combinations. So, our view is early development with both assets, really let the science and the clinical data do the decision making, the go, no-go criteria will purely be driven by the data. It'd be very difficult for me without that data or for Weiguo without that data to make any kind of decisions on which is the better combination. So about doing early development with a number of partners and then moving into later development probably with more focus and with planning in on what we're doing late development.On the 900 people plus by 2023, yes, we're obviously not -- this isn't a business that's about building the size of the team. This is a business it's about, about ensuring that we're making good financial decisions and developing our business competently towards ultimately making money. So our hope is that the oncology team of 900 plus people by the end of 2023 will be justified by the assets that we have through NDA approval and launch. We certainly won't be building a team of 900 people, if there's no sort of financially attractive reason to have those people. But I can clearly say that the first 350 this year makes a lot of sense, it will cover 95% of the institutions in China and it will get Surufatinib off to a great start. And I think then we can get into next year and look at it and see how we're doing and does stepping up to the next level makes sense.And that's the approach we took getting to 2,400 medical reps in cardiovascular space. When we first started selling our cardiovascular drug in China, we had less than 100 medical reps and we just literally year-after-year-after-year of the year built up around the business case on the business and now we have a large team and it makes a lot of money. So that's what we will do in oncology as well.As far as the divestiture of non-core assets, we've been working really hard on this. And I don't want to tempt fate. So I won't go into details on this. But needless to say, we've been working very hard on this. And if something's going to happen, it will happen. We can never tell until you've actually signed a deal on these things. But we've been saying, we are keen to offload certain non-core assets to enable us to focus in on our core focus on oncology in China. And we intend to do that. Hopefully that answers your question.

[Operator Instructions].Okay. Since we currently have no further questions, so Christian if you'd like to continue.

Yes, okay, thank you very much. We went over a bit here but thank you everyone for your questions. And please feel free to reach out further if you have additional questions. But thanks very much and look forward to a big year. Bye-bye.

This concludes today's call. Thank you for joining. You may now disconnect your lines.