Shares in drug developer Hutchmed (China) (LON:HCM) soared on news the firm had signed a licence deal with GSK (LON:GSK). The licence gives GSK worldwide rights, excluding China, Hong Kong and Taiwan, to develop and market one of Hutchmed’s cancer therapies.
Licence deal with GSK
Hutchmed has signed over the commercial rights to its KRAS-EGFR treatment HMPL-A830, with clinical trials expected to begin by year-end. Development will initially focus on colorectal, pancreatic and lung cancer indications.
These cancers have the highest incidence of patients with KRAS-altered tumors, who often lack a safe and durable therapy. Hutchmed will be responsible for the global phase I program, which is expected to start in H2 2026. GSK will be responsible for all subsequent clinical development and markieting.
The agreement includes a $110 million upfront payment by GSK and potential development, regulatory and commercial milestone payments for up to a total of $1.295 billion, plus royalties on net sales.
GSK’s global head of oncology R&D, Dr Hesham Abdullah, said the deal refelected GSK’s commitment to leadership in the oncology field. ‘The dual KRAS-EGFR mechanism of HMPL-A830 has the potential to significantly improve upon current standard of care’, added Abdullah.
Hutchmed (China) was once a star of the UK stock market, but since 2022 it has failed to shine. The shares have come all the way down from 600p to 180p, but today’s news has triggered an impressive rebound.
In fairness, this is the fourth positive development the company has reported in the last few weeks. On 17 August, it announced its Orpathys treatemnt showed ‘statistically significant and clinically meangful’ improvements in patients with EGFR-mutated lung cancer.
Last week, it announced China had conditionally approved a new drug application for its HMPL-453 liver cancer treatment. Two days ago, it revealed positive high-level results from Chinese trials of Orpathys in conjunction with AstraZeneca’s (LON:AZN) Tagrisso.
Given the shift in market sentiment away from go-go growth stocks to more defensive areas, healthcare is back in vogue. We would expected Hutchmed to get upgrades after today’s news, so investors looking for interesting mid-cap biotechs might want to take a look.
