Running a $5 billion biotechnology company remotely may be a daunting prospect at the simplest of times. Doing so during an epidemic is even more unnerving.
Yet that's exactly what Christian Hogg has had to grapple with since February, when the chief executive of Hutchison China MediTech (Chi-Med) found himself stranded in Hong Kong and unable to visit China , where the company’s commercial operations are based.
Biotech companies in China were among the primary to experience disruptions to their businesses, as manufacturing, logistics and transport were all impacted by the outbreak.
“Factories closed and clinical trials were affected,” Hogg says, recounting the first days of lockdown. “After working with local authorities, we put social distancing and protective equipment in situ and reopened our factories in late February.”
By March, clinical trials with patients were back to 70% and by April, back to 95%, because the company conducted clinical trials with patients via videoconferencing or phone.
The speed at which Chi-Med, was ready to resume operations speaks to Hogg’s intimate knowledge of the corporate . The 55-year-old joined as CEO in 2000 from Procter & Gamble, after he was approached by CK Hutchison, the conglomerate controlled by Chinese billionaire Li Ka-shing , for the role.
“At the time, there was no biotech industry in China in the least , only state-owned enterprises manufacturing generic drugs,” Hogg recalls. “But between 2005 and 2015 a huge change happened as Chinese emerging companies began to build out the infrastructure, and research and development and investors began to pile in.”
“The overwhelming majority of biotech companies in China today aren't necessarily creating innovation themselves. they're acquiring innovations from the West and licensing drugs from Big Pharma and biotech,” Hogg adds.
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Since 2006, Chi-Med has been dual-listed on London’s junior stock exchange Aim and Nasdaq. Its time as a listed company hasn’t always been a smooth ride.
In October 2019, the company’s Nasdaq-listed shares dropped 6% when CK Hutchison sold 1.3% of the company’s shares, taking its holding to below 50%, after the Hong Kong company said it wanted to deconsolidate Chi-Med’s results from its own.
Chi-Med’s U.S.-listed shares are up 35.5% within the year so far , consistent with FactSet.
Such hitches haven’t stopped Hogg from pursuing his company’s steadfast mission to become a worldwide oncology business, and revolutionize cancer treatment by creating a portfolio of medicine aimed toward preventing the disease from multiple angles through combining different therapies.
“At the top of the day, creating a antineoplastic isn’t very difficult—you can get an ingenious chemist to impregnate a molecule,” Hogg explains.
“What is difficult is that within a cell you've got 500 proteins and enzymes at work and therefore the drug might hit the target you're going for, but it'll also hit tons of other proteins and enzymes, and what we’ve done over 15 years is concentrated on creating laser like therapies that hit the proper target while reducing toxicity.”
That discipline and focus has began to pay off. thus far this year, Chi-Med has been granted three U.S. Food and Drug Administration means Designations, for fruquintinib in metastatic colorectal cancer, and surufatinib for 2 sorts of advanced neuroendocrine tumors. The submission of a replacement Drug Application for surufatinib within the U.S. is additionally planned for later this year.
Two of the company’s cancer drugs have also submitted new drug applications in China, with the aim of launching them at the top of 2020 and early 2021.
“We are encouraged because the company continues to execute on its transition to become an independent, global oncology company, and reiterate our Buy rating,” Goldman Sachs analysts wrote during a recent research note.
Once Chi Med has proven commercialization success behind the launch of its first three cancer drugs, Hogg says the corporate will consider an initial public offering in Hong Kong , which could come as soon as next year.
The company postponed plans for an IPO in June 2019 over market uncertainties amid the social protests within the city. At the time, it had hoped to boost up to $500 million from the listing.
“It makes an excellent deal of sense to list in Hong Kong , but it’s about picking the proper time,” Hogg says.
Meanwhile, General Atlantic, the U.S. buyout group, has plugged the gap for fresh equity, investing $100 million in Chi-Med in June, bringing the company’s total cash position to $400 million.
Hogg says the corporate is burning through around $150 million of money a year to develop its pipeline of medicine and move clinical trials forward.
Chinese government policy reforms—aimed at creating a world-class domestic pharmaceutical industry, and which include reimbursing for brand spanking new products and a rise within the pace of latest drug approvals-—have also helped Chi-Med’s growth.
“It is critical to urge on the reimbursement list to form the drugs affordable,” Hogg says, pertaining to the list of medicines covered by basic medical insurance schemes.
On Oct. 1, Chi-Med will assume all medical detailing and marketing activities for elunate (fruquintinib capsules) from U.S. drugmaker Eli Lilly across all of China. To handle that, it'll boost its commercial team from quite 320 to 400, with plans to feature another 100 by the top of 2021.
The move is aimed toward making Chi-Med a totally integrated oncology company in China. Hogg’s ambitions go even further, because the company plans to create out its commercial capacity within the U.S. over subsequent 18 months, creating a team of between 60 to 70 people on the bottom .
“We have a $5 billion market cap now. subsequent stage is for us to urge to $20 billion.”