Morgan Stanley Downgrades Hutchison China MediTech Ltd. (HCM) to Underweight

Morgan Stanley analyst Jack Lin downgraded Hutchison China MediTech Ltd. (NASDAQ: HCM) from Equalweight to Underweight with a price target of $13.75 (from $18.00).

The analyst comments: "1H25 saw domestic in-market sales decline c.37% YoY, contrasting with healthy overseas ramp-up of FRUZAQLA (+25%). Management attributed the decline to competitive pressures and product life cycle impacts. FY25 oncology/immunology sales guidance was revised down to US$270mn-350mn from US$350mn-450mn. Domestic commercial growth outlook has been reset following following challenges resulting from recent restructuring of commercial operations and downward revisions of domestic sales for fruquintinib, savolitinib and surufatinib. We anticipate limited growth from existing assets, while the regulatory timeline for the Syk inhibitor for treatment of ITP remains uncertain. Commercial momentum for FRUZAQLA appears to have also plateaued, with IQVIA monthly sales run-rate stabilizing since May. We anticipate much more moderate growth in overseas sales of FRUZAQLA going forward."

For an analyst ratings summary and ratings history on Hutchison China MediTech Ltd. click here. For more ratings news on Hutchison China MediTech Ltd. click here.

Shares of Hutchison China MediTech Ltd. closed at $17.04 yesterday.

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