CICC has released a research report maintaining its Outperform rating on HUTCHMED (00013) while raising the price target by 9.24% to HK$26, implying a 29.48% upside from the current share price. The firm kept its 2026 and 2027 net profit attributable to shareholders forecasts largely unchanged at US$55.55 million and US$88.65 million, respectively.

The revised valuation follows the successful SAFFRON trial, which has increased the probability of success for savolitinib in overseas markets. CICC applied a discounted cash flow (DCF) model to derive the updated target price.

Recent developments

Today, HUTCHMED announced positive results from the global Phase III registration study SAFFRON, evaluating savolitinib (Orpathys) in combination with AstraZeneca's third-generation EGFR TKI osimertinib (Tagrisso). The trial achieved statistically significant and clinically meaningful improvements in both progression-free survival (PFS) and overall survival (OS) in patients with MET-driven EGFR-mutant non-small cell lung cancer (NSCLC) who had progressed on prior osimertinib treatment.

SAFFRON results bolster overseas filing prospects

The SAFFRON trial assessed savolitinib plus osimertinib versus platinum-based doublet chemotherapy in patients with EGFR-mutated, MET-overexpressed or amplified NSCLC who progressed after first-line osimertinib treatment. PFS served as the primary endpoint, with OS as a key secondary endpoint. CICC believes the positive outcomes on both endpoints provide strong support for savolitinib's regulatory submissions in core overseas markets, particularly the United States. Detailed data from the SAFFRON study will be presented at upcoming academic conferences. According to AstraZeneca's interim report, the partnership anticipates potential submission of a new drug application in the second half of 2026. CICC recommends monitoring data readouts and filing progress closely.

Clear commercial pathway and substantial market opportunity if approved

Osimertinib generated US$7.254 billion in sales in 2025. Company disclosures indicate that approximately 34% of tumors develop MET overexpression or amplification following treatment with third-generation EGFR TKIs, with such resistance mechanisms often associated with poor prognosis and a lack of safe, effective standard therapies. CICC notes that AstraZeneca's established front-line commercial infrastructure for osimertinib, combined with savolitinib as a subsequent-line combination to extend treatment duration and manage resistance, creates a clear commercialization strategy with a well-defined addressable market. The firm projects that if the indication receives approval in 2027, commercial revenue contribution could begin materializing that year.

Key risks

Potential downside risks include clinical development failures, delays in regulatory submissions, deterioration of the competitive landscape, setbacks in partnership execution, and higher-than-expected expenses.