HUTCHMED (China) - H2 2022
February 28, 2023
Transcript
Operator (participant)
Good day, thank you for standing by. Welcome to HUTCHMED 2022 full year results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You would then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Mr. Mark Lee, SVP, Corporate Finance and Development of HUTCHMED. Please go ahead, sir.
Mark Lee (SVP of Corporate Management and Communications)
Thank you, Amber. Welcome everyone. Good morning, good afternoon, good evening. Welcome to the HUTCHMED 2022 full year results and business update presentation. Just at this time, I'll mention that the performance and the results of our operations that we'll be talking about today are historic in nature and past performance is not guaranteed. The use of this presentation does contain forward-looking statements in relation to the safe harbor provisions, and anything that is said and discussed should be heard and read in conjunction with HUTCHMED's results that we have published on RNS, in our SEC filings and in our announcements in Hong Kong on Hong Kong Stock Exchange.
Today, we have a broad management team for you to present and answer questions, including Weiguo Su, our Chief Executive Officer and Chief Scientific Officer. Johnny Cheng, our Chief Financial Officer. Karen Atkin, our Chief Operating officer. Hong Chen, our Chief Commercial Officer. Michael Shi, our Chief Medical Officer and Head of R&D. Zhenping Wu, our Executive Vice President of Pharmaceutical Sciences and Manufacturing. Charles Nixon, our General Counsel. With that, I'll hand over to Weiguo.
Weiguo Su (CEO and Chief Scientific Officer)
Okay, thank you very much, Mark. Good morning, good afternoon, good evening, everyone. Welcome again to HUTCHMED 2022 full year results conference call. A few hours ago, we announced our 2022 full year results. Mark, can you show the next slide, please? Thank you. During 2022, HUTCHMED made significant strategic changes to allow us to better deal with adverse external conditions and to focus on getting to profitability sooner. On the pipeline, we made significant progress, including the positive Phase III global registration study for FRESCO-2 for fruquintinib. Based on the strong data, NDA submissions are planned for 2023, starting from U.S., followed by E.U. and Japan. In parallel, our second wave of products, including savolitinib, amdizalisib, and tazemetostat in registration trials in China also made a significant progress. China NDA submissions are planned for 2023 and 2024.
Finally, on the China commercial, despite all the challenges associated with COVID and unfavorable exchange rate, our China commercial team delivered strong numbers for our three approved products. Now, I'll pass it to Mr. Hong Chen, Chief Commercial Officer of China Commercial to lead it off, to give you an update on the China commercial operation. Next slide, Mark, and for Hong Chen.
Hong Chen (Chief Commercial Officer)
Thank you, Weiguo. Hello, everyone. I'm glad to present the 2022 China commercial achievements of our three novel products. Just as Weiguo said, 2022 was the most difficult year during the last three years due to the COVID impact. The foreign exchange rate is unfavorable. Our three market products, fruquintinib, surufatinib, and savolitinib still achieved significant sales growth. Firstly, I would like to update you the HUTCHMED commercial infrastructure and the capabilities. From this slide, we can see more than 900 dedicated and experienced commercial staff covering more than 33,000 oncology specialists and 3,000 key hospitals. The list of hospital pharmacies increased 100% to more than 800 in 2022. In order to mitigate the COVID challenges, many more and highly effective academic events were held online for covering more HCPs. Next slide, please.
For ELUNATE, it continued to keep strong growth. The sales value was up to $93.5 million. In terms of in-market sales with 32% growth. Around 32,000 new patients were treated with ELUNATE. We can see ELUNATE continued to keep leading position in third-line CRC market with 44% patient share according to the latest IQVIA checking study. Next slide, please. 2022 was the first year for SULANDA listed into NRDL in spite of the 52% price reduction. SULANDA still achieved 178% value growth. Around 17,000 new patients was treated and was recommended by important guidelines such as CSCO and CACA, et cetera. The patient share ranked to be the second in net market since Q3 last year, which surpassed Sutent and Afinitor despite the later launch. Next slide, please.
ORPATHYS, as the first in-class MEK inhibitor in China, achieved around 160% growth for its first full commercial year. In-market sales value was up to $41 million. It's recommended by five important guidelines such as NHC, CSCO, CACA, et cetera. More important, it's listed in NRDL this year and will be officially reimbursed since March first, actually tomorrow, with modest price reduction. It can be expected that many more patients will be benefited from ORPATHYS treatment. Overall, in spite of the COVID challenges, we continue to make good progress for all three market products. Along with everything getting back to normal, we are confident the stronger momentum in 2023. That's all for the China commercial part. Thank you.
Johnny Cheng (CFO)
Thank you, Chen Hong. Yes. On this slide number nine, on the right-hand bottom corner, as you all can see, overall with our oncology business, we have recognized a $164 million of revenue, up 37% from prior year, in line with our guidance for 2022. For 2023, our guidance, revenue guidance for the oncology business, subject to the closing of the Takeda deal, is $450 million-$550 million. This includes partial recognition of the $400 million upfront income from Takeda. We continue to target a high double-digit growth from our product sales. Moving on to the next page. Page 10. You all can see, we have over $630 million cash and short-term investment, and $114 million of unutilized banking facilities.
In addition, as mentioned, we expect to receive $400 million of upfront income from Takeda at closing. Overall, we have very strong cash resources. Moving on to the next page 11. A quick summary of our operating performance. Consolidated revenue up 20% to $426 million, of which, as I mentioned earlier, our oncology revenue up 37% to $164 million. Our investment in R&D increased by 29% to $387 million, mainly focused on over 15 registration enabling trials. Also, our joint venture increased their net income contribution by 11% to $50 million. Overall, the net loss to the company increased to $361 million. A point to note is that we had a one-time gain from prior year on divestment of one of our equity investees. I will now pass on to Karen.
Karen Atkin (COO)
Thank you, Johnny. Let's go to slide 12, please. Our partnership strategy is focused on three main activities. We have a very successful long-standing partnership with AstraZeneca for savolitinib, launched in all territories worldwide. For fruquintinib, we've already launched in China in partnership with Eli Lilly, and we recently decided to revise our commercial partnership strategy to plan to launch with a single global commercial partner outside of China. We've moved quickly on that strategy to announce the licensing agreement in January with Takeda for the global development, manufacturing and commercialization of fruquintinib in all territories apart from China, Hong Kong and Macau, where we will lead the commercialization. The decision to include the U.S. alongside other territories in scope for partnerships has meant we attracted a great deal of interest, and we were delighted to have selected such a strong partner as Takeda.
Going forward, we will also seek partners for some of our earlier stage assets, as you can see here, for all territories outside of China. For the China partnerships, we're also actively seeking additional late-stage products to in-license with our 100+ oncology commercial team. Can we go to slide 13, please? Yeah. The partnership we have with AstraZeneca for savolitinib was announced back in 2011 at a very early stage of development, but has grown from strength to strength with 7 registration studies ongoing. AstraZeneca is leading the clinical development outside of China.
The nearest term NDA submission opportunity is in late 2024 in the U.S., subject to a positive readout for the SAVANNAH study in non-small cell lung cancer and alignment with the FDA on the potential for accelerated approval. Our newest global partnership, you can see, on the top line in yellow, was announced on the 23rd of January for fruquintinib with Takeda and is progressing very well. We chose Takeda for their strong oncology commercial capabilities in the U.S. in particular, but also in Japan and Europe. They showed us how they would leverage their recent U.S. product launch experiences together with the knowledge of the CRC space they have in Japan to maximize the potential of fruquintinib for patients with refractory colorectal cancer, but also develop beyond CRC. Takeda are hungry for a major oncology product such as fruquintinib, and they impressed us with their launch plans.
This is a really high-profile landmark deal for us, subject to regulatory clearances, we will receive an upfront payment of $400 million, together with the potential to receive up to an additional $730 million in development and sales-related milestones. We've already started the rolling U.S. FDA submission, and we expect to complete it in a few months time. The FDA typically provides target review completion dates on acceptance of an NDA filing. Subject to U.S. approval, therefore have the potential to start to book royalties from this partnership from 2024 onwards. I now pass on to Mike for the R&D update.
Michael Shi (EVP, Head of R&D and Chief Medical Officer)
Thank you, Karen. Slide 14, please. Yeah, this slide shows the HUTCHMED's deep and broad pipeline advancing the clinic, and these compounds cover broad spectrum of hematology oncology indication. The first three products, as Karen mentioned, right, we are already in the market and two are within global partnership. Our next wave of compound has really entered a clinic for the registration trial. Two compounds are amdizalisib and sovleplenib, both have a breakthrough designation stage, and we are finishing the clinical enrollment. EZH2 inhibitor with that is our first in-license product, we're working with a partner, Ipsen. We have the global China rights, it's currently in the bridging study. We're also running the global China part of the study in the second line, follicular lymphoma.
The third wave compound is also advancing very rapidly. The FGFR inhibitor, 306 IDH1/2 inhibitor, our 3rd-generation CDK inhibitor 760, and CSF1R inhibitor 653 are all potentially entering pivotal trial stage this year. Next slide. Colorectal cancer is the third most common cancer worldwide, with over 900,000 deaths, and the third five-year survival rate is very poor. Most of the recent advances in CRC are focused on the small patient population with actionable mutations such as BRAF, MSI-High or HER2. The majority of the metastatic colorectal cancer patients, the treatment options are very limited. Essentially, they actually remain the same, almost the same about a decade ago with regorafenib and ELUNATE that approve the third-line therapy. There's a still very high unmet need in the late-stage metastatic cancer patient.
Next slide. Our first global MRCT, FRESCO-2 trials was presented at ESMO last year and demonstrate the fruquintinib has a statistically significant and clinical and meaningful increase of the primary endpoint overall survival and key secondary endpoint PFS compared with the placebo in late line CRC patients. The magnitude of the improvement, all clinical endpoints, OS, PFS, and DCR are clearly standing out for fruquintinib in comparison with existing therapy. Also because the fruquintinib is a very specific MEK inhibitor 1, 2, 3, it has less off-target toxicity and is well-tolerated with a safety profile consistent with previous therapy. Slide 17. The FRESCO trial was started after the consultation with the U.S., E.U, and Japan health authority and conducted across the globe. The results are highly consistent with the China pivotal trial, FRESCO, and also the U.S. bridging study.
We also believe this is a truly practice-changing. As the FDA previously granted a Fast Track designation for third line plus CRC, HUTCHMED has already started rolling submission and we are planning to complete this submission, U.S. NDA first half the year and also follow with the EU and Japan completion this year. Next slide. In November 2022, we announced the top line results of another fruquintinib phase three trial in the second line gastric cancer in China. The gastric cancer is the fifth most common diagnosis cancer worldwide, with over one million new cases globally. China alone account for 40%, 44% global cases, also is very high prevalent in the Asian countries. FRUTIGA is a double blind second line phase three trial, placebo-controlled trial in combination with paclitaxel.
The trial met its, the one of the dual primary endpoints with a significant improvement and clinical meaningful PFS improvement. Also it have other secondary endpoints with OR DCR have a statistically improvement and also will include the durable response. The safety profile fruquintinib in the FRUTIGA trial is also very consistent with the previously reported study. Based on that, HUTCHMED is preparing to file the supplementary NDA with the NMPA the first half of this year. Next slide. This slide shows the seven registration trial of our MET inhibitor, savolitinib, we know are currently enrolling. Three led by AstraZeneca globally and four led by HUTCHMED. With the robust, the SAVANNAH trial reported at the WCLC last year, the AstraZeneca needed a new cohort of the SAVANNAH to really aiming for evaluate the potential accelerated approval.
Savolitinib also been granted a Fast Track designation by FDA for the combination treatment of TAGRISSO in TAGRISSO-refractory non-small cell lung cancer patient. Also reinforced the first, the SAFFRON trial is the second and third line TAGRISSO plus savolitinib in the refractory, TAGRISSO-refractory non-small cell lung cancer with MET alteration. Also we reached a milestone payment for AstraZeneca last year. The other registration trial is SAMETA in the papillary renal cell carcinoma led by AZ, also the other trial, the SACHI, SANOVO in lung cancer are all continually enrolling led by Hodgkin's lymphoma. Also we are entering the registration phase for the gastric cancer with MET amplification for savolitinib. Next slide. We are very excited about the second wave of compounds that are advancing the late stage development.
Sovleplenib is a highly differentiated Syk inhibitor with the Breakthrough designation for ITP in China. ITP is the acquired autoimmune disorder characterized by low platelet count resulting from platelet destruction and impaired production. There are about estimated two to five per 100,000 persons in the general population. We are very encouraged by our phase I/II result demonstrate the robust ORR of 80% and the durable response rate 40% in relapsed refractory primary ITP patients. This is really on par with the current existing widely used ITP second line treatment like TPO-RA, and also the same response rate showed in the patients who were refractory or pretreated with TPO. It's a very robust product.
We are very excited, we completed enrollment for the phase three registration trial, ESLIM-01, in December last year, and we pre-prepare for the potential readout and NDA filing in China later this year. Slide 21. The other compound is amdizalisib, a differentiated PI3Kδ inhibitor, is currently ongoing in two single-arm phase two registration study in China. Third-line follicular lymphoma and second-line marginal zone lymphoma. The data we published before show the compound is not only promising with efficacy but also has a favorable safety profile when compared with the same class of a compound, as highlighted in the low incidence of AE of interest such as diarrhea and liver enzyme increase, as well as low discontinuation rate.
Of course, this needs to be further characterized in the larger patient population, and we are excited to report that we have completed enrollment for this pivotal trial in third-line follicular lymphoma, we reported yesterday, and the clinical readout and potential NDA filing will be later this year. Next slide. Tazmetostat is our in-line EZH2 inhibitor from Epizyme. Currently it's in a bridging study we're anticipating to file next year. Also Epizyme with Ipsen reported at ASH, its very robust tazmetostat in combination with R-squared in the second-line follicular lymphoma. We are part of the global SYMPHONY-1 trial to really testing in the second-line setting. We are also exploring tazmetostat in combination with our PI3Kδ inhibitor and develop that in the relapsed refractory lymphoma patient. Next slide.
Our clinical development products continue to grow. In addition to the positive readout for fruquintinib trial in the CRC and gastric cancer, this slide show the 15 ongoing plus ongoing registration trial in the 6 leading compounds, including the lifecycle indication of market product and of the late-stage asset, and with the anticipated NDA following timeline in the next few years. Slide 24. I'm highlighting the deliverables for 2023 for R&D. On the regulatory activity, we'll complete the registration filing for fruquintinib in all major global markets, U.S., E.U., and Japan for third line CRC. We'll initiate the supplementary NDA filing in the first half for the fruquintinib in the second line gastric cancer in China.
We'll also initiate the PMDA consultation for savolitinib in the midyear based on the Japan bridging study and the SANOVO trial, registration trial in China. Importantly, we'll anticipate the data readout and potential NDA filing in China for sovleplenib in second line ITP and amdizalisib in third line follicular lymphoma pivotal trial both slated for later part of this year. On the development side, HUTCHMED, our partner, continue to complete enrollment for multiple registration trial for savolitinib non-small cell lung cancer. will complete multiple trial like the fruquintinib plus sintilimab in gastric cancer and RCC. On the team side, we also advance our pipeline with amdizalisib in NHL and tazemetostat bridging study. we also have a good readout for our savolitinib monotherapy in MET-amplified patients and also sovleplenib in the AIHA advancing to phase three trial.
Recap the R&D progress, HUTCHMED has a deep onboard portfolio and multiple near-term catalysts for this year. Our R&D team will remain laser focused on the execution of our labeled development product. With that, I'll turn to Dr. Weiguo Su, our CEO and the CSO.
Weiguo Su (CEO and Chief Scientific Officer)
Okay, thanks, Mike. Just to sum it up, HUTCHMED took the necessary steps in 2022, focused on getting to profitability and becoming self-sustaining. Now, we have a lot to execute and deliver on our pipeline. We believe these launches of new products, next slide, Mark. You know, as Mike just showed you, we have many registration trials ongoing, leading to NDA submissions, both in China and globally in the next few years. Clearly, we have a lot to execute and deliver on our pipeline. We believe these launches of new products and new indications will position us to continue to grow our China commercial. We also expect to start receiving royalties from our ex-China sales of our partner products, savolitinib and fruquintinib.
You know, we believe these changes will not only help us get through tough market conditions, but also ensure that we, you know, we emerge a stronger company. With that, I would like to thank you all for your attention, and the management team is available to take questions.
Operator (participant)
Thank you. We will now begin the question and answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Once again, to star one one for question. Our first question comes from the line of Kelly Xu from Jefferies. Please ask your question, Kelly.
Kelly Xu (Senior Biotech Analyst)
Thank you for taking my questions, and congrats on a great year. Regarding HUTCHMED's commercial infrastructure for oncology franchise, have you achieved the optimal targets in terms of the number of covered hospitals and healthcare providers? Where would be your other focused area in 2023 to grow sales further? Could you talk about when do you expect the company to become profitable? Thank you.
Weiguo Su (CEO and Chief Scientific Officer)
Okay. Thanks, Kelly, for the questions. Just very quickly on commercial structure. I'll probably give a quick answer and see if Chenghong has anything else to add. Basically, we are around 900 FTEs supporting fruquintinib and surufatinib, and we should be able to support even more indications for these two products. With regard to further build out, I think, you know, given that our next wave of products, sovleplenib, amdizalisib, and tazemetostat, all in hematologic indications. We actually plan to build up a specialty team to support our next wave of compounds in hem indications. With regard to specific timeline for profitability, we are targeting 2025.
Obviously, you know, you know, we need to continue to grow our China commercial to increase revenues. Also, I think the timing of our ex-China products to start to contribute the income, I think that matters as well, including savolitinib and fruquintinib, but we believe both will start to, you know, contribute royalties to us late 2024 and certainly 2025. Again, you know, our target is 2025. Maybe, Cheng Hong or Johnny, if you have anything else to add with regard to commercial infrastructure in China, are, you know, are we covering all the hospitals now and anything else where we need to beef up?
Hong Chen (Chief Commercial Officer)
Thank you, Weiguo. I think, for now, our commercial infrastructure is optimal for current. Products, launch the products as well as indications. We continue to improve our efficacy for this team and to catch up the market opportunities. Definitely we will increase with more opportunity coming or more products coming. It's on the way to build up the great team to achieve the more targets.
Kelly Xu (Senior Biotech Analyst)
Thank you.
Weiguo Su (CEO and Chief Scientific Officer)
Yeah. Thank you, Hong.
Hong Chen (Chief Commercial Officer)
Yeah.
Operator (participant)
Great. Thank you. Our next question comes from the line of Louise Chen from Cantor Fitzgerald. Please ask your question, Louise.
Louise Chen (Managing Director)
Okay, thank you, congratulations on all the progress this quarter. I wanted to ask you a few questions. First one, just to follow up on the first question that Kelly had asked you. Are you expecting profitability for the full year 2025? Also wanted to ask you have a lot going on this year, very busy. Wanted to ask you know, what are your key, you know, most important readouts or approvals that you're looking forward to this year? Last question is how are you thinking about operating expenses year-over-year? Thank you.
Weiguo Su (CEO and Chief Scientific Officer)
Okay, thank you for the, for these questions, Louis. I'll ask Johnny to provide some more details on these questions.
Johnny Cheng (CFO)
First, regarding profitability, 2025 is consistent with what we have communicated to the market for the last couple of years. That remains our target to be able to break even and turn around to become profitable in 2025. As I said, this is our target, we haven't changed our target for the last couple of years. In terms of the OpEx year-over-year, I think for 2023, you can expect the level for OpEx operating expenses will be similar, by and large, overall will be similar to 2022.
The reason being we are continuing to grow our China commercial. At the same time, we have synergy and a cost reduction in U.S., as we are not building our U.S. commercial team, due to this partnership with Takeda. That is the overall in terms of profitability and OpEx.
Weiguo Su (CEO and Chief Scientific Officer)
Okay. Thanks, Johnny.
Johnny Cheng (CFO)
Thank you.
Operator (participant)
Here. Our next question comes from the line of Alec Stranahan from Bank of America. Please ask your question, Alec.
Alec Stranahan (VP of Equity Research)
Hey, guys. Thanks for taking our questions. Just a few from us. First, what's left for the rolling submission for fruquintinib? Just remind us whether you guys are handling the submission yourself or if Takeda or a combination of both are doing the submission. Second, on amdizalisib, the selective lymphoma readout I think is second half of this year. Is this just due from the pace of the enrollment or when the study started, or is it a prioritized indication for you guys at this point? Would you file in follicular lymphoma next year if the data looks good, or would you wait for, say, MZL to read out as well?
Just lastly, on the business update, obviously some trade-offs with giving up economics to partners, while maximizing the revenue potential and same thing on focusing on the late-stage pipeline. If you could just, you know, help us walk through the thought process a little bit more, that'd be helpful. Thanks.
Weiguo Su (CEO and Chief Scientific Officer)
Okay. Thanks, Alex, for the questions. Let me ask Mike to take your questions first. Mike?
Michael Shi (EVP, Head of R&D and Chief Medical Officer)
Yeah. Just to answer your question for fruquintinib submission, we already started the rolling submission because we have the Fast Track designation. You know, as you know, the Takeda deal has not yet been finalized, we already put hit on four cylinders, right, to do the submission. The NDA submission, the E.U. submission, and Japan submission, we already get started. We also plan a lot of things, for example, the E.U. market assesses, all these program has been ongoing. Of course, you know, when the final transaction and happen, we'll certainly discuss with our partner about how we can really accelerate the registration process. For example, you know, Takeda has a very strong presence in Japan.
We do think, right, with their expertise in all the markets, which we're gonna accelerate the whole registration process without slowing it down. You know, to answer the question for amdizalisib is that we thought, we just finished phase II follicular lymphoma enrollment. We're anticipating a readout. You know, again, I remind you, this is the third line follicular lymphoma. We previously have agreement with the CDE about the trial design. If the trial is, you know, have a, you know, a positive readout, we're gonna submit later this year for the CDE, for the approval. You know, I also mentioned, right, for amdizalisib, we are still, we also have other combination trial going on.
For the base of the submission, it will be all the data what we have, right? For the particular for lymphoma and also for all the patient data what we have to support NDA package. The, you know, for the development prioritization, what we really focus on the late stage product, how we can really, you know, in the near term, drive the value for all these late stage products and, you know, towards what Dr. Su mentioned, towards a break-even point, right? In by 2025. We have multiple products in the development. We hope our registration and salary, the development will support our path to, for the sustain the profitability.
Weiguo Su (CEO and Chief Scientific Officer)
Okay. Thanks, Mike. Maybe just add a couple, a couple of points, Alex, regarding amdizalisib filing strategy. Certainly FL will be first. Marginal zone will be actually a second, NDA will be sometime likely next year or late next year. These will be filed separately instead of together. Regarding prioritization, portfolio prioritization, we will plan an R&D day sometime this year to go over in detail, you know, the prioritization process and the priorities going forward with various trials in China and outside. Thank you.
Alec Stranahan (VP of Equity Research)
Thanks.
Operator (participant)
Thank you. Our next question comes from the line of Yang Huang from Credit Suisse. Please ask your question, Yang.
Yang Huang (Director and Senior Analyst for China Healthcare Research)
Thanks. I have two questions. First one, management has just guided for this year oncology revenue will be $450 million-$550 million, but with some partial recognition of Takeda up from payment. Can you give us some more color on how you're going to kind of recognize partially, and then what's going to be kind of more color can we have in term of product sales for this year's guidance? That's my first question. Thanks.
Weiguo Su (CEO and Chief Scientific Officer)
Okay. maybe Johnny can provide some details on the $450 million-$550 million guidance, as well as, you know, our expectation for 2023 product sales. Johnny?
Johnny Cheng (CFO)
Thank you, Dr. Su. $400 million upfront income. The accounting recognitions would have to take into consideration of the performance obligation under the terms of the licensing agreement. That as the closing has yet to happen, so our auditor have to determine when it actually happens and the degree of percentage of completion in terms of our obligation. As a result, we have estimated a certain level of recognition in 2023. Part of the performance obligation we anticipate that will be completed in 2024 and per, you know, some of which may be beyond. This is although we received the full $400 million, the accounting recognition would not allow us to actually recognize it in full.
In terms of the product sales, as you have looked at, our recognitions of the product sales, HUTCHMED level is about 63% growth versus last year. We continue to project a high double digit growth in 2023. Basically, in the range of, you know, a high double digit estimation as we are not giving specific guidance to this.
You can estimate that the level of projection growth, you have to take into account, basically you have to take into account, ELUNATE already entered into the NRDL and ORPATHYS would be in the first year, starting from March that they would be able to, the patients will be able to gain access from benefits from the NRDL.
Yang Huang (Director and Senior Analyst for China Healthcare Research)
Oh, okay. I see. Thanks.
Weiguo Su (CEO and Chief Scientific Officer)
Yeah. Thanks, Johnny. I think, you know, given the opening of China, you know, COVID is impact is gonna diminish this year. You know, certainly, you know, in January we had COVID outbreak, right? Also Chinese New Year as well. We expect conditions to become far better this year compared to last year. We expect, you know, similar levels of growth this year, if not better.
Yang Huang (Director and Senior Analyst for China Healthcare Research)
Okay. Got it. Yeah, that's helpful. My second question is, the company is going to file sNDA for fruquintinib in gastric cancer. It looked like a larger indication. Can company comment on how should we compare the commercial, kind of prospect, for fruquintinib in term of gastric cancer compare with its current indication in CRC?
Weiguo Su (CEO and Chief Scientific Officer)
Sure. Maybe Mike, you can take this question.
Michael Shi (EVP, Head of R&D and Chief Medical Officer)
Yeah. For the gastric cancer, right? In the second line, you know, current approved, you know, product is really paclitaxel and also ram paclitaxel, right? You know, it was approved last year, the ram plus paclitaxel. You know, I think that for fruquintinib, but it's really, you know, you know, started the trial when the paclitaxel was the, you know, standard of care. The trial was a positive and meet at one of the pure primary endpoint. It is a large indication for second-line gastric cancer. You know, as I mentioned, you know, 44% the patient globally, in China, also is representing is a huge opportunity in terms of patient volume. You know, for the commercial side, I think the company will plan accordingly, right? For the, you know, for the NDA submission and, the follow-on, commercial part. Yeah.
Weiguo Su (CEO and Chief Scientific Officer)
You know, briefly, second line GC patient population size should almost double that of third line CRC or later line CRC. You know, less competitive treatments available also, other than paclitaxel is still standard of care. And as Mike mentioned, paclitaxel plus ramucirumab was approved last year, but it is highly priced and it is far from standard of care in China. We view it a great opportunity here.
Yang Huang (Director and Senior Analyst for China Healthcare Research)
Okay. I see. Just a quick follow-up. Have we got any feedback or had any meeting with the CDE in terms of gastric cancer finding?
Weiguo Su (CEO and Chief Scientific Officer)
No. The answer is no. We are actually focusing on preparation of CSR and, you know, just to get ready for submission.
Yang Huang (Director and Senior Analyst for China Healthcare Research)
Okay. Got it. Thanks.
Operator (participant)
All right. Thank you. Our next question comes from the line of Mike Mitchell from Panmure Gordon. Please ask your question, Mike.
Mike Mitchell (Healthcare Research Analyst)
Thanks. Thanks everyone, thanks for taking my questions. I just wanted to know, from your perspective, what the likely steps are regarding the SEC and the U.S. accounting oversight issue. I know you've put a comment in today's statement, if you have any more on that would be great. Just a second question actually just to follow up to the previous Q&A. I just wondered if you could return to the Takeda deal, just on the point of partial recognition of the upfront. Would there be material obligations still to be completed in 2024 relating to the upfront payment? I'm just trying to understand exactly what those would be. Any more color on that would be helpful. Thanks.
Weiguo Su (CEO and Chief Scientific Officer)
Okay. Thanks, Mike. Maybe Johnny?
Johnny Cheng (CFO)
Yes.
Weiguo Su (CEO and Chief Scientific Officer)
Um.
Johnny Cheng (CFO)
Thank you, Dr. Su. HFCAA from the PCAOB, we heard it from December last year that they have come to this side of the world and basically they have reviewed, and they were able to gain access. This is what we have known, and we do not foresee issues in terms of the U.S. authorities gaining access to the audit working paper of the auditors of the company that they have selected. This is as far as we have known.
Our resources and our auditors have not able to give us more color on this, but we believe that this issue, based on the announcement by the PCAOB last year, actually, we have no further negative news regarding this issue. In terms of the revenue recognitions, in terms of this performance obligation, basically, by and large, I think 2023, 2024 is all related to the regulatory submission, as well as some of the approval step that requires us to follow up. Some of which I think may made it to 2023.
Also of course some items related to technical transfer, for example, they are all the consideration that the auditor would assess. As I said, the closing timing hasn't occurred yet, we are not in a position to actually comment in great detail about the recognition method and the extent that we can recognize for this year.
Mike Mitchell (Healthcare Research Analyst)
Okay.
Johnny Cheng (CFO)
I hope that helps answer your... Yeah. Thank you.
Mike Mitchell (Healthcare Research Analyst)
Thanks, Johnny. Bye now. Bye.
Operator (participant)
Thank you. Our next question comes from the line of Roderick Ma from Goldman Sachs. Please ask your question, Roderick.
Roderick Ma (Analyst)
Hi, this is Roderick for Ziyi Che, just two questions from us. Since you already started the rolling submission for fruquintinib in the U.S., have you heard any FDA feedback on the submission? The 2nd question is for the NRDL inclusion of savolitinib. Is there any like details on the price, maybe will be provided at some point? Thanks.
Weiguo Su (CEO and Chief Scientific Officer)
Okay, thanks for the question. For the U.S. NDA for fruquintinib, I'll ask Mike to provide some feedback.
Michael Shi (EVP, Head of R&D and Chief Medical Officer)
Yeah. We are, you know, ongoing smoothly and we already have the, you know, first module submitted, and as what I said, right, this all went through, you know, we'll continue to targeting to, you know, finish those the other modules, you know, the first half of this year. So far it's been going on smoothly.
Weiguo Su (CEO and Chief Scientific Officer)
Okay. Yeah, typically you don't hear anything until you finish or complete the filing. With regard to savo NRDL, we agreed with AstraZeneca not to disclose the price after negotiation. However, it will become available tomorrow, I assume, March first. You probably will be able to find out the NRDL price very soon.
Roderick Ma (Analyst)
Got it. Thank you.
Operator (participant)
Here. Our next question comes from the line of Matthew Yan from CLSA. Please ask your question, Matthew.
Matthew Yan (Senior Equity Analyst)
Hi. Thanks for taking my questions, congratulate on the results. I got two questions. First is regarding the supplementary filing for second-line gastric cancer for fruquintinib. I wonder what's your view regarding particular result and method primary endpoint of PFS but not overall survival. Do you think the CDE is very likely to agree that PFS will be enough to support this filing this year? My second question is regarding the PI3K and the [foreign language]. I wonder, can you elaborate more on how it differentiates in the China PI3K market, especially versus the demo leading peers approved and about to be approved from SPG Hungary or Innovent? Yeah, those are my two questions. Thanks.
Weiguo Su (CEO and Chief Scientific Officer)
Okay. Yeah. Thanks for the questions, and I'll ask Mike again to provide his view on second line GC for fruquintinib and also amdizalisib differentiation. Mike?
Michael Shi (EVP, Head of R&D and Chief Medical Officer)
For the second line gastric cancer, you know, for the, for the lot of, you know, trials, if you can see particularly done in Asia, right? With the subsequent treatment is very high compared with the global. So far if you look at all the Asian trials, including the subset of patients in the RAINBOW trial, right, the global trial, is all, you know, you know, even for ramucirumab plus paclitaxel and the RAINBOW-Asia trial, as you can see, is the PFS significant and the OS is not significant. This is particularly related to the treatment paradigm in Asia. We think this is, you know, as what we have this design, right? We have a lot of the factors that can look into it.
I think this is really reflecting the practice in Asia and in China. From what we have, we do think this is the PFS as a primary endpoint is one of the fewer endpoint. We have built-in statistical analysis to really adjust the offers for this statistical design, and it was the trial design was agreeable with CDE. We do intend to using these trial data to submit for the second line GC and pretty much benchmarking for the RAINBOW-Asia, if you look at that data, right? It's approved in China, like what I mentioned, last year. Go back to amdizalisib, right?
The data what we reported is really if you look at the comparison with the competitor, the safety profile is really, quite, you know, not only the efficacy is quite robust, but also the safety profile. Some of the, you know, area of interest like diarrhea, liver enzyme increase, we do see amdizalisib, it looks very favorable. You know, in the treatment landscape again, right, the single arm, you know, registration trial, phase II trial was discussed and agreed upon with the CDE design. The, you know, at, you know, at the moment, right, we also received the Breakthrough Therapy in China, right?
We do base on the safety profile and the robust clinical efficacy, we are intending, you know, of course, if you look at the CDE discussion recently, we are also, you know, preparing for conditional approval and a potentially confirmatory trial. At this stage, right, you know, based on the timeframe what we have, we do think this is a, you know, it's a good opportunity to file based on the single arm followed with the confirmatory trial and to confirm this study. Yeah.
Weiguo Su (CEO and Chief Scientific Officer)
Thanks, Mike.
Operator (participant)
Okay, thank you. I'm showing no further questions. I'll now turn the conference back to Mark for closing remarks.
Mark Lee (SVP of Corporate Management and Communications)
Okay. Thanks, Amber. Weiguo, any comments or you can close, I think.
Weiguo Su (CEO and Chief Scientific Officer)
Well, you know, again, thank you everyone for attending the call. 2022, we made really significant strategic changes. Now we believe we are well-positioned to execute on our plan towards profitability. We have a lot to deliver in our pipeline, including our three approved products with additional life cycle management indications, as well as our second wave of products now reaching NDA stage, all in parallel with our third wave of compounds entering into registration studies later this year. We are really positioned to grow actually to accelerate our growth in China and outside China.
This will actually see us all the way through 2025 and even beyond, you know, 2020, 2026, 2027 with all these, third wave of compounds lined up for registration studies and potential NDA submissions in China. We're really confident that we will be able to deliver on our pipeline and also our China commercial team led by Hong Chen is really high performing, very. You know, worked through 2022 with all the difficulties and, you know, they are, again, also positioned to grow very quickly, very rapidly with new launches of new indications and also new products in the next few years.
You know, all in all, we are, you know, we got through 2022, very difficult year, but now, we believe we are on our way to profitability and, you know, we are a much stronger company today. Thank you all for your attention. If you have any further questions, reach out to us, to Mark's team or to myself. Thank you.
Operator (participant)
Right. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.