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Summit Therapeutics Reports Financial Results for the Third Quarter and Nine Months Ended 31 October 2017 and Operational Progress

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OXFORD, United Kingdom, Dec. 06, 2017 (GLOBE NEWSWIRE) -- Summit Therapeutics plc (AIM:SUMM)(NASDAQ:SMMT), the drug discovery and development company advancing therapies for Duchenne muscular dystrophy (‘DMD') and C. difficile infection (‘CDI'), today reports its financial results for the third quarter and nine months ended 31 October 2017, and reports on operational progress.

Glyn Edwards, Chief Executive Officer of Summit, commented: "Next year holds the potential to be transformative for our utrophin modulation programme. We remain on track to report during the first quarter of 2018 the 24-week data from PhaseOut DMD, our ongoing Phase 2 clinical trial evaluating our lead utrophin modulator ezutromid. Ezutromid is a potentially disease-modifying treatment for all patients with DMD and we look forward to reporting these initial data from this proof of concept trial.

"In this period there has also been continued momentum in the development of our precision CDI antibiotic, ridinilazole. Ridinilazole achieved another positive Phase 2 clinical trial result, further highlighting its potential to both treat the infection and preserve the microbiome to reduce the risk of recurrent disease. The award of a contract worth up to $62 million from BARDA during the period will support in part the Phase 3 clinical and regulatory development of ridinilazole was a major achievement, one which we believe provides important validation of its potential. We are looking forward to initiating the Phase 3 clinical programme for ridinilazole in the first half of 2018 as we seek to bring this urgently needed treatment to patients.

"The ongoing support of our shareholders is allowing us to continue to advance these two therapies that have the potential to enhance the quality of life of patients and families living with the burden of DMD and CDI."

Utrophin Modulation Programme: A Universal Treatment for DMD

  • PhaseOut DMD is the Phase 2 proof of concept clinical trial that is seeking to establish proof of mechanism for Summit's lead utrophin modulator ezutromid by evaluating a range of muscle structure, muscle health and functional endpoints. PhaseOut DMD has enrolled a total of 40 patients at sites in the UK and US. Following the 48 weeks of treatment, patients have the option to continue onto an extension phase. The extension phase will be used to gather long term safety and efficacy data and is expected to last until ezutromid either receives marketing approval in the relevant country or its development is discontinued.
  • Completed initial 24 weeks of dosing of ezutromid and remain on-track to report interim 24-week data during Q1 2018 from PhaseOut DMD. These data will include 24-week biopsy results from all patients who provided a 24-week biopsy sample (approximately 20 patients). Summit also expects to report 24-week MRI and functional data from all other patients in the trial. Top-line data from the complete 48-week clinical trial are expected in Q3 2018.
  • Presented a series of posters at the 22nd International Congress of the World Muscle Society that included highlighting validation data of muscle biopsy biomarkers designed to assess utrophin modulator activity in clinical trials. These biomarkers use automated techniques that are capable of analysing thousands of muscle fibres in whole muscle biopsy sections and they have been developed in collaboration with Flagship Biosciences, a leader in quantitative tissue-based biomarkers. These techniques will be used to analyse the biopsy samples in PhaseOut DMD.
  • Publication of preclinical data by scientific adviser and co-founder Professor Kay Davies highlighting the benefits of utrophin modulation on muscle health in preclinical models of disease.  The data showed how continuous expression of utrophin in a dystrophin deficient animal model reduced mitochondrial aberration and oxidative stress, mechanisms that contribute to muscle damage.
  • Joined the Collaborative Trajectory Analysis Project, or cTAP, a community wide coalition in DMD that is developing a natural history database to support clinical trial design and analysis.

CDI Programme: Ridinilazole, a Precision Investigational Antibiotic

  • Awarded contract from Biomedical Advanced Research and Development Authority (‘BARDA'), worth up to $62 million to support the clinical and regulatory development of ridinilazole for the treatment of CDI. Summit is initially eligible to receive $32 million from BARDA to partially fund activities related to the two planned Phase 3 clinical trials of ridinilazole including initiating enrolment and dosing of patients through to the potential submission of applications for marketing approval. Summit is eligible for further funding of up to $30 million if BARDA exercises in full three option work segments. Summit is continuing to explore various additional funding options for the Phase 3 development programme.
  • Reported positive data from an exploratory Phase 2 clinical trial that supported ridinilazole as a highly selective, precision antibiotic for the treatment of CDI. During the trial's ten-day treatment period, the microbiomes of ridinilazole-treated patients were markedly preserved as measured by overall bacterial diversity and key changes in bacterial families, when compared to patients treated with fidaxomicin, a marketed narrow-spectrum antibiotic. The primary endpoint of the trial was safety, as measured by the number of treatment emergent adverse events and serious adverse events. During the trial, no new or unexpected safety signals were identified and ridinilazole was generally well-tolerated.

Operational Highlights

  • Held successful R&D Day for investors and analysts in New York City in October 2017. The event reviewed the DMD and CDI programmes and included presentations from key opinion leaders in both fields of research. A webcast of the event is available on Summit's website.

Financial Highlights

  • Public offering of 1,677,850 American Depositary Shares (‘ADS'), representing 8,389,250 ordinary shares of one penny nominal value, with new and existing institutional investors, and raised gross proceeds of $20.1 million (£14.9 million). The public offering, including the underwriters exercise in full of their over-allotment option, closed in September 2017.
  • Cash and cash equivalents at 31 October 2017 of £31.8 million compared to £28.1 million at 31 January 2017.
  • Profit for the nine months ended 31 October 2017 of £4.4 million compared to a loss of £16.4 million for the nine months ended 31 October 2016 reflecting receipt and recognition of a $22.0 million (£17.2 million) development milestone payment received from Sarepta Therapeutics Inc. (‘Sarepta') in June 2017.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 (MAR).

About Summit Therapeutics
Summit is a biopharmaceutical company focused on the discovery, development and commercialisation of novel medicines for indications for which there are no existing or only inadequate therapies. Summit is conducting clinical programmes focused on the genetic disease Duchenne muscular dystrophy and the infectious disease C. difficile infection. Further information is available at www.summitplc.com and Summit can be followed on Twitter (@summitplc).

For more information, please contact:

Summit    
Glyn Edwards / Richard Pye (UK office) Tel: 44 (0)1235 443 951
Erik Ostrowski / Michelle Avery (US office)   +1 617 225 4455
     
Cairn Financial Advisers LLP (Nominated Adviser) Tel: +44 (0)20 7213 0880
Liam Murray / Tony Rawlinson    
     
N+1 Singer (Joint Broker) Tel: +44 (0)20 7496 3000
Aubrey Powell / Jen Boorer    
     
Panmure Gordon (Joint Broker) Tel: +44 (0)20 7886 2500
Freddy Crossley, Corporate Finance    
Tom Salvesen, Corporate Broking    
     
MacDougall Biomedical Communications (US) Tel: +1 781 235 3060
Karen Sharma   ksharma@macbiocom.com
     
Consilium Strategic Communications (UK) Tel: +44 (0)20 3709 5700
Mary-Jane Elliott / Jessica Hodgson /   summit@consilium-comms.com
Philippa Gardner/ Rosie Phillips    


Forward Looking Statements
Any statements in this press release about our future expectations, plans and prospects, including statements about the development and potential commercialisation of our product candidates, the therapeutic potential of our product candidates, the timing of initiation, completion and availability of data from clinical trials, the potential benefits and future operation of the collaboration with Sarepta including any potential future payments thereunder, the potential benefits and future operation of the BARDA contract including any potential future payments thereunder, any other potential third-party collaborations and expectations regarding the sufficiency of our cash balance to fund operating expenses and capital expenditures, and other statements containing the words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "would," and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: the uncertainties inherent in the initiation of future clinical trials, availability and timing of data from ongoing and future clinical trials and the results of such trials, whether preliminary results from a clinical trial will be predictive of the final results of that trial or whether results of early clinical trials will be indicative of the results of later clinical trials, the ability of BARDA to terminate its contract with us for convenience at any time,  expectations for regulatory approvals, availability of funding sufficient for our foreseeable and unforeseeable operating expenses and capital expenditure requirements and other factors discussed in the "Risk Factors" section of filings that we make with the Securities and Exchange Commission, including our Annual Report on Form 20-F for the fiscal year ended 31 January 2017. In addition, any forward-looking statements included in this press release represent our views only as of the date of this release and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update any forward-looking statements included in this press release.


FINANCIAL REVIEW

Revenue

Revenue was £1.7 million for the three months ended 31 October 2017 compared to £0.6 million for the three months ended 31 October 2016. Revenue was £22.4 million for the nine months ended 31 October 2017 compared to £0.6 million for the nine months ended 31 October 2016. These increases were principally due to income received pursuant to Summit's exclusive licence and collaboration agreement with Sarepta Therapeutics, Inc. (‘Sarepta'). During the three months ended 31 October 2017, £1.7 million relating to the upfront payment of £32.8 million ($40.0 million) made by Sarepta in October 2016 was recognised. To date, an aggregate of £7.5 million of the upfront payment has been recognised while the remaining £25.3 million is classified as deferred revenue and will continue to be recognised as revenue over the development period. Revenue during the nine months ended 31 October 2017 reflects the receipt of a development milestone of £17.2 million ($22.0 million) paid by Sarepta which was recognised in full. 

Other Operating Income

Other operating income was £1.6 million for the three and nine months ended 31 October 2017, compared to £nil for the three months ended 31 October 2016 and £0.1 million for the nine months ended 31 October 2016. These increases resulted from the recognition of £0.7 million pursuant to Summit's funding contract with the Biomedical Advanced Research and Development Authority ('BARDA') that was awarded to the Group in September 2017 and £0.9 million resulting from the derecognition of a part of Summit's financial liabilities on funding arrangements, which is further discussed in Note 6 – ‘Financial liabilities on funding arrangements.'

Other operating income recognised in comparative periods related to the Innovate UK funding agreement, from which the Company withdrew in May 2016 to take advantage of more tax efficient opportunities related to research and development expenditure, and the Wellcome Trust Translational Award funding agreement.

Operating Expenses

Research and Development Expenses

Research and development expenses increased by £3.4 million to £7.4 million for the three months ended 31 October 2017 from £4.0 million for the three months ended 31 October 2016. Research and development expenses increased by £4.9 million to £19.1 million for the nine months ended 31 October 2017 from £14.2 million for the nine months ended 31 October 2016. These increases reflected the greater investment in both the DMD and CDI clinical programmes, as well as an increase in research and development related staffing costs.  

General and Administration Expenses
General and administration expenses increased by £0.1 million to £2.0 million for the three months ended 31 October 2017 from £1.9 million for the three months ended 31 October 2016. General and administration expenses increased by £1.6 million to £6.9 million for the nine months ended 31 October 2017 from £5.3 million for the nine months ended 31 October 2016. These increases were primarily due to a net negative movement in exchange rate variances and increased staff-related costs, offset by a decrease in legal and professional fees.

Finance income
Finance income was £3.1 million for the three and nine months ended 31 October 2017 and related to the derecognition of a part of Summit's financial liabilities on funding arrangements, specifically the re-measurements and discounts associated with the liabilities since initial recognition, which is further discussed in Note 6 – ‘Financial liabilities on funding arrangements.' Finance income recognised in comparative periods relates to interest received.

Finance costs
Finance costs relate to the subsequent re-measurement and unwinding of the discounts associated with the financial liability recognised in respect of charitable funding arrangements. Finance costs remained consistent at £0.2 million for the three months ended 31 October 2017 and for the three months ended 31 October 2016. Finance costs remained consistent at £0.7 million for the nine months ended 31 October 2017 and £0.6 million for the nine months ended 31 October 2016.

Taxation

The income tax credit increased by £0.6 million to £1.5 million for the three months ended 31 October 2017 from £0.9 million for the three months ended 31 October 2016. The income tax credit increased by £1.0 million to £4.0 million for the nine months ended 31 October 2017 from £3.0 million for the nine months ended 31 October 2016. These increases were the result of higher research and development expenditure.

Profit / (Loss)

Total comprehensive loss for the three months ended 31 October 2017 was £1.8 million with a basic loss per share of 3 pence compared to a total comprehensive loss of £4.6 million for the three months ended 31 October 2016 and a basic loss per share of 8 pence. Total comprehensive income for the nine months ended 31 October 2017 was £4.4 million with a basic earnings per share of 7 pence compared to a total comprehensive loss of £16.4 million for the nine months ended 31 October 2016 and a basic loss per share of 27 pence.

Cash Flows

Operating Activities
For the nine months ended 31 October 2017, net cash used in operating activities was £8.9 million. This compares to net cash generated from operating activities of £17.9 million for the nine months ended 31 October 2016. This net negative movement of £26.8 million was primarily driven by the receipt of the £32.8 million ($40.0 million) upfront payment from Sarepta during the nine months ended 31 October 2016, offset by the receipt of a £17.2 million ($22.0 million) development milestone payment from Sarepta during the nine months ended 31 October 2017; this resulted in a net reduction in cash received from Sarepta during the nine months ended 31 October 2017 of £15.6 million, compared to during the nine months ended 31 October 2016. In addition, an increase of £6.5 million in research and development and general and administration expenses, and a £3.0 million reduction in research and development tax credits received (due to timing) during the nine months ended 31 October 2017 as compared to the nine months ended 31 October 2016, contributed to the net movement.

Investing Activities
Net cash used in investing activities for the nine months ended 31 October 2017 and the nine months ended 31 October 2016 includes the net amount of bank interest received on cash deposits less amounts paid to acquire property, plant and equipment. Amounts paid to acquire property, plant and equipment during the nine months ended 31 October 2017 of £0.4 million related primarily to the Company's relocation of its UK offices, for which the Company signed a ten-year lease in February 2017.

Financing Activities
Net cash generated from financing activities for the nine months ended 31 October 2017 includes £13.5 million of proceeds, net of transaction costs, received following the Company's underwritten public equity offering in September 2017 and £0.4 million received following the exercise of warrants and share options. For the nine months ended 31 October 2016, the Company received net proceeds of £0.4 million following the exercise of warrants and share options.

Financial Position

As at 31 October 2017, cash and cash equivalents were £31.8 million compared to £28.1 million as at 31 January 2017.

Glyn Edwards                          Erik Ostrowski
Chief Executive Officer             Chief Financial Officer

6 December 2017


FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)
For the three months ended 31 October 2017

   

 
Three months
ended
31 October
2017
Three months
ended
31 October
2017
Three
months
ended
31 October
2016
  Note $000s £000s £000s
         
Revenue 2 2,294   1,727   576  
         
Other operating income 3 2,090   1,574   -  
         
Operating expenses        
  Research and development   (9,861 ) (7,425 ) (3,955 )
  General and administration   (2,631 ) (1,981 ) (1,906 )
Total operating expenses   (12,492 ) (9,406 ) (5,861 )
         
Operating loss   (8,108
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