Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2019 | |
Document and Entity Information | |
Entity Registrant Name | Hutchison China MediTech Ltd |
Entity Central Index Key | 0001648257 |
Document Type | 6-K |
Document Period End Date | Mar. 31, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 91,689 | $ 86,036 |
Short-term investments | 180,174 | 214,915 |
Accounts receivable-third parties | 42,273 | 40,176 |
Inventories | 17,612 | 12,309 |
Other current assets | 18,246 | 17,105 |
Total current assets | 349,994 | 370,541 |
Property, plant and equipment | 17,036 | 16,616 |
Right-of-use assets | 5,176 | |
Investments in equity investees | 158,927 | 138,318 |
Deferred issuance costs | 1,391 | |
Other assets | 6,773 | 6,643 |
Total assets | 539,297 | 532,118 |
Current liabilities | ||
Accounts payable | 30,764 | 25,625 |
Other payables, accruals and advance receipts | 64,160 | 56,327 |
Lease liabilities | 3,191 | |
Other current liabilities | 3,210 | 3,527 |
Total current liabilities | 101,325 | 85,479 |
Lease liabilities | 2,522 | |
Long-term bank borrowings | 26,763 | 26,739 |
Other liabilities | 8,332 | 7,645 |
Total liabilities | 138,942 | 119,863 |
Commitments and contingencies | ||
Company's shareholders' equity | ||
Ordinary shares; $0.10 par value; 750,000,000 shares authorized; 666,577,450 shares issued at December 31, 2018 and March 31, 2019 | 66,658 | 66,658 |
Additional paid-in capital | 508,550 | 505,585 |
Accumulated losses | (203,583) | (183,004) |
Accumulated other comprehensive (loss)/income | 4,144 | (243) |
Total Company's shareholders' equity | 375,769 | 388,996 |
Non-controlling interests | 24,586 | 23,259 |
Total shareholders' equity | 400,355 | 412,255 |
Total liabilities and shareholders' equity | $ 539,297 | $ 532,118 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheets | ||
Ordinary shares, par value (in US$ per share) | $ 0.10 | $ 0.10 |
Ordinary shares, authorized (in shares) | 750,000,000 | 750,000,000 |
Ordinary shares, issued (in shares) | 666,577,450 | 666,577,450 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Revenues | |||
Total revenues | $ 52,168 | $ 52,337 | |
Operating expenses | |||
Research and development expenses | (33,282) | (28,664) | |
Selling expenses | (3,785) | (4,615) | |
Administrative expenses | (10,195) | (7,023) | |
Total operating expenses | (88,218) | (77,358) | |
Loss from operations | (36,050) | (25,021) | |
Other income, net of other expenses | 1,143 | 1,151 | |
Loss before income taxes and equity in earnings of equity investees | (34,907) | (23,870) | |
Income tax expense | (1,309) | (1,565) | |
Equity in earnings of equity investees, net of tax | 17,110 | 15,030 | |
Net loss | (19,106) | (10,405) | |
Less: Net income attributable to non-controlling interests | (779) | (1,325) | |
Net loss attributable to the Company | $ (19,885) | $ (11,730) | |
Losses per share attributable to the Company-basic and diluted (US$ per share) | [1] | $ (0.03) | $ (0.02) |
Number of shares used in per share calculation-basic and diluted | 665,470,220 | 663,844,980 | |
Related parties | |||
Revenues | |||
Total revenues | $ 1,993 | $ 4,313 | |
Goods | Third parties | |||
Revenues | |||
Total revenues | 44,744 | 40,631 | |
Operating expenses | |||
Costs of goods and services | (38,316) | (34,030) | |
Goods | Related parties | |||
Revenues | |||
Total revenues | 1,866 | 1,731 | |
Operating expenses | |||
Costs of goods and services | (1,343) | (1,209) | |
Commercialization services | Third parties | |||
Revenues | |||
Total revenues | 1,739 | 2,558 | |
Operating expenses | |||
Costs of goods and services | (1,297) | (1,817) | |
Collaboration research and development services | Third parties | |||
Revenues | |||
Total revenues | 2,714 | 4,835 | |
Research and development services | Related parties | |||
Revenues | |||
Total revenues | 127 | $ 2,582 | |
Other collaboration revenue from royalties | Third parties | |||
Revenues | |||
Total revenues | $ 978 | ||
[1] | Note: The losses per share attributable to the Company—basic and diluted presented were adjusted retroactively for each of the three months ended March 31, 2018 and 2019 to take into account the share split approved by ordinary resolution at the extraordinary general meeting of the Company held on May 29, 2019, pursuant to which each ordinary share was subdivided into 10 ordinary shares. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (parenthetical) | May 29, 2019 |
Subsequent Events | |
Stock split ratio | 10 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statements of Comprehensive Loss | ||
Net loss | $ (19,106) | $ (10,405) |
Other comprehensive income | ||
Foreign currency translation gain | 4,944 | 7,699 |
Total comprehensive loss | (14,162) | (2,706) |
Less: Comprehensive income attributable to non-controlling interests | (1,336) | (2,150) |
Total comprehensive loss attributable to the Company | $ (15,498) | $ (4,856) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total Company's Shareholders' Equity | Ordinary Shares | Additional Paid-in Capital | Accumulated Losses | Accumulated Other Comprehensive Income/(Loss) | Non-controlling Interests | Total |
Balance at Dec. 31, 2017 | $ 460,653 | $ 66,447 | $ 496,960 | $ (108,184) | $ 5,430 | $ 23,230 | $ 483,883 |
Balance (in shares) at Dec. 31, 2017 | 664,470 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss)/income | (11,730) | (11,730) | 1,325 | (10,405) | |||
Issuances in relation to share option exercises | 254 | $ 29 | 225 | 254 | |||
Issuances in relation to exercise of share options (in shares) | 292 | ||||||
Share-based compensation - share options | 333 | 333 | 1 | 334 | |||
Share-based compensation - Long-term incentive plan ("LTIP") | 2,080 | 2,080 | 7 | 2,087 | |||
Share-based compensation | 2,413 | 2,413 | 8 | 2,421 | |||
LTIP-treasury shares acquired and held by Trustee | (5,451) | (5,451) | (5,451) | ||||
Transfer between reserves | 15 | (15) | |||||
Foreign currency translation adjustments | 6,874 | 6,874 | 825 | 7,699 | |||
Balance at Mar. 31, 2018 | 453,013 | $ 66,476 | 494,162 | (119,929) | 12,304 | 25,388 | 478,401 |
Balance (in shares) at Mar. 31, 2018 | 664,762 | ||||||
Balance at Dec. 31, 2017 | 460,653 | $ 66,447 | 496,960 | (108,184) | 5,430 | 23,230 | 483,883 |
Balance (in shares) at Dec. 31, 2017 | 664,470 | ||||||
Balance at Dec. 31, 2018 | 388,996 | $ 66,658 | 505,585 | (183,004) | (243) | 23,259 | 412,255 |
Balance (in shares) at Dec. 31, 2018 | 666,577 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Impact of change in accounting policy (Note 2) | (655) | (655) | (16) | (671) | |||
Adjusted balance | 388,341 | $ 66,658 | 505,585 | (183,659) | (243) | 23,243 | 411,584 |
Net (loss)/income | (19,885) | (19,885) | 779 | (19,106) | |||
Share-based compensation - share options | 2,290 | 2,290 | 5 | 2,295 | |||
Share-based compensation - Long-term incentive plan ("LTIP") | 982 | 982 | 2 | 984 | |||
Share-based compensation | 3,272 | 3,272 | 7 | 3,279 | |||
LTIP-treasury shares acquired and held by Trustee | (346) | (346) | (346) | ||||
Transfer between reserves | 39 | (39) | |||||
Foreign currency translation adjustments | 4,387 | 4,387 | 557 | 4,944 | |||
Balance at Mar. 31, 2019 | $ 375,769 | $ 66,658 | $ 508,550 | $ (203,583) | $ 4,144 | $ 24,586 | $ 400,355 |
Balance (in shares) at Mar. 31, 2019 | 666,577 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statements of Cash Flows | ||
Net cash used in operating activities | $ (28,923) | $ (30,840) |
Investing activities | ||
Purchases of property, plant and equipment | (1,361) | (1,318) |
Deposits in short-term investments | (175,174) | (244,004) |
Proceeds from short-term investments | 209,915 | 273,031 |
Net cash generated from investing activities | 33,380 | 27,709 |
Financing activities | ||
Proceeds from issuance of ordinary shares | 254 | |
Purchases of treasury shares | (346) | (5,451) |
Payment of issuance costs | (34) | |
Net cash used in financing activities | (346) | (5,231) |
Net (decrease)/increase in cash and cash equivalents | 4,111 | (8,362) |
Effect of exchange rate changes on cash and cash equivalents | 1,542 | 1,194 |
Net increase in cash and cash equivalents, including effect of exchange rate changes | 5,653 | (7,168) |
Cash and cash equivalents | ||
Cash and cash equivalents at beginning of period | 86,036 | 85,265 |
Cash and cash equivalents at end of period | $ 91,689 | $ 78,097 |
Organization and Nature of Busi
Organization and Nature of Business | 3 Months Ended |
Mar. 31, 2019 | |
Organization and Nature of Business | |
Organization and Nature of Business | 1. Organization and Nature of Business Hutchison China MediTech Limited (the “Company”) and its subsidiaries (together the “Group”) are principally engaged in researching, developing, manufacturing and selling pharmaceuticals and healthcare products. The Group and its equity investees have research and development facilities and manufacturing plants in the People’s Republic of China (the “PRC”) and sell their products mainly in the PRC and Hong Kong. Liquidity As at March 31, 2019, the Group had accumulated losses of US$203,583,000 primarily due to its spending in drug research and development (“Drug R&D”) activities. The Group regularly monitors current and expected liquidity requirements to ensure that it maintains sufficient cash balances and adequate credit facilities to meet its liquidity requirements in the short and long term. As at March 31, 2019, the Group had cash and cash equivalents of US$91,689,000, short-term investments of US$180,174,000 and unutilized bank borrowing facilities of US$119,359,000. Short-term investments comprised of bank deposits maturing over three months. The Group’s operating plan includes the continued receipt of dividends from certain of its equity investees. Based on the Group’s operating plan, the existing cash and cash equivalents, short-term investments and unutilized bank borrowing facilities are considered to be sufficient to meet the cash requirements to fund planned operations and other commitments for at least the next twelve months (the look-forward period used). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The interim unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements, except for the adoption of Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”) as described below. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period. The comparative year-end condensed balance sheet data was derived from the annual audited consolidated financial statements, but is condensed to the same degree as the interim condensed balance sheet data. The interim unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users have read or have access to the annual audited consolidated financial statements for the preceding fiscal year. The preparation of interim unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the interim unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used in determining items such as useful lives of property, plant and equipment, write-down of inventories, allowance for doubtful accounts, share-based compensation, impairments of long-lived assets, impairment of other intangible asset and goodwill, income tax expenses, tax valuation allowances, revenues and cost accruals from research and development projects. Actual results could differ from those estimates. Leases Summary of impact of applying ASC 842 The Group applied ASC 842 to its various leases at the date of initial application of January 1, 2019. As a result, the Group has changed its accounting policy for leases as detailed below. The core principle of ASC 842 is that a lessee should recognize the assets and liabilities that arise from leases. Therefore, the Group recognizes in the condensed consolidated balance sheets liabilities to make lease payments (the lease liabilities) and right-of-use assets representing its right to use the underlying assets for their lease terms. The Group applied ASC 842 using the optional transition method by recognizing the cumulative effect as an adjustment to opening accumulated losses as at January 1, 2019. The comparative information prior to January 1, 2019 has not been adjusted and continues to be reported under ASC 840, Leases (“ASC 840”). The Group assessed lease agreements as at January 1, 2019 under ASC 842, except for short-term leases. The Group elected the short-term lease exception for leases with a term of 12 months or less and recognizes lease expenses for such leases on a straight-line basis over the lease term and does not recognize right-of-use assets or lease liabilities accordingly. As a result of this assessment, the Group recorded an aggregate US$0.7 million in additional lease expenses as a cumulative adjustment to opening accumulated losses upon adoption. Additionally, the Group recognized right-of-use assets and lease liabilities of US$5.7 million and US$6.4 million respectively as at January 1, 2019. The lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessees’ incremental borrowing rate as at January 1, 2019. The Group’s weighted average incremental borrowing rate applied on January 1, 2019 was 3.97% per annum. A reconciliation of the Group’s reported operating lease commitments as at December 31, 2018 and the Group’s lease liabilities recognized upon adoption of ASC 842 as at January 1, 2019 is as follows: (in US$’000) Operating lease commitments as at December 31, 2018 (note (a)) 8,835 Less: Leases not commenced as at January 1, 2019 (3,676) Less: Short-term leases (5) Add: Adjustment as a result of the treatment for a termination option (note (b)) 1,409 Less: Discount under the lessees’ incremental borrowing rate as at January 1, 2019 (206) Lease liabilities recognized as at January 1, 2019 6,357 Notes: (a) Future aggregate minimum payments under non-cancellable operating leases under ASC 840 were as follows: December 31, 2018 (in US$’000) Not later than 1 year 3,026 Between 1 to 2 years 2,735 Between 2 to 3 years 1,056 Between 3 to 4 years 882 Between 4 to 5 years 810 Later than 5 years 326 Total minimum lease payments 8,835 (b) The Group leases its corporate offices in Hong Kong through a support service agreement with an indirect subsidiary of CK Hutchison Holdings Limited (“CK Hutchison”), which is the Company’s ultimate holding company. The support service agreement may be terminated by giving 3-months advance notice; therefore, there was no lease commitment beyond the 3-months advance notice period as at December 31, 2018. This termination option is not considered probable of exercise for the purposes of applying ASC 842. The Group recognized right-of-use assets as at January 1, 2019 measured at their carrying amounts as if ASC 842 had been applied since their commencement dates, but discounted using the lessees’ incremental borrowing rate as at January 1, 2019. Recognized right-of-use assets was as follows: (in US$’000) Offices 4,877 Factories 383 Others 487 5,747 There were no adjustments to net cash generated from/(used in) operating activities, investing activities or financing activities in the condensed consolidated statement of cash flows. In applying ASC 842 for the first time, the Group has used the following practical expedients permitted by the standard: (i) no reassessment of whether any expired or existing contracts are or contain leases; (ii) no reassessment of the lease classification for any expired or existing leases; (iii) the exclusion of initial direct costs for the measurement of the right-of-use assets at the date of initial application; and (iv) the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease. Updated accounting policy—ASC 842 In an operating lease, a lessee obtains control of only the use of the underlying asset, but not the underlying asset itself. An operating lease is recognized as a right-of-use asset with a corresponding liability at the date which the leased asset is available for use by the Group. The Group recognizes an obligation to make lease payments equal to the present value of the lease payments over the lease term. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. Lease liabilities include the net present value of the following lease payments: (i) fixed payments; (ii) variable lease payments; and (iii) payments of penalties for terminating the lease if the lease term reflects the lessee exercising that option, if any. Lease liabilities exclude the following payments that are generally accounted for separately: (i) non-lease components, such as maintenance and security service fees and value added tax, and (ii) any payments that a lessee makes before the lease commencement date. The lease payments are discounted using the interest rate implicit in the lease or if that rate cannot be determined, the lessee’s incremental borrowing rate being the rate that the lessee would have to pay to borrow the funds in its currency and jurisdiction necessary to obtain an asset of similar value, economic environment and terms and conditions. An asset representing the right to use the underlying asset during the lease term is recognized that consists of the initial measurement of the operating lease liability, any lease payments made to the lessor at or before the commencement date less any lease incentives received, any initial direct cost incurred by the Group and any restoration costs. After commencement of the operating lease, the Group recognizes lease expenses on a straight-line basis over the lease term. The right-of-use asset is subsequently measured at cost less accumulated amortization and any impairment provision. The amortization of the right-of-use asset represents the difference between the straight-line lease expense and the accretion of interest on the lease liability each period. The interest amount is used to accrete the lease liability and to amortize the right-of-use asset. There is no amount recorded as interest expense. Payments associated with short-term leases are recognized as lease expenses on a straight-line basis over the period of the leases. Subleases of right-of-use assets are accounted for similar to other leases. As an intermediate lessor, the Group separately accounts for the head-lease and sublease unless it is relieved of its primary obligation under the head-lease. Sublease income is recorded on a gross basis separate from the head-lease expenses. If the total remaining lease cost on the head-lease is more than the anticipated sublease income for the lease term, this is an indicator that the carrying amount of the right-of-use asset associated with the head-lease may not be recoverable, and the right-of-use asset will be assessed for impairment. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents | |
Cash and Cash Equivalents | 3. Cash and Cash Equivalents December 31, March 31, 2018 2019 (in US$’000) Cash at bank and on hand 78,556 51,409 Bank deposits maturing in three months or less (note (a)) 7,480 40,280 86,036 91,689 Denominated in: US$ (note (b)) 58,291 73,539 RMB (note (b)) 23,254 15,739 UK Pound Sterling (“£”) (note (b)) 331 84 Hong Kong dollar (“HK$”) 4,160 2,327 86,036 91,689 Notes: (a) The weighted average effective interest rate on bank deposits for the year ended December 31, 2018 and the three months ended March 31, 2019 was 1.98% per annum and 2.49% per annum respectively (with maturity ranging from 7 to 90 days and 30 to 35 days respectively). (b) Certain cash and bank balances denominated in RMB, US$ and £ were deposited with banks in the PRC. The conversion of these balances into foreign currencies is subject to the rules and regulations of foreign exchange control promulgated by the PRC government. |
Short-term Investments
Short-term Investments | 3 Months Ended |
Mar. 31, 2019 | |
Short-term Investments | |
Short-term Investments | 4. Short-term Investments December 31, March 31, 2018 2019 (in US$’000) Bank deposits maturing over three months (note) Denominated in: US$ 214,538 179,796 HK$ 377 378 214,915 180,174 Note: The weighted average effective interest rate on bank deposits for the year ended December 31, 2018 and the three months ended March 31, 2019 was 2.18% per annum and 2.82% per annum respectively (with maturity ranging from 91 to 100 days and 91 to 97 days respectively). |
Accounts Receivable-Third Parti
Accounts Receivable-Third Parties | 3 Months Ended |
Mar. 31, 2019 | |
Accounts Receivable-Third Parties | |
Accounts Receivable-Third Parties | 5. Accounts Receivable—Third Parties Accounts receivable from contracts with customers, net of allowance for doubtful accounts, consisted of the following: December 31, March 31, 2018 2019 (in US$’000) Accounts receivable, gross 40,217 42,360 Allowance for doubtful accounts (41) (87) Accounts receivable, net 40,176 42,273 Substantially all accounts receivable are denominated in RMB, US$ and HK$ and are due within one year from the end of the reporting periods. The carrying values of accounts receivable approximate their fair values due to their short-term maturities. Movements on the allowance for doubtful accounts: 2018 2019 (in US$’000) As at January 1 258 41 Increase in allowance for doubtful accounts 171 76 Decrease in allowance due to subsequent collection (160) (31) Exchange difference 12 1 As at March 31 281 87 An aging analysis based on the relevant invoice dates is as follows: December 31, March 31, 2018 2019 (in US$’000) Not later than 3 months 37,326 39,603 Between 3 months to 6 months 2,704 2,595 Between 6 months to 1 year 61 162 Later than 1 year 126 — Accounts receivable, gross 40,217 42,360 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventories | |
Inventories | 6. Inventories Inventories, net of provision for excess and obsolete inventories, consisted of the following: December 31, March 31, 2018 2019 (in US$’000) Raw materials 652 1,333 Finished goods 11,657 16,279 12,309 17,612 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Leases | 7. Leases The Group leases various offices, factories and other assets. Lease contracts are typically within a period of 1 to 5 years. Leases consisted of the following: March 31, 2019 (in US$’000) Right-of-use assets Offices (note (a)) 4,308 Factories 325 Others (note (b)) 543 Total right-of-use assets 5,176 Lease liabilities—current 3,191 Lease liabilities—non-current 2,522 5,713 Notes: (a) Includes (i) US$0.2 million right-of-use asset for offices in the United States of America that is leased through July 2023 which includes an option to renew the lease up to an additional 3 years; and (ii) US$1.4 million right-of-use asset for corporate offices in Hong Kong that is leased through May 2021 which includes a termination option with 3 months advance notice. The renewal and termination options were not recognized as part of the right-of-use assets and lease liabilities. (b) Includes US$0.4 million right-of-use asset for retail space in the United Kingdom that is leased through May 2022 which the Group has subleased through May 2022. Lease activities are summarized as follows: Three Months Ended March 31, 2019 (in US$’000) Lease expenses: Short-term leases with lease terms equal or less than 12 months 12 Leases with lease terms greater than 12 months 818 830 Sublease rental income 61 Cash paid on lease liabilities 852 Non-cash: Lease liabilities recognized from obtaining right-of-use assets — The weighted average remaining lease term and the weighted average discount rate as at March 31, 2019 was 1.83 years and 3.96% respectively. Future lease payments are as follows: March 31, 2019 (in US$’000) Lease payments: Not later than 1 year 3,356 Between 1 to 2 years 2,006 Between 2 to 3 years 449 Between 3 to 4 years 105 Between 4 to 5 years 25 Total lease payments 5,941 Less: Discount factor (228) Total lease liabilities 5,713 |
Investments in Equity Investees
Investments in Equity Investees | 3 Months Ended |
Mar. 31, 2019 | |
Investments in Equity Investees | |
Investments in Equity Investees | 8. Investments in Equity Investees Investments in equity investees consisted of the following: December 31, March 31, 2018 2019 (in US$’000) Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited ("HBYS") 60,992 65,594 Shanghai Hutchison Pharmaceuticals Limited ("SHPL") 68,812 84,737 Nutrition Science Partners Limited ("NSPL") 8,102 8,109 Other 412 487 138,318 158,927 All of the equity investees are private companies and there are no quoted market prices available for their shares. Summarized financial information for the significant equity investees HBYS, SHPL and NSPL is as follows: (i) Summarized balance sheets Commercial Platform Innovation Platform Consumer Health Prescription Drugs Drug R&D HBYS SHPL NSPL December 31, March 31, December 31, March 31, December 31, March 31, 2018 2019 2018 2019 2018 2019 (in US$’000) Current assets 116,020 142,306 124,512 148,151 17,320 16,633 Non-current assets 100,353 102,819 98,532 101,305 — — Current liabilities (73,974) (93,365) (84,357) (78,528) (1,117) (415) Non-current liabilities (17,302) (17,481) (6,909) (7,454) — — Net assets 125,097 134,279 131,778 163,474 16,203 16,218 Non-controlling interests (3,113) (3,090) — — — — 121,984 131,189 131,778 163,474 16,203 16,218 (ii) Summarized statements of operations Commercial Platform Innovation Platform Consumer Health Prescription Drugs Drug R&D HBYS SHPL NSPL (note (a)) Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, 2018 2019 2018 2019 2018 2019 (in US$’000) Revenue 62,090 58,484 86,733 89,501 — — Gross profit 30,557 31,505 63,114 64,582 — — Interest income 35 33 214 141 — 44 Finance cost (30) (4) — — — — Profit/(loss) before taxation 6,749 7,056 31,300 32,813 (2,194) 15 Income tax expense (note (b)) (1,141) (1,163) (4,670) (4,715) — — Net income/(loss) 5,608 5,893 26,630 28,098 (2,194) 15 Non-controlling interests 2 89 — — — — Net income/(loss) attributable to the shareholders of equity investee 5,610 5,982 26,630 28,098 (2,194) 15 Notes: (a) NSPL primarily incurred research and development expenses during the three months ended March 31, 2018 and did not have any activity for the three months ended March 31, 2019. (b) The main entities within the HBYS and SHPL groups have been granted the High and New Technology Enterprise (“HNTE”) status. Accordingly, the entities were eligible to use a preferential income tax rate of 15% for the three months ended March 31, 2018 and 2019. For the three months ended March 31, 2018 and 2019, other immaterial equity investees had net income of approximately US$15,000 and US$125,000 respectively. (iii) Reconciliation of the summarized financial information presented to the carrying amount of investments in equity investees is as follows: Commercial Platform Innovation Platform (note) Consumer Health Prescription Drugs Drug R&D HBYS SHPL NSPL 2018 2019 2018 2019 2018 2019 (in US$’000) Opening net assets after non-controlling interests as at January 1 110,616 121,984 132,731 131,778 38,401 16,203 Impact of change in accounting policy (ASC 842) — (19) — (2) — — Net income/(loss) attributable to the shareholders of equity investee 5,610 5,982 26,630 28,098 (2,194) 15 Other comprehensive income 4,727 3,242 5,995 3,600 — — Closing net assets after non-controlling interests as at March 31 120,953 131,189 165,356 163,474 36,207 16,218 Group’s share of net assets 60,477 65,594 82,678 81,737 18,104 8,109 Goodwill — — 3,179 3,000 — — Carrying amount of investments as at March 31 60,477 65,594 85,857 84,737 18,104 8,109 Note: The Innovation Platform includes other immaterial equity investees. As at December 31, 2018 and March 31, 2019, the aggregate carrying amount of investments in NSPL and other immaterial equity investees was approximately US$8,514,000 and US$8,596,000 respectively. The equity investees had the following capital commitments: March 31, 2019 (in US$’000) Property, plant and equipment Contracted but not provided for 1,807 |
Accounts Payable
Accounts Payable | 3 Months Ended |
Mar. 31, 2019 | |
Accounts Payable | |
Accounts Payable | 9. Accounts Payable December 31, March 31, 2018 2019 (in US$’000) Accounts payable—third parties 14,158 19,204 Accounts payable—non-controlling shareholders of subsidiaries (Note 16 (iv)) 4,960 4,143 Accounts payable—related party (Note 16 (ii)) 6,507 7,417 25,625 30,764 Substantially all accounts payable are denominated in RMB and US$ and due within one year from the end of the reporting period. The carrying values of accounts payable approximate their fair values due to their short-term maturities. An aging analysis based on the relevant invoice dates is as follows: December 31, March 31, 2018 2019 (in US$’000) Not later than 3 months 19,185 23,642 Between 3 months to 6 months 5,584 4,225 Between 6 months to 1 year 703 2,762 Later than 1 year 153 135 25,625 30,764 |
Other Payables, Accruals and Ad
Other Payables, Accruals and Advance Receipts | 3 Months Ended |
Mar. 31, 2019 | |
Other Payables, Accruals and Advance Receipts | |
Other Payables, Accruals and Advance Receipts | 10. Other Payables, Accruals and Advance Receipts Other payables, accruals and advance receipts consisted of the following: December 31, March 31, 2018 2019 (in US$’000) Accrued salaries and benefits 8,715 6,056 Accrued research and development expenses 28,883 37,219 Accrued selling and marketing expenses 4,675 4,756 Accrued administrative and other general expenses 6,181 9,897 Deferred government incentives 1,817 384 Deposits 1,230 1,899 Dividend payable to non-controlling shareholder of subsidiary (Note 16(iv)) 1,282 1,282 Others 3,544 2,667 56,327 64,160 |
Bank Borrowings
Bank Borrowings | 3 Months Ended |
Mar. 31, 2019 | |
Bank Borrowings | |
Bank Borrowings | 11. Bank Borrowings Bank borrowings consisted of the following: December 31, March 31, 2018 2019 (in US$’000) Non-current 26,739 26,763 The weighted average interest rate for outstanding bank borrowings for the year ended December 31, 2018 and the three months ended March 31, 2019 was 2.79% per annum and 2.94% per annum respectively. The carrying amounts of the Group’s bank borrowings are all denominated in HK$. (i) 3-year term loan and 18-month revolving loan facilities In November 2017, the Group through its subsidiary, entered into facility agreements with a bank for the provision of unsecured credit facilities in the aggregate amount of HK$400,000,000 (US$51,282,000). The credit facilities include (i) a HK$210,000,000 (US$26,923,000) 3-year term loan facility and (ii) a HK$190,000,000 (US$24,359,000) 18-month revolving loan facility. The term loan bears interest at 1.50% over the Hong Kong Interbank Offered Rate (“HIBOR”) per annum and an upfront fee of HK$1,575,000 (US$202,000). The revolving loan facility bears interest at 1.25% over HIBOR per annum. The term loan was drawn in May 2018 and is due in November 2020. Accordingly, the term loan is recorded under long-term bank borrowings as at December 31, 2018 and March 31, 2019. As at December 31, 2018 and March 31, 2019, no amount has been drawn from the revolving loan facility. These credit facilities are guaranteed by the Company. (ii) 2-year revolving loan facilities In August 2018, the Group through its subsidiary, entered into two separate facility agreements with banks for the provision of unsecured credit facilities in the aggregate amount of HK$507,000,000 (US$65,000,000). The first credit facility is a HK$351,000,000 (US$45,000,000) revolving loan facility, with a term of 2 years and an annual interest rate of 1.35% over HIBOR. The second credit facility is a HK$156,000,000 (US$20,000,000) revolving loan facility, with a term of 2 years and an annual interest rate of 1.35% over HIBOR. These credit facilities are guaranteed by the Company. As at December 31, 2018 and March 31, 2019, no amount has been drawn from either of the revolving loan facilities. (iii) 3-year revolving loan facility In November 2018, the Group through its subsidiary renewed a 3-year revolving loan facility with a bank in the aggregate amount of HK$234,000,000 (US$30,000,000) with an annual interest rate of 0.85% over HIBOR. This credit facility is guaranteed by the Company. As at December 31, 2018 and March 31, 2019, no amount has been drawn from the revolving loan facility. The Group’s bank borrowings are repayable as from the dates indicated as follows: December 31, March 31, 2018 2019 (in US$’000) Not later than 1 year — — Between 1 to 2 years 26,923 26,923 26,923 26,923 As at December 31, 2018 and March 31, 2019, the Group had unutilized bank borrowing facilities of HK$931,000,000 (US$119,359,000). |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies Capital commitments The Group had the following capital commitments: March 31, 2019 (in US$’000) Property, plant and equipment Contracted but not provided for 1,341 The Group does not have any other significant commitments or contingencies. |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation | |
Share-based Compensation | 13. Share‑based Compensation (i) The Company conditionally adopted a share option scheme on June 4, 2005 (as amended on March 21, 2007) and such scheme has a term of 10 years. It expired in 2016 and no further share options can be granted. Another share option scheme was conditionally adopted on April 24, 2015 (the “HCML Share Option Scheme”). Pursuant to the HCML Share Option Scheme, the Board of Directors of the Company may, at its discretion, offer any employees and directors (including Executive and Non-executive Directors but excluding Independent Non-executive Directors) of the Company, holding companies of the Company and any of their subsidiaries or affiliates, and subsidiaries or affiliates of the Company share options to subscribe for shares of the Company. As at March 31, 2019, the aggregate number of shares issuable under the HCML Share Option Scheme is 23,130,970 ordinary shares and the aggregate number of shares issuable under the prior share option scheme which expired in 2016 is 1,845,180 ordinary shares. Additionally, the number of shares authorized but unissued was 83,422,550 ordinary shares. Share options granted are generally subject to a four-year vesting schedule, depending on the nature and the purpose of the grant. Share options subject to the four-year vesting schedule, in general, vest 25% upon the first anniversary of the vesting commencement date as defined in the grant letter, and 25% every subsequent year. However, certain share option grants may have a different vesting schedule as approved by the Board of Directors of the Company. No outstanding share options will be exercisable or subject to vesting after the expiry of a maximum of eight to ten years from the date of grant. A summary of the Company’s share option activity and related information is as follows: Weighted average Number of Weighted average remaining Aggregate share exercise price in contractual life intrinsic value options £ per share (years) (in £’000) Outstanding at January 1, 2018 11,264,120 1.77 6.29 43,158 Granted 10,606,260 4.69 Exercised (2,107,080) 1.40 Cancelled (1,208,450) 4.30 Outstanding at December 31, 2018 18,554,850 3.31 7.35 15,158 Cancelled (145,350) 4.65 Outstanding at March 31, 2019 18,409,500 3.30 7.09 24,301 Vested and exercisable at December 31, 2018 8,032,040 1.68 4.84 14,843 Vested and exercisable at March 31, 2019 8,532,040 1.82 4.82 23,437 In estimating the fair value of share options granted, the following assumptions were used in the Polynomial model for awards granted in the periods indicated: Year Ended December 31, 2011 2013 2016 2017 2018 Weighted average grant date fair value of share options (in £ per share) 0.18 0.32 0.90 1.27 1.67 Significant inputs into the valuation model (weighted average): Exercise price (in £ per share) 0.44 0.61 1.97 3.11 4.69 Share price at effective date of grant (in £ per share) 0.43 0.61 1.97 3.11 4.66 Expected volatility (note (a)) 46.6 % 36.0 % 39.0 % 36.3 % 37.6 % Risk-free interest rate (note (b)) 3.13 % 3.16 % 1.00 % 1.17 % 1.46 % Contractual life of share options (in years) 10 10 8 10 10 Expected dividend yield (note (c)) 0 % 0 % 0 % 0 % 0 % Notes: (a) The Company calculated its expected volatility with reference to the historical volatility prior to the issuances of share options. (b) The risk-free interest rates used in the Polynomial model are with reference to the sovereign yield of the United Kingdom because the Company’s ordinary shares are currently listed on AIM and denominated in £. (c) The Company has not declared or paid any dividends and does not currently expect to do so in the foreseeable future, and therefore uses an expected dividend yield of zero in the Polynomial model. The Company will issue new shares to satisfy share option exercises. The following table summarizes the Company’s share option exercises: Three Months Ended March 31, 2018 2019 (in US$’000) Cash received from share options exercised 254 — Total intrinsic value of share options exercised 1,764 — The Group recognizes compensation expense on a graded vesting approach over the requisite service period. The following table presents share-based compensation expense included in the Group’s consolidated statements of operations: Three Months Ended March 31, 2018 2019 (in US$’000) Research and development expenses 334 2,109 Administrative expenses — 186 334 2,295 As at March 31, 2019, the total unrecognized compensation cost was US$13,028,000, and will be recognized on a graded vesting approach over the weighted average remaining service period of 3.07 years. (ii) The Company grants awards under the LTIP to participating directors and employees, giving them a conditional right to receive ordinary shares of the Company or the equivalent ADS (collectively the “Awarded Shares”) to be purchased by the Trustee up to a cash amount. Vesting will depend upon continued employment of the award holder with the Group and will otherwise be at the discretion of the Board of Directors of the Company. Additionally, some awards are subject to change based on annual performance targets prior to their determination date. LTIP awards prior to the determination date Performance targets vary by award, and may include targets for shareholder returns, free cash flows, revenues, net profit after taxes and the achievement of clinical and regulatory milestones. As the extent of achievement of the performance targets is uncertain prior to the determination date, a probability based on management’s assessment on the achievement of the performance target has been assigned to calculate the amount to be recognized as an expense over the requisite period with a corresponding entry to liability. LTIP awards after the determination date Upon the determination date, the Company will pay a determined monetary amount, up to the maximum cash amount based on the actual achievement of the performance target specified in the award, to the Trustee to purchase the Awarded Shares. Any cumulative compensation expense previously recognized as a liability will be transferred to additional paid-in capital, as an equity-settled award. If the performance target is not achieved, no Awarded Shares of the Company will be purchased and the amount previously recorded in the liability will be reversed through profit or loss. Granted awards under the LTIP are as follows: Maximum cash amount per annum Covered Performance target Grant date (in US$ millions) financial years determination date October 19, 2015 1.8 2014-2016 note (a) March 24, 2016 0.3 note (b) note (b) March 15, 2017 0.4 note (c) note (c) March 15, 2017 and August 2, 2017 6.0 2017-2019 note (d) December 15, 2017 0.5 2018-2019 note (d) August 6, 2018 0.1 2018-2019 note (d) December 14, 2018 1.5 note (d) Notes: (a) The annual performance target determination date is the date of the announcement of the Group’s annual results for the covered financial year and vesting occurs one business day after the publication date of the annual report of the Company for the financial year falling two years after the covered financial year to which the LTIP award relates. (b) This award does not stipulate performance targets and is subject to a vesting schedule of 25% on each of the first, second, third and fourth anniversaries of the date of grant. (c) This award did not stipulate performance targets and vested one business day after the publication date of the annual report for the 2017 financial year. (d) The annual performance target determination date is the date of the announcement of the Group’s annual results for the covered financial year and vesting occurs two business days after the announcement of the Group’s annual results for the financial year falling two years after the covered financial year to which the LTIP award relates. The Trustee has been set up solely for the purpose of purchasing and holding the Awarded Shares during the vesting period on behalf of the Group using funds provided by the Group. On the determination date, if any, the Company will determine the cash amount, based on the actual achievement of each annual performance target, for the Trustee to purchase the Awarded Shares. The Awarded Shares will then be held by the Trustee until they are vested. The Trustee’s assets include treasury shares and funds for additional treasury shares, trustee fees and expenses. The number of treasury shares (in the form of ordinary shares or ADS of the Company) purchased and held by the Trustee were as follows: Number of Cost treasury shares (in US$’000) As at January 1, 2018 559,775 1,957 Purchased 795,005 5,451 Vested (233,750) (731) As at December 31, 2018 1,121,030 6,677 Purchased 60,430 346 Vested (240,150) (944) As at March 31, 2019 941,310 6,079 For the three months ended March 31, 2018 and 2019, US$59,000 and US$37,000 of the LTIP awards were forfeited respectively. The following table presents the share-based compensation expenses recognized under the LTIP awards: Three Months Ended March 31, 2018 2019 (in US$’000) Research and development expenses 475 361 Selling and administrative expenses 405 275 880 636 Recorded with a corresponding credit to: Liability 563 178 Additional paid-in capital 317 458 880 636 For the three months ended March 31, 2018 and 2019, US$1,770,000 and US$526,000 were reclassified from liability to additional paid-in capital respectively upon LTIP awards reaching the determination date. As at December 31, 2018 and March 31, 2019, US$1,235,000 and US$887,000 were recorded as liabilities respectively for LTIP awards prior to the determination date. As at March 31, 2019, the total unrecognized compensation cost was approximately US$3,990,000, which considers expected performance targets and the amount expected to vest, and will be recognized over the requisite periods. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2019 | |
Revenues | |
Revenues | 14. Revenues The following table presents revenue disaggregated by customer types, major categories and reportable segments: Three Months Ended March 31, 2018 Innovation Commercial Platform Platform Total (in US$’000) Customer types Third parties—Distribution — 43,189 43,189 Third parties—Collaboration 4,835 — 4,835 Related parties (Note 16(i)) 2,582 1,731 4,313 7,417 44,920 52,337 Major categories Goods — 42,362 42,362 Services 7,417 2,558 9,975 7,417 44,920 52,337 Three Months Ended March 31, 2019 Innovation Commercial Platform Platform Total (in US$’000) Customer types Third parties-Distribution 1,959 44,524 46,483 Third parties-Collaboration 3,692 — 3,692 Related parties (Note 16(i)) 127 1,866 1,993 5,778 46,390 52,168 Major categories Goods 1,959 44,651 46,610 Services 2,841 1,739 4,580 Royalties 978 — 978 5,778 46,390 52,168 |
Research and Development Expens
Research and Development Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Research and Development Expenses | |
Research and Development Expenses | 15. Research and Development Expenses Research and development expenses are summarized as follows: Three Months Ended March 31, 2018 2019 (in US$’000) Clinical trial related costs 19,472 19,706 Personnel compensation and related costs 7,850 11,295 Other research and development expenses 1,342 2,281 28,664 33,282 |
Significant Transactions with R
Significant Transactions with Related Parties and Non-Controlling Shareholders of Subsidiaries | 3 Months Ended |
Mar. 31, 2019 | |
Significant Transactions with Related Parties and Non-Controlling Shareholders of Subsidiaries | |
Significant Transactions with Related Parties and Non-Controlling Shareholders of Subsidiaries | 16. Significant Transactions with Related Parties and Non-Controlling Shareholders of Subsidiaries The Group has the following significant transactions with related parties and non-controlling shareholders of subsidiaries, which were carried out in the normal course of business at terms determined and agreed by the relevant parties. (i) Transactions with related parties: Three Months Ended March 31, 2018 2019 (in US$’000) Sales to: Indirect subsidiaries of CK Hutchison 1,731 1,866 Revenue from research and development services from: Equity investees 2,582 127 Purchases from: Equity investees 662 1,062 Rendering of marketing services from: Indirect subsidiaries of CK Hutchison 172 94 An equity investee 3,197 1,736 3,369 1,830 Rendering of support services from: An indirect subsidiary of CK Hutchison 227 233 (ii) Balances with related parties included in: December 31, March 31, 2018 2019 (in US$’000) Accounts receivable—related parties Indirect subsidiaries of CK Hutchison (note (a)) 2,709 2,189 An equity investee (note (a)) 73 — 2,782 2,189 Accounts payable An equity investee (note (a)) 6,507 7,417 Amounts due from related parties Equity investees (note (a)) 889 893 Amounts due to related parties An indirect subsidiary of CK Hutchison (note (b)) 432 623 Other deferred income An equity investee (note (c)) 1,356 1,335 Notes: (a) Balances with related parties are unsecured, repayable on demand and interest-free. The carrying values of balances with related parties approximate their fair values due to their short-term maturities. (b) Amounts due to an indirect subsidiary of CK Hutchison are unsecured, repayable on demand and interest-bearing if not settled within one month. (c) Other deferred income represents amounts recognized from granting of promotion and marketing rights. (iii) Transactions with non-controlling shareholders of subsidiaries: Three Months Ended March 31, 2018 2019 (in US$’000) Sales 5,740 6,034 Purchases 3,323 3,504 Interest expense 18 — (iv) Balances with non-controlling shareholders of subsidiaries included in: December 31, March 31, 2018 2019 (in US$’000) Accounts receivable—third parties 5,070 4,193 Accounts payable 4,960 4,143 Other payables, accruals and advance receipts Dividend payable 1,282 1,282 Other non-current liabilities Loan 579 579 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes | |
Income Taxes | 17. Income Taxes Three Months Ended March 31, 2018 2019 (in US$’000) Current tax HK (note (a)) 113 85 PRC (note (b)) 537 352 Other 50 69 Deferred income tax 865 803 Income tax expense 1,565 1,309 Notes: (a) The Company, two subsidiaries incorporated in the British Virgin Islands and its Hong Kong subsidiaries are subject to Hong Kong profits tax which has been provided for at the rate of 16.5% on the estimated assessable profits less estimated available tax losses in each entity. (b) Taxation in the PRC has been provided for at the applicable rate on the estimated assessable profits less estimated available tax losses, if any, in each entity. Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate is 25%. In addition, the EIT Law provides for, among others, a preferential tax rate of 15% for companies which qualify as HNTE. HMPL and its wholly-owned subsidiary Hutchison MediPharma (Suzhou) Limited qualify as a HNTE up to December 31, 2019 and 2020 respectively. Pursuant to the EIT law, a 10% withholding tax is levied on dividends paid by PRC companies to their foreign investors. A lower withholding tax rate of 5% is applicable under the China-HK Tax Arrangement if direct foreign investors with at least 25% equity interest in the PRC companies are Hong Kong tax residents, and meet the conditions or requirements pursuant to the relevant PRC tax regulations regarding beneficial ownership. Since the equity holders of the major subsidiaries and equity investees of the Company are Hong Kong incorporated companies and Hong Kong tax residents, and meet the aforesaid conditions or requirements, the Company has used 5% to provide for deferred tax liabilities on retained earnings which are anticipated to be distributed. As at December 31, 2018 and March 31, 2019, the amounts accrued in deferred tax liabilities relating to withholding tax on dividends were determined on the basis that 100% of the distributable reserves of the major subsidiaries and equity investees operating in the PRC will be distributed as dividends. The reconciliation of the Group’s reported income tax expense to the theoretical tax amount that would arise using the tax rates of the Company against the Group’s loss before income taxes and equity in earnings of equity investees is as follows: Three Months Ended March 31, 2018 2019 (in US$’000) Loss before income taxes and equity in earnings of equity investees (23,870) (34,907) Tax calculated at the statutory tax rate of the Company (3,939) (5,760) Tax effects of: Different tax rates available in different jurisdictions 1,204 1,220 Tax valuation allowance 5,472 6,499 Preferential tax deduction (1,793) (1,721) Expenses not deductible for tax purposes 195 695 Utilization of previously unrecognized tax losses (110) (165) Withholding tax on undistributed earnings of PRC entities 832 858 Others (296) (317) Income tax expense 1,565 1,309 |
Losses per Share
Losses per Share | 3 Months Ended |
Mar. 31, 2019 | |
Losses per Share | |
Losses per Share | 18. Losses per Share (i) Basic losses per share Basic losses per share is calculated by dividing the net loss attributable to the Company by the weighted average number of outstanding ordinary shares in issue during the period. Treasury shares held by the Trustee are excluded from the weighted average number of outstanding ordinary shares in issue for purposes of calculating basic losses per share. Three Months Ended March 31, 2018 2019 Weighted average number of outstanding ordinary shares in issue 663,844,980 665,470,220 Net loss attributable to the Company (US$’000) (11,730) (19,885) Losses per share attributable to the Company (US$ per share) (0.02) (0.03) (ii) Diluted losses per share Diluted losses per share is calculated by dividing net loss attributable to the Company by the weighted average number of outstanding ordinary shares in issue and dilutive ordinary share equivalents outstanding during the period. Dilutive ordinary share equivalents include shares issuable upon the exercise or settlement of share option and LTIP awards issued by the Company using the treasury stock method. For the three months ended March 31, 2018 and 2019, the share options and LTIP awards issued by the Company were not included in the calculation of diluted losses per share because of their anti-dilutive effect. Therefore, diluted losses per share was equal to basic losses per share for the three months ended March 31, 2018 and 2019. Note: The losses per share attributable to the Company—basic and diluted presented were adjusted retroactively for each of the three months ended March 31, 2018 and 2019 to take into account the share split approved by ordinary resolution at the extraordinary general meeting of the Company held on May 29, 2019, pursuant to which each ordinary share was subdivided into 10 ordinary shares. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting | |
Segment Reporting | 19. Segment Reporting The Group determines its operating segments from both business and geographic perspectives as follows: (i) Innovation Platform (Drug R&D): focuses on discovering, developing and commercializing targeted therapeutics in oncology and autoimmune diseases, and the provision of research and development services; and (ii) Commercial Platform: comprises of the manufacture, marketing and distribution of prescription and over‑the‑counter pharmaceuticals in the PRC as well as consumer health products through Hong Kong. The Commercial Platform is further segregated into two core business areas: (a) (b) Innovation Platform and Prescription Drugs businesses under the Commercial Platform are primarily located in the PRC. The locations for Consumer Health business under the Commercial Platform are further segregated into the PRC and Hong Kong. The performance of the reportable segments is assessed based on three measurements: (a) losses or earnings of subsidiaries before interest income, interest expense, income tax expenses and equity in earnings of equity investees, net of tax (“Adjusted (LBIT)/EBIT” or “Adjusted LBIT”), (b) equity in earnings of equity investees, net of tax and (c) operating (loss)/profit. The segment information is as follows: Three Months Ended March 31, 2018 Innovation Platform Commercial Platform Drug Prescription Consumer R&D Drugs Health Hong PRC PRC PRC Kong Subtotal Unallocated Total (in US$’000) Revenue from external customers 7,417 35,471 3,438 6,011 44,920 — 52,337 Adjusted (LBIT)/EBIT (24,427) 1,648 392 633 2,673 (3,176) (24,930) Interest income 20 10 3 14 27 1,219 1,266 Equity in earnings of equity investees, net of tax (1,089) 13,314 2,805 — 16,119 — 15,030 Operating (loss)/profit (25,496) 14,972 3,200 647 18,819 (1,957) (8,634) Interest expense — — — 18 18 188 206 Income tax expense 9 445 108 104 657 899 1,565 Net (loss)/income attributable to the Company (25,444) 13,933 2,585 261 16,779 (3,065) (11,730) Depreciation/amortization 782 34 6 5 45 7 834 Additions to non-current assets (other than financial instruments and deferred tax assets) 1,059 3 7 — 10 2 1,071 As at December 31, 2018 Innovation Platform Commercial Platform Drug Prescription Consumer R&D Drugs Health Hong PRC PRC PRC Kong Subtotal Unallocated Total (in US$’000) Total assets 100,388 118,445 67,352 11,686 197,483 234,247 532,118 Property, plant and equipment 15,223 204 71 418 693 700 16,616 Leasehold land 1,174 — — — — — 1,174 Goodwill — 2,779 407 — 3,186 — 3,186 Other intangible asset — 347 — — 347 — 347 Investments in equity investees 8,514 68,812 60,992 — 129,804 — 138,318 Three Months Ended March 31, 2019 Innovation Platform Commercial Platform Drug Prescription Consumer R&D Drugs Health Hong PRC PRC PRC Kong Subtotal Unallocated Total (in US$’000) Revenue from external customers 5,778 37,849 3,342 5,199 46,390 — 52,168 Adjusted (LBIT)/EBIT (32,318) 775 271 366 1,412 (5,417) (36,323) Interest income 99 14 11 1 26 1,551 1,676 Equity in earnings of equity investees, net of tax 70 14,049 2,991 — 17,040 — 17,110 Operating (loss)/profit (32,149) 14,838 3,273 367 18,478 (3,866) (17,537) Interest expense — — — — — 260 260 Income tax expense 47 228 93 43 364 898 1,309 Net (loss)/income attributable to the Company (32,117) 14,321 2,761 135 17,217 (4,985) (19,885) Depreciation/amortization 1,097 40 6 22 68 40 1,205 Additions to non-current assets (other than financial instruments and deferred tax assets) 1,136 129 6 — 135 6 1,277 As at March 31, 2019 Innovation Platform Commercial Platform Drug Prescription Consumer R&D Drugs Health Hong PRC PRC PRC Kong Subtotal Unallocated Total (in US$’000) Total assets 77,773 144,381 71,260 10,423 226,064 235,460 539,297 Property, plant and equipment 15,653 315 73 364 752 631 17,036 Right-of-use assets 3,274 32 44 520 596 1,306 5,176 Leasehold land 1,196 — — — — — 1,196 Goodwill — 2,852 407 — 3,259 — 3,259 Other intangible asset — 340 — — 340 — 340 Investments in equity investees 8,596 84,737 65,594 — 150,331 — 158,927 Revenue from external customers is after elimination of inter-segment sales. Sales between segments are carried out at mutually agreed terms. There was one customer which accounted for over 10% of the Group’s revenue for the three months ended March 31, 2018 and 2019 respectively. Unallocated expenses mainly represent corporate expenses which include corporate employee benefit expenses and the relevant share-based compensation expenses. Unallocated assets mainly comprise cash and cash equivalents and short-term investments. A reconciliation of Adjusted LBIT to net loss is as follows: Three Months Ended March 31, 2018 2019 (in US$’000) Adjusted LBIT (24,930) (36,323) Interest income 1,266 1,676 Equity in earnings of equity investees, net of tax 15,030 17,110 Interest expense (206) (260) Income tax expense (1,565) (1,309) Net loss (10,405) (19,106) |
Note to Consolidated Statements
Note to Consolidated Statements of Cash Flows | 3 Months Ended |
Mar. 31, 2019 | |
Note to Consolidated Statements of Cash Flows | |
Note to Consolidated Statements of Cash Flows | 20. Note to Consolidated Statements of Cash Flows Reconciliation of net loss for the period to net cash used in operating activities: Three Months Ended March 31, 2018 2019 (in US$’000) Net loss (10,405) (19,106) Adjustments to reconcile net loss to net cash used in operating activities Share-based compensation expense—share options 334 2,295 Share-based compensation expense—LTIP 880 636 Equity in earnings of equity investees, net of tax (15,030) (17,110) Changes in right-of-use assets — 754 Other adjustments 2,541 1,840 Changes in working capital Accounts receivable—third parties (5,747) (2,142) Inventories 2,160 (5,358) Accounts payable (7,605) 5,139 Other payables, accruals and advance receipts 2,154 6,929 Lease liabilities — (851) Other changes in working capital (122) (1,949) Total changes in working capital (9,160) 1,768 Net cash used in operating activities (30,840) (28,923) |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2019 | |
Litigation | |
Litigation | 21. Litigation From time to time, the Group may become involved in litigation relating to claims arising from the ordinary course of business. The Group believes that there are currently no claims or actions pending against the Group, the ultimate disposition of which could have a material adverse effect on the Group’s results of operations, financial position or cash flows. However, litigation is subject to inherent uncertainties and the Group’s view of these matters may change in the future. When an unfavorable outcome occurs, there exists the possibility of a material adverse impact on the Group’s financial position and results of operations for the periods in which the unfavorable outcome occurs, and potentially in future periods. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events | |
Subsequent Events | 22. Subsequent Events The Group evaluated subsequent events through June 6, 2019, which is the date when the interim unaudited condensed consolidated financial statements were issued. Pursuant to a resolution passed in the Annual General Meeting on April 24, 2019, the Company’s authorized share capital was increased from US$75,000,000 to US$150,000,000 by the addition of 75,000,000 ordinary shares of US$1.00 each (equivalent to 750,000,000 ordinary shares of US$0.10 each after the share split) in the share capital of the Company. On May 17, 2019, Luye Pharma Hong Kong Ltd. issued a notice to the Group purporting to terminate a distribution agreement that granted the Group exclusive commercial rights to Seroquel in the PRC for failure to meet a pre-specified target. The Group disagrees with this assertion, believes that they have no basis for termination and intends to enforce its rights under the current agreement. Accordingly, no adjustment has been made to Seroquel-related balances as at March 31, 2019 including accounts receivable, inventories, long-term prepayment and accounts payable of US$1.7 million, US$0.6 million, US$1.3 million and US$1.3 million respectively, and therefore, this did not result in a significant impact to the Group for the three months ended March 31, 2019. Pursuant to a resolution passed in the extraordinary general meeting on May 29, 2019, each ordinary share of the Company was subdivided into 10 ordinary shares and the par value was changed from US$1.00 per ordinary share to US$0.10 per ordinary share. All Company ordinary share and per share amounts presented were adjusted retroactively as the share split was effective prior to the issuance of the interim unaudited condensed consolidated financial statements. On May 31, 2019, the Group through its subsidiary, entered into a separate facility agreement with a bank for the provision of unsecured credit facilities in the aggregate amount of HK$400,000,000 (US$51,282,000). The credit facilities include (i) a HK$210,000,000 (US$26,923,000) term loan facility and (ii) a HK$190,000,000 (US$24,359,000) revolving loan facility, both with a term of 3 years and an annual interest rate of 0.85% over HIBOR, with an upfront fee of HK$819,000 (US$105,000) on the term loan. These credit facilities are guaranteed by the Company and include certain financial covenant requirements. No amounts have been drawn from these credit facilities. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The interim unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements, except for the adoption of Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”) as described below. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of results for the periods presented, have been included. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year or any other interim period. The comparative year-end condensed balance sheet data was derived from the annual audited consolidated financial statements, but is condensed to the same degree as the interim condensed balance sheet data. The interim unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users have read or have access to the annual audited consolidated financial statements for the preceding fiscal year. The preparation of interim unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the interim unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used in determining items such as useful lives of property, plant and equipment, write-down of inventories, allowance for doubtful accounts, share-based compensation, impairments of long-lived assets, impairment of other intangible asset and goodwill, income tax expenses, tax valuation allowances, revenues and cost accruals from research and development projects. Actual results could differ from those estimates. |
Leases | Leases Summary of impact of applying ASC 842 The Group applied ASC 842 to its various leases at the date of initial application of January 1, 2019. As a result, the Group has changed its accounting policy for leases as detailed below. The core principle of ASC 842 is that a lessee should recognize the assets and liabilities that arise from leases. Therefore, the Group recognizes in the condensed consolidated balance sheets liabilities to make lease payments (the lease liabilities) and right-of-use assets representing its right to use the underlying assets for their lease terms. The Group applied ASC 842 using the optional transition method by recognizing the cumulative effect as an adjustment to opening accumulated losses as at January 1, 2019. The comparative information prior to January 1, 2019 has not been adjusted and continues to be reported under ASC 840, Leases (“ASC 840”). The Group assessed lease agreements as at January 1, 2019 under ASC 842, except for short-term leases. The Group elected the short-term lease exception for leases with a term of 12 months or less and recognizes lease expenses for such leases on a straight-line basis over the lease term and does not recognize right-of-use assets or lease liabilities accordingly. As a result of this assessment, the Group recorded an aggregate US$0.7 million in additional lease expenses as a cumulative adjustment to opening accumulated losses upon adoption. Additionally, the Group recognized right-of-use assets and lease liabilities of US$5.7 million and US$6.4 million respectively as at January 1, 2019. The lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessees’ incremental borrowing rate as at January 1, 2019. The Group’s weighted average incremental borrowing rate applied on January 1, 2019 was 3.97% per annum. A reconciliation of the Group’s reported operating lease commitments as at December 31, 2018 and the Group’s lease liabilities recognized upon adoption of ASC 842 as at January 1, 2019 is as follows: (in US$’000) Operating lease commitments as at December 31, 2018 (note (a)) 8,835 Less: Leases not commenced as at January 1, 2019 (3,676) Less: Short-term leases (5) Add: Adjustment as a result of the treatment for a termination option (note (b)) 1,409 Less: Discount under the lessees’ incremental borrowing rate as at January 1, 2019 (206) Lease liabilities recognized as at January 1, 2019 6,357 Notes: (a) Future aggregate minimum payments under non-cancellable operating leases under ASC 840 were as follows: December 31, 2018 (in US$’000) Not later than 1 year 3,026 Between 1 to 2 years 2,735 Between 2 to 3 years 1,056 Between 3 to 4 years 882 Between 4 to 5 years 810 Later than 5 years 326 Total minimum lease payments 8,835 (b) The Group leases its corporate offices in Hong Kong through a support service agreement with an indirect subsidiary of CK Hutchison Holdings Limited (“CK Hutchison”), which is the Company’s ultimate holding company. The support service agreement may be terminated by giving 3-months advance notice; therefore, there was no lease commitment beyond the 3-months advance notice period as at December 31, 2018. This termination option is not considered probable of exercise for the purposes of applying ASC 842. The Group recognized right-of-use assets as at January 1, 2019 measured at their carrying amounts as if ASC 842 had been applied since their commencement dates, but discounted using the lessees’ incremental borrowing rate as at January 1, 2019. Recognized right-of-use assets was as follows: (in US$’000) Offices 4,877 Factories 383 Others 487 5,747 There were no adjustments to net cash generated from/(used in) operating activities, investing activities or financing activities in the condensed consolidated statement of cash flows. In applying ASC 842 for the first time, the Group has used the following practical expedients permitted by the standard: (i) no reassessment of whether any expired or existing contracts are or contain leases; (ii) no reassessment of the lease classification for any expired or existing leases; (iii) the exclusion of initial direct costs for the measurement of the right-of-use assets at the date of initial application; and (iv) the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease. Updated accounting policy—ASC 842 In an operating lease, a lessee obtains control of only the use of the underlying asset, but not the underlying asset itself. An operating lease is recognized as a right-of-use asset with a corresponding liability at the date which the leased asset is available for use by the Group. The Group recognizes an obligation to make lease payments equal to the present value of the lease payments over the lease term. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. Lease liabilities include the net present value of the following lease payments: (i) fixed payments; (ii) variable lease payments; and (iii) payments of penalties for terminating the lease if the lease term reflects the lessee exercising that option, if any. Lease liabilities exclude the following payments that are generally accounted for separately: (i) non-lease components, such as maintenance and security service fees and value added tax, and (ii) any payments that a lessee makes before the lease commencement date. The lease payments are discounted using the interest rate implicit in the lease or if that rate cannot be determined, the lessee’s incremental borrowing rate being the rate that the lessee would have to pay to borrow the funds in its currency and jurisdiction necessary to obtain an asset of similar value, economic environment and terms and conditions. An asset representing the right to use the underlying asset during the lease term is recognized that consists of the initial measurement of the operating lease liability, any lease payments made to the lessor at or before the commencement date less any lease incentives received, any initial direct cost incurred by the Group and any restoration costs. After commencement of the operating lease, the Group recognizes lease expenses on a straight-line basis over the lease term. The right-of-use asset is subsequently measured at cost less accumulated amortization and any impairment provision. The amortization of the right-of-use asset represents the difference between the straight-line lease expense and the accretion of interest on the lease liability each period. The interest amount is used to accrete the lease liability and to amortize the right-of-use asset. There is no amount recorded as interest expense. Payments associated with short-term leases are recognized as lease expenses on a straight-line basis over the period of the leases. Subleases of right-of-use assets are accounted for similar to other leases. As an intermediate lessor, the Group separately accounts for the head-lease and sublease unless it is relieved of its primary obligation under the head-lease. Sublease income is recorded on a gross basis separate from the head-lease expenses. If the total remaining lease cost on the head-lease is more than the anticipated sublease income for the lease term, this is an indicator that the carrying amount of the right-of-use asset associated with the head-lease may not be recoverable, and the right-of-use asset will be assessed for impairment. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of reconciliation of operating lease commitments and lease liabilities recognized | (in US$’000) Operating lease commitments as at December 31, 2018 (note (a)) 8,835 Less: Leases not commenced as at January 1, 2019 (3,676) Less: Short-term leases (5) Add: Adjustment as a result of the treatment for a termination option (note (b)) 1,409 Less: Discount under the lessees’ incremental borrowing rate as at January 1, 2019 (206) Lease liabilities recognized as at January 1, 2019 6,357 Notes: (a) Future aggregate minimum payments under non-cancellable operating leases under ASC 840 were as follows: December 31, 2018 (in US$’000) Not later than 1 year 3,026 Between 1 to 2 years 2,735 Between 2 to 3 years 1,056 Between 3 to 4 years 882 Between 4 to 5 years 810 Later than 5 years 326 Total minimum lease payments 8,835 (b) The Group leases its corporate offices in Hong Kong through a support service agreement with an indirect subsidiary of CK Hutchison Holdings Limited (“CK Hutchison”), which is the Company’s ultimate holding company. The support service agreement may be terminated by giving 3-months advance notice; therefore, there was no lease commitment beyond the 3-months advance notice period as at December 31, 2018. This termination option is not considered probable of exercise for the purposes of applying ASC 842. |
Schedule of future aggregate minimum payments under non-cancellable operating leases under ASU 840 | December 31, 2018 (in US$’000) Not later than 1 year 3,026 Between 1 to 2 years 2,735 Between 2 to 3 years 1,056 Between 3 to 4 years 882 Between 4 to 5 years 810 Later than 5 years 326 Total minimum lease payments 8,835 |
Schedule of recognized right-of-use assets | (in US$’000) Offices 4,877 Factories 383 Others 487 5,747 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents | |
Schedule of cash and cash equivalents | December 31, March 31, 2018 2019 (in US$’000) Cash at bank and on hand 78,556 51,409 Bank deposits maturing in three months or less (note (a)) 7,480 40,280 86,036 91,689 Denominated in: US$ (note (b)) 58,291 73,539 RMB (note (b)) 23,254 15,739 UK Pound Sterling (“£”) (note (b)) 331 84 Hong Kong dollar (“HK$”) 4,160 2,327 86,036 91,689 Notes: (a) The weighted average effective interest rate on bank deposits for the year ended December 31, 2018 and the three months ended March 31, 2019 was 1.98% per annum and 2.49% per annum respectively (with maturity ranging from 7 to 90 days and 30 to 35 days respectively). (b) Certain cash and bank balances denominated in RMB, US$ and £ were deposited with banks in the PRC. The conversion of these balances into foreign currencies is subject to the rules and regulations of foreign exchange control promulgated by the PRC government. |
Short-term Investments (Tables)
Short-term Investments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Short-term Investments | |
Schedule of short term investments | December 31, March 31, 2018 2019 (in US$’000) Bank deposits maturing over three months (note) Denominated in: US$ 214,538 179,796 HK$ 377 378 214,915 180,174 Note: The weighted average effective interest rate on bank deposits for the year ended December 31, 2018 and the three months ended March 31, 2019 was 2.18% per annum and 2.82% per annum respectively (with maturity ranging from 91 to 100 days and 91 to 97 days respectively). |
Accounts Receivable-Third Par_2
Accounts Receivable-Third Parties (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounts Receivable-Third Parties | |
Schedule of accounts receivable | December 31, March 31, 2018 2019 (in US$’000) Accounts receivable, gross 40,217 42,360 Allowance for doubtful accounts (41) (87) Accounts receivable, net 40,176 42,273 |
Schedule of movement on the allowance for doubtful accounts | 2018 2019 (in US$’000) As at January 1 258 41 Increase in allowance for doubtful accounts 171 76 Decrease in allowance due to subsequent collection (160) (31) Exchange difference 12 1 As at March 31 281 87 |
Schedule of aging analysis based on the relevant invoice dates | December 31, March 31, 2018 2019 (in US$’000) Not later than 3 months 37,326 39,603 Between 3 months to 6 months 2,704 2,595 Between 6 months to 1 year 61 162 Later than 1 year 126 — Accounts receivable, gross 40,217 42,360 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventories | |
Schedule of inventories, net of provision for excess and obsolete inventories | December 31, March 31, 2018 2019 (in US$’000) Raw materials 652 1,333 Finished goods 11,657 16,279 12,309 17,612 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Schedule of leases | March 31, 2019 (in US$’000) Right-of-use assets Offices (note (a)) 4,308 Factories 325 Others (note (b)) 543 Total right-of-use assets 5,176 Lease liabilities—current 3,191 Lease liabilities—non-current 2,522 5,713 Notes: (a) Includes (i) US$0.2 million right-of-use asset for offices in the United States of America that is leased through July 2023 which includes an option to renew the lease up to an additional 3 years; and (ii) US$1.4 million right-of-use asset for corporate offices in Hong Kong that is leased through May 2021 which includes a termination option with 3 months advance notice. The renewal and termination options were not recognized as part of the right-of-use assets and lease liabilities. (b) Includes US$0.4 million right-of-use asset for retail space in the United Kingdom that is leased through May 2022 which the Group has subleased through May 2022. |
Schedule of lease activities | Three Months Ended March 31, 2019 (in US$’000) Lease expenses: Short-term leases with lease terms equal or less than 12 months 12 Leases with lease terms greater than 12 months 818 830 Sublease rental income 61 Cash paid on lease liabilities 852 Non-cash: Lease liabilities recognized from obtaining right-of-use assets — |
Schedule of future lease payments | March 31, 2019 (in US$’000) Lease payments: Not later than 1 year 3,356 Between 1 to 2 years 2,006 Between 2 to 3 years 449 Between 3 to 4 years 105 Between 4 to 5 years 25 Total lease payments 5,941 Less: Discount factor (228) Total lease liabilities 5,713 |
Investments in Equity Investe_2
Investments in Equity Investees (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments in Equity Investees | |
Schedule of composition of equity investees | December 31, March 31, 2018 2019 (in US$’000) Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited ("HBYS") 60,992 65,594 Shanghai Hutchison Pharmaceuticals Limited ("SHPL") 68,812 84,737 Nutrition Science Partners Limited ("NSPL") 8,102 8,109 Other 412 487 138,318 158,927 |
Summarized balance sheets for significant equity investees | Commercial Platform Innovation Platform Consumer Health Prescription Drugs Drug R&D HBYS SHPL NSPL December 31, March 31, December 31, March 31, December 31, March 31, 2018 2019 2018 2019 2018 2019 (in US$’000) Current assets 116,020 142,306 124,512 148,151 17,320 16,633 Non-current assets 100,353 102,819 98,532 101,305 — — Current liabilities (73,974) (93,365) (84,357) (78,528) (1,117) (415) Non-current liabilities (17,302) (17,481) (6,909) (7,454) — — Net assets 125,097 134,279 131,778 163,474 16,203 16,218 Non-controlling interests (3,113) (3,090) — — — — 121,984 131,189 131,778 163,474 16,203 16,218 |
Summarized statements of operations for significant equity investees | Commercial Platform Innovation Platform Consumer Health Prescription Drugs Drug R&D HBYS SHPL NSPL (note (a)) Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, 2018 2019 2018 2019 2018 2019 (in US$’000) Revenue 62,090 58,484 86,733 89,501 — — Gross profit 30,557 31,505 63,114 64,582 — — Interest income 35 33 214 141 — 44 Finance cost (30) (4) — — — — Profit/(loss) before taxation 6,749 7,056 31,300 32,813 (2,194) 15 Income tax expense (note (b)) (1,141) (1,163) (4,670) (4,715) — — Net income/(loss) 5,608 5,893 26,630 28,098 (2,194) 15 Non-controlling interests 2 89 — — — — Net income/(loss) attributable to the shareholders of equity investee 5,610 5,982 26,630 28,098 (2,194) 15 Notes: (a) NSPL primarily incurred research and development expenses during the three months ended March 31, 2018 and did not have any activity for the three months ended March 31, 2019. (b) The main entities within the HBYS and SHPL groups have been granted the High and New Technology Enterprise (“HNTE”) status. Accordingly, the entities were eligible to use a preferential income tax rate of 15% for the three months ended March 31, 2018 and 2019. |
Reconciliation of the summarized financial information presented to the carrying amount of investments in equity investees | Commercial Platform Innovation Platform (note) Consumer Health Prescription Drugs Drug R&D HBYS SHPL NSPL 2018 2019 2018 2019 2018 2019 (in US$’000) Opening net assets after non-controlling interests as at January 1 110,616 121,984 132,731 131,778 38,401 16,203 Impact of change in accounting policy (ASC 842) — (19) — (2) — — Net income/(loss) attributable to the shareholders of equity investee 5,610 5,982 26,630 28,098 (2,194) 15 Other comprehensive income 4,727 3,242 5,995 3,600 — — Closing net assets after non-controlling interests as at March 31 120,953 131,189 165,356 163,474 36,207 16,218 Group’s share of net assets 60,477 65,594 82,678 81,737 18,104 8,109 Goodwill — — 3,179 3,000 — — Carrying amount of investments as at March 31 60,477 65,594 85,857 84,737 18,104 8,109 Note: The Innovation Platform includes other immaterial equity investees. As at December 31, 2018 and March 31, 2019, the aggregate carrying amount of investments in NSPL and other immaterial equity investees was approximately US$8,514,000 and US$8,596,000 respectively. |
Schedule of equity investees capital commitments | March 31, 2019 (in US$’000) Property, plant and equipment Contracted but not provided for 1,807 |
Accounts Payable (Tables)
Accounts Payable (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounts Payable | |
Schedule of accounts payable | December 31, March 31, 2018 2019 (in US$’000) Accounts payable—third parties 14,158 19,204 Accounts payable—non-controlling shareholders of subsidiaries (Note 16 (iv)) 4,960 4,143 Accounts payable—related party (Note 16 (ii)) 6,507 7,417 25,625 30,764 |
Schedule of aging analysis based on the relevant invoice dates | December 31, March 31, 2018 2019 (in US$’000) Not later than 3 months 19,185 23,642 Between 3 months to 6 months 5,584 4,225 Between 6 months to 1 year 703 2,762 Later than 1 year 153 135 25,625 30,764 |
Other Payables, Accruals and _2
Other Payables, Accruals and Advance Receipts (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Payables, Accruals and Advance Receipts | |
Schedule of other payables, accruals and advance receipts | December 31, March 31, 2018 2019 (in US$’000) Accrued salaries and benefits 8,715 6,056 Accrued research and development expenses 28,883 37,219 Accrued selling and marketing expenses 4,675 4,756 Accrued administrative and other general expenses 6,181 9,897 Deferred government incentives 1,817 384 Deposits 1,230 1,899 Dividend payable to non-controlling shareholder of subsidiary (Note 16(iv)) 1,282 1,282 Others 3,544 2,667 56,327 64,160 |
Bank Borrowings (Tables)
Bank Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Bank Borrowings | |
Schedule of bank borrowings | December 31, March 31, 2018 2019 (in US$’000) Non-current 26,739 26,763 |
Schedule of maturities of bank borrowings | December 31, March 31, 2018 2019 (in US$’000) Not later than 1 year — — Between 1 to 2 years 26,923 26,923 26,923 26,923 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies | |
Schedule of capital commitments | March 31, 2019 (in US$’000) Property, plant and equipment Contracted but not provided for 1,341 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
HCML Share Option Scheme | |
Share-based Compensation | |
A summary of share option activity and related information | Weighted average Number of Weighted average remaining Aggregate share exercise price in contractual life intrinsic value options £ per share (years) (in £’000) Outstanding at January 1, 2018 11,264,120 1.77 6.29 43,158 Granted 10,606,260 4.69 Exercised (2,107,080) 1.40 Cancelled (1,208,450) 4.30 Outstanding at December 31, 2018 18,554,850 3.31 7.35 15,158 Cancelled (145,350) 4.65 Outstanding at March 31, 2019 18,409,500 3.30 7.09 24,301 Vested and exercisable at December 31, 2018 8,032,040 1.68 4.84 14,843 Vested and exercisable at March 31, 2019 8,532,040 1.82 4.82 23,437 |
Assumption for fair value of share options granted | Year Ended December 31, 2011 2013 2016 2017 2018 Weighted average grant date fair value of share options (in £ per share) 0.18 0.32 0.90 1.27 1.67 Significant inputs into the valuation model (weighted average): Exercise price (in £ per share) 0.44 0.61 1.97 3.11 4.69 Share price at effective date of grant (in £ per share) 0.43 0.61 1.97 3.11 4.66 Expected volatility (note (a)) 46.6 % 36.0 % 39.0 % 36.3 % 37.6 % Risk-free interest rate (note (b)) 3.13 % 3.16 % 1.00 % 1.17 % 1.46 % Contractual life of share options (in years) 10 10 8 10 10 Expected dividend yield (note (c)) 0 % 0 % 0 % 0 % 0 % Notes: (a) The Company calculated its expected volatility with reference to the historical volatility prior to the issuances of share options. (b) The risk-free interest rates used in the Polynomial model are with reference to the sovereign yield of the United Kingdom because the Company’s ordinary shares are currently listed on AIM and denominated in £. (c) The Company has not declared or paid any dividends and does not currently expect to do so in the foreseeable future, and therefore uses an expected dividend yield of zero in the Polynomial model. |
Summary of share option exercises | Three Months Ended March 31, 2018 2019 (in US$’000) Cash received from share options exercised 254 — Total intrinsic value of share options exercised 1,764 — |
Summary of share-based compensation expenses | Three Months Ended March 31, 2018 2019 (in US$’000) Research and development expenses 334 2,109 Administrative expenses — 186 334 2,295 |
LTIP | |
Share-based Compensation | |
Schedule of granted awards | Maximum cash amount per annum Covered Performance target Grant date (in US$ millions) financial years determination date October 19, 2015 1.8 2014-2016 note (a) March 24, 2016 0.3 note (b) note (b) March 15, 2017 0.4 note (c) note (c) March 15, 2017 and August 2, 2017 6.0 2017-2019 note (d) December 15, 2017 0.5 2018-2019 note (d) August 6, 2018 0.1 2018-2019 note (d) December 14, 2018 1.5 note (d) Notes: (a) The annual performance target determination date is the date of the announcement of the Group’s annual results for the covered financial year and vesting occurs one business day after the publication date of the annual report of the Company for the financial year falling two years after the covered financial year to which the LTIP award relates. (b) This award does not stipulate performance targets and is subject to a vesting schedule of 25% on each of the first, second, third and fourth anniversaries of the date of grant. (c) This award did not stipulate performance targets and vested one business day after the publication date of the annual report for the 2017 financial year. (d) The annual performance target determination date is the date of the announcement of the Group’s annual results for the covered financial year and vesting occurs two business days after the announcement of the Group’s annual results for the financial year falling two years after the covered financial year to which the LTIP award relates. |
Schedule of treasury shares (in the form of ordinary shares or ADS of the Company) purchased and held by the Trustee | Number of Cost treasury shares (in US$’000) As at January 1, 2018 559,775 1,957 Purchased 795,005 5,451 Vested (233,750) (731) As at December 31, 2018 1,121,030 6,677 Purchased 60,430 346 Vested (240,150) (944) As at March 31, 2019 941,310 6,079 |
Summary of share-based compensation expenses | Three Months Ended March 31, 2018 2019 (in US$’000) Research and development expenses 475 361 Selling and administrative expenses 405 275 880 636 Recorded with a corresponding credit to: Liability 563 178 Additional paid-in capital 317 458 880 636 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenues | |
Schedule of revenue disaggregated by customer types, major categories and reportable segments | Three Months Ended March 31, 2018 Innovation Commercial Platform Platform Total (in US$’000) Customer types Third parties—Distribution — 43,189 43,189 Third parties—Collaboration 4,835 — 4,835 Related parties (Note 16(i)) 2,582 1,731 4,313 7,417 44,920 52,337 Major categories Goods — 42,362 42,362 Services 7,417 2,558 9,975 7,417 44,920 52,337 Three Months Ended March 31, 2019 Innovation Commercial Platform Platform Total (in US$’000) Customer types Third parties-Distribution 1,959 44,524 46,483 Third parties-Collaboration 3,692 — 3,692 Related parties (Note 16(i)) 127 1,866 1,993 5,778 46,390 52,168 Major categories Goods 1,959 44,651 46,610 Services 2,841 1,739 4,580 Royalties 978 — 978 5,778 46,390 52,168 |
Research and Development Expe_2
Research and Development Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Research and Development Expenses | |
Summary of research and development expenses | Three Months Ended March 31, 2018 2019 (in US$’000) Clinical trial related costs 19,472 19,706 Personnel compensation and related costs 7,850 11,295 Other research and development expenses 1,342 2,281 28,664 33,282 |
Significant Transactions with_2
Significant Transactions with Related Parties and Non-Controlling Shareholders of Subsidiaries (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Significant Transactions with Related Parties and Non-Controlling Shareholders of Subsidiaries | |
Schedule of transactions with related parties | Three Months Ended March 31, 2018 2019 (in US$’000) Sales to: Indirect subsidiaries of CK Hutchison 1,731 1,866 Revenue from research and development services from: Equity investees 2,582 127 Purchases from: Equity investees 662 1,062 Rendering of marketing services from: Indirect subsidiaries of CK Hutchison 172 94 An equity investee 3,197 1,736 3,369 1,830 Rendering of support services from: An indirect subsidiary of CK Hutchison 227 233 |
Schedule of balances with related parties | December 31, March 31, 2018 2019 (in US$’000) Accounts receivable—related parties Indirect subsidiaries of CK Hutchison (note (a)) 2,709 2,189 An equity investee (note (a)) 73 — 2,782 2,189 Accounts payable An equity investee (note (a)) 6,507 7,417 Amounts due from related parties Equity investees (note (a)) 889 893 Amounts due to related parties An indirect subsidiary of CK Hutchison (note (b)) 432 623 Other deferred income An equity investee (note (c)) 1,356 1,335 Notes: (a) Balances with related parties are unsecured, repayable on demand and interest-free. The carrying values of balances with related parties approximate their fair values due to their short-term maturities. (b) Amounts due to an indirect subsidiary of CK Hutchison are unsecured, repayable on demand and interest-bearing if not settled within one month. (c) Other deferred income represents amounts recognized from granting of promotion and marketing rights. |
Schedule of transactions with non-controlling shareholders of subsidiaries | Three Months Ended March 31, 2018 2019 (in US$’000) Sales 5,740 6,034 Purchases 3,323 3,504 Interest expense 18 — |
Schedule of balances with non-controlling shareholders of subsidiaries | December 31, March 31, 2018 2019 (in US$’000) Accounts receivable—third parties 5,070 4,193 Accounts payable 4,960 4,143 Other payables, accruals and advance receipts Dividend payable 1,282 1,282 Other non-current liabilities Loan 579 579 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes | |
Components of income tax expense | Three Months Ended March 31, 2018 2019 (in US$’000) Current tax HK (note (a)) 113 85 PRC (note (b)) 537 352 Other 50 69 Deferred income tax 865 803 Income tax expense 1,565 1,309 Notes: (a) The Company, two subsidiaries incorporated in the British Virgin Islands and its Hong Kong subsidiaries are subject to Hong Kong profits tax which has been provided for at the rate of 16.5% on the estimated assessable profits less estimated available tax losses in each entity. (b) Taxation in the PRC has been provided for at the applicable rate on the estimated assessable profits less estimated available tax losses, if any, in each entity. Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate is 25%. In addition, the EIT Law provides for, among others, a preferential tax rate of 15% for companies which qualify as HNTE. HMPL and its wholly-owned subsidiary Hutchison MediPharma (Suzhou) Limited qualify as a HNTE up to December 31, 2019 and 2020 respectively. Pursuant to the EIT law, a 10% withholding tax is levied on dividends paid by PRC companies to their foreign investors. A lower withholding tax rate of 5% is applicable under the China-HK Tax Arrangement if direct foreign investors with at least 25% equity interest in the PRC companies are Hong Kong tax residents, and meet the conditions or requirements pursuant to the relevant PRC tax regulations regarding beneficial ownership. Since the equity holders of the major subsidiaries and equity investees of the Company are Hong Kong incorporated companies and Hong Kong tax residents, and meet the aforesaid conditions or requirements, the Company has used 5% to provide for deferred tax liabilities on retained earnings which are anticipated to be distributed. As at December 31, 2018 and March 31, 2019, the amounts accrued in deferred tax liabilities relating to withholding tax on dividends were determined on the basis that 100% of the distributable reserves of the major subsidiaries and equity investees operating in the PRC will be distributed as dividends. |
Schedule of reconciliation of the Group's reported income tax expense to the theoretical tax amount | Three Months Ended March 31, 2018 2019 (in US$’000) Loss before income taxes and equity in earnings of equity investees (23,870) (34,907) Tax calculated at the statutory tax rate of the Company (3,939) (5,760) Tax effects of: Different tax rates available in different jurisdictions 1,204 1,220 Tax valuation allowance 5,472 6,499 Preferential tax deduction (1,793) (1,721) Expenses not deductible for tax purposes 195 695 Utilization of previously unrecognized tax losses (110) (165) Withholding tax on undistributed earnings of PRC entities 832 858 Others (296) (317) Income tax expense 1,565 1,309 |
Losses per Share (Tables)
Losses per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Losses per Share | |
Schedule of basic losses per share | Three Months Ended March 31, 2018 2019 Weighted average number of outstanding ordinary shares in issue 663,844,980 665,470,220 Net loss attributable to the Company (US$’000) (11,730) (19,885) Losses per share attributable to the Company (US$ per share) (0.02) (0.03) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting | |
Schedule of segment information for the reportable segments | Three Months Ended March 31, 2018 Innovation Platform Commercial Platform Drug Prescription Consumer R&D Drugs Health Hong PRC PRC PRC Kong Subtotal Unallocated Total (in US$’000) Revenue from external customers 7,417 35,471 3,438 6,011 44,920 — 52,337 Adjusted (LBIT)/EBIT (24,427) 1,648 392 633 2,673 (3,176) (24,930) Interest income 20 10 3 14 27 1,219 1,266 Equity in earnings of equity investees, net of tax (1,089) 13,314 2,805 — 16,119 — 15,030 Operating (loss)/profit (25,496) 14,972 3,200 647 18,819 (1,957) (8,634) Interest expense — — — 18 18 188 206 Income tax expense 9 445 108 104 657 899 1,565 Net (loss)/income attributable to the Company (25,444) 13,933 2,585 261 16,779 (3,065) (11,730) Depreciation/amortization 782 34 6 5 45 7 834 Additions to non-current assets (other than financial instruments and deferred tax assets) 1,059 3 7 — 10 2 1,071 As at December 31, 2018 Innovation Platform Commercial Platform Drug Prescription Consumer R&D Drugs Health Hong PRC PRC PRC Kong Subtotal Unallocated Total (in US$’000) Total assets 100,388 118,445 67,352 11,686 197,483 234,247 532,118 Property, plant and equipment 15,223 204 71 418 693 700 16,616 Leasehold land 1,174 — — — — — 1,174 Goodwill — 2,779 407 — 3,186 — 3,186 Other intangible asset — 347 — — 347 — 347 Investments in equity investees 8,514 68,812 60,992 — 129,804 — 138,318 Three Months Ended March 31, 2019 Innovation Platform Commercial Platform Drug Prescription Consumer R&D Drugs Health Hong PRC PRC PRC Kong Subtotal Unallocated Total (in US$’000) Revenue from external customers 5,778 37,849 3,342 5,199 46,390 — 52,168 Adjusted (LBIT)/EBIT (32,318) 775 271 366 1,412 (5,417) (36,323) Interest income 99 14 11 1 26 1,551 1,676 Equity in earnings of equity investees, net of tax 70 14,049 2,991 — 17,040 — 17,110 Operating (loss)/profit (32,149) 14,838 3,273 367 18,478 (3,866) (17,537) Interest expense — — — — — 260 260 Income tax expense 47 228 93 43 364 898 1,309 Net (loss)/income attributable to the Company (32,117) 14,321 2,761 135 17,217 (4,985) (19,885) Depreciation/amortization 1,097 40 6 22 68 40 1,205 Additions to non-current assets (other than financial instruments and deferred tax assets) 1,136 129 6 — 135 6 1,277 As at March 31, 2019 Innovation Platform Commercial Platform Drug Prescription Consumer R&D Drugs Health Hong PRC PRC PRC Kong Subtotal Unallocated Total (in US$’000) Total assets 77,773 144,381 71,260 10,423 226,064 235,460 539,297 Property, plant and equipment 15,653 315 73 364 752 631 17,036 Right-of-use assets 3,274 32 44 520 596 1,306 5,176 Leasehold land 1,196 — — — — — 1,196 Goodwill — 2,852 407 — 3,259 — 3,259 Other intangible asset — 340 — — 340 — 340 Investments in equity investees 8,596 84,737 65,594 — 150,331 — 158,927 |
Schedule of reconciliation of Adjusted LBIT to net loss | Three Months Ended March 31, 2018 2019 (in US$’000) Adjusted LBIT (24,930) (36,323) Interest income 1,266 1,676 Equity in earnings of equity investees, net of tax 15,030 17,110 Interest expense (206) (260) Income tax expense (1,565) (1,309) Net loss (10,405) (19,106) |
Note to Consolidated Statemen_2
Note to Consolidated Statements of Cash Flows (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Note to Consolidated Statements of Cash Flows | |
Schedule of reconciliation of net loss for the period to net cash used in operating activities | Three Months Ended March 31, 2018 2019 (in US$’000) Net loss (10,405) (19,106) Adjustments to reconcile net loss to net cash used in operating activities Share-based compensation expense—share options 334 2,295 Share-based compensation expense—LTIP 880 636 Equity in earnings of equity investees, net of tax (15,030) (17,110) Changes in right-of-use assets — 754 Other adjustments 2,541 1,840 Changes in working capital Accounts receivable—third parties (5,747) (2,142) Inventories 2,160 (5,358) Accounts payable (7,605) 5,139 Other payables, accruals and advance receipts 2,154 6,929 Lease liabilities — (851) Other changes in working capital (122) (1,949) Total changes in working capital (9,160) 1,768 Net cash used in operating activities (30,840) (28,923) |
Organization and Nature of Bu_2
Organization and Nature of Business (Details) | Mar. 31, 2019HKD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018HKD ($) | Dec. 31, 2018USD ($) |
Organization and Nature of Business | ||||
Accumulated losses | $ 203,583,000 | $ 183,004,000 | ||
Cash and cash equivalents | 91,689,000 | 86,036,000 | ||
Short-term investments | 180,174,000 | 214,915,000 | ||
Unutilized bank borrowing facilities | $ 931,000,000 | $ 119,359,000 | $ 931,000,000 | $ 119,359,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Leases (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Cumulative adjustment to opening accumulated losses upon adoption | $ (671) | ||
Weighted average incremental borrowing rate | 3.97% | 3.96% | |
Reconciliation of operating lease commitments and lease liabilities recognized | |||
Operating lease commitments | $ 8,835 | 8,835 | |
Less: Leases not commenced | (3,676) | ||
Less: Short-term leases | (5) | ||
Add: Adjustment as a result of the treatment for a termination option | 1,409 | ||
Less: Discount under the lessees' incremental borrowing rate | (206) | ||
Lease liabilities | 6,357 | $ 5,713 | |
Future aggregate minimum payments under non-cancellable operating leases under ASC 840 | |||
Not later than 1 year | 3,026 | ||
Between 1 to 2 years | 2,735 | ||
Between 2 to 3 years | 1,056 | ||
Between 3 to 4 years | 882 | ||
Between 4 to 5 years | 810 | ||
Later than 5 years | 326 | ||
Total minimum lease payments | 8,835 | 8,835 | |
Recognized right-of-use assets | $ 5,747 | 5,176 | |
Practical expedients package | true | ||
Practical expedients, use of hindsight | true | ||
Offices | |||
Future aggregate minimum payments under non-cancellable operating leases under ASC 840 | |||
Recognized right-of-use assets | $ 4,877 | 4,308 | |
Factories | |||
Future aggregate minimum payments under non-cancellable operating leases under ASC 840 | |||
Recognized right-of-use assets | 383 | 325 | |
Others | |||
Future aggregate minimum payments under non-cancellable operating leases under ASC 840 | |||
Recognized right-of-use assets | $ 487 | $ 543 | |
Hong Kong | Offices | |||
Future aggregate minimum payments under non-cancellable operating leases under ASC 840 | |||
Advance notice period for lease termination option | 3 months | 3 months | |
Recognized right-of-use assets | $ 1,400 | ||
Accumulated Losses | |||
Cumulative adjustment to opening accumulated losses upon adoption | $ (655) |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Cash and Cash Equivalents | ||
Cash at bank and on hand | $ 51,409 | $ 78,556 |
Bank deposits maturing in three months or less (note (a)) | 40,280 | 7,480 |
Cash and cash equivalents | 91,689 | 86,036 |
US$ | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents | 73,539 | 58,291 |
RMB | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents | 15,739 | 23,254 |
UK Pound Sterling | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents | 84 | 331 |
Hong Kong dollar ("HK$") | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents | $ 2,327 | $ 4,160 |
Bank deposits maturing in three months or less | Weighted average | ||
Cash and Cash Equivalents | ||
Effective interest rate (in percentage) | 2.49% | 1.98% |
Bank deposits maturing in three months or less | Minimum | ||
Cash and Cash Equivalents | ||
Bank deposit maturity period (in days) | 30 days | 7 days |
Bank deposits maturing in three months or less | Maximum | ||
Cash and Cash Equivalents | ||
Bank deposit maturity period (in days) | 35 days | 90 days |
Short-term Investments (Details
Short-term Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Short term Investments | ||
Short-term investments | $ 180,174 | $ 214,915 |
Bank deposits maturing over three months | Weighted average | ||
Short term Investments | ||
Effective interest rate (in percentage) | 2.82% | 2.18% |
Bank deposits maturing over three months | Minimum | ||
Short term Investments | ||
Bank deposit maturity period (in days) | 91 days | 91 days |
Bank deposits maturing over three months | Maximum | ||
Short term Investments | ||
Bank deposit maturity period (in days) | 97 days | 100 days |
US$ | ||
Short term Investments | ||
Short-term investments | $ 179,796 | $ 214,538 |
Hong Kong dollar ("HK$") | ||
Short term Investments | ||
Short-term investments | $ 378 | $ 377 |
Accounts Receivable-Third Par_3
Accounts Receivable-Third Parties (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts Receivable-Third Parties | ||
Accounts receivable, gross | $ 42,360 | $ 40,217 |
Allowance for doubtful accounts | (87) | (41) |
Accounts receivable, net | $ 42,273 | $ 40,176 |
Accounts Receivable-Third Par_4
Accounts Receivable-Third Parties - Movements on the Allowance for Doubtful Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Allowance for Doubtful Accounts Receivable | ||
As at January 1 | $ 41 | $ 258 |
Increase in allowance for doubtful accounts | 76 | 171 |
Decrease in allowance due to subsequent collection | (31) | (160) |
Exchange difference | 1 | 12 |
As at March 31 | $ 87 | $ 281 |
Accounts Receivable-Third Par_5
Accounts Receivable-Third Parties - Aging Analysis (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Account Receivable | ||
Accounts receivable, gross | $ 42,360 | $ 40,217 |
Not later than 3 months | ||
Account Receivable | ||
Accounts receivable, gross | 39,603 | 37,326 |
Between 3 months to 6 months | ||
Account Receivable | ||
Accounts receivable, gross | 2,595 | 2,704 |
Between 6 months to 1 year | ||
Account Receivable | ||
Accounts receivable, gross | $ 162 | 61 |
Later than 1 year | ||
Account Receivable | ||
Accounts receivable, gross | $ 126 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventories | ||
Raw materials | $ 1,333 | $ 652 |
Finished goods | 16,279 | 11,657 |
Total | $ 17,612 | $ 12,309 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Mar. 31, 2019 |
Leases | ||
Right-of-use assets | $ 5,747 | $ 5,176 |
Lease liabilities-current | 3,191 | |
Lease liabilities-non-current | 2,522 | |
Lease liabilities | $ 6,357 | 5,713 |
Lease expenses | 830 | |
Sublease rental income | 61 | |
Cash paid on lease liabilities | $ 852 | |
Weighted average remaining lease term (years) | 1 year 9 months 29 days | |
Weighted average discount rate | 3.97% | 3.96% |
Lease payments: | ||
Not later than 1 year | $ 3,356 | |
Between 1 to 2 years | 2,006 | |
Between 2 to 3 years | 449 | |
Between 3 to 4 years | 105 | |
Between 4 to 5 years | 25 | |
Total lease payments | 5,941 | |
Less: Discount factor | (228) | |
Total lease liabilities | $ 6,357 | 5,713 |
Short-term leases with lease terms equal or less than 12 months | ||
Leases | ||
Lease expenses | 12 | |
Leases with lease terms greater than 12 months | ||
Leases | ||
Lease expenses | 818 | |
Offices | ||
Leases | ||
Right-of-use assets | $ 4,877 | 4,308 |
Offices | United States of America | ||
Leases | ||
Right-of-use assets | $ 200 | |
Existence of option to renew the lease | true | |
Offices | Hong Kong | ||
Leases | ||
Right-of-use assets | $ 1,400 | |
Existence of option to terminate the lease | true | |
Advance notice period for lease termination option | 3 months | 3 months |
Factories | ||
Leases | ||
Right-of-use assets | $ 383 | $ 325 |
Others | ||
Leases | ||
Right-of-use assets | $ 487 | 543 |
Others | United Kingdom | ||
Leases | ||
Right-of-use assets | $ 400 | |
Minimum | ||
Leases | ||
Terms of lease contracts | 1 year | |
Maximum | ||
Leases | ||
Terms of lease contracts | 5 years | |
Maximum | Offices | United States of America | ||
Leases | ||
Renewal term of lease | 3 years |
Investments in Equity Investe_3
Investments in Equity Investees (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investments in Equity Investees | ||
Investments in equity investees | $ 158,927 | $ 138,318 |
Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited ("HBYS") | ||
Investments in Equity Investees | ||
Investments in equity investees | 65,594 | 60,992 |
Shanghai Hutchison Pharmaceuticals Limited ("SHPL") | ||
Investments in Equity Investees | ||
Investments in equity investees | 84,737 | 68,812 |
Nutrition Science Partners Limited ("NSPL") | ||
Investments in Equity Investees | ||
Investments in equity investees | 8,109 | 8,102 |
Other | ||
Investments in Equity Investees | ||
Investments in equity investees | $ 487 | $ 412 |
Investments in Equity Investe_4
Investments in Equity Investees - Summarized Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Consumer Health | Commercial Platform | Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited ("HBYS") | ||||
Summarized balance sheet | ||||
Current assets | $ 142,306 | $ 116,020 | ||
Non-current assets | 102,819 | 100,353 | ||
Current liabilities | (93,365) | (73,974) | ||
Non-current liabilities | (17,481) | (17,302) | ||
Net assets | 134,279 | 125,097 | ||
Non-controlling interests | (3,090) | (3,113) | ||
Net assets, excluding non-controlling interests | 131,189 | 121,984 | $ 120,953 | $ 110,616 |
Prescription Drugs | Commercial Platform | Shanghai Hutchison Pharmaceuticals Limited ("SHPL") | ||||
Summarized balance sheet | ||||
Current assets | 148,151 | 124,512 | ||
Non-current assets | 101,305 | 98,532 | ||
Current liabilities | (78,528) | (84,357) | ||
Non-current liabilities | (7,454) | (6,909) | ||
Net assets | 163,474 | 131,778 | ||
Net assets, excluding non-controlling interests | 163,474 | 131,778 | 165,356 | 132,731 |
Drug R&D | Innovation Platform | Nutrition Science Partners Limited ("NSPL") | ||||
Summarized balance sheet | ||||
Current assets | 16,633 | 17,320 | ||
Current liabilities | (415) | (1,117) | ||
Net assets | 16,218 | 16,203 | ||
Net assets, excluding non-controlling interests | $ 16,218 | $ 16,203 | $ 36,207 | $ 38,401 |
Investments in Equity Investe_5
Investments in Equity Investees - Summarized Statements of Operations (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited ("HBYS") | ||
Summarized statements of operations | ||
Preferential income tax rate (as a percent) | 15.00% | 15.00% |
Shanghai Hutchison Pharmaceuticals Limited ("SHPL") | ||
Summarized statements of operations | ||
Preferential income tax rate (as a percent) | 15.00% | 15.00% |
Other | ||
Summarized statements of operations | ||
Net income/(loss) | $ 125,000 | $ 15,000 |
Commercial Platform | Consumer Health | Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited ("HBYS") | ||
Summarized statements of operations | ||
Revenue | 58,484,000 | 62,090,000 |
Gross profit | 31,505,000 | 30,557,000 |
Interest income | 33,000 | 35,000 |
Finance cost | (4,000) | (30,000) |
Profit/(loss) before taxation | 7,056,000 | 6,749,000 |
Income tax expense (note (b)) | (1,163,000) | (1,141,000) |
Net income/(loss) | 5,893,000 | 5,608,000 |
Non-controlling interests | 89,000 | 2,000 |
Net income/(loss) attributable to the shareholders of equity investee | 5,982,000 | 5,610,000 |
Commercial Platform | Prescription Drugs | Shanghai Hutchison Pharmaceuticals Limited ("SHPL") | ||
Summarized statements of operations | ||
Revenue | 89,501,000 | 86,733,000 |
Gross profit | 64,582,000 | 63,114,000 |
Interest income | 141,000 | 214,000 |
Profit/(loss) before taxation | 32,813,000 | 31,300,000 |
Income tax expense (note (b)) | (4,715,000) | (4,670,000) |
Net income/(loss) | 28,098,000 | 26,630,000 |
Net income/(loss) attributable to the shareholders of equity investee | 28,098,000 | 26,630,000 |
Innovation Platform | Drug R&D | Nutrition Science Partners Limited ("NSPL") | ||
Summarized statements of operations | ||
Interest income | 44,000 | |
Profit/(loss) before taxation | 15,000 | (2,194,000) |
Net income/(loss) | 15,000 | (2,194,000) |
Net income/(loss) attributable to the shareholders of equity investee | $ 15,000 | $ (2,194,000) |
Investments in Equity Investe_6
Investments in Equity Investees - Reconciliation of Summarized Financial Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Reconciliation of the summarized financial information presented to the carrying amount of investments in equity investees | |||
Carrying amount of investments | $ 158,927,000 | $ 138,318,000 | |
Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited ("HBYS") | |||
Reconciliation of the summarized financial information presented to the carrying amount of investments in equity investees | |||
Carrying amount of investments | 65,594,000 | 60,992,000 | |
Shanghai Hutchison Pharmaceuticals Limited ("SHPL") | |||
Reconciliation of the summarized financial information presented to the carrying amount of investments in equity investees | |||
Carrying amount of investments | 84,737,000 | 68,812,000 | |
Nutrition Science Partners Limited ("NSPL") | |||
Reconciliation of the summarized financial information presented to the carrying amount of investments in equity investees | |||
Carrying amount of investments | 8,109,000 | 8,102,000 | |
Commercial Platform | Consumer Health | Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited ("HBYS") | |||
Reconciliation of the summarized financial information presented to the carrying amount of investments in equity investees | |||
Opening net assets after non-controlling interests as at January 1 | 121,984,000 | $ 110,616,000 | |
Impact of change in accounting policy (ASC 842) | (19,000) | ||
Net income/(loss) attributable to the shareholders of equity investee | 5,982,000 | 5,610,000 | |
Other comprehensive income | 3,242,000 | 4,727,000 | |
Closing net assets after non-controlling interests as at March 31 | 131,189,000 | 120,953,000 | |
Group's share of net assets | 65,594,000 | 60,477,000 | |
Carrying amount of investments | 65,594,000 | 60,477,000 | |
Commercial Platform | Prescription Drugs | Shanghai Hutchison Pharmaceuticals Limited ("SHPL") | |||
Reconciliation of the summarized financial information presented to the carrying amount of investments in equity investees | |||
Opening net assets after non-controlling interests as at January 1 | 131,778,000 | 132,731,000 | |
Impact of change in accounting policy (ASC 842) | (2,000) | ||
Net income/(loss) attributable to the shareholders of equity investee | 28,098,000 | 26,630,000 | |
Other comprehensive income | 3,600,000 | 5,995,000 | |
Closing net assets after non-controlling interests as at March 31 | 163,474,000 | 165,356,000 | |
Group's share of net assets | 81,737,000 | 82,678,000 | |
Goodwill | 3,000,000 | 3,179,000 | |
Carrying amount of investments | 84,737,000 | 85,857,000 | |
Innovation Platform | NSPL and other immaterial equity investees | |||
Reconciliation of the summarized financial information presented to the carrying amount of investments in equity investees | |||
Carrying amount of investments | 8,596,000 | $ 8,514,000 | |
Innovation Platform | Drug R&D | Nutrition Science Partners Limited ("NSPL") | |||
Reconciliation of the summarized financial information presented to the carrying amount of investments in equity investees | |||
Opening net assets after non-controlling interests as at January 1 | 16,203,000 | 38,401,000 | |
Net income/(loss) attributable to the shareholders of equity investee | 15,000 | (2,194,000) | |
Closing net assets after non-controlling interests as at March 31 | 16,218,000 | 36,207,000 | |
Group's share of net assets | 8,109,000 | 18,104,000 | |
Carrying amount of investments | $ 8,109,000 | $ 18,104,000 |
Investments in Equity Investe_7
Investments in Equity Investees - Capital Commitments (Details) - Property, plant and equipment $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Capital commitments | |
Property, plant and equipment - Contracted but not provided for | $ 1,341 |
Equity investees | |
Capital commitments | |
Property, plant and equipment - Contracted but not provided for | $ 1,807 |
Accounts Payable (Details)
Accounts Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts payable-related party (Note 16(ii)) | $ 7,417 | $ 6,507 |
Accounts Payable | 30,764 | 25,625 |
Not later than 3 months | ||
Accounts Payable | 23,642 | 19,185 |
Between 3 months to 6 months | ||
Accounts Payable | 4,225 | 5,584 |
Between 6 months to 1 year | ||
Accounts Payable | 2,762 | 703 |
Later than 1 year | ||
Accounts Payable | 135 | 153 |
Non-controlling shareholders of subsidiaries | ||
Accounts payable-third parties | 4,143 | 4,960 |
Third parties | ||
Accounts payable-third parties | $ 19,204 | $ 14,158 |
Other Payables, Accruals and _3
Other Payables, Accruals and Advance Receipts (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other Payables, Accruals and Advance Receipts | ||
Accrued salaries and benefits | $ 6,056 | $ 8,715 |
Accrued research and development expenses | 37,219 | 28,883 |
Accrued selling and marketing expenses | 4,756 | 4,675 |
Accrued administrative and other general expenses | 9,897 | 6,181 |
Deferred government incentives | 384 | 1,817 |
Deposits (note) | 1,899 | 1,230 |
Dividend payable to non-controlling shareholder of subsidiary (Note 16(iv)) | 1,282 | 1,282 |
Others | 2,667 | 3,544 |
Total other payables, accruals and advance receipts | $ 64,160 | $ 56,327 |
Bank Borrowings - Schedule of B
Bank Borrowings - Schedule of Bank Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Bank Borrowings | ||
Non-current | $ 26,763 | $ 26,739 |
Weighted average interest rate for outstanding bank borrowings | 2.94% | 2.79% |
Bank Borrowings - Loan Faciliti
Bank Borrowings - Loan Facilities (Details) | 1 Months Ended | ||||||||
Nov. 30, 2018HKD ($) | Aug. 31, 2018HKD ($)agreement | Nov. 30, 2017HKD ($) | Nov. 30, 2017USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Nov. 30, 2018USD ($) | Aug. 31, 2018USD ($) | Nov. 30, 2017USD ($) | |
Revolving loan facility | |||||||||
Bank Borrowings | |||||||||
Term | 3 years | ||||||||
Aggregate amount of credit facilities | $ 234,000,000 | $ 30,000,000 | |||||||
Amount drawn from the credit facility | $ 0 | $ 0 | |||||||
Revolving loan facility | HIBOR | |||||||||
Bank Borrowings | |||||||||
Basis spread on variable rate | 0.85% | ||||||||
Unsecured credit facility | |||||||||
Bank Borrowings | |||||||||
Aggregate amount of credit facilities | $ 507,000,000 | $ 400,000,000 | $ 65,000,000 | $ 51,282,000 | |||||
Number of facility agreements entered | agreement | 2 | ||||||||
Unsecured credit facility | Term loan | |||||||||
Bank Borrowings | |||||||||
Term | 3 years | 3 years | |||||||
Aggregate amount of credit facilities | $ 210,000,000 | 26,923,000 | |||||||
Amount of upfront fee | $ 1,575,000 | $ 202,000 | |||||||
Unsecured credit facility | Term loan | HIBOR | |||||||||
Bank Borrowings | |||||||||
Basis spread on variable rate | 1.50% | 1.50% | |||||||
Unsecured credit facility | Revolving loan facility | |||||||||
Bank Borrowings | |||||||||
Term | 18 months | 18 months | |||||||
Aggregate amount of credit facilities | $ 190,000,000 | $ 24,359,000 | |||||||
Amount drawn from the credit facility | 0 | 0 | |||||||
Unsecured credit facility | Revolving loan facility | HIBOR | |||||||||
Bank Borrowings | |||||||||
Basis spread on variable rate | 1.25% | 1.25% | |||||||
First unsecured credit facility | Revolving loan facility | |||||||||
Bank Borrowings | |||||||||
Term | 2 years | ||||||||
Aggregate amount of credit facilities | $ 351,000,000 | 45,000,000 | |||||||
Amount drawn from the credit facility | 0 | 0 | |||||||
First unsecured credit facility | Revolving loan facility | HIBOR | |||||||||
Bank Borrowings | |||||||||
Basis spread on variable rate | 1.35% | ||||||||
Second unsecured credit facility | Revolving loan facility | |||||||||
Bank Borrowings | |||||||||
Term | 2 years | ||||||||
Aggregate amount of credit facilities | $ 156,000,000 | $ 20,000,000 | |||||||
Amount drawn from the credit facility | $ 0 | $ 0 | |||||||
Second unsecured credit facility | Revolving loan facility | HIBOR | |||||||||
Bank Borrowings | |||||||||
Basis spread on variable rate | 1.35% |
Bank Borrowings - Schedule of M
Bank Borrowings - Schedule of Maturities of Bank Borrowings (Details) | Mar. 31, 2019HKD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018HKD ($) | Dec. 31, 2018USD ($) |
Bank Borrowings | ||||
Between 1 to 2 years | $ 26,923,000 | $ 26,923,000 | ||
Bank borrowings | 26,923,000 | 26,923,000 | ||
Unutilized bank borrowing facilities | $ 931,000,000 | $ 119,359,000 | $ 931,000,000 | $ 119,359,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Property, plant and equipment | |
Capital commitments | |
Property, plant and equipment - Contracted but not provided for | $ 1,341 |
Share based Compensation - HCML
Share based Compensation - HCML Share Option Scheme (Details) - shares | Jun. 04, 2005 | Mar. 31, 2019 |
Share option scheme expired in 2016 | ||
Share-based Compensation | ||
Expiry period | 10 years | |
Aggregate number of shares issuable | 1,845,180 | |
HCML Share Option Scheme | ||
Share-based Compensation | ||
Aggregate number of shares issuable | 23,130,970 | |
Number of shares authorized but unissued | 83,422,550 | |
HCML Share Option Scheme | Minimum | ||
Share-based Compensation | ||
Expiry period | 8 years | |
HCML Share Option Scheme | Maximum | ||
Share-based Compensation | ||
Expiry period | 10 years | |
HCML Share Option Scheme | Four-year awards | ||
Share-based Compensation | ||
Vesting period | 4 years | |
Vesting percentage upon first anniversary | 25.00% | |
Annual vesting percentage after the first anniversary | 25.00% |
Share-based Compensation - HCML
Share-based Compensation - HCML Share Option Activity (Details) - HCML Share Option Scheme - GBP (£) £ / shares in Units, £ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of share options | |||
Outstanding as at beginning of period (in shares) | 18,554,850 | 11,264,120 | |
Granted (in shares) | 10,606,260 | ||
Exercised (in shares) | (2,107,080) | ||
Cancelled (in shares) | (145,350) | (1,208,450) | |
Outstanding as at end of period (in shares) | 18,409,500 | 18,554,850 | 11,264,120 |
Vested and exercisable (in shares) | 8,532,040 | 8,032,040 | |
Weighted-average exercise price | |||
Outstanding balance as at beginning of period (in GBP per share) | £ 3.31 | £ 1.77 | |
Granted (in GBP per share) | 4.69 | ||
Exercised (in GBP per share) | 1.40 | ||
Cancelled (in GBP per share) | 4.65 | 4.30 | |
Outstanding balance as at end of period (in GBP per share) | 3.30 | 3.31 | £ 1.77 |
Vested and exercisable (in GBP per share) | £ 1.82 | £ 1.68 | |
Weighted average remaining contractual life | |||
Outstanding (in years) | 7 years 1 month 2 days | 7 years 4 months 6 days | 6 years 3 months 15 days |
Vested and exercisable (in years) | 4 years 9 months 26 days | 4 years 10 months 2 days | |
Aggregate intrinsic value | |||
Outstanding (in GBP) | £ 24,301 | £ 15,158 | £ 43,158 |
Vested and exercisable (in GBP) | £ 23,437 | £ 14,843 |
Share-based Compensation - HC_2
Share-based Compensation - HCML Options Fair value Assumptions (Details) - HCML Share Option Scheme - £ / shares | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | Dec. 31, 2011 | |
Share-based Compensation | |||||
Weighted average grant date fair value of share options (in GBP per share) | £ 1.67 | £ 1.27 | £ 0.90 | £ 0.32 | £ 0.18 |
Significant inputs into the valuation model (weighted average): | |||||
Exercise price (in GBP per share) | 4.69 | 3.11 | 1.97 | 0.61 | 0.44 |
Share price at effective date of grant (in GBP per share) | £ 4.66 | £ 3.11 | £ 1.97 | £ 0.61 | £ 0.43 |
Expected volatility (in percentage) (note (a)) | 37.60% | 36.30% | 39.00% | 36.00% | 46.60% |
Risk-free interest rate (in percentage) (note (b)) | 1.46% | 1.17% | 1.00% | 3.16% | 3.13% |
Contractual life of share options (in years) | 10 years | 10 years | 8 years | 10 years | 10 years |
Expected dividend yield (in percentage) (note (c)) | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Share-based Compensation - HC_3
Share-based Compensation - HCML Share Option Exercises (Details) - HCML Share Option Scheme $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Share option values | |
Cash received from share options exercised | $ 254 |
Total intrinsic value of share options exercised | $ 1,764 |
Share-based Compensation - HC_4
Share-based Compensation - HCML Share Based Compensation Expense (Details) - HCML Share Option Scheme - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation | ||
Share-based compensation expense | $ 2,295,000 | $ 334,000 |
Unrecognized compensation cost | $ 13,028,000 | |
Unrecognized compensation cost - weighted-average remaining service period | 3 years 26 days | |
Research and development expenses | ||
Share-based Compensation | ||
Share-based compensation expense | $ 2,109,000 | $ 334,000 |
Administrative expenses | ||
Share-based Compensation | ||
Share-based compensation expense | $ 186,000 |
Share-based Compensation - LTIP
Share-based Compensation - LTIP (Details) - LTIP - USD ($) $ in Thousands | Dec. 14, 2018 | Aug. 06, 2018 | Dec. 15, 2017 | Aug. 02, 2017 | Mar. 15, 2017 | Oct. 19, 2015 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Mar. 24, 2016 |
Share-based Compensation | ||||||||||
Awards forfeited | 37,000 | 59,000 | ||||||||
Shared-based Compensation Award, Performance | ||||||||||
Share-based Compensation | ||||||||||
Maximum cash amount per annum | $ 1,500 | $ 100 | $ 500 | $ 6,000 | $ 400 | $ 1,800 | $ 300 | |||
Number of business days for vesting after publication date of annual report | 1 day | 1 day | ||||||||
Number of years after the covered financial year to which the LTIP award relates | 2 years | 2 years | 2 years | 2 years | 2 years | |||||
Vesting percentage on first anniversary | 25.00% | |||||||||
Vesting percentage on second anniversary | 25.00% | |||||||||
Vesting percentage on third anniversary | 25.00% | |||||||||
Vesting percentage on fourth anniversary | 25.00% | |||||||||
Number of business days for vesting after announcement of group's annual results | 2 days | 2 days | 2 days | 2 days | ||||||
Ordinary Shares | ||||||||||
Ordinary Shares Purchased and Held by Trustee - Number of treasury shares | ||||||||||
As at January 1 | 1,121,030 | 559,775 | 559,775 | |||||||
Purchased | 60,430 | 795,005 | ||||||||
Vested | (240,150) | (233,750) | ||||||||
As at December 31 | 941,310 | 1,121,030 | ||||||||
Ordinary Shares Purchased and Held by Trustee - Cost | ||||||||||
As at January 1 | $ 6,677 | $ 1,957 | $ 1,957 | |||||||
Purchased | 346 | 5,451 | ||||||||
Vested | (944) | (731) | ||||||||
As at December 31 | $ 6,079 | $ 6,677 |
Share-based Compensation - LT_2
Share-based Compensation - LTIP Share Based Compensation Expense (Details) - LTIP - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Share-based Compensation | |||
Share-based compensation expense | $ 636,000 | $ 880,000 | |
Share-based compensation reclassified from liability to additional paid-in capital | 526,000 | 1,770,000 | |
Share-based compensation recorded as liability | 887,000 | $ 1,235,000 | |
Unrecognized compensation cost | 3,990,000 | ||
Liability | |||
Share-based Compensation | |||
Share-based compensation expense | 178,000 | 563,000 | |
Additional Paid-in Capital | |||
Share-based Compensation | |||
Share-based compensation expense | 458,000 | 317,000 | |
Research and development expenses | |||
Share-based Compensation | |||
Share-based compensation expense | 361,000 | 475,000 | |
Selling and administrative expenses | |||
Share-based Compensation | |||
Share-based compensation expense | $ 275,000 | $ 405,000 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Total revenues | $ 52,168 | $ 52,337 |
Goods | ||
Revenues | ||
Total revenues | 46,610 | 42,362 |
Services | ||
Revenues | ||
Total revenues | 4,580 | 9,975 |
Royalties | ||
Revenues | ||
Total revenues | 978 | |
Third parties-Distribution | ||
Revenues | ||
Total revenues | 46,483 | 43,189 |
Third parties-Collaboration | ||
Revenues | ||
Total revenues | 3,692 | 4,835 |
Related parties | ||
Revenues | ||
Total revenues | 1,993 | 4,313 |
Innovation Platform | ||
Revenues | ||
Total revenues | 5,778 | 7,417 |
Innovation Platform | Goods | ||
Revenues | ||
Total revenues | 1,959 | |
Innovation Platform | Services | ||
Revenues | ||
Total revenues | 2,841 | 7,417 |
Innovation Platform | Royalties | ||
Revenues | ||
Total revenues | 978 | |
Innovation Platform | Third parties-Distribution | ||
Revenues | ||
Total revenues | 1,959 | |
Innovation Platform | Third parties-Collaboration | ||
Revenues | ||
Total revenues | 3,692 | 4,835 |
Innovation Platform | Related parties | ||
Revenues | ||
Total revenues | 127 | 2,582 |
Commercial Platform | ||
Revenues | ||
Total revenues | 46,390 | 44,920 |
Commercial Platform | Goods | ||
Revenues | ||
Total revenues | 44,651 | 42,362 |
Commercial Platform | Services | ||
Revenues | ||
Total revenues | 1,739 | 2,558 |
Commercial Platform | Third parties-Distribution | ||
Revenues | ||
Total revenues | 44,524 | 43,189 |
Commercial Platform | Related parties | ||
Revenues | ||
Total revenues | $ 1,866 | $ 1,731 |
Research and Development Expe_3
Research and Development Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Research and Development Expenses | ||
Clinical trial related costs | $ 19,706 | $ 19,472 |
Personnel compensation and related costs | 11,295 | 7,850 |
Other research and development expenses | 2,281 | 1,342 |
Research and development expenses | $ 33,282 | $ 28,664 |
Significant Transactions with_3
Significant Transactions with Related Parties and Non-Controlling Shareholders of Subsidiaries - Related parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Balances with related parties included in: | |||
Accounts receivable-related parties | $ 2,189 | $ 2,782 | |
Accounts payable | 7,417 | 6,507 | |
Marketing services | |||
Related party transaction | |||
Expenses | 1,830 | $ 3,369 | |
Indirect subsidiaries of CK Hutchison | |||
Balances with related parties included in: | |||
Accounts receivable-related parties | 2,189 | 2,709 | |
Amounts due to related parties | $ 623 | $ 432 | |
Maximum settlement period, interest free (in months) | 1 month | 1 month | |
Indirect subsidiaries of CK Hutchison | Sales | |||
Related party transaction | |||
Sales | $ 1,866 | 1,731 | |
Indirect subsidiaries of CK Hutchison | Marketing services | |||
Related party transaction | |||
Expenses | 94 | 172 | |
Indirect subsidiaries of CK Hutchison | Support services | |||
Related party transaction | |||
Expenses | 233 | 227 | |
Equity investees | |||
Related party transaction | |||
Purchases | 1,062 | 662 | |
Balances with related parties included in: | |||
Accounts receivable-related parties | $ 73 | ||
Accounts payable | 7,417 | 6,507 | |
Amounts due from related parties | 893 | 889 | |
Other deferred income | 1,335 | $ 1,356 | |
Equity investees | Research and development services | |||
Related party transaction | |||
Sales | 127 | 2,582 | |
Equity investees | Marketing services | |||
Related party transaction | |||
Expenses | $ 1,736 | $ 3,197 |
Significant Transactions with_4
Significant Transactions with Related Parties and Non-Controlling Shareholders of Subsidiaries - Non-controlling shareholders of subsidiaries (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Non-controlling shareholders of subsidiaries | |||
Sales | $ 52,168 | $ 52,337 | |
Interest expense | 260 | 206 | |
Balances with non-controlling shareholders of subsidiaries | |||
Accounts receivable-third parties | 42,273 | $ 40,176 | |
Other payables, accruals and advance receipts | 64,160 | 56,327 | |
Other non-current liabilities | 8,332 | 7,645 | |
Non-controlling shareholders of subsidiaries | |||
Non-controlling shareholders of subsidiaries | |||
Sales | 6,034 | 5,740 | |
Purchases | 3,504 | 3,323 | |
Interest expense | $ 18 | ||
Balances with non-controlling shareholders of subsidiaries | |||
Accounts receivable-third parties | 4,193 | 5,070 | |
Accounts payable | 4,143 | 4,960 | |
Non-controlling shareholders of subsidiaries | Dividend payable | |||
Balances with non-controlling shareholders of subsidiaries | |||
Other payables, accruals and advance receipts | 1,282 | 1,282 | |
Non-controlling shareholders of subsidiaries | Loan | |||
Balances with non-controlling shareholders of subsidiaries | |||
Other non-current liabilities | $ 579 | $ 579 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019USD ($)subsidiary | Mar. 31, 2018USD ($) | Dec. 31, 2018 | |
Other | $ 69 | $ 50 | |
Deferred income tax | 803 | 865 | |
Income tax expense | 1,309 | 1,565 | |
Reconciliation of reported income tax expense to the theoretical tax amount | |||
Loss before income taxes and equity in earnings of equity investees | (34,907) | (23,870) | |
Tax calculated at the statutory tax rate of the Company | (5,760) | (3,939) | |
Different tax rates available in different jurisdictions | 1,220 | 1,204 | |
Tax valuation allowance | 6,499 | 5,472 | |
Preferential tax deduction | (1,721) | (1,793) | |
Expenses not deductible for tax purposes | 695 | 195 | |
Utilization of previously unrecognized tax losses | (165) | (110) | |
Withholding tax on undistributed earnings of PRC entities | 858 | 832 | |
Others | (317) | (296) | |
Income tax expense | 1,309 | 1,565 | |
Hong Kong | |||
Current tax | $ 85 | $ 113 | |
Tax rates | |||
Income tax rate (as a percent) | 16.50% | 16.50% | |
PRC | |||
Current tax | $ 352 | $ 537 | |
Tax rates | |||
Income tax rate (as a percent) | 25.00% | 25.00% | |
Preferential income tax rate (as a percent) | 15.00% | 15.00% | |
Dividends declared withholding tax rate (as a percent) | 10.00% | 10.00% | |
Lower withholding tax rate (as a percent) | 5.00% | 5.00% | |
Minimum equity interest of foreign investor required for lower withholding tax rate (as a percent) | 25.00% | 25.00% | |
Distributable reserves expected to be distributed as dividends (as a percent) | 100.00% | 100.00% | |
British Virgin Islands | |||
Tax rates | |||
Number of subsidiaries | subsidiary | 2 |
Losses per Share (Details)
Losses per Share (Details) $ / shares in Units, $ in Thousands | May 29, 2019 | Mar. 31, 2019USD ($)$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares |
Basic (losses)/earnings per share | |||
Weighted average number of outstanding ordinary shares in issue | shares | 665,470,220 | 663,844,980 | |
Net loss attributable to the Company | $ | $ (19,885) | $ (11,730) | |
Losses per share attributable to the Company (US$ per share) | $ / shares | $ (0.03) | $ (0.02) | |
Subsequent Events | |||
Basic (losses)/earnings per share | |||
Stock split ratio | 10 |
Segment Reporting - Segment Inf
Segment Reporting - Segment Information (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019USD ($)area | Mar. 31, 2018USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Segment reporting | ||||
Revenue from external customers | $ 52,168 | $ 52,337 | ||
Adjusted (LBIT)/EBIT | (36,323) | (24,930) | ||
Interest income | 1,676 | 1,266 | ||
Equity in earnings of equity investees, net of tax | 17,110 | 15,030 | ||
Operating (loss)/profit | (17,537) | (8,634) | ||
Interest expense | 260 | 206 | ||
Income tax expense | 1,309 | 1,565 | ||
Net loss attributable to the Company | (19,885) | (11,730) | ||
Depreciation/amortization | 1,205 | 834 | ||
Additions to non-current assets (other than financial instruments and deferred tax assets) | 1,277 | 1,071 | ||
Segment information | ||||
Total assets | 539,297 | $ 532,118 | ||
Property, plant and equipment | 17,036 | 16,616 | ||
Right-of-use assets | 5,176 | $ 5,747 | ||
Leasehold land | 1,196 | 1,174 | ||
Goodwill | 3,259 | 3,186 | ||
Other intangible asset | 340 | 347 | ||
Investments in equity investees | 158,927 | 138,318 | ||
Innovation Platform | ||||
Segment reporting | ||||
Revenue from external customers | $ 5,778 | 7,417 | ||
Commercial Platform | ||||
Segment reporting | ||||
Number of core business areas | area | 2 | |||
Revenue from external customers | $ 46,390 | 44,920 | ||
Reportable segment | Innovation Platform | Drug R&D | PRC | ||||
Segment reporting | ||||
Revenue from external customers | 5,778 | 7,417 | ||
Adjusted (LBIT)/EBIT | (32,318) | (24,427) | ||
Interest income | 99 | 20 | ||
Equity in earnings of equity investees, net of tax | 70 | (1,089) | ||
Operating (loss)/profit | (32,149) | (25,496) | ||
Income tax expense | 47 | 9 | ||
Net loss attributable to the Company | (32,117) | (25,444) | ||
Depreciation/amortization | 1,097 | 782 | ||
Additions to non-current assets (other than financial instruments and deferred tax assets) | 1,136 | 1,059 | ||
Segment information | ||||
Total assets | 77,773 | 100,388 | ||
Property, plant and equipment | 15,653 | 15,223 | ||
Right-of-use assets | 3,274 | |||
Leasehold land | 1,196 | 1,174 | ||
Investments in equity investees | 8,596 | 8,514 | ||
Reportable segment | Commercial Platform | ||||
Segment reporting | ||||
Revenue from external customers | 46,390 | 44,920 | ||
Adjusted (LBIT)/EBIT | 1,412 | 2,673 | ||
Interest income | 26 | 27 | ||
Equity in earnings of equity investees, net of tax | 17,040 | 16,119 | ||
Operating (loss)/profit | 18,478 | 18,819 | ||
Interest expense | 18 | |||
Income tax expense | 364 | 657 | ||
Net loss attributable to the Company | 17,217 | 16,779 | ||
Depreciation/amortization | 68 | 45 | ||
Additions to non-current assets (other than financial instruments and deferred tax assets) | 135 | 10 | ||
Segment information | ||||
Total assets | 226,064 | 197,483 | ||
Property, plant and equipment | 752 | 693 | ||
Right-of-use assets | 596 | |||
Goodwill | 3,259 | 3,186 | ||
Other intangible asset | 340 | 347 | ||
Investments in equity investees | 150,331 | 129,804 | ||
Reportable segment | Commercial Platform | Prescription Drugs | PRC | ||||
Segment reporting | ||||
Revenue from external customers | 37,849 | 35,471 | ||
Adjusted (LBIT)/EBIT | 775 | 1,648 | ||
Interest income | 14 | 10 | ||
Equity in earnings of equity investees, net of tax | 14,049 | 13,314 | ||
Operating (loss)/profit | 14,838 | 14,972 | ||
Income tax expense | 228 | 445 | ||
Net loss attributable to the Company | 14,321 | 13,933 | ||
Depreciation/amortization | 40 | 34 | ||
Additions to non-current assets (other than financial instruments and deferred tax assets) | 129 | 3 | ||
Segment information | ||||
Total assets | 144,381 | 118,445 | ||
Property, plant and equipment | 315 | 204 | ||
Right-of-use assets | 32 | |||
Goodwill | 2,852 | 2,779 | ||
Other intangible asset | 340 | 347 | ||
Investments in equity investees | 84,737 | 68,812 | ||
Reportable segment | Commercial Platform | Consumer Health | PRC | ||||
Segment reporting | ||||
Revenue from external customers | 3,342 | 3,438 | ||
Adjusted (LBIT)/EBIT | 271 | 392 | ||
Interest income | 11 | 3 | ||
Equity in earnings of equity investees, net of tax | 2,991 | 2,805 | ||
Operating (loss)/profit | 3,273 | 3,200 | ||
Income tax expense | 93 | 108 | ||
Net loss attributable to the Company | 2,761 | 2,585 | ||
Depreciation/amortization | 6 | 6 | ||
Additions to non-current assets (other than financial instruments and deferred tax assets) | 6 | 7 | ||
Segment information | ||||
Total assets | 71,260 | 67,352 | ||
Property, plant and equipment | 73 | 71 | ||
Right-of-use assets | 44 | |||
Goodwill | 407 | 407 | ||
Investments in equity investees | 65,594 | 60,992 | ||
Reportable segment | Commercial Platform | Consumer Health | Hong Kong | ||||
Segment reporting | ||||
Revenue from external customers | 5,199 | 6,011 | ||
Adjusted (LBIT)/EBIT | 366 | 633 | ||
Interest income | 1 | 14 | ||
Operating (loss)/profit | 367 | 647 | ||
Interest expense | 18 | |||
Income tax expense | 43 | 104 | ||
Net loss attributable to the Company | 135 | 261 | ||
Depreciation/amortization | 22 | 5 | ||
Segment information | ||||
Total assets | 10,423 | 11,686 | ||
Property, plant and equipment | 364 | 418 | ||
Right-of-use assets | 520 | |||
Unallocated | ||||
Segment reporting | ||||
Adjusted (LBIT)/EBIT | (5,417) | (3,176) | ||
Interest income | 1,551 | 1,219 | ||
Operating (loss)/profit | (3,866) | (1,957) | ||
Interest expense | 260 | 188 | ||
Income tax expense | 898 | 899 | ||
Net loss attributable to the Company | (4,985) | (3,065) | ||
Depreciation/amortization | 40 | 7 | ||
Additions to non-current assets (other than financial instruments and deferred tax assets) | 6 | $ 2 | ||
Segment information | ||||
Total assets | 235,460 | 234,247 | ||
Property, plant and equipment | 631 | $ 700 | ||
Right-of-use assets | $ 1,306 |
Segment Reporting - Elimination
Segment Reporting - Elimination (Details) - customer | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting | ||
Number of customers accounted for more than 10% of revenue | 1 | 1 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Adjusted LBIT to net loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting | ||
Adjusted LBIT | $ (36,323) | $ (24,930) |
Interest income | 1,676 | 1,266 |
Equity in earnings of equity investees, net of tax | 17,110 | 15,030 |
Interest expense | (260) | (206) |
Income tax expense | (1,309) | (1,565) |
Net loss | $ (19,106) | $ (10,405) |
Note to Consolidated Statemen_3
Note to Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities | ||
Net loss | $ (19,106) | $ (10,405) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Share-based compensation expense-share options | 2,295 | 334 |
Share-based compensation expense - LTIP | 636 | 880 |
Equity in earnings of equity investees, net of tax | (17,110) | (15,030) |
Changes in right-of-use assets | 754 | |
Other adjustments | 1,840 | 2,541 |
Changes in working capital | ||
Accounts receivable-third parties | (2,142) | (5,747) |
Inventories | (5,358) | 2,160 |
Accounts payable | 5,139 | (7,605) |
Other payables, accruals and advance receipts | 6,929 | 2,154 |
Lease liabilities | (851) | |
Other changes in working capital | (1,949) | (122) |
Total changes in working capital | 1,768 | (9,160) |
Net cash used in operating activities | $ (28,923) | $ (30,840) |
Litigation (Details)
Litigation (Details) | Mar. 31, 2019claim |
Litigation | |
Number of claims or actions pending | 0 |
Subsequent Events (Details)
Subsequent Events (Details) | May 31, 2019HKD ($) | May 31, 2019USD ($) | May 29, 2019$ / sharesshares | Nov. 30, 2018HKD ($) | Nov. 30, 2017HKD ($) | Nov. 30, 2017USD ($) | May 31, 2019USD ($) | May 28, 2019$ / shares | Apr. 24, 2019USD ($)$ / sharesshares | Apr. 23, 2019USD ($) | Mar. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares | Nov. 30, 2018USD ($) | Aug. 31, 2018HKD ($) | Aug. 31, 2018USD ($) | Nov. 30, 2017USD ($) |
Subsequent events | ||||||||||||||||
Ordinary shares, par value (in US$ per share) | $ / shares | $ 0.10 | $ 0.10 | ||||||||||||||
Accounts receivable | $ 42,273,000 | $ 40,176,000 | ||||||||||||||
Inventories | 17,612,000 | 12,309,000 | ||||||||||||||
Accounts payable | 30,764,000 | 25,625,000 | ||||||||||||||
Revolving loan facility | ||||||||||||||||
Subsequent events | ||||||||||||||||
Aggregate amount of credit facilities | $ 234,000,000 | $ 30,000,000 | ||||||||||||||
Term | 3 years | |||||||||||||||
Amount drawn from the credit facility | 0 | 0 | ||||||||||||||
Revolving loan facility | HIBOR | ||||||||||||||||
Subsequent events | ||||||||||||||||
Basis spread on variable rate | 0.85% | |||||||||||||||
Unsecured credit facility | ||||||||||||||||
Subsequent events | ||||||||||||||||
Aggregate amount of credit facilities | $ 400,000,000 | $ 507,000,000 | $ 65,000,000 | $ 51,282,000 | ||||||||||||
Unsecured credit facility | Term loan | ||||||||||||||||
Subsequent events | ||||||||||||||||
Aggregate amount of credit facilities | $ 210,000,000 | 26,923,000 | ||||||||||||||
Term | 3 years | 3 years | ||||||||||||||
Amount of upfront fee | $ 1,575,000 | $ 202,000 | ||||||||||||||
Unsecured credit facility | Term loan | HIBOR | ||||||||||||||||
Subsequent events | ||||||||||||||||
Basis spread on variable rate | 1.50% | 1.50% | ||||||||||||||
Unsecured credit facility | Revolving loan facility | ||||||||||||||||
Subsequent events | ||||||||||||||||
Aggregate amount of credit facilities | $ 190,000,000 | $ 24,359,000 | ||||||||||||||
Term | 18 months | 18 months | ||||||||||||||
Amount drawn from the credit facility | 0 | $ 0 | ||||||||||||||
Unsecured credit facility | Revolving loan facility | HIBOR | ||||||||||||||||
Subsequent events | ||||||||||||||||
Basis spread on variable rate | 1.25% | 1.25% | ||||||||||||||
Seroquel | ||||||||||||||||
Subsequent events | ||||||||||||||||
Accounts receivable | 1,700,000 | |||||||||||||||
Inventories | 600,000 | |||||||||||||||
Long-term prepayment | 1,300,000 | |||||||||||||||
Accounts payable | 1,300,000 | |||||||||||||||
Seroquel | Adjustment | ||||||||||||||||
Subsequent events | ||||||||||||||||
Accounts receivable | 0 | |||||||||||||||
Inventories | 0 | |||||||||||||||
Long-term prepayment | 0 | |||||||||||||||
Accounts payable | $ 0 | |||||||||||||||
Subsequent Events | ||||||||||||||||
Subsequent events | ||||||||||||||||
Authorized share capital | $ 150,000,000 | $ 75,000,000 | ||||||||||||||
Additional authorized share capital (in shares) | shares | 750,000,000 | 75,000,000 | ||||||||||||||
Stock split ratio | 10 | |||||||||||||||
Ordinary shares, par value (in US$ per share) | $ / shares | $ 0.10 | $ 1 | $ 1 | |||||||||||||
Subsequent Events | Unsecured credit facility | ||||||||||||||||
Subsequent events | ||||||||||||||||
Aggregate amount of credit facilities | $ 400,000,000 | $ 51,282,000 | ||||||||||||||
Subsequent Events | Unsecured credit facility | Term loan | ||||||||||||||||
Subsequent events | ||||||||||||||||
Aggregate amount of credit facilities | $ 210,000,000 | 26,923,000 | ||||||||||||||
Term | 3 years | 3 years | ||||||||||||||
Amount of upfront fee | $ 819,000 | $ 105,000 | ||||||||||||||
Amount drawn from the credit facility | 0 | |||||||||||||||
Subsequent Events | Unsecured credit facility | Term loan | HIBOR | ||||||||||||||||
Subsequent events | ||||||||||||||||
Basis spread on variable rate | 0.85% | 0.85% | ||||||||||||||
Subsequent Events | Unsecured credit facility | Revolving loan facility | ||||||||||||||||
Subsequent events | ||||||||||||||||
Aggregate amount of credit facilities | $ 190,000,000 | 24,359,000 | ||||||||||||||
Term | 3 years | 3 years | ||||||||||||||
Amount drawn from the credit facility | $ 0 | |||||||||||||||
Subsequent Events | Unsecured credit facility | Revolving loan facility | HIBOR | ||||||||||||||||
Subsequent events | ||||||||||||||||
Basis spread on variable rate | 0.85% | 0.85% |