CICC: maintain HUTCHMED (00013) target price of HK $30, rating "outperform industry"

Zhongjin released a research report stating that it maintains HUTCHMED's (00013) 2025/2026 net profit forecast of $360 million/ $100 million. Based on the DCF model, the bank maintains an outperform rating and a target price of HK$30, with an upside potential of 20.5% from the current stock price. On June 30, the company announced that the combination therapy of savolitinib and osimertinib received approval from the National Medical Products Administration for the treatment of locally advanced or metastatic non-squamous non-small cell lung cancer patients with EGFR mutation and MET amplification after EGFR TKI treatment progression. This approval will also trigger a $11 million milestone payment from AstraZeneca. Key points from Zhongjin: This indication is currently the largest approved indication for savolitinib. According to the company's announcement: approximately 10-25% of non-small cell lung cancer patients in the US and Europe have EGFR mutations, while this percentage is as high as 30-40% among Asian patients. MET amplification or overexpression is one of the major mechanisms of acquired resistance to EGFR TKI treatment in patients with metastatic non-small cell lung cancer with EGFR mutations. Among patients with disease progression after third-generation EGFR TKI treatment, approximately 15-50% have MET abnormalities. This therapy is the only all-oral combination therapy choice approved domestically for patients of this kind. This indication approval is based on the phase III SACHI study, and data readouts from the American Society of Clinical Oncology (ASCO) 2025 annual meeting show a significant progression-free survival (PFS) benefit compared to platinum-based chemotherapy. According to the company's announcement, in the SACHI intent-to-treat population, the median PFS assessed by investigators/independent review committee for the savolitinib + osimertinib combination therapy was 8.2 months and 7.2 months, compared to 4.5 months and 4.2 months for the chemotherapy group, reducing the risk of disease progression by 66% and 60% respectively compared to the chemotherapy group, and showing good safety features. The global phase III clinical trial SAFFRON is ongoing, with a focus on overseas regulatory registration progress. According to the company's announcement, this combination therapy received fast track designation from the US FDA in 2023. Partner AstraZeneca is conducting the SAFFRON global phase III clinical trial to evaluate the efficacy of this combination therapy compared to platinum-containing doublet chemotherapy in osimertinib-treated advanced MET-overexpressed and/or amplified non-small cell lung cancer to support potential regulatory applications for savolitinib in the US and other regions globally. The bank recommends monitoring SAFFRON data readout and overseas application progress in 2026. Risk factors: Research and development failure, slower than expected regulatory progress, worsening competitive landscape.