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| Summit Therapeutics Reports 4th Quarter and Year End Financial Results and Operational Progress | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| By: Nasdaq / GlobeNewswire - 29 Mar 2017 | Back to overview list |
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Summit Therapeutics plc
SUMMIT THERAPEUTICS REPORTS FINANCIAL RESULTS FOR THE
Oxford, UK, 29 March 2017 - 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 fourth quarter and fiscal year ended 31 January 2017. Mr Glyn Edwards, Chief Executive Officer of Summit, commented: " We believe the progress made over the past year in our DMD and CDI programmes, combined with our strengthened financial position following the signing of the Sarepta licensing agreement has placed us in a strong position to deliver value for our patients and shareholders. "Our Phase 2 proof of concept trial, PhaseOut DMD, is well underway with enrolment expected to be completed in the second quarter of 2017. We now look forward to providing the full analysis of 24-week biopsies from the approximately 20 patients dosed with the F3 or F6 formulation of ezutromid, plus 24-week MRI and functional measures from all patients in the trial, in the first quarter of 2018. This approach is in lieu of reporting interim analysis from a smaller group in 2017, and it is expected to provide a more complete picture of the potential benefits of ezutromid at this time point on utrophin expression, muscle health and muscle function. "In CDI, our Phase 2 clinical data supports the potential front-line use of ridinilazole to treat the initial infection and provide patients with a sustained clinical response. This sustained clinical response is the focus of our planned Phase 3 programme that is designed, with input from the FDA and EMA, to evaluate superiority of ridinilazole over the current standard of care antibiotic vancomycin. With the Phase 3 trials planned to start in the first half of 2018, we look forward to an exciting and important time ahead as we seek to bring these two potentially important treatment options one step closer to patients." Utrophin Modulation Programme for DMD Exclusive Licence and Collaboration Agreement
Ezutromid (formerly SMT C1100) Highlights
Other activities
CDI Programme Ridinilazole (formerly SMT19969) Highlights
Operational
Financial Highlights
Conference Call and Webcast Information
About Summit Therapeutics
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Forward Looking Statements
CHAIRMAN'S STATEMENT The past year has been one of strong progress across the Company as we continue to advance our innovative drug programmes targeting rare and infectious diseases. Our focus in rare diseases is on our utrophin modulator pipeline for the treatment of the fatal muscle wasting disease, Duchenne muscular dystrophy ('DMD'). In infectious diseases, we are developing a novel antibiotic called ridinilazole for the treatment of patients with infections caused by the bacteria C. difficile . A major highlight of the year was the signing of a licence and collaboration agreement with Sarepta Therapeutics Inc. ('Sarepta') for European rights to our utrophin modulator pipeline. This agreement provided a $40 million upfront cash payment to Summit with the potential for substantial future success based milestone and royalty payments. The year also included positive clinical data in both our DMD and CDI programmes as we continue to progress these innovative therapies through clinical trials and towards potential commercialisation. This progress leaves us poised for an exciting year ahead. This is expected to include the continuation of our Phase 2 proof of concept trial for our lead utrophin modulator, ezutromid, and activities to prepare our novel antibiotic ridinilazole to be ready to enter Phase 3 clinical trials in the first half of 2018. A Balanced Portfolio I believe our pipeline of investigational therapies provides a balanced risk profile. Our DMD programme aims to address the underlying cause of the disease by seeking to maintain production of utrophin protein to compensate for the dystrophin that is lacking in individuals with DMD, in order to maintain healthy muscle function. We have shown the potential of this therapeutic approach in preclinical disease models and our focus is on demonstrating proof of concept in patients with DMD for ezutromid in the ongoing Phase 2 clinical trial called PhaseOut DMD. Generation of positive clinical data would clear a key technical milestone and support the continued development of ezutromid as a potential disease modifying treatment for this devastating muscle wasting disease. To complement this, our novel class antibiotic ridinilazole has already shown evidence of clinical efficacy in patients with CDI in our Phase 2 clinical trial. In my view, this leaves ridinilazole in a strong position to continue to progress to Phase 3 clinical development and towards potential regulatory approval, particularly in light of the historic clinical success of antibiotics that have generated positive Phase 2 data.
Operational Progress: Sarepta Therapeutics Licence and Collaboration Agreement
This deal brings to Summit a number of benefits. It provides access to additional development and regulatory expertise from Sarepta to support ezutromid and our wider utrophin pipeline while, importantly, we retained full commercial rights in other territories including the United States.
Operational Progress: R&D overview
In parallel, we continue to develop our earlier stage pipeline of future generation utrophin modulators. This pipeline shows our deep commitment to developing effective therapies for the DMD community. I look forward to reporting on the continued advance of this pipeline which is being developed as part of our strategic alliance with the University of Oxford as we seek to maintain our leadership position in the field of utrophin modulation. There is an urgent need to develop new antibiotics to combat the serious healthcare threat posed by pathogens, including C. difficile . We continue to believe that ridinilazole offers the potential to change the treatment paradigm in CDI. Further data we presented from our proof of concept Phase 2 trial showed ridinilazole was highly preserving of the gut microbiome in patients during treatment. This observation was in stark contrast to patients treated with the current standard of care antibiotic vancomycin whose microbiomes were severely damaged during treatment. A damaged microbiome leaves patients at high risk from disease recurrence. We therefore believe ridinilazole has the potential to be positioned as the mainstay treatment for CDI due to its potential to treat initial infection and reduce rates of recurrence.
Future Development Strategy
As ridinilazole is prepared for entry into Phase 3 clinical trials, we are in parallel evaluating various options to support its future development as we seek to maximise the value of this exciting asset. This includes a collaboration agreement with a third party, or securing substantial non-dilutive funding from government entities or not for profit organisations. This evaluation will consider a number of factors as we seek to identify the optimal path to continue the development of ridinilazole.
Operational
Summary and Outlook
I would like to thank all of our shareholders for their continued support. I also wish to sincerely thank all the patients and their families who are involved with our clinical trials. Without their dedication and support, we would not be able to advance these potential new treatments. Finally I would like to thank the team at Summit for the continued hard work over the past 12 months as we seek to advance potential new medicines that have the opportunity to transform the lives of patients and their families.
Frank Armstrong, FRCPE, FFPM
OPERATIONAL REVIEW Summit is a biopharmaceutical company focused on the discovery, development and commercialisation of novel medicines for indications in rare diseases and infectious diseases for which there are no existing or only inadequate therapies. In rare diseases, Summit is seeking to develop a treatment for all patients affected with the fatal disorder DMD using its utrophin modulation technology. Summit's focus in infectious diseases is on advancing the development of an antibiotic called ridinilazole that has the potential to not only treat the initial CDI infection, but importantly to reduce rates of disease recurrence. Duchenne Muscular Dystrophy: Utrophin Modulation Programme DMD is the most common and most severe form of muscular dystrophy. There are approximately 50,000 patients with DMD in the developed world. The disease predominately affects males and results in the progressive wasting of muscles throughout the body. DMD typically results in death by the time patients reach their late twenties. Patients with DMD are unable to produce dystrophin, a protein essential for maintaining healthy muscle function. Utrophin is a naturally occurring protein that is functionally and structurally similar to dystrophin, and plays an active role in the development of new muscle fibres, both in foetal development and in the repair of damaged muscle fibres. Utrophin production is switched off in mature muscle fibres, and in the case of a healthy individual, replaced by the production of dystrophin. Utrophin modulation has the potential to maintain the production of utrophin in all skeletal muscles, including the diaphragm and the heart, to compensate for the lack of dystrophin in patients with DMD and so restore and maintain healthy muscle function. A key benefit of utrophin modulation is that it is independent of the underlying genetic fault in the dystrophin gene and therefore has the potential to treat the entire patient population. Summit has established a leadership position in the field of utrophin modulation and is developing a pipeline of small molecule utrophin modulator therapies, including ezutromid which is being evaluated in a Phase 2 clinical trial. Exclusive Licence and Collaboration Agreement with Sarepta Therapeutics Inc. ('Sarepta') In October 2016, Summit announced a licence and collaboration agreement with Sarepta. This granted Sarepta exclusive commercial rights to the Company's utrophin modulator pipeline, including ezutromid, in Europe, Turkey and the Commonwealth of Independent States, with an option over specific countries in Central and South America. Summit retains commercialisation rights in all other countries, including the US and Japan. Under the agreement, Summit has agreed to collaborate with Sarepta on the research and development of utrophin modulator therapies under a joint, global development plan. This agreement also provides Summit with access to Sarepta's development, regulatory and commercialisation expertise to support the continuing development of Summit's utrophin modulator pipeline. Financially, Summit received an upfront payment of $40 million, and will be eligible for future ezutromid-related development, regulatory and sales milestone payments totalling up to $522 million. This includes a $22 million milestone, payable on or after 1 April 2017, upon the first dosing of the last patient in Summit's ongoing PhaseOut DMD trial. In addition, Summit is eligible for escalating royalties ranging from a low to high teens percentage of net sales in the licensed territories. Summit will also be eligible to receive development and regulatory milestones related to potential future generation utrophin modulator candidate(s). Beginning in 2018, Summit and Sarepta will share at a 55%/45% split specified global research and development costs related to Summit's utrophin modulator pipeline, including ezutromid and its future generation utrophin modulator candidate(s). Ezutromid Clinical Trial Activities
Ezutromid: Phase 2 Proof of Concept Trial
DMD is characterised by high levels of muscle degeneration caused by the absence of functional dystrophin. Muscle fibres consequently enter into a cycle of repair and degeneration that over time leads to fat infiltrating into muscle and loss of ambulation and other functional abilities. Ezutromid aims to maintain production of utrophin so that it can substitute for the missing dystrophin. This has potential to allow muscle fibres to mature and so reduce the level of muscle degeneration, reduce the rate of fat infiltration and reduce the rate of decline in functional abilities. PhaseOut DMD is assessing all of these factors through various techniques including use of muscle biopsy to evaluate utrophin distribution and muscle fibre regeneration and maturity; magnetic resonance imaging to measure fat infiltration; and various functional tests including the North Star Ambulatory Assessment and the six minute walk test. The Company expects to report full analysis of the 24-week biopsy data in the first quarter of 2018, in lieu of reporting an earlier interim 24-week biopsy analysis from a smaller group of these patients in 2017. The full analysis group consists of approximately 20 samples from patients dosed with both the F3 or F6 formulations of ezutromid who will provide a 24-week biopsy sample. The Company plans to analyse all 24-week treatment biopsies once all samples have been collected. In addition to reporting on the full 24-week biopsy data, Summit expects to announce the 24-week analysis of MRI and functional data from all patients in the trial. The Company believes that this revised approach of analysing a larger dataset will provide a more complete picture of ezutromid's potential by evaluating a larger number of patients. In addition to PhaseOut DMD, Summit plans to conduct a randomised, placebo controlled trial designed with the potential to support accelerated and conditional approvals in the US and Europe, respectively. It is anticipated that this trial would start after positive interim data from PhaseOut DMD, and the Company would plan to provide timing guidance following the release of the 24-week dataset. In March 2017, Summit applied to the MHRA and FDA regulatory authorities to extend PhaseOut DMD as the Company seeks to allow for the transition of patients participating in PhaseOut DMD onto an open-label extension at the end of the initial 48 weeks of the trial without a cessation in dosing. This decision followed support for the Company's plan from the trial's independent Data Monitoring Committee upon an interim review of the safety and tolerability data from the ongoing trial. The extension phase is expected to last until ezutromid either receives marketing approval in relevant countries or its development is discontinued.
Ezutromid: Phase 1 New Formulation Trial
Summit is evaluating the safety and efficacy of F6 alongside F3 in the ongoing PhaseOut DMD clinical trial. It is anticipated that approximately ten patients enrolled at trial sites in the US will be dosed with F6. We believe both formulations of ezutromid have the potential to modulate the expression of utrophin, and the inclusion of F6 is expected to provide a greater understanding of the potential relationship between ezutromid drug exposure and clinical benefit. Pipeline and Research Activities
Future Generation Utrophin Modulators
Summit also has a number of second generation utrophin modulators that are structurally related to ezutromid, but designed to achieve higher drug plasma levels. In September 2016, Summit placed the development of these modulators on hold as the key objective of this development programme was fulfilled by the substantial increase in ezutromid plasma levels achieved by the F6 formulation.
Development of Biomarkers
Regulatory Updates
Fast Track and Rare Pediatric Disease Designations
C. difficile Infection Programme CDI is a major healthcare threat with over one million cases estimated between the United States and Europe each year. Mainstay treatments are dominated by broad spectrum antibiotics, the use of which are associated with high rates of recurrent disease. With each episode typically being more severe and associated with increased risk of mortality, recurrent disease is the key clinical issue in CDI. Ridinilazole is a novel class antibiotic that has the potential both to treat the initial infection as well as to reduce the high rates of recurrent disease experienced in CDI. Ridinilazole has received Qualified Infectious Disease Product designation and has been granted Fast Track designation in the US. The development of ridinilazole has been financially supported by Wellcome Trust Seeding Drug Discovery and Translational Awards. Phase 2 Clinical Programme Summit has generated a comprehensive package of data supporting ridinilazole as a potential new front-line treatment of CDI. In the Phase 2 proof of concept trial, called CoDIFy, ridinilazole achieved statistical superiority over the current standard of care antibiotic vancomycin in sustained clinical response, including a large numerical reduction in the rate of recurrent disease. Recurrence of CDI, and the failure to subsequently achieve a sustained clinical response after treatment, is a major issue in the management of the disease, as collateral damage to the gut microbiome by antibiotics such as vancomycin leaves patients vulnerable to disease recurrence. Additional data reported during 2016 from CoDIFy showed ridinilazole to be highly preserving of the gut microbiome during the treatment for CDI when compared to vancomycin. In these microbiome analyses, vancomycin inflicted significant damage to several bacterial groups associated with a healthy microbiome and caused a significant decrease in the total gut bacteria. In contrast, ridinilazole did not decrease the healthy bacteria analysed, nor the total bacteria, with some patients showing initial signs of recovery in these key bacterial groups. In addition, CoDIFy showed ridinilazole was associated with a greater reduction in inflammatory disease markers compared to vancomycin in patients with severe CDI. In addition to CoDIFy, Summit has completed treatment in an exploratory Phase 2 trial to evaluate ridinilazole against the antibiotic fidaxomicin. This trial is intended to lead to a greater understanding of the impact of ridinilazole on a number of disease parameters, including its impact on the microbiome. Summit expects to report top-line data, including analysis of the microbiome, in the second quarter of 2017. Regulatory Update and Planned Phase 3 Clinical Programme In February 2017, Summit outlined its Phase 3 development programme for ridinilazole following input from the FDA and European Medicines Agency. The Phase 3 programme is expected to concentrate on evaluating ridinilazole's potential superiority over vancomycin as the Company seeks to differentiate this novel antibiotic from currently marketed CDI treatments and those in late-stage development. The Company plans to conduct two Phase 3 clinical trials evaluating ridinilazole compared to vancomycin, with each trial expected to enrol approximately 700 patients with CDI. The primary endpoint of the Phase 3 clinical trials is expected to be superiority in sustained clinical response. Other planned endpoints will include health economic outcome measures. Activities to prepare ridinilazole for Phase 3 clinical trials continue with these trials anticipated to start in the first half of 2018. Summit is currently exploring funding options for the Phase 3 clinical development programme for ridinilazole and various options to maximize the value of ridinilazole, including potentially entering into a collaboration with a third party or securing meaningful non-dilutive funding from government entities and philanthropic, non-government and not for profit organisations. Preclinical Activities In February 2016, preclinical data published in the Journal of Antimicrobial Chemotherapy reported that ridinilazole outperformed the current standards of care, vancomycin and metronidazole, by having a robust killing effect on C. difficile that significantly reduced the level of toxins produced by the bacteria that play a major role in driving the symptoms and severity of the disease. This study also showed that ridinilazole halts C. difficile cell division, leading to ridinilazole's bactericidal activity. Patent Grant In April 2016, the patent estate protecting ridinilazole was strengthened following grant of a composition of matter patent covering ridinilazole by the United States Patent and Trademark Office. The patent (United States Patent 9,314,456) is entitled 'Antibacterial Compounds' and provides a period of exclusivity for ridinilazole in the United States until at least 1 December 2029, with the possibility of patent term extension. Operational Update In January 2017, Dr David Roblin was appointed as Chief Operating Officer ('COO') and President of Research & Development. Dr Roblin has had a highly successful career in the pharmaceutical industry, including senior leadership roles at Pfizer and Bayer, which involved overseeing the research, development and commercial launch of drugs across several therapy areas including infectious diseases. Dr Roblin's most recent role was COO and Director of Scientific Translation at the Francis Crick Institute, a London-based biomedical institute dedicated to understanding the fundamental biology underlying health and disease. Dr Roblin, who has been acting as a research and development adviser to Summit since 2014, will take up his new role on an interim basis in April 2017 with this becoming full-time in June 2017. FINANCIAL REVIEW Revenue As part of the exclusive licence and collaboration agreement entered into with Sarepta, the Company received an upfront payment of £32.8 million ($40.0 million). Of this amount, £2.3 million has been recognised as revenue for the year ended 31 January 2017. The remaining £30.5 million of the upfront payment is classified as deferred income and will be recognised as revenue over the development period. See Note 1, 'New accounting policy - Revenue Recognition.' Other Operating Income Other operating income decreased by 94.4% to £0.07 million during the year ended 31 January 2017 from £1.3 million (adjusted - see Note 1 'Change in Accounting Policy') for the year ended 31 January 2016. Income attributed to the funding agreement with the Wellcome Trust has now been recognised in full with the completion of our CoDIFy Phase 2 clinical trial of ridinilazole. Income recognised as part of the funding from Innovate UK for the DMD programme decreased by £0.5 million to £0.06 million for the year ended 31 January 2017 from £0.6 million for the year ended 31 January 2016. The decrease in income is in line with the achievement of milestones under the funding agreement. Further, in September 2016, the Company elected to withdraw from the Innovate UK funding agreement in order to enable the Company to take advantage of more tax efficient opportunities related to research and development expenditure. Operating Expenses
Research and Development Expenses
General and Administration Expenses
Finance Costs
Taxation Our income tax credit increased by £1.3 million, or 41.8%, to £4.3 million for the year ended 31 January 2017 from £3.0 million for the year ended 31 January 2016. This was as a result of increased expenditure on research and development. Losses Losses before interest, tax, depreciation and amortisation were £24.8 million for the year ended 31 January 2017 compared to £20.3 million for the year ended 31 January 2016. Net loss for the year ended 31 January 2017 was £21.4 million with a net loss per share of 35 pence compared to a net loss of £20.1 million for the year ended 31 January 2016 and a net loss per share of 34 pence. Cash Flows The Group had a net cash inflow of £12.5 million for the year ended 31 January 2017 as compared to a net cash inflow of £4.9 million for the previous year. For the year ended 31 January 2017, the Company generated £12.1 million in cash from operating activities. This compares to net cash used in operating activities of £17.2 million for the year ended 31 January 2016. This net movement of £29.3 million was driven by the receipt of a £32.8 million ($40.0 million) upfront payment received as part of the exclusive licence and collaboration agreement Summit entered into with Sarepta. This positive inflow was offset by an increase in research and development expenditure and general and administrative expenditure during the year ended 31 January 2017. There was also a £1.6 million increase in the amount of research and development tax credit received during the year ended 31 January 2017 which was £3.0 million as compared to £1.4 million received during the year ended 31 January 2016. Net cash inflow from financing activities for the year ended 31 January 2017 relates primarily to proceeds from the exercise of warrants and the exercise of share options. Net cash inflow from financing activities for the year ended 31 January 2016 primarily relates to the proceeds received from the sales of our equity securities, net of expenses. The Company generated a net cash inflow from financing activities of £0.4 million for the year ended 31 January 2017 compared to £22.1 million for the year ended 31 January 2016. Financial Position As at 31 January 2017, total cash and cash equivalents held were £28.1 million compared to £16.3 million as at 31 January 2016. The Company believes its existing cash and cash equivalents, including an anticipated $22.0 million payment for a near-term development milestone under the licence and collaboration agreement with Sarepta, will be sufficient to enable it to fund its operating expenses and capital expenditure requirements through to 31 December 2018. Due to the recognition of deferred revenue associated with the Sarepta agreement and the recognition of a financial liability on funding arrangements resulting from a change in accounting policy, the Consolidated Statement of Financial Position has moved to a net liability position. Headcount Average headcount of the Group for the year was 44 (2016: 37). Share Capital In April 2016, warrants over 177,045 Ordinary Shares were exercised raising net proceeds of £0.1 million. During the year, 373,781 share options were exercised raising net proceeds of £0.28 million. On 22 February 2017, post the period under review, the number of Ordinary Shares increased to 61,891,566 following the exercise of warrants by Oxford University Innovation Limited (formerly Isis Innovation Limited) over 50,000 Ordinary Shares at an exercise price of 20 pence per share. The issue raised net proceeds of £0.01 million.
Glyn Edwards Erik Ostrowski
29 March 2017 FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(audited)
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