One of the rules of pharma is that the more specialist a player is, the greater the margins and the longer the company in question is likely to hold onto its patent. In this way one can say that the Hutchison China Meditech share price is a play on a strategy which, once complete, should reward those backing the HCM share price.
The reason for saying this is we have already seen the Hutchison China Meditech share price bottom out this year in March just below $15. This comes two years after the launch in China of Chi-Med’s colorectal cancer treatment Elunate, which was delivered in partnership with pharma giant Eli Lily.
If anything, partnering with such an established name as Eli Lily added extra credibility to HCM shares with regard to this milestone initiative.
Investors appreciate the HCM share price Nasdaq listing
It is well known that the Nasdaq market in the US trumps all others in terms of its appreciation and valuation of all things in the tech and pharma space. Therefore as far as HCM shares Nasdaq listing we are looking at the driving force in terms of liquidity.
Recent newsflow has only helped investors in HCM shares, given that in the pandemic environment, pharma stocks of all shapes and sizes are particularly in focus.
This is whether they are COVID-19 related or not. Indeed, it has been generally reported that due to hospitals diverting resources to the pandemic, early detection of serious ailments such as cancers and heart disease have been neglected. This suggests that HCM shares move into the oncology space ahead of the pandemic was fortuitous.
HCM shares - going it alone
Partnering with Eli Lily was a coup in China a couple of years back. However, it is clearly the case that followers of the Hutchison China Meditech share price would regard the pharma group going it alone with its own blockbuster as being an advance over this.
Surufatinib is Chi-Med’s move on its own in China, and has been approved for the treatment of neuroendocrine tumours. This could be approved in China as soon as by the end of this year, while FDA approval in the US may not arrive long after.
Hutchison China Meditech share price: blockbuster lung cancer treatment?
While different cancers instil different levels of fear and mortality, it is the case that lung cancer has been the north face of the Eiger in oncology. Therefore, Savolitinib, a treatment in which Chi-Med is partnered with Astrazeneca, bears all the hallmarks of being a blockbuster in the making.
Brokers Deutsche Bank believe that when combined with Astra’s early stage lung cancer treatment Tagrisso, Savolitinib could be worth more than $1bn to the HCM share price. This compares a $4.5bn market capitalisation currently.
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HCM share price Nasdaq: daily chart technical target as high as $44
From a technical perspective it would appear that HCM shares have been in a rising trend channel since the beginning of 2020. This rising trend channel has taken in the March support for the stock just below $15, as well as the 50 day / 200 day moving average golden cross buy signal seen at the end of June.
The possibility is that while there is no weekly close back below the current floor of the channel at $28, we could be treated to a 3 - 6 months technical target at the price channel top of $44.
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