On 26 October, HUTCHMED presented the results of two Phase III studies for savolitinib at the 2026 ESMO Congress: the overseas SAFFRON study was selected for the Presidential Symposium, while the domestic SANOVO study was selected for a LBA Proffered Paper oral presentation. We think that savolitinib is about to enter its overseas monetization period, while expanding into front-line patient populations domestically: 1) SAFFRON is the first Phase III trial to show OS benefit in MET-driven, osimertinib-resistant patients, with an overseas NDA under review; savolitinib is likely to become the company’s second FDA-approved product; 2) SANOVO demonstrated dual superiority in first-line PFS/OS alongside outstanding safety; domestic NDA submission is expected within 2026, and we are bullish on its front-line sales potential. On the early-stage pipeline front, the value of the ATTC platform is set to be unlocked. The global Phase I trial for A830 was initiated in September, the licensing deal with GSK has closed, and global clinical trials for A251 and A580 are progressing smoothly. Maintain BUY.
SAFFRON: Significant benefits in both PFS and OS
SAFFRON results were presented during the Presidential Symposium. Among 338 patients with EGFRm NSCLC accompanied by MET overexpression/ amplification who progressed after osimertinib treatment, savolitinib + osimertinib significantly improved survival compared with platinum-based doublet chemotherapy: OS 17.8 vs 12.9 months (HR 0.68), PFS 7.6 vs 5.4 months (HR 0.55), with consistent benefits across all pre-specified subgroups. Meanwhile, safety was manageable, with ≥Grade 3 TEAEs at 64% vs 63%. AstraZeneca submitted a US NDA for this combination therapy at the end of September, with approval expected in 2027. We are optimistic about its global potential: 1) The MET overexpression/amplification population accounts for c. 1/3 of 3rd-generation TKI-resistant NSCLC patients, and SAFFRON is the first Phase III study to demonstrate a significant OS benefit in this group; 2) MET aberration is a poor prognostic factor – in MARIPOSA-2, amivantamab + chemotherapy achieved a PFS of only 4.4 months in the MET-amplified subgroup, markedly lower than the 8.2 months in the overall population, highlighting an urgent need for targeted regimens; 3) Savolitinib + osimertinib is an all-oral, chemo-free regimen offering administration convenience and good compliance.
Earnings forecasts and valuation
In view of smooth pipeline progress, we maintain our 2026/2027/2028 attributable net profit forecasts of USD59/69/112mn, with EPS of USD0.07/0.08/0.13. Maintaining WACC = 11.3%, perpetual growth rate = 2.0%, and 1 ADR = 5.1 ordinary shares, we keep our DCF-based H-share/US target prices unchanged at HKD33.49/USD21.48.
Risks: clinical trial uncertainties; slow progress in commercialization and overseas clinical advancement.