Summit Therapeutics Reports Financial Results and Operational Progress for the Third Quarter and Nine Months Ended 31 October 2019
Summit Therapeutics plc
(‘Summit’, the ‘Company’ or the ‘Group’)
Summit Therapeutics Reports Financial Results and Operational Progress for the Third Quarter and Nine Months Ended 31 October 2019
Oxford, UK, and Cambridge, MA, US, 17 December 2019 - Summit Therapeutics plc (NASDAQ: SMMT, AIM: SUMM) today reports its financial results and provides an update on its operational progress for the third quarter and nine months ended 31 October 2019.
“Our enthusiasm for ridinilazole continues to grow. Phase 2 clinical data presented this past quarter showed ridinilazole had significant improvements in patient quality of life measures and preservation of the gut microbiome compared to the current standard of care. These findings reinforce our belief that ridinilazole could provide better overall clinical, physical and mental outcomes for patients with C. difficile infection," said Glyn Edwards, Chief Executive Officer of Summit. "We were also pleased to announce recently the proposed $50 million investment into Summit that will primarily be used to support the ongoing Phase 3 clinical programme and commercial preparatory activities for ridinilazole. We look forward to continuing to advance ridinilazole through our landmark Phase 3 clinical trials that remain on track to report results in the second half of 2021."
Ridinilazole for C. difficile Infection (‘CDI’)
- Ri-CoDIFy Phase 3 landmark clinical trials aim to support registration of the precision antibiotic ridinilazole in the US and other territories, and its adoption as a first-line treatment for CDI by:
- showing superiority over the current standard of care, vancomycin, using a composite endpoint measuring sustained clinical response;
- generating health economic data to help support ridinilazole's commercial launch, if approved; and
- undertaking deep microbiome analyses to evaluate ridinilazole’s preservation of the gut microbiome.
- The Phase 3 clinical programme remains on track for expected reporting of top-line data in the second half of 2021. The trials had enrolled a total of 128 patients as at the end of November 2019 with over two thirds of the 300 planned clinical trials sites having been opened.
- Reported new Phase 2 clinical trial data that showed ridinilazole improved patients' quality of life compared to vancomycin, including statistically significant improvements in measurements of physical and mental health. Additional data from the Phase 2 clinical trial provided mechanistic insights into how ridinilazole preserved the diversity of the gut microbiome in patients with CDI to maintain the balance of the metabolome of active chemicals made or modified by gut bacteria that help prevent C. difficile recurrence. These new results were reported at the ID Week Conference held in Washington DC in October 2019.
- Commercial and medical affairs hires have been made in the United States to support work to prepare for a potential launch and to secure future market access for ridinilazole, if approved.
Discuva Platform
Enterobacteriaceae
- DDS-04 compound series is a new class of antibiotics in lead optimisation that acts via the novel bacterial target LolCDE with the potential to treat infections caused by the Gram-negative bacteria, Enterobacteriaceae.
- In vivo proof of concept has been demonstrated with a DDS-04 series compound in pneumonia, sepsis and urinary tract infection ('UTI'). Data from all three disease models were presented at the ASM / ESCMID Conference held in September.
Gonorrhoea
- The focus of the gonorrhoea programme has shifted from SMT-571 to related compounds as part of ongoing preclinical studies as the Company seeks to bring an optimal clinical candidate forward. The lead optimisation work is being supported by an award of up to $4.5 million from CARB-X.
Corporate Highlights
- A proposed fundraising of approximately $50 million through a subscription and placing of new ordinary shares and warrants to existing investors (the 'Fundraising') was announced on 6 December 2019. The Fundraising requires approval by shareholders at a general meeting of the Company to be held on 23 December 2019. If the Fundraising is completed, the net proceeds, together with the Company's existing cash resources and funding agreements, are expected to extend its cash runway to 31 January 2021.
- Conditional on the Fundraising being completed, the board of directors will be restructured to support preparations for the potential commercial launch of ridinilazole for the treatment of CDI. Specifically, conditional on the Fundraising being completed, Mr Robert W. Duggan, Mr Manmeet Soni, Dr Elaine Stracker and Dr Ventzislav Stefanov were appointed as non-executive directors, and Dr Frank Armstrong, Mr Leopoldo Zambeletti and Mr David Wurzer are stepping down from the board of directors. Mr Glyn Edwards will take the role of Chairman in addition to his existing role as Chief Executive Officer.
- As a condition of the Fundraising, it is proposed that the admission of the Company's ordinary shares to trading on AIM will be cancelled ('AIM Delisting') with effect from 7.00 am on 24 February 2020. The Company's American Depositary Shares ('ADSs') will remain listed on the Nasdaq Stock Market where one ADS is represented by five ordinary shares. The proposed AIM Delisting reflects the increasing focus of Summit's business operations on the United States, and specifically the Company's plans to commercialise ridinilazole in the United States with its own specialised sales force, if approved.
Financial Highlights
- Cash and cash equivalents at 31 October 2019 of £13.6 million compared to £26.9 million at 31 January 2019. Cash position does not include the proposed Fundraising of approximately $50 million announced on 6 December 2019 (see Corporate Highlights above for further details).
- Loss for the three months ended 31 October 2019 of £7.0 million compared to a loss of £8.1 million for the three months ended 31 October 2018.
- The Company today announces that it has changed its accounting reference date from 31 January to 31 December with immediate effect.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 (MAR).
About Summit Therapeutics
Summit Therapeutics is a leader in antibiotic innovation. Our new mechanism antibiotics are designed to become the new standards of care for the benefit of patients and create value for payors and healthcare providers. We are currently developing new mechanism antibiotics to treat infections caused by C. difficile, N. gonorrhoeae and Enterobacteriaceae and are using our proprietary Discuva Platform to expand our pipeline. For more information, visit www.summitplc.com and follow us on Twitter @summitplc.
For more information:
Summit Glyn Edwards / Richard Pye (UK office) Michelle Avery (US office) | Tel: +44 (0)1235 443 951 +1 617 225 4455 |
Cairn Financial Advisers LLP (Nominated Adviser) Liam Murray / Tony Rawlinson / Ludovico Lazzaretti | Tel: +44 (0)20 7213 0880 |
N+1 Singer (Joint Broker) Aubrey Powell / George Tzimas, Corporate Finance Tom Salvesen, Corporate Broking | Tel: +44 (0)20 7496 3000 |
Bryan Garnier & Co Limited (Joint Broker) Phil Walker / Dominic Wilson | Tel: +44 (0)20 7332 2500 |
MSL Group (US) Erin Anthoine | Tel: +1 781 684 6552 summit@mslgroup.com |
Consilium Strategic Communications (UK) Mary-Jane Elliott / Sue Stuart / Sukaina Virji / Lindsey Neville | Tel: +44 (0)20 3709 5700 summit@consilium-comms.com |
Forward Looking Statements
Any statements in this press release about the Company’s future expectations, plans and prospects, including but not limited to, whether or not the Company will consummate the Fundraising, the restructuring of the board of directors, the AIM Delisting, the trading markets for the Company's ordinary shares and ADSs, statements about the potential benefits and future operation of the BARDA or CARB-X contract, including any potential future payments thereunder, the clinical and preclinical development of the Company’s product candidates, the therapeutic potential of the Company’s product candidates, the potential of the Discuva Platform, the potential commercialisation of the Company’s product candidates, the sufficiency of the Company’s cash resources, the timing of initiation, completion and availability of data from clinical trials, the potential submission of applications for marketing approvals 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 risk that the Company's shareholders do not approve the Fundraising and AIM Delisting, the risk that other closing conditions to the Fundraising are not satisfied, the ability of BARDA or CARB-X to terminate the Company’s contract for convenience at any time, the uncertainties inherent in the initiation of future clinical trials, availability and timing of data from ongoing and future preclinical studies and clinical trials and the results of such preclinical studies and clinical 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 or preclinical studies will be indicative of the results of later clinical trials, expectations for regulatory approvals, laws and regulations affecting government contracts, availability of funding sufficient for the Company’s foreseeable and unforeseeable operating expenses and capital expenditure requirements and other factors discussed in the "Risk Factors" section of filings that the Company makes with the Securities and Exchange Commission, including the Company’s Annual Report on Form 20-F for the fiscal year ended 31 January 2019. Accordingly, readers should not place undue reliance on forward-looking statements or information. In addition, any forward-looking statements included in this press release represent the Company’s views only as of the date of this release and should not be relied upon as representing the Company’s views as of any subsequent date. The Company specifically disclaims any obligation to update any forward-looking statements included in this press release.
FINANCIAL REVIEW
Other Operating Income
Other operating income was £3.8 million for the three months ended 31 October 2019, as compared to £2.8 million for the three months ended 31 October 2018. Other operating income was £12.8 million for the nine months ended 31 October 2019, as compared to £9.0 million for the nine months ended 31 October 2018. These increases resulted primarily from the recognition of operating income from Summit’s funding contract with BARDA for the development of ridinilazole, which was £3.6 million for the three months ended 31 October 2019 as compared to £2.2 million for the three months ended 31 October 2018 and £11.7 million for the nine months ended 31 October 2019 as compared to £7.5 million for the nine months ended 31 October 2018. As of 31 October 2019, an aggregate of £26.6 million ($34.3 million) of the total committed BARDA funding of $53.6 million has been recognised.
The Group also recognised operating income related to the CARB-X award supporting the development of the Company's gonorrhoea programme of £0.2 million during the three months ended 31 October 2019 as compared to £0.1 million for the three months ended 31 October 2018 and £0.6 million during the nine months ended 31 October 2019 as compared to £0.3 million for the nine months ended 31 October 2018.
Revenue
Revenue was £0.1 million for the three months ended 31 October 2019 compared to £0.7 million for the three months ended 31 October 2018. Revenue was £0.5 million for the nine months ended 31 October 2019 compared to £42.5 million for the nine months ended 31 October 2018.
Revenue of £0.1 million recognised during the three months ended 31 October 2019 and £0.4 million recognised during the nine months ended 31 October 2019 related to the receipt of a $2.5 million (£1.9 million) upfront payment in respect of the licence and commercialisation agreement signed with Eurofarma Laboratórios SA in December 2017 for the exclusive right to commercialise ridinilazole in specified Latin American and Caribbean countries.
The decreases in revenue recognised are principally due to the reduction in revenue related to the Sarepta licence and collaboration agreement for the treatment of Duchenne muscular dystrophy ('DMD'). Revenue relating to the cost-share arrangement under the Sarepta agreement recognised during the three months ended 31 October 2019 amounted to £nil and during the nine months ended 31 October 2019 amounted to £0.1 million, as compared to total revenues relating to the upfront payment, development milestone payment and cost-share arrangement recognised during the three months ended 31 October 2018 of £0.6 million and during the nine months ended 31 October 2018 of £41.9 million. The agreement with Sarepta was terminated, effective August 2019, with no material ongoing obligations for either party.
Operating Expenses
Research and Development Expenses
Research and development expenses decreased by £1.0 million to £7.2 million for the three months ended 31 October 2019 from £8.2 million for the three months ended 31 October 2018. Research and development expenses decreased by £4.9 million to £24.7 million for the nine months ended 31 October 2019 from £29.6 million for the nine months ended 31 October 2018. These decreases primarily reflect decreases in clinical programme costs pertaining to the historical DMD programme.
Expenses related to the CDI programme increased by £4.2 million to £16.9 million for the nine months ended 31 October 2019 from £12.7 million for the nine months ended 31 October 2018. This increase primarily related to clinical operations and supply manufacturing activities related to the ongoing Ri-CoDIFy Phase 3 clinical trials of ridinilazole that commenced in February 2019.
Investment in the Group's preclinical antibiotic pipeline was £2.0 million for the nine months ended 31 October 2019 compared to £1.1 million for the nine months ended 31 October 2018. This increase primarily related to preclinical development activities for DDS-04 series for the treatment of Enterobacteriaceae infections and the gonorrhoea programme.
Expenses related to the DMD programme decreased to £0.2 million for the nine months ended 31 October 2019 from £8.6 million for the nine months ended 31 October 2018. The Group does not expect to incur further significant costs for this programme.
Other research and development expenses decreased by £1.7 million to £5.6 million during the nine months ended 31 October 2019 as compared to £7.3 million during the nine months ended 31 October 2018, which was driven by a decrease in staffing and facility costs.
General and Administration Expenses
General and administration expenses decreased by £0.3 million to £4.4 million for the three months ended 31 October 2019 from £4.7 million for the three months ended 31 October 2018. General and administration expenses decreased by £2.1 million to £7.2 million for the nine months ended 31 October 2019 from £9.3 million for the nine months ended 31 October 2018. These decreases were driven primarily by the non-cash charge for the acceleration of share-based payment expense resulting from the surrender of share options offset by a net positive movement in exchange rate variances accounted for in the comparative periods.
Finance Costs
Finance costs recognised during the three and nine months ended 31 October 2019 relate to lease liability interest payable and the unwinding of the discount associated with provisions. Finance costs were £0.1 million for the three months ended 31 October 2019 compared to £0.1 million for the three months ended 31 October 2018. Finance costs were £0.2 million for the nine months ended 31 October 2019 compared to £0.4 million for the nine months ended 31 October 2018. This decrease relates to the cessation of the unwinding of the discount following the remeasurement in June 2018 of the financial liabilities on funding arrangements for the historical DMD programme.
Taxation
The income tax credit for the three months ended 31 October 2019 was £0.7 million as compared to £1.3 million for the three months ended 31 October 2018. The income tax credit for the nine months ended 31 October 2019 was £2.6 million as compared to £1.7 million for the nine months ended 31 October 2018. The Group's current net tax credit for the periods reflects the accrued UK research and development tax credit based on management's estimate of the qualifying expenditure relating to research and development activities carried out by the Group, the taxes relating to the US operations and the release of deferred tax liabilities associated with the amortisation of intangible assets.
Losses
Loss before income tax was £7.8 million for the three months ended 31 October 2019 compared to a loss before income tax of £9.4 million for the three months ended 31 October 2018. Loss before income tax was £18.8 million for the nine months ended 31 October 2019 compared to a profit before income tax of £10.9 million for the nine months ended 31 October 2018.
Net loss for the three months ended 31 October 2019 was £7.0 million with a basic loss per share of 4 pence compared to a net loss of £8.1 million for the three months ended 31 October 2018 with a basic loss per share of 10 pence. Net loss for the nine months ended 31 October 2019 was £16.2 million with a basic loss per share of 10 pence compared to a net profit of £12.7 million for the nine months ended 31 October 2018 with a basic earnings per share of 16 pence.
The profits recorded during the nine months ended 31 October 2018 were due to the recognition of all remaining deferred revenue related to the Sarepta agreement.
Cash Flows
The Group had a net cash outflow of £13.7 million for the nine months ended 31 October 2019 as compared to a net cash outflow of £8.2 million for the nine months ended 31 October 2018.
Operating Activities
For the nine months ended 31 October 2019, net cash used in operating activities was £13.2 million compared to £22.1 million for the nine months ended 31 October 2018. This positive movement of £8.9 million was driven by an increase in cash received from licensing agreements and funding arrangements of £0.8 million, an increase in taxation cash inflows of £5.4 million due to the timing of receipt of the Group's research and development tax credits receivable on qualifying expenditure in respect of financial years ended 31 January 2017, 2018 and 2019, and a decrease in operating costs of £10.2 million as a result of the Group’s decision to discontinue development of ezutromid.
Investing Activities
Net cash used in investing activities was £0.2 million for the nine months ended 31 October 2019 as compared to £0.1 million for the nine months ended 31 October 2018. Net cash used in investing activities for the nine months ended 31 October 2019 includes amounts paid to acquire property, plant and equipment and intangible assets, offset by bank interest received on cash deposits.
Financing Activities
Net cash used in financing activities for the nine months ended 31 October 2019 of £0.3 million primarily relates to lease liability repayments. Net cash generated from financing activities for the nine months ended 31 October 2018 of £14.0 million was primarily driven by £14.1 million of proceeds, net of transaction costs, received following the Group’s equity placing in March 2018.
Financial Position and Cash Runway Guidance
As at 31 October 2019, total cash and cash equivalents held were £13.6 million (31 January 2019: £26.9 million).
On 6 December 2019, the Group announced a proposed Fundraising of approximately $50 million which is subject to certain shareholder approvals being obtained at a general meeting to be held on 23 December 2019. Please see Note 1 for further details should the Group not receive shareholder approval. If shareholder approval is obtained, the net proceeds of the Fundraising, together with the Group’s existing cash resources and funding agreements, are expected to extend its cash runway to 31 January 2021.
Glyn Edwards | ||
Chief Executive Officer | ||
17 December 2019 |
FINANCIAL STATEMENTS
Condensed Consolidated Statement of Comprehensive Income (unaudited)
For the three months ended 31 October 2019
Three months ended 31 October 2019 | Three months ended 31 October 2019 | Three months ended 31 October 2018 | |||||
(Adjusted*) | |||||||
Note | $000s | £000s | £000s | ||||
Revenue | 160 | 124 | 675 | ||||
Other operating income | 4,881 | 3,772 | 2,825 | ||||
Operating expenses | |||||||
Research and development | (9,347 | ) | (7,224 | ) | (8,195 | ) | |
General and administration | (5,650 | ) | (4,367 | ) | (4,654 | ) | |
Total operating expenses | (14,997 | ) | (11,591 | ) | (12,849 | ) | |
Operating (loss) | (9,956 | ) | (7,695 | ) | (9,349 | ) | |
Finance income | 1 | 1 | — | ||||
Finance costs | (82 | ) | (63 | ) | (60 | ) | |
(Loss) before income tax | (10,037 | ) | (7,757 | ) | (9,409 | ) | |
Income tax | 941 | 727 | 1,275 | ||||
(Loss) for the period | (9,096 | ) | (7,030 | ) | (8,134 | ) | |
Other comprehensive (loss) / income | |||||||
Items that may be reclassified subsequently to profit or loss | |||||||
Exchange differences on translating foreign operations | (21 | ) | (16 | ) | 6 | ||
Total comprehensive (loss) for the period | (9,117 | ) | (7,046 | ) | (8,128 | ) | |
Basic and diluted (loss) per ordinary share from operations | 2 | (5) cents | (4) pence | (10) pence |
* See Note 1 - ‘Basis of Accounting - Adoption of IFRS 16 ‘Leases’’
Condensed Consolidated Statement of Comprehensive Income (unaudited)
For the nine months ended 31 October 2019
Nine months ended 31 October 2019 | Nine months ended 31 October 2019 | Nine months ended 31 October 2018 | |||||
(Adjusted*) | |||||||
Note | $000s | £000s | £000s | ||||
Revenue | 646 | 499 | 42,507 | ||||
Other operating income | 16,533 | 12,778 | 8,979 | ||||
Operating expenses | |||||||
Research and development | (31,976 | ) | (24,713 | ) | (29,640 | ) | |
General and administration | (9,350 | ) | (7,226 | ) | (9,309 | ) | |
Impairment of goodwill and intangible assets | — | — | (3,986 | ) | |||
Total operating expenses | (41,326 | ) | (31,939 | ) | (42,935 | ) | |
Operating (loss) / profit | (24,147 | ) | (18,662 | ) | 8,551 | ||
Finance income | 4 | 3 | 2,786 | ||||
Finance costs | (241 | ) | (186 | ) | (410 | ) | |
(Loss) / profit before income tax | (24,384 | ) | (18,845 | ) | 10,927 | ||
Income tax | 3,404 | 2,631 | 1,730 | ||||
(Loss) / profit for the period | (20,980 | ) | (16,214 | ) | 12,657 | ||
Other comprehensive income | |||||||
Items that may be reclassified subsequently to profit or loss | |||||||
Exchange differences on translating foreign operations | 6 | 5 | 25 | ||||
Total comprehensive (loss) / profit for the period | (20,974 | ) | (16,209 | ) | 12,682 | ||
Basic and diluted (loss) / earnings per ordinary share from operations | 2 | (13) cents | (10) pence | 16 pence |
* See Note 1 - ‘Basis of Accounting - Adoption of IFRS 16 ‘Leases’’
Condensed Consolidated Statement of Financial Position (unaudited)
As at 31 October 2019
31 October 2019 | 31 October 2019 | 31 January 2019 | |||||
(Adjusted*) | |||||||
$000s | £000s | £000s | |||||
ASSETS | |||||||
Non-current assets | |||||||
Goodwill | 2,347 | 1,814 | 1,814 | ||||
Intangible assets | 13,049 | 10,085 | 10,604 | ||||
Property, plant and equipment | 1,594 | 1,232 | 1,540 | ||||
16,990 | 13,131 | 13,958 | |||||
Current assets | |||||||
Trade and other receivables | 11,583 | 8,953 |
By: GlobeNewswire
- 17 Dec 2019
Return to news
Upcoming Life Sciences Events
|