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 ended 31
October 2016.
Mr Glyn Edwards, Chief Executive Officer
of Summit commented: “During the third quarter, we
strengthened our DMD programme by entering into an exclusive
collaboration and license agreement with Sarepta Therapeutics,
granting European rights to our utrophin modulator pipeline,
including our lead candidate, ezutromid. This collaboration gives
us access to Sarepta’s DMD development, regulatory and commercial
expertise, while strengthening our financial position with global
research and development cost sharing and the potential for future
milestones. Ultimately, we believe that combining our strengths
through this collaboration could help to bring utrophin modulators
to market, where we have the potential to benefit all patients with
this muscle wasting disease.
“PhaseOut DMD, our Phase 2 proof of concept
trial of ezutromid, is enrolling now in the UK and the US, and we
are on track to report data from the first group of 24-week
biopsies in the second or third quarter of 2017. These biopsies
have the potential to demonstrate proof of mechanism for ezutromid
through a change in the pattern of utrophin expression from
baseline and an association of utrophin with mature muscle fibres –
a phenomenon that we expect would only occur with drug treatment.
This trial is expected to evaluate the F3 and F6 formulations of
ezutromid that both have the potential to modulate utrophin over a
wide range of exposures that could help us to maximise safety and
efficacy in patients over longer-term dosing.
“With our CDI programme, we continue
preparations for Phase 3 trials of ridinilazole, a novel antibiotic
with potential as a front-line treatment for patients suffering
from this serious bacterial infection. We look forward to a
productive 2017 with both programmes.”
HIGHLIGHTS
Utrophin Modulation Programme for
DMD
Exclusive Collaboration and License Agreement
with Sarepta Therapeutics Inc. (‘Sarepta’)
- Sarepta granted exclusive European rights to Summit’s utrophin
modulator pipeline including ezutromid
- Summit received upfront payment of $40 million and is eligible
to receive up to $522 million in future ezutromid-related milestone
payments plus sales royalties
- Global research and development costs related to ezutromid and
utrophin pipeline to be split 55%/45% (Summit/Sarepta) beginning in
2018
- Summit is eligible to receive additional milestone payments and
sales royalties for potential future generation candidate(s)
Ezutromid Clinical Development
- Enrolment of patients into PhaseOut DMD Phase 2 clinical trial
ongoing in the UK and US
- New F6 formulation of ezutromid achieved over six-fold increase
in maximum plasma levels in DMD patients compared to current F3
formulation in Phase 1 clinical trial; F6 to be evaluated alongside
F3 formulation in ongoing PhaseOut DMD trial
- Route to market strategy outlined that includes potential
accelerated and conditional approval pathways in the US and
Europe
- Ezutromid received Fast Track designation and Rare Pediatric
Disease designation from the US Food and Drug Administration
CDI Programme
- Preparatory activities to support ridinilazole advancing into
Phase 3 clinical trials ongoing
- Treatment completed in exploratory Phase 2 clinical trial
evaluating ridinilazole against fidaxomicin with top-line data
expected to be reported in Q2 2017
Financial Highlights
- Cash and cash equivalents at 31 October 2016 of £34.6 million
compared to £16.3 million at 31 January 2016
- Loss for the nine months ended 31 October 2016 of £16.4 million
compared to a loss of £13.0 million for the nine months ended 31
October 2015 (adjusted – see Note 1, ‘Change in accounting
policy’)
About Summit TherapeuticsSummit
is a biopharmaceutical company focused on the discovery,
development and commercialization of novel medicines for
indications for which there are no existing or only inadequate
therapies. Summit is conducting clinical programs 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
Therapeutics Glyn Edwards / Richard Pye
(UK office)Erik Ostrowski / Michelle Avery (US office) |
Tel: +44 (0)1235 443
951 +1 617 225 4455 |
|
|
Cairn Financial
Advisers LLP (Nominated Adviser)Liam Murray / Tony
Rawlinson |
Tel: +44 (0)20
7213 0880 |
|
|
N+1
Singer (Broker)Aubrey Powell / Jen Boorer |
Tel: +44 (0)20
7496 3000 |
|
|
MacDougall
Biomedical Communications(US media contact)Chris Erdman /
Karen Sharma |
Tel: +1 781 235 3060
cerdman@macbiocom.comksharma@macbiocom.com |
|
|
Consilium
Strategic Communications (Financial public relations,
UK)Mary-Jane Elliott / Sue Stuart / Jessica Hodgson / Lindsey
Neville |
Tel: +44 (0)20 3709
5700summit@consilium-comms.com |
Forward Looking StatementsAny
statements in this press release about our future expectations,
plans and prospects, including statements about 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 Therapeutics Inc., 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, 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 2016. 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.
OPERATIONAL REVIEW
Summit is seeking to develop a treatment for all
patients affected with the fatal disorder DMD using its utrophin
modulation technology. Summit is also advancing the development of
a highly selective antibiotic to treat CDI.
Summit’s DMD utrophin modulation programme is a
treatment approach independent of the underlying mutations in the
dystrophin gene that cause the disease. Therefore, we believe this
approach has the potential to benefit the entire patient
population. Summit has established a leadership position in the
field of utrophin modulation and is developing a pipeline of orally
administered small molecule utrophin modulator product candidates.
Summit’s most advanced utrophin modulator is ezutromid which is
currently being evaluated in a Phase 2 proof of concept trial.
Ezutromid has received orphan drug designation in the US and
Europe, and Fast Track and Rare Pediatric Disease designations in
the US.
Summit’s CDI product candidate is ridinilazole,
a novel class antibiotic that has the potential to treat the
initial infection and reduce recurrent disease, the key clinical
issue in CDI. Ridinilazole markedly reduced recurrence rates and
had a statistically superior rate of sustained clinical response
(‘SCR’) compared to vancomycin in a Phase 2 proof of concept trial.
Summit is currently evaluating its options for advancing
ridinilazole into Phase 3 clinical trials. Ridinilazole has
received Qualified Infectious Disease Product, or QIDP, designation
and has been granted Fast Track designation in the US.
Duchenne Muscular Dystrophy: Utrophin
Modulation Programme
Exclusive Collaboration and License Agreement
with Sarepta Therapeutics Inc. (‘Sarepta’)In October 2016, Summit
announced an exclusive collaboration and license agreement with
Sarepta. This granted Sarepta rights to Summit’s utrophin modulator
pipeline in the European Union, Switzerland, Norway, Iceland,
Turkey and the Commonwealth of Independent States, with an option
for Latin American rights. Summit retains commercialization rights
in all other countries, including the key markets of the US and
Japan.
Under the terms of the agreement, Summit has
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 $42
million in respect of specified development milestones (including a
$22 million milestone upon the first dosing of the last patient in
Summit’s PhaseOut DMD trial, payable on or after 1 April 2017),
$150 million in respect of specified regulatory milestones and a
potential $330 million from specified sales milestones. In
addition, Summit is eligible for escalating royalties ranging from
a low to high teens percentage of net sales in the licensed
territories. Beginning in 2018, Summit and Sarepta will share at a
55%/45% split specified global research and development costs
related to ezutromid and future generation utrophin modulators. If
Sarepta elects to exercise its option for Latin American rights,
Summit would be entitled to additional fees, milestones and
royalties. Summit will also be eligible to receive development and
regulatory milestones related to potential future generation
utrophin modulator candidate(s).
Ezutromid: Phase 2 Proof of Concept
TrialPhaseOut DMD is a Phase 2 clinical trial evaluating ezutromid
in patients with DMD, and it aims to establish proof of concept for
this utrophin modulator. The 48-week open-label trial is expected
to enrol up to 40 boys ranging in age from their fifth to their
tenth birthdays.
Enrolment of patients into PhaseOut DMD is
ongoing at sites in the UK and US. The Company anticipates
reporting 24-week muscle biopsy data from the first group of
patients in Q2 or Q3 2017.
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, loss of
ambulation and loss of 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 these factors
through various techniques including use of muscle biopsy to
evaluate utrophin expression 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.
Ezutromid: Phase 1 New Formulation TrialSummit
announced in August 2016 results from a Phase 1 clinical trial that
showed a new formulation of ezutromid called F6 achieved a
substantial increase in plasma exposure in patients compared to the
current clinical formulation called F3. The trial evaluated the
pharmacokinetics and safety of three fixed doses (250mg, 500mg and
1,000mg twice a day) of the F6 formulation in patients aged between
five and nine years who followed a modified diet. At the highest
dose, the five evaluable patients achieved an average maximum
concentration of 390ng/mL on day 7, the final day of dosing. This
was a six-fold increase in maximum plasma levels compared to
formulation F3 but were achieved with two-fifths of the dose of
ezutromid.
Summit plans to test the F6 formulation
alongside the F3 formulation in the ongoing PhaseOut DMD clinical
trial. It is anticipated that up to ten of the patients enrolled in
the US will be dosed with F6 to evaluate safety and efficacy. The
two formulations of ezutromid have the potential to modulate the
expression of utrophin, and the inclusion of F6 will provide a
greater understanding of the potential relationship between drug
exposure and clinical benefit.
Ezutromid: Commercialisation StrategySummit
outlined in August 2016 its strategy for the future development of
ezutromid. The Company plans to conduct a randomised, placebo
controlled trial designed with the potential to support accelerated
and conditional regulatory approvals in the United States and
Europe respectively. Assuming positive interim data from PhaseOut
DMD, it is anticipated that this trial would start in the second
half of 2017, with data available for potential regulatory filings
in 2019. Summit also expects to conduct a separate confirmatory
clinical trial designed to support full product approvals in major
territories.
Development of BiomarkersAs highlighted, a key
endpoint in the PhaseOut DMD trial is measurement of utrophin and
muscle regeneration biomarkers from muscle biopsies. Summit, in
collaboration with Flagship Biosciences Inc., has been developing
an automated, digital analysis tool to precisely measure muscle
maturity and integrity and utrophin expression in individual
fibres, and data from this research were presented at the 21st
Congress of the World Muscle Society held in Granada, Spain, in
October 2016. This research represents an important step in helping
to further our understanding of the potential benefits of utrophin
modulator therapies such as ezutromid.
Fast Track and Rare Pediatric Disease
DesignationsIn September, ezutromid was granted two separate
designations by the US FDA in the treatment of DMD: Fast Track and
Rare Pediatric Disease. Fast Track designation provides the Company
with advantages such as opportunities for more frequent
interactions with the FDA during all aspects of development,
submission of a New Drug Application (‘NDA’) on a rolling basis,
and eligibility for accelerated approval and priority review. Rare
Pediatric Disease designation could qualify Summit for a Priority
Review Voucher upon the approval of ezutromid, which could be used
for a subsequent marketing application or sold or transferred an
unlimited number of times (although only used once). The Priority
Review Voucher programme was extended on 13 December 2016 through
the enactment of the 21st Century Cures Act, under which a drug
designated as a Rare Pediatric Disease can receive a voucher if
approved before 1 October 2022.
DMD Community WebsiteOn 12 September 2016,
Summit launched www.utrophintrials.com, an online resource on
utrophin and Summit’s utrophin modulator clinical trials, in an
effort to broaden the Company’s relationship with the Duchenne
community as it advances ezutromid and other utrophin
modulators.
C. difficile Infection
Programme
Summit has generated a comprehensive package of
data supporting the potential of the novel class antibiotic
ridinilazole as a new front-line treatment of infections caused by
the bacteria Clostridium difficile. The Phase 2 proof of concept
trial called CoDIFy showed ridinilazole outperformed the antibiotic
vancomycin, which is the current standard of care. Ridinilazole
demonstrated a large numerical reduction in rates of recurrent
disease compared to vancomycin with this difference driven by
ridinilazole outperforming vancomycin in the preservation of the
gut microbiome.
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.
Phase 3 preparations are ongoing as the Company
continues to explore options to support the future development of
ridinilazole with a view to maximising the potential commercial
value of this antibiotic. Summit’s preference remains finding a
third party collaborator although the Company continues to actively
explore other potential options, including funding from government
and non-profit organisations.
In parallel, Summit is undertaking an
exploratory Phase 2 trial called CoDIFy 2 to evaluate ridinilazole
against the antibiotic fidaxomicin. This trial is intended to
further understand the impact of ridinilazole on a number of
disease parameters, including its impact on patients’ gut
microbiomes to help inform the design of the Phase 3 clinical
programme for ridinilazole. Dosing of patients in this trial has
now completed, and Summit expects to report top-line data,
including analysis of the microbiome, during Q2 2017.
The development of ridinilazole has been
financially supported by Seeding Drug Discovery and Translational
Awards both from the Wellcome Trust.
FINANCIAL REVIEW
Revenue
As part of the exclusive collaboration and
license agreement entered into with Sarepta, the Company received
an upfront payment of £32.9 million. Of this amount, £0.6 million
was recognised during the three months ended 31 October 2016. The
remaining £32.3 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 for the three months
ended 31 October 2016 was £nil compared to £0.3 million for the
three months ended 31 October 2015. Other operating income for the
nine months ended 31 October 2016 was £0.07 million compared to
£1.1 million (adjusted – see Note 1, ‘Change in accounting policy’)
for the nine months ended 31 October 2015. All monies and income
attributed to the funding agreement with the Wellcome Trust have
now been received and accounted for 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 was
lower in the nine months ended 31 October 2016 as compared to the
nine months ended 31 October 2015, with no income recognised in the
three months ended 31 October 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 ExpensesResearch and Development
ExpensesResearch and development expenses decreased by £0.5 million
to £4.0 million for the three months ended 31 October 2016 from
£4.5 million for the three months ended 31 October 2015. The
decrease is driven by the completion of our CoDIFy Phase 2 clinical
trial of ridinilazole. Research and development expenses increased
by £2.3 million to £14.2 million for the nine months ended 31
October 2016 from £11.9 million for the nine months ended 31
October 2015. This increase reflected an overall increase in
investment in the DMD programme and an increase in research and
development related staffing costs driven by an increase in
research and development related headcount.
General and Administration ExpensesGeneral and
administration expenses increased by £0.6 million to £1.9 million
for the three months ended 31 October 2016 from £1.3 million for
the three months ended 31 October 2015. General and administration
expenses increased by £1.8 million to £5.2 million for the nine
months ended 31 October 2016 from £3.4 million for the nine months
ended 31 October 2015. These increases were primarily due to
continuing additional corporate costs associated with being a
publicly traded company in the United States as well as in the
United Kingdom and an increase in staff related costs offset by a
favourable exchange rate variance for both the three months ended
31 October 2016 and nine months ended 31 October 2016.
Finance CostsFollowing an IFRS IC agenda
decision in May 2016 on the application of IAS 20 'Government
Grants,' the Company has changed its accounting policy regarding
charitable funding arrangements from the Wellcome Trust and US Not
for Profit organisations. See Note 1 – ‘Change in accounting
policy.’ Finance costs relate to the subsequent re-measurement of
the financial liability recognised in respect of
funding arrangements and the unwinding of the discounts
associated with the liabilities. Finance costs decreased by £0.3
million to £0.2 million for the three months ended 31 October 2016
from £0.5 million for the three months ended 31 October 2015
(adjusted). Finance costs decreased by £0.1 million to £0.7 million
for the nine months ended 31 October 2016 from £0.8 million for the
nine months ended 31 October 2015 (adjusted).
Cash Flows
Operating ActivitiesFor the nine months ended 31
October 2016, the Company generated £17.9 million in cash from
operating activities. This compares to net cash used in operating
activities of £11.2 million for the nine months ended 31 October
2015. This net movement of £29.1 million was driven by the receipt
of a £32.9 million upfront payment received as part of the
exclusive collaboration and licensing agreement entered into with
Sarepta. This was offset by an increase in research and development
expenditure and general and administrative expenditure during the
nine months ended 31 October 2016, offset by a £1.6 million
increase in the amount of research and development tax credit
received during the nine months ended 31 October 2016, which
totalled £3.0 million.
Investing ActivitiesNet cash used in investing
activities for the nine months ended 31 October 2016 and the nine
months ended 31 October 2015 includes the net amount of bank
interest received on cash deposits less amounts paid to acquire
property, plant and equipment.
Financing ActivitiesNet cash inflow from
financing activities for the nine months ended 31 October 2016
relates to proceeds from the exercise of warrants and the exercise
of share options during the nine months ended 31 October 2016. For
the nine months ended 31 October 2015, the Company received net
cash inflow related to proceeds from the sale of the Company’s
equity securities and exercise of share options, net of
expenses.
Financial position
As at 31 October 2016, total cash and cash
equivalents held were £34.6 million (31 January 2016: £16.3
million).
Glyn Edwards |
Erik Ostrowski |
Chief Executive
Officer |
Chief Financial
Officer |
15 December 2016
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited) For the three months ended 31 October 2016
|
|
Threemonths ended 31 October 2016 |
Threemonths ended 31 October 2016 |
Adjusted*Threemonths ended 31 October
2015 |
|
Note |
$000s |
£000s |
£000s |
|
|
|
|
|
Revenue |
|
703 |
|
576 |
|
- |
|
|
|
|
|
|
Other operating
income |
|
- |
|
- |
|
326 |
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
Research
and development |
|
(4,830 |
) |
(3,955 |
) |
(4,502 |
) |
General and administration |
|
(2,327 |
) |
(1,906 |
) |
(1,301 |
) |
Total operating
expenses |
|
(7,157 |
) |
(5,861 |
) |
(5,803 |
) |
|
|
|
|
|
Operating
loss |
|
(6,454 |
) |
(5,285 |
) |
(5,477 |
) |
|
|
|
|
|
Finance
income |
|
2 |
|
1 |
|
8 |
|
Finance
cost |
|
(501 |
) |
(243 |
) |
(587 |
) |
|
|
|
|
|
Loss before
income tax |
|
(6,953 |
) |
(5,527 |
) |
(6,056 |
) |
|
|
|
|
|
Income
tax |
|
1,154 |
|
945 |
|
761 |
|
|
|
|
|
|
Loss for the
period |
|
(5,799 |
) |
(4,582 |
) |
(5,295 |
) |
|
|
|
|
|
Other
comprehensive income / (losses) |
|
|
|
|
Exchange
differences on translating foreign operations |
|
34 |
|
28 |
|
(5 |
) |
Total comprehensive loss for the period |
|
(5,765 |
) |
(4,554 |
) |
(5,300 |
) |
Basic and diluted loss per Ordinary Share from
operations |
2 |
(9)cents |
(8)pence |
(9)pence |
*See Note 1 – ‘Change in accounting policy’
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited) For the nine months ended 31 October 2016
|
|
Ninemonths ended 31 October 2016 |
Nine months ended 31 October
2016 |
Adjusted*Nine months ended 31 October2015 |
|
Note |
$000s |
£000s |
£000s |
|
|
|
|
|
Revenue |
|
703 |
|
576 |
|
- |
|
|
|
|
|
|
Other operating
income |
|
88 |
|
72 |
|
1,058 |
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
Research
and development |
|
(17,292 |
) |
(14,160 |
) |
(11,859 |
) |
General and administration |
|
(6,412 |
) |
(5,250 |
) |
(3,378 |
) |
Total operating
expenses |
|
(23,704 |
) |
(19,410 |
) |
(15,237 |
) |
|
|
|
|
|
Operating
loss |
|
(22,913 |
) |
(18,762 |
) |
(14,179 |
) |
|
|
|
|
|
Finance
income |
|
8 |
|
7 |
|
24 |
|
Finance
cost |
|
(790 |
) |
(647 |
) |
(805 |
) |
|
|
|
|
|
Loss before
income tax |
|
(23,695 |
) |
(19,402 |
) |
(14,960 |
) |
|
|
|
|
|
Income
tax |
|
3,610 |
|
2,956 |
|
1,945 |
|
|
|
|
|
|
Loss for the
period |
|
(20,085 |
) |
(16,446 |
) |
(13,015 |
) |
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
Exchange
differences on translating foreign operations |
|
53 |
|
43 |
|
(2 |
) |
Total comprehensive loss for the period |
|
(20,032 |
) |
(16,403 |
) |
(13,017 |
) |
Basic and diluted loss per Ordinary Share from
operations |
2 |
(33)cents |
(27)pence |
(22)pence |
*See Note 1 – ‘Change in accounting policy’
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(unaudited)As at 31 October 2016
|
|
31 October2016 |
31
October 2016 |
Adjusted*31 January2016 |
|
|
$000s |
£000s |
£000s |
ASSETS |
|
|
|
|
Non-current
assets |
|
|
|
|
Goodwill |
|
811 |
|
664 |
|
664 |
|
Intangible assets |
|
4,241 |
|
3,473 |
|
3,473 |
|
Property,
plant and equipment |
|
139 |
|
114 |
|
83 |
|
|
|
5,191 |
|
4,251 |
|
4,220 |
|
Current
assets |
|
|
|
|
Prepayments and other
receivables |
|
1,348 |
|
1,104 |
|
1,519 |
|
Current tax
receivable |
|
3,624 |
|
2,967 |
|
3,014 |
|
Cash and
cash equivalents |
|
42,293 |
|
34,632 |
|
16,304 |
|
|
|
47,265 |
|
38,703 |
|
20,837 |
|
|
|
|
|
|
Total assets |
|
52,456 |
|
42,954 |
|
25,057 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Non-current
liabilities |
|
|
|
|
Provisions for other
liabilities and charges |
|
(104 |
) |
(85 |
) |
(73 |
) |
Deferred income |
4 |
(30,948 |
) |
(25,343 |
) |
- |
|
Deferred tax
liability |
|
(811 |
) |
(664 |
) |
(664 |
) |
Financial liabilities
on funding arrangements |
1 |
(6,965 |
) |
(5,703 |
) |
(5,034 |
) |
|
|
(38,828 |
) |
(31,795 |
) |
(5,771 |
) |
Current
liabilities |
|
|
|
|
Trade and other
payables |
|
(3,858 |
) |
(3,158 |
) |
(3,206 |
) |
Deferred income |
|
(8,440 |
) |
(6,912 |
) |
- |
|
|
|
(12,298 |
) |
(10,070 |
) |
(3,206 |
) |
|
|
|
|
|
Total liabilities |
|
(51,126 |
) |
(41,865 |
) |
(8,977 |
) |
|
|
|
|
|
Net assets |
|
1,330 |
|
1,089 |
|
16,080 |
|
|
|
|
|
|
EQUITY |
|
|
|
|
Share capital |
|
755 |
|
618 |
|
613 |
|
Share premium
account |
|
56,669 |
|
46,405 |
|
46,035 |
|
Share-based payment
reserve |
|
5,854 |
|
4,794 |
|
3,757 |
|
Merger reserve |
|
(2,372 |
) |
(1,943 |
) |
(1,943 |
) |
Special reserve |
|
24,415 |
|
19,993 |
|
19,993 |
|
Currency translation
reserve |
|
79 |
|
64 |
|
21 |
|
Accumulated losses reserve |
|
(84,070 |
) |
(68,842 |
) |
(52,396 |
) |
Total equity |
|
1,330 |
|
1,089 |
|
16,080 |
|
*See Note 1 – ‘Change in accounting policy’
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited) For the nine months ended 31 October 2016
|
|
Ninemonthsended 31
October2016 |
Ninemonthsended31
October2016 |
Adjusted*Ninemonthsended31 October2015 |
|
|
$000s |
£000s |
£000s |
Cash flows from
operating activities |
|
|
|
|
Loss before income
tax |
|
(23,695 |
) |
(19,402 |
) |
(14,960 |
) |
|
|
|
|
|
Adjusted for: |
|
|
|
|
Finance income |
|
(8 |
) |
(7 |
) |
(24 |
) |
Finance cost |
|
790 |
|
647 |
|
805 |
|
Foreign exchange
gain |
|
(245 |
) |
(201 |
) |
(10 |
) |
Depreciation |
|
45 |
|
37 |
|
27 |
|
Amortisation of
intangible fixed assets |
|
10 |
|
8 |
|
7 |
|
Increase in
provisions |
|
15 |
|
12 |
|
21 |
|
Research and
development expenditure credit |
|
(4 |
) |
(3 |
) |
(26 |
) |
Share-based payment |
|
1,266 |
|
1,037 |
|
871 |
|
Adjusted loss from
operations before changes in working capital |
|
(21,826 |
) |
(17,872 |
) |
(13,289 |
) |
|
|
|
|
|
Decrease in prepayments
and other receivables |
|
710 |
|
581 |
|
1,487 |
|
Increase in deferred
income |
|
39,388 |
|
32,255 |
|
- |
|
Decrease
in trade and other payables |
|
(46 |
) |
(40 |
) |
(775 |
) |
Cash generated from /
(used by) operations |
|
18,226 |
|
14,924 |
|
(12,577 |
) |
Taxation
received |
|
3,670 |
|
3,005 |
|
1,401 |
|
Net cash generated from / (used by) operating
activities |
|
21,896 |
|
17,929 |
|
(11,176 |
) |
|
|
|
|
|
Investing
activities |
|
|
|
|
Purchase of property,
plant and equipment |
|
(53 |
) |
(43 |
) |
(59 |
) |
Interest
received |
|
8 |
|
7 |
|
24 |
|
Net cash used in investing activities |
|
(45 |
) |
(36 |
) |
(35 |
) |
|
|
|
|
|
Financing
activities |
|
|
|
|
Proceeds from issue of
share capital |
|
- |
|
- |
|
26,101 |
|
Transaction costs on
share capital issued |
|
- |
|
- |
|
(4,187 |
) |
Proceeds from exercise
of warrants |
|
131 |
|
107 |
|
- |
|
Exercise of share
options |
|
328 |
|
268 |
|
222 |
|
Cash received from
funding arrangements accounted for as financial liabilities |
|
28 |
|
23 |
|
- |
|
Net cash generated from financing activities |
|
487 |
|
398 |
|
22,136 |
|
|
|
|
|
|
Increase in
cash and cash equivalents |
|
22,338 |
|
18,291 |
|
10,925 |
|
|
|
|
|
|
Effect of
exchange rates in cash and cash equivalents |
|
45 |
|
37 |
|
- |
|
|
|
|
|
|
Cash and cash
equivalents at beginning of the period |
|
19,910 |
|
16,304 |
|
11,265 |
|
|
|
|
|
|
Cash and cash equivalents at end of the
period |
|
42,293 |
|
34,632 |
|
22,190 |
|
*See Note 1 – ‘Change in accounting policy’
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited)
Nine months ended 31 October 2016
Group |
|
Sharecapital£000s |
Sharepremiumaccount£000s |
Share-basedpaymentreserve£000s |
Mergerreserve£000s |
Specialreserve£000s |
Currencytranslationreserve£000s |
Accumulatedlossesreserve£000s |
Total £000s |
At 1 February 2016
(adjusted*) |
|
613 |
46,035 |
3,757 |
(1,943 |
) |
19,993 |
21 |
(52,396 |
) |
16,080 |
|
Loss for the
period |
|
- |
- |
- |
- |
|
- |
- |
(16,446 |
) |
(16,446 |
) |
Currency
translation adjustment |
|
- |
- |
- |
- |
|
- |
43 |
- |
|
43 |
|
Total comprehensive
loss for the period |
|
- |
- |
- |
- |
|
- |
43 |
(16,446 |
) |
(16,403 |
) |
New share capital
issued from exercise of warrants |
|
2 |
105 |
- |
- |
|
- |
- |
- |
|
107 |
|
Share options
exercised |
|
3 |
265 |
- |
- |
|
- |
- |
- |
|
268 |
|
Share-based payment |
|
- |
- |
1,037 |
- |
|
- |
- |
- |
|
1,037 |
|
At 31
October 2016 |
|
618 |
46,405 |
4,794 |
(1,943 |
) |
19,993 |
64 |
(68,842 |
) |
1,089 |
|
Year ended 31 January 2016 (adjusted*)
Group |
|
Sharecapital£000s |
Sharepremiumaccount£000s |
Share-basedpaymentreserve£000s |
Mergerreserve£000s |
Specialreserve£000s |
Currencytranslationreserve£000s |
Accumulatedlossesreserve£000s |
Total £000s |
At 1 February 2015 |
|
411 |
24,101 |
|
2,597 |
(1,943 |
) |
19,993 |
62 |
|
(32,259 |
) |
12,962 |
|
Loss for the year |
|
- |
- |
|
- |
- |
|
- |
- |
|
(20,137 |
) |
(20,137 |
) |
Currency
translation adjustment |
|
- |
- |
|
- |
- |
|
- |
(41 |
) |
- |
|
(41 |
) |
Total comprehensive
loss for the year |
|
- |
- |
|
- |
- |
|
- |
(41 |
) |
(20,137 |
) |
(20,178 |
) |
New share capital
issued |
|
198 |
25,903 |
|
- |
- |
|
- |
- |
|
- |
|
26,101 |
|
Transaction costs on
share capital issued |
|
- |
(4,187 |
) |
- |
- |
|
- |
- |
|
- |
|
(4,187 |
) |
Share options
exercised |
|
4 |
218 |
|
- |
- |
|
- |
- |
|
- |
|
222 |
|
Share-based payment |
|
- |
- |
|
1,160 |
- |
|
- |
- |
|
- |
|
1,160 |
|
At 31
January 2016 |
|
613 |
46,035 |
|
3,757 |
(1,943 |
) |
19,993 |
21 |
|
(52,396 |
) |
16,080 |
|
Nine months ended 31 October 2015
(adjusted*)
Group |
|
Sharecapital£000s |
Sharepremiumaccount£000s |
Share-basedpaymentreserve£000s |
Mergerreserve£000s |
Specialreserve£000s |
Currencytranslationreserve£000s |
Accumulatedlossesreserve£000s |
Total £000s |
At 1 February 2015 |
|
411 |
24,101 |
|
2,597 |
(1,943 |
) |
19,993 |
62 |
|
(32,259 |
) |
12,962 |
|
Loss for the
period |
|
- |
- |
|
- |
- |
|
- |
- |
|
(13,015 |
) |
(13,015 |
) |
Currency
translation adjustment |
|
- |
- |
|
- |
- |
|
- |
(2 |
) |
- |
|
(2 |
) |
Total comprehensive
loss for the period |
|
- |
- |
|
- |
- |
|
- |
(2 |
) |
(13,015 |
) |
(13,017 |
) |
New share capital
issued |
|
198 |
25,903 |
|
- |
- |
|
- |
- |
|
- |
|
26,101 |
|
Transaction costs on
share capital issued |
|
- |
(4,187 |
) |
- |
- |
|
- |
- |
|
- |
|
(4,187 |
) |
Share options
exercised |
|
4 |
218 |
|
- |
- |
|
- |
- |
|
- |
|
222 |
|
Share-based payment |
|
- |
- |
|
871 |
- |
|
- |
- |
|
- |
|
871 |
|
At 31
October 2015 |
|
613 |
46,035 |
|
3,468 |
(1,943 |
) |
19,993 |
60 |
|
(45,274 |
) |
22,952 |
|
*See Note 1 – ‘Change in accounting policy’
NOTES TO THE FINANCIAL STATEMENTSFor the three
and nine months ended 31 October 2016
1. Basis of accounting
The unaudited consolidated interim financial
statements of Summit and its subsidiaries (the ‘Group’) for the
nine months ended 31 October 2016 have been prepared in accordance
with International Financial Reporting Standards (‘IFRS’) and
International Financial Reporting Interpretations Committee
(‘IFRIC’) interpretations as issued by the International Accounting
Standards Board and as adopted by the European Union and with those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS including those applicable to accounting periods ending
31 January 2017 and the accounting policies set out in Summit’s
consolidated financial statements. They do not include all the
statements required for full annual financial statements, and
should be read in conjunction with the consolidated financial
statements of the Group as at 31 January 2016 (the ‘2016
Accounts’). The 2016 Accounts, on which the Company’s auditors
delivered an unqualified audit report, have been delivered to the
Registrar of Companies following the 2016 Annual General
Meeting.
The interim financial statements are prepared in
accordance with the historical cost convention. Whilst the
financial information included in this announcement has been
prepared in accordance with IFRSs as issued by the International
Accounting Standards Board and adopted for use in the European
Union, this announcement does not itself contain sufficient
information to comply with IFRSs.
The interim financial statements have been
prepared assuming the Group will continue on a going concern
basis.
The financial information for the three and nine
month periods ended 31 October 2016 and 2015 are unaudited.
Solely for the convenience of the reader, unless
otherwise indicated, all pound sterling amounts stated in the
Consolidated Balance Sheet as at 31 October 2016, in the
Consolidated Income Statement for the three and nine months ended
31 October 2016 and in the Consolidated Cash Flow Statement for the
nine months ended 31 October 2016 have been translated into US
dollars at the rate on 31 October 2016 of $1.2212 to £1.00. These
translations should not be considered representations that any such
amounts have been, could have been or could be converted into US
dollars at that or any other exchange rate as at that or any other
date.
The Board of Directors of the Company approved
this statement on 15 December 2016.
Change in accounting
policyFollowing an IFRS IC agenda decision in May 2016 on
the application of IAS 20 'Government Grants,' the Company has
changed its accounting policy regarding charitable funding
arrangements from the Wellcome Trust and US Not for Profit
organisations.
In exchange for the funding provided, these
arrangements require the company to pay royalties on potential
future revenues generated from these projects and also give the
counterparties certain rights over the intellectual property if the
compound is not exploited. The IFRIC decision has clarified that
such arrangements result in a financial liability. The estimate of
the financial liability is initially recognised at fair value using
a discounted cash flow model with the difference between the fair
value of the liability and the cash received considered to
represent a charitable grant.
When determining the fair value on initial
recognition, the significant assumptions in the model include the
estimation of the timing and the probability of successful
development leading to commercialisation of the project related
results and related estimates of future cash flows. Estimated
future cash flows include expected sources of revenue (including
commercial sales and upfront payments, milestone payments and
royalties from potential licensing arrangements) and are calculated
using estimated geographical market share and associated
pricing.
The financial liability is subsequently measured
at amortised cost using a discounted cash flow model which
calculates the risk adjusted present values of estimated potential
future cash flows for the respective projects related to the
Wellcome Trust and US Not for Profit agreements. The financial
liability is re-measured when there is a specific significant event
that provides evidence of a significant change in the probability
of successful development such as the completion of a phase of
research or changes in use or market for a product. The model will
be updated for changes in the clinical probability of success and
other associated assumptions with the discount rate remaining
consistent within the model.
Re-measurements of the financial liability are
recognised in the income statement as finance costs. Grant income
is recognised as other operating income in accordance with
International Accounting Standard 20, ‘Accounting for Government
Grants and Disclosure of Government Assistance,’ at the same time
as the underlying expenditure is incurred, provided that there is
reasonable assurance that the Group will comply with the
conditions.
This change in accounting policy has been
reflected retrospectively in these financial statements.
The impact of this change in accounting policy
on the consolidated financial statements is a reduction in other
income historically recognised, a change in the level of accrued
income accounted for as grant income and the recognition of a
financial liability and finance costs associated with the unwinding
of the discount.
Impact on Consolidated Interim Statement of Comprehensive
Income |
OriginalNinemonthsended31 October2015£000 |
|
AdjustedNinemonthsended31 October2015£000 |
|
Impact£000 |
Other
operating income |
1,208 |
|
|
1,058 |
|
|
(150 |
) |
Finance costs |
- |
|
|
(805 |
) |
|
(805 |
) |
|
1,208 |
|
|
253 |
|
|
(955 |
) |
|
|
|
|
|
|
Impact on Consolidated Statement of Financial
Position |
Original31 January2016£000 |
|
Adjusted31 January2016£000 |
|
Impact£000 |
Prepayments and other receivables |
1,538 |
|
|
1,519 |
|
|
(19 |
) |
Financial liabilities on funding arrangements |
- |
|
|
(5,034 |
) |
|
(5,034 |
) |
Accumulated losses reserve |
(47,343 |
) |
|
(52,396 |
) |
|
(5,053 |
) |
|
|
|
|
|
|
Impact on Consolidated Statement of Cash
Flows |
OriginalNinemonthsended31 October2015£000 |
|
AdjustedNinemonthsended31 October2015£000 |
|
Impact£000 |
Loss
before income tax |
(14,005 |
) |
|
(14,960 |
) |
|
(955 |
) |
Adjusted for: |
|
|
|
|
|
Finance costs |
- |
|
|
805 |
|
|
805 |
|
Decrease in trade and other payables |
(925 |
) |
|
(775 |
) |
|
150 |
|
|
|
|
|
|
|
New accounting policy – Revenue
Recognition
As a result of the exclusive collaboration and
licensing agreement entered into with Sarepta Therapeutics Inc.,
the following revenue recognition policy has been adopted. See Note
4 – ‘Collaboration and License Agreement with Sarepta Therapeutics
Inc.’
Revenue is measured at the fair value of the
consideration received or receivable and represents amounts
receivable for goods and services provided in the normal course of
business net of value added tax and other sales-related taxes. The
Group recognises revenue when the amount can be reliably measured;
when it is probable that future economic benefits will flow to the
Group; and when specific criteria have been met for each of the
Group’s activities.
Collaboration revenues consist of revenues
generated from collaborative research and development arrangements.
Such agreements may consist of multiple elements and provide for
varying consideration terms, such as upfront, development,
regulatory and sales milestones and sales royalties and similar
payments. Where such arrangements can be divided into separate
units of accounting (each unit constituting a separate earnings
process), the arrangement consideration is allocated to the
different units based on their relative fair values and recognised
over the respective performance period.
Revenues from non-refundable, upfront payments
are assessed as to whether they relate to the provision of a
license or development services. Upfront payments classified as the
provision of a license are recognised in full immediately while
revenue related to further development services are initially
reported as deferred income on the Consolidated Statement of
Financial Position and are recognised as revenue over the
development period.
Development and approval milestone payments are
recognised as revenue based on the percentage of completion method
on the assumption that all stages will be completed successfully,
but with cumulative revenue recognised limited to non-refundable
amounts already received or reasonably certain to be received.
Royalty revenue is recognised on an accrual
basis in accordance with the substance of the relevant agreement,
provided that it is probable that the economic benefits will flow
to the Group and the amount of revenue can be measured
reliably.
Sales related milestone payments are recognised
in full in the period in which the relevant milestone is
achieved.
2. Loss per share calculation
The loss per Ordinary Share has been calculated
by dividing the loss for the period by the weighted average number
of Ordinary Shares in issue during the nine month period to 31
October 2016: 61,457,313 and during the three month period to 31
October 2016: 61,571,215 (for the nine month period to 31 October
2015: 58,354,036 and for the three month period to 31 October 2015:
61,290,740).
Since the Group has reported a net loss, diluted
loss per ordinary share is equal to basic loss per ordinary
share.
3. Issue of share capital
On 14 April 2016, the number of Ordinary Shares increased to
61,467,785 following the exercise of warrants over 177,045 Ordinary
Shares at an exercise price of 60 pence per share. The
issue of shares raised net proceeds of £0.1 million.
During the nine month period to 31 October 2016, the following
exercise of share options took place:
Date |
|
|
Number
ofoptionsexercised |
June 28, 2016 |
|
|
16,667 |
October 6, 2016 |
|
|
238,804 |
October 7, 2016 |
|
|
77,500 |
October 14, 2016 |
|
|
3,560 |
October 24, 2016 |
|
|
11,000 |
|
|
|
347,531 |
The total net proceeds from exercised share options during the
period was £0.27 million.
Following the exercise of the above share options, the number of
Ordinary Shares in issue was 61,815,316.
All new Ordinary Shares rank pari passu with existing Ordinary
Shares.
4. Collaboration and License Agreement
with Sarepta Therapeutics Inc.
On 4 October 2016, Summit announced its entry
into an exclusive Collaboration and License Agreement (the
‘Collaboration Agreement‘) with Sarepta Therapeutics Inc.
(‘Sarepta‘), pursuant to which the Company granted Sarepta the
exclusive right to commercialize products in the Company’s utrophin
modulator pipeline in the European Union, Switzerland, Norway,
Iceland, Turkey and the Commonwealth of Independent States (the
‘Licensed Territory‘). Such products include the Company’s lead
product candidate, ezutromid, for the treatment of Duchenne
muscular dystrophy and its second generation and future generation
small molecule utrophin modulators. The Company also granted
Sarepta an option to expand the Licensed Territory to include Latin
America. The Company retains commercialization rights in the rest
of the world. Under the terms of the Collaboration Agreement,
Summit received an upfront payment of $40.0 million (£32.9 million)
from Sarepta. The terms of the contract have been assessed and the
Company believe the development services to be indistinguishable
and as a result the upfront payment has been initially reported as
deferred income on the Consolidated Statement of Financial Position
and is being recognised as revenue over the development period. In
addition, the Company will be eligible to receive specified
development, regulatory and potential sales milestones related to
ezutromid and Summit’s second generation and future generation
small molecule utrophin modulators. Summit is also eligible for
escalating royalties ranging from a low to high teens percentage of
net sales in the Licensed Territories.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 (MAR).
- END -
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