HUTCHMED (China) Limited (HCM) Earnings Call Transcript & Summary

Welcome, everyone. Thank you for joining HUTCHMED 2024 Full Year Results Call. [Operator Instructions] This session will also be recorded, and the recorded webcast will be posted on the platform in about a day or so. And just to go over some of the safe harbor statement. The performance and results of operation of HUTCHMED contained within this presentation are all historical in nature, and past performance is no guarantee of future results. Forward-looking statements are based on current beliefs and expectations of management regarding future events and are subject to significant known and unknown risks and uncertainty. Should one of these risks materialize, then the assumption may be proven to be incorrect and actual results may vary from what was mentioned in the forward-looking statement. Today, we will have a very good lineup of presentation. First, our Chief Executive Officer, Chief Scientific Officer, Dr. Su, will have the opening. And then our Chief Financial Officer, Johnny Cheng, will go over the 2024 financial review and outlook. And then our Head of Commercial, George Yuan, will go over our commercial aspects, and that will be followed by our Head of R&D and Chief Medical Officer, Michael Shi, to talk about our pipeline updates and also our new ATTC platform. And then will be followed by closing remarks by Dr. Su, and then we will have the Q&A. So without further delay, I will pass over the presentation to Dr. Su.

Okay. Thank you, David. Good morning, good evening, everyone. Welcome to HUTCHMED results conference call. Today, we announced 2024 full year results. We are pleased and proud to report a net profit for 2024 behind the global commercial success of Fruzaqla. The management will share more details on the 2024 results and provide an update for 2025. Overall, financially, Fruzaqla did exceptionally well with total sales of $290.6 million. On the pipeline, we saw savolitinib full approval in China with expansion into the first line for exon 14 skipping non-small cell lung cancer. Globally, savolitinib SAVANNAH/SAFFRON studies progressed well, positioning us well for potential global registration. Towards the end of 2024, we reported positive SACHI interim analysis in China in second-line EGFR mutation-positive, MET-amplified non-small cell lung cancer patients, leading to NDA submission before end of 2024. For fruquintinib, towards the end of the year, we received approval for second-line endometrial cancer in combination with sintilimab. We believe these new indications and new approval of new products will help drive China commercial. 2025 is shaping up a big year for the pipeline. Mike will go through the details with you. And looking forward, we are starting to get excited about our next-generation innovations, and these are ATTCs now starting to move towards clinic. The success of these programs will ensure our long-term growth beyond 2030. With that, let me invite my colleague, Johnny, our CFO, to go through the results. Johnny, please.

Thank you, Dr. Su. And yes, we end the year with cash resources of over $830 million, which reflects a small reduction of around $50 million from 2023. A portion of the use of the cash resources were utilized for our long-term incentive plan to retain talents. Another portion was attributable for working capital to support our ex-China collaboration with Takeda. Moving on to the next page. On the financial results, we recognized consolidated revenue of $630 million and reported a net income of $37 million. Our oncology business revenue met our guidance last year to achieve over $360 million revenue. Overall profitability was the result of strong commercial performance, ongoing recognition of deferred revenue, tight control over selling and admin expenses as well as scaling down our ex-China R&D operations from the restructuring initiatives we started in 2023. On the right-hand side of the page, as you can see, the 2025 revenue guidance for our oncology business is $350 million to $450 million. As compared to last year, this guidance has taken into account the nonrecurring service and manufacturing income from Takeda to support regulatory approval and also commercial launch in various jurisdictions in 2024. I will now pass on to our Head of Commercial, George Yuan.

Thank you, Johnny. If we look at the commercial side, the overall HUTCHMED oncology portfolio delivered a very solid performance with USD 0.5 billion sales, which is in-market sales and more than double the sales of 2023. The growth mainly driven by FRUZAQLA, as our CEO mentioned, and also Elunate and Sulanda continue to deliver growth in a very complicated market environment. Orpathys is a little bit flat with more competition to the market. As everyone knows, there's -- now there's a 5-Met inhibitor in the market nowadays. In 2025, we continue to look for an ambitious target with more than 30% growth for our combined portfolio. Next slide. If you look at the FRUZAQLA, the 2024 is the first full year performance commercialized by Takeda outside China. Of course, U.S. play a dominant role for the success. But within the 12-month period, the FRUZAQLA get approval in 12 countries. And we also believe the market in European, once we -- the major market in European, once we get reimbursement, the growth will further be drive that and also the guideline -- international guideline being supported the brand for the growth. For Japan, with Takeda's experience in the GI, especially with previous experience with Vectibix, we have a high expectation as well. Next slide. Elunate in China, we know that China is an aging population. And with the lifestyle change, the CRC is now a leading cancer type in China. And anti-VEGFR treatment is well adopted in the later-line treatment of the mCRC. Elunate achieved USD 115 million in 2025 and still keep the third-line mCRC market leader position with very strong data and a guideline support. Of course, the market becomes more and more complicated and also the competition becomes severe with more [ fruquintinib ] generics going to the market and also the TAS-102 get reimbursement. And in December 2024, Elunate received its EMC second-line approval, and this is bringing the VEGFR-TKI combo with PD-1 into the gynecology market and will further drive our growth in the future. Next slide. Then we shift the gear to talking about neuroendocrinology tumors, which is a relatively neglected area in the oncology community due to the low incidence and widely distributed in various organ across the body. Recent year, with more medical education in which HUTCHMED played a critical role that received a lot of attention by the oncologist and Sulanda with its differentiated profile become the leader of the TKI and continue to gain market share according to the IQVIA survey. In 2024, Sulanda continued to deliver double-digit growth. But of course, on the flip side, we see a lot of players coming to the market, especially you see the new SSA coming to the market as well as a lot of new medicine under development. Let's talk about Orpathys. Orpathys is the first MET inhibitor being approved in China, and we are proud that Orpathys really changed the MET alteration in cancer patients' life in China. In 2024, there are 4 new players, both from local and from multinational into the market, especially when received NRDL coverage for the first line, while Orpathys is still the second-line coverage. But with AZ's commercial capability in lung cancer area and also wide coverage, Orpathys withhold the sales number and continue to penetrate in vast China market. We believe the full approval of first line and the reimbursement listing afterwards plus the potential business opportunity to combine with Tagrisso for MET application patients will regain the momentum of the brand. Thank you, now let's talk -- shift to Michael.

Yes. Thank you, George. Good morning, good evening, everyone. I'm give you a pipeline update. So we have made tremendous progress on our late-stage products. So in addition to the global approval in CRC, fruquintinib is also expanding into new indications in endometrial cancer and RCC. So two other compounds, savolitinib and surufatinib are also in late-stage development in multiple indications. Our second wave of hematology product, Surufatinib and Tazemetostat are all NDA stage and the registration trial for new indication development. And also, I want to bring attention our third wave of products, Fanregratinib, our FGFR inhibitor and the Ranosidenib IDH1 and 2 dual inhibitor are also at a pivotal trial stage to propel future growth. Next slide. On the life cycle indication development, we received conditional approval in China for the fruquintinib plus sintilimab in the treatment of second-line endometrial cancer. EMC indicates the incidence and mortality are projected to grow in China and the patients who progress on first-line therapy remain with high unmet need. And the pivotal trial, FRUSICA-1, we have presented data in ASCO 2024. The combination of fruquintinib and sintilimab showed meaningful efficacy and manageable safety profile. The overall response rate in 87 efficacy valuable patients was 35.6%, including 2 complete responses, and the DCR was 88% and duration of response was now reached. And also the median PFS was 9.5 months and the median survival was 21 months. So up to now, the most common therapy option for second-line endometrial cancer is the chemotherapy. So the fruquintinib and sintilimab combo are the new chemo-free regimen, this group patients with very high unmet need. Okay. Next slide. Increased mortality rate in renal cancer in China also outpaced other developed nations and the second-line treatment option remain very limited in China. FRUSICA-2 is a Phase III results in the second-line RCC with fruquintinib with sintilimab versus Axitinib or everolimus as a comparator. So I'm very pleased to report that today earlier, we announced the positive top line results for FRUSICA-2 trial and NDA preparation is planned. So if approved, this will be the first immune checkpoint inhibitor and the TKI combo in China for the second-line RCC. So very excited to report this in the upcoming scientific conference. Next slide. In partnership with AstraZeneca, we are making great progress on savolitinib global and China development. These are the late-stage trials and 3 led by AstraZeneca and 4 led by HUTCHMED in multiple cancer types with Met aberrations, including non-small cell lung cancer, papillary renal cell carcinoma and the gastric cancer. So we're excited to see the global Phase II trial, SAVANNAH, will report the top line results next week at the European Lung Cancer Congress in Paris. The METex14 non-small cell lung cancer confirmatory Phase IIIb trial also reached a positive readout, and we received the full approval in the second line and also expand the label to first-line indication. So the updated results, OS results were also presented at ELCC next week. China Phase III randomized trial of savolitinib plus osimertinib versus chemo after progression on EGFR TKI also reached positive top line results at the pre-planned interim analysis. So we have submitted NDA and received the breakthrough therapy designation. The NDA is currently under priority review. The global submitted trial in PRCC also completed enrollment and other trials led by AZ and China are also currently enrolling patients in lung cancer and gastric cancer. Next slide. The SACHI China Phase III trial met the primary endpoint of PFS at the interim analysis. So we had the breakthrough designation and NDA under priority review. So SACHI evaluate the combination of savolitinib and Tagrisso for the treatment of patients with ER mutant non-small cell lung cancer with MET amplification after progression of first, second and third-generation TKI and compared with the chemotherapy Pemetrexed plus Platinum doublet and the results will be submitted for presentation at upcoming scientific conference. Next slide. In October '24, we announced positive results for SAVANNAH global Phase II study demonstrated high clinically meaningful and durable response rate. So MET amplification or overexpression represent about 34% of Tagrisso refractory patients. In the World Lung cancer 2022, AZ reported 52% overall response rate, 7.2 months PFS and 9.6 months duration of response in chemo-naive patients. So despite the MARIPOSA-2 and ORIENT-31, the second-line treatment remained very limited because SACHI and SAVANNAH data support the chemo-free option for biomarker selected MET-positive EGFR mutant patients who progress on the EGFR TKI. So the combo have a very balanced safety, efficacy and quality of life profile. And also the global SAFFRON Phase III trial also will evaluate the efficacy and safety of this combo in MET overexpressed or amplified patients versus chemotherapy. So the recruitment is expected to complete this year. Next slide. Our next wave product, tazemetostat is a global first-in-class EZH2 inhibitor and our first in-licensed product from Ipsen. Tazemetostat is approved in the U.S. for certain epithelial sarcoma and follicular lymphoma and also in Japan for EZH2 gene mutated positive follicular lymphoma. We have completed China bridging study and the results are consistent with the global study. We are planning to report the top line results later this year. The NDA is currently under review for third-line follicular lymphoma with EZH2 mutation, and we expect approval in mid this year. And also China is participating in the global Phase III SYMPHONY trial evaluating tazemetostat plus R-square in the second-line follicular lymphoma with a potential indication expansion. Next slide. We report the first autoimmune agent Sovleplenib is a highly differentiated oral SYK inhibitor. It offers a dual mechanism targeting both B cell to prevent autoantibody production and also prevent macrophage destroying the platelet. So this is the IQVIA report on the China ITP treatment landscape. We believe Sovleplenib not only can compete in this 0.25 million ITP patients who are currently on alternative treatment, but also potentially help patients who lost follow-up, primarily due to no other alternative effective treatment. Next slide. The Phase III ESLIM-01 result, we reported the result last year at the European Hematology Association meeting, demonstrated robust overall response rate of 71% and a durable response rate of 48% in relapsed/refractory primary ITP patients. This high response rate are on par with almost all the other alternative treatment, particularly in this patient with a highly pretreated patient. Over 75% of the patients had priorly treated with TPO/TPO-RA. So updated results were also presented at ASH meeting last year, showing a long-term treated treatment lead to durable response rate, 51% and also the overall response rate, 81%. So significantly better than many other treatment options. Next slide. So the Sovleplenib, I mentioned the NDA is currently under review, and we are working closely with the NMPA and look forward to bring this innovative medicine to the patients. And also, we have another indication, autoimmune disease in development, the warm antibody autoimmune hemolytic anemia. And the Phase II results were also presented at EHA last year and the subsequent published in Lancet Hematology. Sovleplenib demonstrated encouraging hemoglobin benefit compared with placebo with an overall response rate of 43% versus 0% in the placebo group for the first 8 weeks and also the overall response rate of 67.7% and the durable response rate of 47.6% during the 24 weeks of Sovleplenib treatment. It also demonstrated a favorable safety profile. So we initiated the Phase III portion of the ESLIM-02 study in the WAIHA, and we're currently enrolling patients and on track to finish enrollment this year. Next slide. And pancreatic cancer is a deadly disease with huge unmet need with a 5-year survival rate of less than 13%. It is an immune cold tumor and dually not respond to immunotherapy. And surufatinib already marketed in neuroendocrine tumors is a VEGFR, FGFR and CSF-1R inhibitor and also show immune modulating function. So we're currently conducting a Phase II/III trial of surufatinib in combination with camrelizumab and the chemotherapy for treatment naive pancreatic cancer. And this study was informed by an investigator-initiated trial presented at ASCO GI last year using surufatinib combined with camrelizumab, the Hengrui PD-1 inhibitor plus the chemotherapy in the frontline setting. And the overall response rate was 50% versus 27% in the chemo arm. And the median PFS, OS reached 9 months and 13 months, respectively, compared with only 5.8 months and 8.6 months in the control group. So the Phase II stage, we're already fully enrolled, and we're expecting to have the Phase II readout later this year. Next slide. Here, I'm going to update you about our antibody target therapy conjugate, the ATTC platform. So for the past 3 years, we really invested significant resource into this new platform, which should provide multiple drug candidates in the future. And compared with the traditional ADC, the toxin payload is replaced with the target small molecule. And the ADCC has several key differentiation compared with the traditional ADC platform. It could have better efficacy through antibody small molecule combination that will target specific mutations. It can overcome drug resistance and potentially support combination with target therapy, with chemo and immunotherapies, so particularly in the early stage -- early line of setting with the standard of care. On the safety side, it has improved the safety given with the lower on-target and off-tumor toxicity of small molecule. It less myelosuppression compared with chemo-based ADC and you have -- we can think have a better quality of life than cytotoxin-based conjugate. It also has a [indiscernible] PK profile resulting from antibody-guided delivery to target sites will improve the bioavailability and reduce drug-drug interaction. Okay. So -- and also the ATTC platform has the potential to incorporate high molecular weight drops payload, such as PROTACs or protein-protein inhibitors. Okay. Next slide. Yes, this slide, I'm going to show you a preclinical proof of concept of our target ATTC. And so in this case, our target antibody is linked to a target therapy payload, the TD1 with a special linker. So on the left figure here, you can see the target antibody, which is shown in green here and a small molecule payload TT1 shown in red, have a tumor growth inhibition and the combination of both actually have a more synergistic effect. But it's very importantly, a single dose of the target therapy, the ATTC show a robust antitumor activity when it compared with either the antibody alone, payload alone or combination of the antibody and payload together. More importantly, on the right-hand side, we also show -- the small molecule TD-1 payload alone for a combination with antibody actually will not tolerate very well. It showed a body weight reduction. But the ATTC dosing does not influence the body weight. So it is a very important preclinical proof of concept of ATTC. It show a single-dose ATTC deliver 14 days of tumor progression regression -- and also the good tolerability. So this has really demonstrated the unique feature for this ATTC platform. Next slide. So our next ATTC generation technology leverage our expertise in target therapy and also small molecule inhibitor and also the payload chemistry. And the conjugate potentially have a key advantage over traditional ADCs. On the right-hand side, it targets protein required for cancer growth, has a synergistic combination effect with functional antibody and also the ability to combine with IO chemo or target therapy as a standard of care, particularly in the frontline setting, and it can overcome chemo resistant, which is delivered by the driver mutation. So the benefit for further optimize this can also overcome the small molecule with a narrow therapeutic window. Through a reduction of on-target and off-tumor toxicity, our platform is designated to deliver high potent concentration of small molecule. So it can be dosed long term with improved safety window and we also reduce systemic toxicity of small molecule. Okay. So our first ATTC will -- as Dr. Su mentioned, we are conducting the IND-enabling study, and it could potentially -- our first global clinical study could initiate later this year. So to recap our R&D progress, HUTCHMED has a deep and broad portfolio in oncology, hematology and recently in autoimmune disease. Our R&D team and the global partners remain focused and executed well for the past year, and we have multiple near-term NDA approvals and also late-stage development catalysts in the next year. So in addition, our [indiscernible] ATTC platform will also lead to multiple potentially first-in-class globally competitive assets into the clinical development in the next few years. So next, I'll turn to Dr. Su.

Okay. Thank you, Mike. Just to sum it up, we think the most important milestone for us in 2024 is that we achieved profitability ahead of our schedule. And looking forward, we are quite excited about the growth prospects. As you can see here in the near term, we expect the top line and bottom line growth to accelerate behind FRUZAQLA launches around the world and the new indications in China, such as EMC this year and potentially RCC next year sometime. And for savolitinib, we believe the new indication behind the SACHI study in China in second-line EGFR mutation positive MET-amplified patients once approved, should give a big boost since it's targeting a much bigger patient population. Certainly, more importantly for savolitinib, we are hopeful that SAVANNAH and SAFFRON studies, if successful, will support registration globally and allow us to bring this important medicine to patients globally. In addition, new product launches tazemetostat, Sovleplenib and [indiscernible] pan-FGFR inhibitor, HMPL-453 will add further to the growth. And looking ahead, midterm, we plan to leverage our strong cash to explore acquisition of products or M&A opportunities in China to add further to our commercial portfolio. And longer term, of course, we believe ATTCs will deliver and will ensure our long-term growth. Thank you very much. David, back to you.

Thank you, Dr. Su. We will now proceed to the Q&A session. [Operator Instructions] So the first question will be Goldman Sachs, Paul Choi.

This is Khalil calling in for Paul. I guess a couple of quick ones from us. Apologies if you already mentioned this, but just curious about your Phase III plans for savolitinib in combination with Tagrisso ex-China. And then secondly, I know you mentioned M&A briefly there. How should we think about the types of assets you're looking at and the implications to your cash balance in 2025?

Okay. Thank you for the question. With regard to the Phase III savolitinib, talking -- I'll just ask Mike to provide any details. Mike?

Yes. So globally, for savolitinib, right, we have this SAFFRON trial, Phase III program is the Tagrisso plus savolitinib in EGFR-resistant patient population -- actually Tagrisso-resistant patient population with MET amplification and overexpression. So the Phase III trial is ongoing very well. It has 20 countries participating over 200 sites open for enrollment. So we anticipate AZ will finish recruitment this year. So we are also -- based on the SACHI and SAVANNAH data, we actually will be very interesting to see if that will lead to the global potential registration, yes. So since it's randomized trial, it has the potential to -- if it is positive, it will support a global registration, including U.S., EU and Japan or so.

Okay. Thanks, Mike. Yes, with regard to your second question, M&A or product acquisition or in-licensing of products, I mean, it's really to leverage our strong cash position. We have over $800 million in cash now. And as you know, we announced -- we are in the process of divesting our noncore business that will add further to our cash balance. And in terms of the type of products or acquisitions we -- or M&A, it's all about adding products to our portfolio, but probably products in oncology immunology area where potentially with synergy with our pipeline. So yes, we'll be exploring potential opportunities.

Congrats on the progress.

Thank you.

And the next question will be from Jefferies, Clara Dong.

This is Clara on for Kelly. Congrats on the progress. So maybe can you broadly talk about your strategy to integrate your ATTC programs into your portfolio, like what kind of development path or indication choice you might initially pursue as you are moving your first candidate into clinics? And also, I think you mentioned a platform has potential to generate multiple programs. Could you talk about what are your key criteria to nominate those programs? And you mentioned first global trial could be initiated this year. Are you looking to run the global trial with a partner or independently?

Okay. Thank you very much, Clara. Obviously, we think these ATTCs have really big potential, obviously, targeted therapies with the first few targets we are working on are targeting major signaling pathways, and these are genetic alterations and known to be driver alterations and with incidence rates 30%, 40% or higher in all tumors. And also, there is a lot of evidence that patients or tumors with these kind of genetic alterations tend to benefit less to chemotherapies or to IOs or to traditional toxin-based ADCs. So these are -- with the inhibition of these genetic alterations, hopefully, will allow these patients to benefit better to the treatments. In terms of initial development plan, I mean, you can think of initially late line as a single agent potentially single-arm pivotal studies. But in parallel, I think the goal -- ultimate goal is to move these products into front lines. I think the major advantage of this ATTC that we don't expect overlapping toxicities with frontline, chemo-based frontline therapies, including chemo-based ADCs. So hopefully, they can be combined with whatever frontline SOCs, so we can move these front lines to target a much bigger patient population. So that's -- obviously, ultimately, it will all -- it will be clinical data that will guide us where to go. And hopefully, if proven in clinics, I think we believe they have huge potential.

Our next question is from Bank of America, Alec Stranahan.

Congrats on the progress last year. I guess two questions from us. First, when you look at the EU opportunity for fruquintinib, I guess, how do you see this adding to the top line over the course of 2025? Could this support or maybe even accelerate the already strong growth ex China? Or is it maybe more of an incremental opportunity? And then secondly, on Savo, what sort of incremental info from Savannah should we expect next week at ELCC as a follow-up to that, what would you want to see in SAFFRON for you and ask to feel confident to proceed to global submissions? Is it essentially just confirming what we've seen in SAVANNAH? Or are you maybe hoping for something more there?

Yes. Alec, thanks for the questions. So fruquintinib is obviously very early in global launches. Last year is mainly U.S., while approved by EU, by EMA, but it takes time to gain access. And so really towards very end of the year, it was launched in Spain. So there are many more countries to go, and I'm sure our partner, Takeda is highly focused on EU and also Japan finally gained access in Japan and launch in Japan around Thanksgiving time. So a lot to go in Japan as well. I think all these markets will certainly accelerate the growth. Same in the U.S. as well. I think -- we think Takeda will do a great job as they've been very strong in the launches, savolitinib in terms of SAVANNAH and SAFFRON. SAVANNAH is a single-arm study. It will only support conditional approvals in U.S. and maybe a few other small countries that support this kind of system. It is SAFFRON ultimately will support full approval around the world. So SAFFRON obviously, is the most important study. And yes, it's enrolling very well, as Mike pointed out, and indicating a strong unmet medical need with targeted therapies in this patient population. So we are quite hopeful that SAFFRON study will complete enrollment very soon, and we can ultimately support the global registration.

Next question goes to Panmure Gordon, Julie Simmonds.

Yes, just following on fruquintinib. I'm just wondering as far as sort of you're now looking at additional indications in China and getting some data on those. Wondering how that is potentially could get into global markets and what's required there?

Yes. I mean, obviously, IO and VEGFR, TKI combo has proven synergistic. The successful trial with fruquintinib and sintilimab combination in second-line endometrial cancer and now in a randomized study in renal cell carcinoma clearly confirms the synergy. In terms of outside China, so obviously, we share all the data with Takeda, and this is clearly a low risk and proven at he clinical activity. I think the only challenge is that sintilimab is not approved outside China. So whether we can replace sintilimab with a different PD-1 or other IO, it just makes it a bit more challenging. But clearly, PD-1 and VEGFR combo is a proven mechanism that will result in synergy.

Excellent. And then just wondering back on the M&A side of things, what sort of stage of programs would you be looking at? Is this wanting to add to the later-stage pipeline or back at the sort of early part of what you're doing?

I think it will be open-minded, but certainly preferably late stage, something that could really immediately accretive adding to our commercial portfolio.

Next question goes to Cavendish, Adam McCarter.

Congratulations on the results. So my first question really is just on savolitinib again. So last month during AZ's earnings call, we heard AZ executives say that what they're hearing based on the MARIPOSA study data is that utilization of J&J's drugs is likely to be most impactful in the second line in non-small cell lung cancer. So based on this, I'm just interested to hear what management view is on how they see the MARIPOSA trial potentially affecting savolitinib positioning, it does feel there's going to be an impact there. Second question is on FRUZAQLA. I see from the announcement that FRUZAQLA primarily in the fourth line with growth potential in third line. So do you have a feel on the levels of market penetration that can be achieved for FRUZAQLA in the U.S. Based on the sales, it seems that you've taken quite a significant contribution of the market already. So just interested to how much more headroom is there in there for you to go? And my final question is just on R&D expenses. Obviously, those were down quite a bit over the period. Just wondering how we should think about the outlook on future R&D expenditure, particularly with the level of investment you're going to be putting into the ATTCs and perhaps just overall sort of OpEx in general.

Okay. Thanks for the questions. I'll give you a quick answer on FRUZAQLA, and then I will ask Mike to answer your question on Savo and also the R&D expenses or budget. So FRUZAQLA, yes, in EU, Japan, it's all fourth-line indication or label. So clearly, we'll be -- initially, it will be fourth line. In the United States, the label is third line and above. Obviously, fourth line is blank, right, before the approval. So it's the low-hanging fruit there. I'm pretty sure the label covers the third line. I'm pretty confident our partner, Takeda will try their best to penetrate the third line. Really, it's a very different therapy with proven efficacy and safety without the chemo, without myelosuppression, certainly, particularly for elderly patients or the immunocompromised patients, myelosuppression could be a problem and savo and R&D, I'll leave it to Mike.

Yes. Thank you, Adam. Yes. So for -- in terms of competition, right, I mentioned the MARIPOSA is really in the unselected patient population and also it's a chemo combo, right? So you're going to see not only the traditional chemo-based toxicity, myelosuppression, the hematology toxicity, but also there are some very challenging toxicity for skin toxicity. And the big disadvantage is really the dosing, right? So they have to do the split dosing and very frequent infusion. So it is really for [indiscernible]. Certainly, is approved, but it's a very -- not a very clear biomarker selected patient population. For savolitinib and Tagrisso combination, it's really a very convenient oral regimen and also have a very precision selected target patient population. I think just from -- for the SACHI for the SAVANNAH data, you're going to hear next week. SACHI in the future is MET-amplified overexpress patient is really represented a very big group of patients, 34% of patients with MET overexpression amplification have it's a larger patient population with a clear driver mutation. And this target therapy is really being effective, very convenient. So we believe if it is -- I mean, if it is approved or has an alternative, certainly has a convenient and the precision medicine-based approach. So I think just by looking all this therapy, this is a really high unmet need and with a convenient dosing. So we think even -- I think AZ is also thinking this is really the competitive advantage for the oral target therapy combination. And R&D expense, right? So we are actually very excited about our ATDC platform, right? This is truly the first-in-class. We think all these assets are very globally competitive assets. And I think the strength also for our platform is we are very carefully selected the antibody. Dr. Su alluded to this potentially very broad tumor type, higher percentage driver mutation with a lot of commercial opportunity down the road. So certainly, we do want to take these assets as our priority to invest. My vision is really initially, we're going to do a rapid global dose escalation, really have as a late line expansion clinical proof of concept. So once we demonstrate clinical activity, so we can still leverage a lot of opportunity, not necessarily everything has to be done by ourselves, right? Because certainly, we have multiple assets by this platform. We can pretty much duplicate and repeat the process. And hopefully, when the clinical proof of concept is demonstrated, we can bring potential party in, not necessarily just really exponentially grow our R&D budget. But through potential [indiscernible] opportunity, we can manage the expense. But certainly, these are potentially exciting competitive molecule assets we certainly will be a priority for company to invest for the future growth.

The next question go to UBS, Chen Chen.

So it's very great to see the encouraging preliminary data of your ATTC. I'm just wondering like how many ATTC candidates can move to clinical stage this year. So are you just focusing on one key candidate or you will focus on a few ATTC candidate?

Yes. The short answer is multiple, as you heard from Mike, right? So we have already multiple payloads targeting different genetic drivers. But every payload will have -- has the potential to be linked to different antibodies based on the tumor antigen expression levels in various different tumors. So it's all about deliver these highly potent targeted therapies to different tumors. So yes, there will be multiple. But this is the year that it will get started, maybe IND filings, maybe 1 or 2, maybe 2 this year, depending on timing and how the preclinical IND-enabling talks progress. Certainly 1, could be 2, but there will be more to follow later next year or even beyond.

I see. That's quite clear. And my second question is very quick. So previously, you guided breakeven in 2025, and it's very exciting that you have already achieved this in 2024. So I just want to double check like your breakeven target in 2025. Is this still the guidance now?

The short answer is yes. Maybe Johnny can provide more color on this. Certainly, we think we'll be profitable from here on. We will be -- we believe we reached a self sustaining kind of mode of operation, yes.

Yes. Thank you, Dr. Su. So, Chen Chen we have only been giving out this revenue guidance for our oncology business. I think in terms of our target, as Dr. Su mentioned that we have in advance achieved our self-reliance, self-sustaining profitability model already in 2024. In fact, we made profit 2023, thanks to the upfront income that we recognized from Takeda. And this year, we have -- from our ongoing business, we have been able to make breakeven and a slight profit this year. And going forward, as we said, we will maintain this goal, and we will continue to have this pathway. But this is not our guidance strictly to the market. But one can take because of the divestments of our noncore business, we will be recognizing a substantial high amount of profit in 2025.

We have one question on the line. This is from Morgan Stanley, Jack Lin. This is questions regarding our ATTC platform. Question one is, is there any molecular difference or modification in the TKI being used in the payload of our ATTC as compared to the traditional TKI being consumed orally? So that's question one. Question two is, would it be possible to use more potent payload similar to how ADC technology has allowed to use more toxic payload that would normally not be able to use systematically. That's question number two. And the final question is, what do we think about the future potential dosage or dosing frequency of our ATTC drug candidate?

Okay. Thanks. It's a lot of questions here. So certainly, structure of the TKIs, these are all novel structures, chemical structures will be protected by patents. And so they were obviously different from whatever is available out there. I actually don't even think anything approved against these targets. In terms of toxicity or very potent TKIs, I mean that's the whole idea, right? The ATTC, we hope to improve clinical activity through combination with the -- between the antibody and the payload at the same time, reducing toxicity because the free circulating small molecule payload will be extremely low. So any toxicity associated with the payload will be -- will hopefully be much reduced. So yes, that's -- I think that's the key rationale behind ATTCs. Certainly, as Mike already explained in detail, the clear definition from traditional toxin-based ADCs are that these ATTCs, they are targeted therapies. They are much less -- we expect much less myelosuppression or overlapping toxicities with the chemos and hence, can be combined, hopefully, much better with frontline chemo-based standard of care. So really, the big potential is in combination.

Thank you, Dr. Su. Maybe we will have the very final question of tonight, HSBC, Cindy Chai.

Congrats to the achievement. I just have a quick question. So I know -- we know that there were U.S. tariffs here. And just wonder as fruquintinib is still produced by HUTCHMED and what's the tariffs impact in the future? And also, what's the progress of our manufacturing transfer to Takeda and whether they will -- and after the manufacturing transfer finished, whether they will produce fruquintinib in U.S. or in Japan?

Okay. Thank you for the question. Obviously, tariffs on pharmaceutical products being proposed by President Trump, but no details at the moment in terms of the level. And -- but as you all know, right, the cost of goods or cost of manufacturing for all pharmaceutical products are always relatively low. So the impact to our products, let's say, FRUZAQLA remains to be assessed at the moment, it's really not clear. In terms of tech transfer to Takeda, it's going very well. Both API and drug product ultimately can be sourced outside China. So China can remain as a supplier, HUTCHMED can remain as a supplier, but at least there will be multiple sources to support global market. Thank you.

Thank you, everyone. I think we'll wrap it up here. Thank you for all the questions. Dr. Su, would you have like one last remark?

Yes, absolutely. I just want to thank everyone for participating in this call. And as we presented here, HUTCHMED is in a very good position. We have very strong cash. We have multiple products this year going through regulatory reviews and hopefully come out positive. We have FRUZAQLA going well and expect it to continue the momentum and savolitinib behind SAVANNAH or SAFFRON, ultimately, hopefully, we are hopeful that we can bring this important medicine to patients globally. And all these will ensure accelerated growth for us for years to come. And of course, longer term, yes, it's all about next wave of innovation, particularly ATTCs. Thank you all for participating in the call and look forward to interacting with you.

Thank you, everyone. We will now end the call.