Summit Therapeutics plc (NASDAQ:SMMT) (AIM:SUMM) today reports its
financial results for the first quarter ended 30 April 2018 and
provides an update on operational progress.
Mr Glyn Edwards, Chief Executive Officer
of Summit, commented: “The strength of the interim data
from our PhaseOut DMD trial has bolstered our belief that ezutromid
could become a new standard of care for all patients with Duchenne
muscular dystrophy (‘DMD’). These interim data showed a
statistically significant and meaningful reduction in both muscle
damage and muscle inflammation after just 24 weeks of treatment.
Should these changes be sustained after 48 weeks of treatment, we
believe we will be positioned to pursue an accelerated path to
regulatory approval for ezutromid. We look forward to the full
trial results in the third quarter of this year."
“In infectious diseases, we believe that new
mechanism antibiotics will be key to solving serious bacterial
threats and can provide a meaningful commercial opportunity. We
look forward to the initiation of our Phase 3 clinical trials of
ridinilazole in Q1 2019, and the identification of a lead
preclinical gonorrhoea candidate in H2 2018.”
Rare Diseases
Highlights
- Completed dosing in PhaseOut DMD clinical trial, a Phase 2
proof of concept trial of ezutromid in patients with DMD. Top-line
data from the full 48-week clinical trial are expected in Q3
2018.
- Presented positive 24-week interim data from PhaseOut DMD at
the American Academy of Neurology Annual Meeting. The data showed
that through the modulation of utrophin, ezutromid significantly
reduced muscle damage and muscle inflammation. A correlation
between the reduction in muscle damage and muscle inflammation was
observed, further strengthening the evidence of ezutromid
activity.
- Highlighted scientific rigour in the collection and analysis of
muscle biopsies and magnetic resonance parameters in PhaseOut DMD
at the MDA Clinical Conference.
Infectious Diseases
Highlights
- Presented the discovery of new mechanism antibiotic compounds
for the treatment of gonorrhoea at the European Congress of
Clinical Microbiology and Infectious Diseases. This compound series
was discovered using Summit’s proprietary bacterial genetics-based
platform acquired in December 2017.
Financial Highlights
- Raised gross proceeds of approximately £15.0 million ($21.2
million*) through a placing of new ordinary shares to existing and
new investors in Europe in March 2018.
- Cash and cash equivalents at 30 April 2018 of £27.7 million
compared to £20.1 million at 31 January 2018.
- Loss for the three months ended 30 April 2018 of £5.8 million
compared to a loss of £4.8 million for the three months ended 30
April 2017.
About Summit TherapeuticsSummit
is a biopharmaceutical company focused on the discovery,
development and commercialisation of novel medicines for
indications in neuromuscular and infectious diseases for which
there are no existing or only inadequate therapies. Summit is
currently conducting clinical programmes focused on the
neuromuscular 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).
*Based on a conversion rate of US$1.4135 to
£1.00
This announcement contains inside information
for the purposes of Article 7 of EU Regulation 596/2014 (MAR).
For more information, please
contact:
Summit |
|
|
Glyn
Edwards / Richard Pye (UK office) |
Tel: |
44
(0)1235 443 951 |
Erik
Ostrowski / Michelle Avery (US office) |
|
+1
617 225 4455 |
|
|
|
Cairn Financial Advisers LLP (Nominated
Adviser) |
Tel: |
+44
(0)20 7213 0880 |
Liam
Murray / Tony Rawlinson |
|
|
|
|
|
N+1 Singer (Joint Broker) |
Tel: |
+44
(0)20 7496 3000 |
Aubrey Powell / Jen Boorer |
|
|
|
|
|
Panmure Gordon (Joint Broker) |
Tel: |
+44
(0)20 7886 2500 |
Freddy Crossley |
|
|
|
|
|
MacDougall Biomedical Communications (US) |
Tel: |
+1
781 235 3060 |
Karen
Sharma |
|
ksharma@macbiocom.com |
|
|
|
Consilium Strategic Communications (UK) |
Tel: |
+44
(0)20 3709 5700 |
Mary-Jane Elliott / Jessica Hodgson / |
|
summit@consilium-comms.com |
Philippa Gardner / Lindsey Neville |
|
|
Forward Looking StatementsAny
statements in this press release about Summit’s future
expectations, plans and prospects, including but not limited to,
statements about the clinical and preclinical development of
Summit’s product candidates, the therapeutic potential of Summit’s
product candidates, the timing of initiation, completion and
availability of data from clinical trials, the potential submission
of applications for regulatory approvals, the sufficiency of
Summit’s cash resources, 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 or
preclinical studies will be indicative of the results of later
clinical trials, expectations for regulatory approvals,
availability of funding sufficient for Summit’s foreseeable and
unforeseeable operating expenses and capital expenditure
requirements and other factors discussed in the “Risk Factors”
section of filings that Summit makes with the Securities and
Exchange Commission including Summit’s Annual Report on Form 20-F
for the fiscal year ended 31 January 2018. 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 Summit’s views only as of the date
of this release and should not be relied upon as representing
Summit’s views as of any subsequent date. Summit specifically
disclaims any obligation to update any forward-looking statements
included in this press release.
FINANCIAL REVIEW
Revenue
Revenue increased by £2.2 million to £3.9
million for the three months ended 30 April 2018 from £1.7 million
for the three months ended 30 April 2017. This increase was driven
by revenues associated with our licence and collaboration agreement
with Sarepta Therapeutics, Inc. (‘Sarepta’). Revenue during the
three months ended 30 April 2018 included £1.7 million relating to
the upfront payment of $40.0 million (£32.8 million) received from
Sarepta in October 2016, which was consistent with the £1.7 million
recognised during the three months ended 30 April 2017. Revenue
during the three months ended 30 April 2018 also included £0.9
million relating to the development milestone payment of $22.0
million (£17.2 million) received from Sarepta in May 2017, as
compared to £nil million for the three months ended 30 April 2017.
During the three months ended 30 April 2018, £0.9 million of
revenue relating to development cost share income from Sarepta was
recognised, as compared to £nil million for the three months ended
30 April 2017.
As further discussed in Note 1 ‘Basis of
Accounting – Adoption of IFRS 15 Revenue from contracts with
customers,’ the Group is now recognising revenue associated with
the development milestone payment received from Sarepta in May
2017, which had previously been recognised in full under IAS 18,
over the development period. Development cost share income
received from Sarepta (which commenced in January 2018), is now
also being recognised over the development period. To date, an
aggregate of £16.7 million of the upfront payment and development
milestone has been recognised as revenue while the remaining £33.4
million is classified as deferred revenue. With respect to
development cost share income, £1.1 million has been recognised as
revenue to date, while the remaining £3.4 million is classified as
deferred revenue.
During the three months ended 30 April 2018, the
Group also recognised £0.1 million of revenue 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, and £0.2 million of
revenue pursuant to a research collaboration agreement between the
Group’s acquired subsidiary, Discuva Limited, and F. Hoffmann - La
Roche Limited (‘Roche’). On 21 February 2018, the research
services period under the Roche agreement ended.
Other Operating Income
Other operating income was £3.5 million for
the three months ended 30 April 2018, as compared to £nil for the
three months ended 30 April 2017. This increase resulted primarily
from the recognition of £3.3 million of income pursuant to Summit’s
funding contract with BARDA for the development of ridinilazole
that was awarded to the Group in September 2017.
The Group also recognised £0.1 million of grant
income from Innovate UK awarded to Discuva Limited, and £0.1
million in research and development expenditure credit.
Operating Expenses
Research and Development ExpensesResearch and
development expenses increased by £6.3 million to £11.3 million for
the three months ended 30 April 2018 from £5.0 million for the
three months ended 30 April 2017. This was due to increased
spending related to the Duchenne muscular dystrophy (‘DMD’)
programme, the C. difficile infection (‘CDI’) programme, and
antibacterial research activities.
Investment in the DMD programme increased by
£1.2 million to £4.2 million for the three months ended 30 April
2018 from £3.0 million for the three months ended 30 April 2017.
This increase was driven by an increase in expenses associated with
manufacturing costs for our clinical trials and research
associated with our future generation utrophin modulator
programme. Costs associated with the CDI programme increased by
£4.4 million to £5.0 million for the three months ended 30 April
2018 from £0.6 million for the three months ended 30 April 2017.
This increase primarily related to preparatory activities being
conducted for the planned Phase 3 clinical trials of ridinilazole.
Investment in antibacterial research activities was £0.2 million
for the three months ended 30 April 2018 compared to £nil million
for the three months ended 30 April 2017. Other research and
development expenses increased by £0.5 million to £1.9 million
during the three months ended 30 April 2018 as compared to £1.4
million during the three months ended 30 April 2017, which was
driven by an increase in headcount within the DMD, CDI and
antibacterial research teams.
General and Administration ExpensesGeneral and
administration expenses increased by £0.3 million to £2.7 million
for the three months ended 30 April 2018 from £2.4 million for the
three months ended 30 April 2017. This increase was driven by a net
positive movement in exchange rate variances of £0.8 million,
offset by an increase of £0.7 million in staff related costs, an
increase of £0.2 million in share-based payment expense, an
increase of £0.1 million in overhead and facility related costs and
an increase of £0.1 million in legal and professional fees.
Finance Costs
Finance costs remained consistent at £0.2
million for the three months ended 30 April 2018 and for the three
months ended 30 April 2017, and are related to the unwinding of the
discount on financial liabilities on funding arrangements and
provisions.
Taxation
The income tax credit decreased by £0.3 million
to £0.9 million for the three months ended 30 April 2018 from £1.2
million for the three months ended 30 April 2017. Since the Group
is now receiving third party development funding from a number of
sources, a lower amount of our research and development expenditure
was eligible for UK research and development tax credits during the
three months ended 30 April 2018, as compared to during the three
months ended 30 April 2017.
Losses
Loss before income tax was £6.8 million for the three months
ended 30 April 2018 compared to £6.0 million for the three months
ended 30 April 2017. Net loss for the three months ended 30 April
2018 was £5.8 million with a net loss per share of 8 pence compared
to a net loss of £4.8 million for the three months ended 30 April
2017 and a net loss per share of 8 pence.
Cash Flows
The Group had a net cash inflow of £7.2 million
for the three months ended 30 April 2018 compared to a net cash
outflow of £8.2 million for the three months ended 30 April
2017.
Operating ActivitiesFor the three months ended
30 April 2018, net cash used by operating activities was £7.0
million compared to net cash used by operating activities of £7.9
million for the three months ended 30 April 2017. This positive
movement of £0.9 million was driven by an increase in net operating
costs offset by a net positive increase in working capital.
Investing ActivitiesNet cash used in investing
activities for the three months ended 30 April 2018 was £0.03
million compared to £0.3 million for the three months ended 30
April 2017. This included the net amount of bank interest received
on cash deposits, less amounts paid to acquire property, plant and
equipment and intangible assets.
Financing ActivitiesNet cash generated from
financing activities for the three months ended 30 April 2018 of
£14.2 million includes £14.1 million of proceeds, net of
transaction costs, received following the Group’s equity placing on
the AIM market of the London Stock Exchange in March 2018 and £0.1
million received following the exercise of share options. During
the three months ended 30 April 2017 the Group received proceeds of
£0.01 million following the exercise of warrants and share
options.
Financial Position
As at 30 April 2018, total cash and cash
equivalents held were £27.7 million (31 January 2018: £20.1
million).
Glyn Edwards |
Erik
Ostrowski |
Chief Executive
Officer |
Chief Financial
Officer |
5 June 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited) For the three months ended 30 April 2018
|
|
Three months ended 30 April 2018 |
|
Three months ended 30 April 2018 |
|
Three
months ended 30 April 2017 |
|
|
Note |
$000s |
|
£000s |
|
£000s |
|
|
|
|
|
|
Revenue |
2 |
5,327 |
|
3,874 |
|
1,728 |
|
|
|
|
|
|
Other operating
income |
|
4,751 |
|
3,455 |
|
- |
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
Research and
development |
|
(15,475 |
) |
(11,254 |
) |
(5,035 |
) |
General and administration |
|
(3,670 |
) |
(2,669 |
) |
(2,434 |
) |
Total operating
expenses |
|
(19,146 |
) |
(13,923 |
) |
(7,469 |
) |
|
|
|
|
|
Operating
loss |
|
(9,067 |
) |
(6,594 |
) |
(5,741 |
) |
|
|
|
|
|
Finance
income |
|
1 |
|
1 |
|
1 |
|
Finance
cost |
|
(259 |
) |
(188 |
) |
(224 |
) |
|
|
|
|
|
Loss before
income tax |
|
(9,325 |
) |
(6,781 |
) |
(5,964 |
) |
|
|
|
|
|
Income
tax |
|
1,301 |
|
946 |
|
1,203 |
|
|
|
|
|
|
Loss for the period |
|
(8,024 |
) |
(5,835 |
) |
(4,761 |
) |
|
|
|
|
|
Other
comprehensive losses |
|
|
|
|
Items that may be
reclassified subsequently to profit or loss |
|
|
|
|
Exchange
differences on translating foreign operations |
|
10 |
|
7 |
|
(15 |
) |
Total comprehensive loss for the period |
|
(8,014 |
) |
(5,828 |
) |
(4,776 |
) |
Basic and diluted loss per ordinary share from
operations |
3 |
(11)cents |
|
(8)pence |
|
(8)pence |
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(unaudited)As at 30 April 2018
|
|
30
April2018 |
|
30
April 2018 |
|
31
January 2018(Adjusted*) |
|
|
|
$000s |
|
£000s |
|
£000s |
|
ASSETS |
|
|
|
|
Non-current
assets |
|
|
|
|
Goodwill |
|
3,407 |
|
2,478 |
|
2,478 |
|
Intangible assets |
|
20,053 |
|
14,583 |
|
14,785 |
|
Property,
plant and equipment |
|
1,041 |
|
757 |
|
809 |
|
|
|
24,501 |
|
17,818 |
|
18,072 |
|
Current
assets |
|
|
|
|
Prepayments and other
receivables |
|
17,288 |
|
12,572 |
|
11,134 |
|
Current tax
receivable |
|
7,791 |
|
5,666 |
|
4,654 |
|
Cash and
cash equivalents |
|
38,070 |
|
27,685 |
|
20,102 |
|
|
|
63,149 |
|
45,923 |
|
35,890 |
|
|
|
|
|
|
Total assets |
|
87,650 |
|
63,741 |
|
53,962 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Non-current
liabilities |
|
|
|
|
Deferred revenue |
|
(35,181 |
) |
(25,584 |
) |
(27,270 |
) |
Financial liabilities
on funding arrangements |
|
(4,443 |
) |
(3,231 |
) |
(3,090 |
) |
Provisions for other
liabilities and charges |
|
(2,320 |
) |
(1,687 |
) |
(1,641 |
) |
Deferred tax
liability |
|
(3,271 |
) |
(2,379 |
) |
(2,379 |
) |
|
|
(45,215 |
) |
(32,881 |
) |
(34,380 |
) |
Current
liabilities |
|
|
|
|
Trade and other
payables |
|
(16,371 |
) |
(11,906 |
) |
(8,932 |
) |
Deferred revenue |
|
(18,124 |
) |
(13,180 |
) |
(13,834 |
) |
|
|
(34,495 |
) |
(25,086 |
) |
(22,766 |
) |
|
|
|
|
|
Total liabilities |
|
(79,710 |
) |
(57,967 |
) |
(57,146 |
) |
|
|
|
|
|
Net assets / (liabilities) |
|
7,940 |
|
5,774 |
|
(3,184 |
) |
|
|
|
|
|
EQUITY |
|
|
|
|
Share capital |
|
1,128 |
|
820 |
|
736 |
|
Share premium
account |
|
102,299 |
|
74,394 |
|
60,237 |
|
Share-based payment
reserve |
|
10,022 |
|
7,288 |
|
6,743 |
|
Merger reserve |
|
4,162 |
|
3,027 |
|
3,027 |
|
Special reserve |
|
27,492 |
|
19,993 |
|
19,993 |
|
Currency translation
reserve |
|
61 |
|
44 |
|
37 |
|
Accumulated losses reserve |
|
(137,224 |
) |
(99,792 |
) |
(93,957 |
) |
Total equity /
(deficit) |
|
7,940 |
|
5,774 |
|
(3,184 |
) |
* See Note 1 – ‘Basis of Accounting - Adoption of IFRS 15
Revenue from contracts with customers’
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited) For the three months ended 30 April 2018
|
Three months ended 30 April
2018 |
|
Three months ended 30 April
2018 |
|
Three
months ended 30 April 2017 |
|
|
$000s |
|
£000s |
|
£000s |
|
Cash flows from
operating activities |
|
|
|
Loss before income
tax |
(9,325 |
) |
(6,781 |
) |
(5,964 |
) |
|
|
|
|
Adjusted for: |
|
|
|
Finance income |
(1 |
) |
(1 |
) |
(1 |
) |
Finance cost |
259 |
|
188 |
|
224 |
|
Foreign exchange (gain)
/ loss |
(628 |
) |
(457 |
) |
473 |
|
Depreciation |
106 |
|
77 |
|
23 |
|
Amortisation of
intangible fixed assets |
286 |
|
208 |
|
2 |
|
Loss on disposal of
assets |
- |
|
- |
|
37 |
|
Research and
development expenditure credit |
(89 |
) |
(65 |
) |
- |
|
Share-based payment |
749 |
|
545 |
|
277 |
|
Adjusted loss
from operations before changes in working capital |
(8,643 |
) |
(6,286 |
) |
(4,929 |
) |
|
|
|
|
Increase in prepayments
and other receivables |
(1,972 |
) |
(1,434 |
) |
(482 |
) |
Decrease in deferred
revenue |
(3,216 |
) |
(2,339 |
) |
(1,728 |
) |
Increase
/ (decrease) in trade and other payables |
4,151 |
|
3,019 |
|
(798 |
) |
Cash used by
operations |
(9,680 |
) |
(7,040 |
) |
(7,937 |
) |
Taxation
paid |
- |
|
- |
|
(15 |
) |
Net cash used by operating activities |
(9,680 |
) |
(7,040 |
) |
(7,952 |
) |
|
|
|
|
Investing
activities |
|
|
|
Purchase of property,
plant and equipment |
(34 |
) |
(25 |
) |
(280 |
) |
Purchase of intangible
assets |
(7 |
) |
(5 |
) |
- |
|
Interest
received |
1 |
|
1 |
|
1 |
|
Net cash used in investing activities |
(40 |
) |
(29 |
) |
(279 |
) |
|
|
|
|
Financing
activities |
|
|
|
Proceeds from issue of
share capital |
20,627 |
|
15,000 |
|
- |
|
Transaction costs on
share capital issued |
(1,180 |
) |
(858 |
) |
- |
|
Proceeds from exercise
of warrants |
- |
|
- |
|
10 |
|
Proceeds from exercise
of share options |
136 |
|
99 |
|
3 |
|
Net cash generated from financing activities |
19,583 |
|
14,241 |
|
13 |
|
|
|
|
|
Increase /
(decrease) in cash and cash equivalents |
9,863 |
|
7,172 |
|
(8,218 |
) |
|
|
|
|
Effect of
exchange rates on cash and cash equivalents |
565 |
|
411 |
|
(482 |
) |
|
|
|
|
Cash and cash
equivalents at beginning of the period |
27,642 |
|
20,102 |
|
28,062 |
|
|
|
|
|
Cash and cash equivalents at end of the
period |
38,070 |
|
27,685 |
|
19,362 |
|
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY (unaudited)
Three months ended 30 April 2018
Group |
Share capital £000s |
Share premium account£000s |
|
Share-based payment reserve£000s |
Merger reserve£000s |
Special reserve £000s |
Currencytranslationreserve£000s |
Accumulated losses reserve£000s |
|
Total £000s |
|
At 1 February 2018 (as
previously reported) |
736 |
60,237 |
|
6,743 |
3,027 |
19,993 |
37 |
(80,898 |
) |
9,875 |
|
Change in
accounting policy (modified retrospective application IFRS 15) |
- |
- |
|
- |
- |
- |
- |
(13,059 |
) |
(13,059 |
) |
At 1
February 2018 (Adjusted*) |
736 |
60,237 |
|
6,743 |
3,027 |
19,993 |
37 |
(93,957 |
) |
(3,184 |
) |
Loss for the
period |
- |
- |
|
- |
- |
- |
- |
(5,835 |
) |
(5,835 |
) |
Currency
translation adjustment |
- |
- |
|
- |
- |
- |
7 |
- |
|
7 |
|
Total comprehensive
loss for the period |
- |
- |
|
- |
- |
- |
7 |
(5,835 |
) |
(5,828 |
) |
New share capital
issued |
83 |
14,917 |
|
- |
- |
- |
- |
- |
|
15,000 |
|
Transaction costs on
share capital issued |
- |
(858 |
) |
- |
- |
- |
- |
- |
|
(858 |
) |
Share options
exercised |
1 |
98 |
|
- |
- |
- |
- |
- |
|
99 |
|
Share-based payment |
- |
- |
|
545 |
- |
- |
- |
- |
|
545 |
|
At 30
April 2018 |
820 |
74,394 |
|
7,288 |
3,027 |
19,993 |
44 |
(99,792 |
) |
5,774 |
|
Year ended 31 January 2018
Group |
Share capital £000s |
Share premium account£000s |
|
Share-based payment reserve£000s |
Merger reserve£000s |
|
Special reserve £000s |
Currencytranslationreserve£000s |
|
Accumulated losses reserve£000s |
|
Total £000s |
|
At 1 February 2017 |
618 |
46,420 |
|
5,136 |
(1,943 |
) |
19,993 |
50 |
|
(73,767 |
) |
(3,493 |
) |
Loss for the year |
- |
- |
|
- |
- |
|
- |
- |
|
(7,131 |
) |
(7,131 |
) |
Currency
translation adjustment |
- |
- |
|
- |
- |
|
- |
(13 |
) |
- |
|
(13 |
) |
Total comprehensive
loss for the year |
- |
- |
|
- |
- |
|
- |
(13 |
) |
(7,131 |
) |
(7,144 |
) |
New share capital
issued |
84 |
14,847 |
|
- |
- |
|
- |
- |
|
- |
|
14,931 |
|
Transaction costs on
share capital issued |
- |
(1,428 |
) |
- |
- |
|
- |
- |
|
- |
|
(1,428 |
) |
Issue of ordinary
shares as consideration for a business combination |
30 |
- |
|
- |
4,970 |
|
- |
- |
|
- |
|
5,000 |
|
New share capital
issued from exercise of warrants |
1 |
9 |
|
- |
- |
|
- |
- |
|
- |
|
10 |
|
Share options
exercised |
3 |
389 |
|
- |
- |
|
- |
- |
|
- |
|
392 |
|
Share-based payment |
- |
- |
|
1,607 |
- |
|
- |
- |
|
- |
|
1,607 |
|
At 31
January 2018 |
736 |
60,237 |
|
6,743 |
3,027 |
|
19,993 |
37 |
|
(80,898 |
) |
9,875 |
|
Three months ended 30 April 2017
Group |
Share capital £000s |
Share premium account£000s |
Share-based payment reserve£000s |
Merger reserve£000s |
|
Special reserve £000s |
Currencytranslationreserve£000s |
|
Accumulated losses reserve£000s |
|
Total £000s |
|
At 1 February 2017 |
618 |
46,420 |
5,136 |
(1,943 |
) |
19,993 |
50 |
|
(73,767 |
) |
(3,493 |
) |
Loss for the
period |
- |
- |
- |
- |
|
- |
- |
|
(4,761 |
) |
(4,761 |
) |
Currency
translation adjustment |
- |
- |
- |
- |
|
- |
(15 |
) |
- |
|
(15 |
) |
Total comprehensive
loss for the period |
- |
- |
- |
- |
|
- |
(15 |
) |
(4,761 |
) |
(4,776 |
) |
New share capital
issued from exercise of warrants |
1 |
9 |
- |
- |
|
- |
- |
|
- |
|
10 |
|
Share options
exercised |
- |
3 |
- |
- |
|
- |
- |
|
- |
|
3 |
|
Share-based payment |
- |
- |
277 |
- |
|
- |
- |
|
- |
|
277 |
|
At 30
April 2017 |
619 |
46,432 |
5,413 |
(1,943 |
) |
19,993 |
35 |
|
(78,528 |
) |
(7,979 |
) |
* See Note 1 – ‘Basis of Accounting - Adoption of IFRS 15
Revenue from contracts with customers’
NOTES TO THE FINANCIAL INFORMATIONFor the three
months ended 30 April 2018
1. Basis of Accounting
The unaudited condensed consolidated interim financial
statements of Summit Therapeutics plc (‘Summit’) and its
subsidiaries (the ‘Group’) for the three months ended 30 April 2018
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 with those parts
of the Companies Act 2006 applicable to companies reporting under
IFRS including those applicable to accounting periods ending 31
January 2019 and the accounting policies set out in Summit’s
consolidated financial statements. There have been no changes to
the accounting policies as contained in the annual consolidated
financial statements as of and for the year ended 31 January 2018
other than as described below. 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 2018.
The unaudited condensed consolidated interim financial
statements are prepared on a going concern basis and under the
historical cost convention. Whilst the financial information
included in this announcement has been prepared in accordance with
IFRS and IFRIC interpretations as issued by the International
Accounting Standards Board and with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS, this
announcement does not itself contain sufficient information to
comply with IFRSs.
The Group expects it will need to raise additional funding in
the future in order to support research and development efforts,
potential commercialisation related activities if any of its
product candidates receive marketing approval, as well as to
support activities associated with operating as a public company in
both the United States and the United Kingdom. Management expects
to finance its cash needs through a combination of some, or all, of
the following: equity offerings, collaborations, strategic
alliances, grants and clinical trial support from government
entities, philanthropic, non-government and not for profit
organisations and patient advocacy groups, debt financings, and
marketing, distribution or licensing arrangements.
The financial information for the three month periods ended 30
April 2018 and 2017 are unaudited.
Solely for the convenience of the reader, unless otherwise
indicated, all pound sterling amounts stated in the Consolidated
Statement of Financial Position as at 30 April 2018 and the
Consolidated Statement of Comprehensive Income and Consolidated
Statement of Cash Flows for the three months ended 30 April 2018
have been translated into US dollars at the rate on 30 April 2018
of $1.3751 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
5 June 2018.
Adoption of IFRS 15 Revenue from
contracts with customers
IFRS 15 establishes comprehensive guidelines for determining
when to recognise revenue and how much revenue to recognise. The
Group has adopted this new standard effective 1 February 2018 as
required, using the full retrospective transition method in
accordance with IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors.
The core principle in that framework is that a company should
recognise revenue to depict the transfer of control of promised
goods or services to the customer in an amount that reflects the
consideration to which the company expects to be entitled in
exchange for those goods or services. To determine revenue
recognition for arrangements that a company determines are within
the scope of IFRS 15, a company performs the following five steps:
(i) identify the contract(s) with a customer; (ii) identify the
performance obligations in the contract; (iii) determine the
transaction price; (iv) allocate the transaction price to the
performance obligations in the contract; and (v) recognise revenue
when (or as) the company satisfies a performance obligation.
The Group has assessed the effect of adoption of
this standard as it relates to the licence and collaboration
agreement with Sarepta Therapeutics, Inc. (‘Sarepta’) and the
licence and commercialisation agreement with Eurofarma Laboratórios
S.A. ('Eurofarma').
The licence and collaboration agreement with Sarepta and the
licence and commercialisation agreement with Eurofarma grant the
rights in specific territories to commercialise products in the
Group’s utrophin modulator pipeline and ridinilazole, respectively,
as well as the provision of the associated research and development
activities. Such activities result in a service that is the output
of the Group’s ordinary activities. The Group assessed that the
revenues from these agreements are in the scope of IFRS 15.
For both of these agreements the Group has assessed that the
licence to commercialise the Group’s intellectual property is not
distinct in the context of the contract and that there is a
transformational relationship between the licence and the research
and development activities delivered as they are highly
interrelated elements of the contract. The Group has therefore
determined that there is one single performance obligation under
IFRS 15 in relation to the licence granted and research and
development activities, which is the transfer of a licence for
which the associated research and development activities are
completed over time. The transaction price of these agreements
includes upfront payments, development and regulatory milestone
payments, development cost share income, sales milestones and
sales-based royalties. Milestone payments are included in the
transaction price only when it becomes highly probable that a
significant reversal in the amount of cumulative revenue recognised
will not occur. The relevant transaction price elements are
allocated to the performance obligation identified being the
transfer of a licence for which the associated research and
development activities are completed over time. The revenues are
recognised over the development period using an output method based
on time elapsed, reflecting both the increase in value of the
licence and the progression of the research and development
activities over the development period towards potential
commercialisation of the product. Sales milestones and sales-based
royalties are not yet included in the Group’s revenues since both
programmes are still in development. The predominant element of the
performance obligation that the sales-based royalties relate to is
the licence granted and hence the revenues will be recognised when
the related sales occur.
The licence and collaboration agreement with Sarepta also has
two further performance obligations: i) the research and clinical
development activities relating to the future generation small
molecule utrophin modulators; and ii) the licence granted to
commercialise in Latin America, which is at the option of Sarepta.
Since the development, regulatory and sales milestone payments
allocated to these additional performance obligations are
contingent on future activities, they will therefore only be
included in the transaction price and accounted for as revenue when
it becomes highly probable that a significant reversal in the
amount of cumulative revenue recognised will not occur. The
relevant sales-based royalties will be recognised when the related
sales occur, as the licence granted is the predominant element of
the performance obligation.
Due to the adoption of IFRS 15, the $22.0 million (£17.2
million) development milestone payment the Group received (in May
2017) as part of the licence and collaboration agreement with
Sarepta, which had previously been recognised in full under IAS 18,
is now being recognised as revenue over the development period.
Similarly, development cost share income from Sarepta (which
commenced in January 2018) under the agreement is now being
recognised over the development period. As a result of this change,
£13.1 million of income related to the licence and collaboration
agreement with Sarepta previously recognised as revenue during the
year ended 31 January 2018 is now classified as deferred revenue in
the Statement of Financial Position. This adjustment consists of
(i) £12.4 million related to the development milestone payment; and
(ii) £0.7 million related to development cost share income related
to Sarepta’s share of research and development costs incurred in
January 2018 (the first month that the cost share component of the
agreement was in effect). Whilst IFRS 15 did not impact revenues
recognised during the three months ended 30 April 2017, IFRS 15
will impact the historical comparative financials for the fiscal
quarters from the three months ended 31 July 2017 onwards.
The Group’s assessment results in no difference in the
accounting treatment of the licence and commercialisation agreement
with Eurofarma under IAS 18 and IFRS 15. Revenues recognised
relating to the agreement during the year ended 31 January 2018
under IAS 18 related only to the upfront payment, which was
initially reported as deferred revenue in the Statement of
Financial Position and is being recognised as revenue over the
development period. This is consistent with the accounting
treatment under IFRS 15.
This change in accounting policy has been reflected
retrospectively in the comparative Statement of Financial Position
for the year ended 31 January 2018. The opening Statement of
Financial Position as at 1 February 2017 is in line with
comparative amounts disclosed in the financial statements for the
year ended 31 January 2017, as there was no impact of this change
in accounting policy on the Statement of Financial Position as at
31 January 2017. There was also no impact of this change in
accounting policy on the Statement of Comprehensive Income and
Statement of Cash Flows for the three months ended 30 April
2017.
The impact of this change in accounting policy on the unaudited
condensed consolidated interim financial statements is an increase
in non-current and current deferred revenue, and an increase in
accumulated losses reserve. The increase in non-current and current
deferred revenue for the year ended 31 January 2018 relates to the
difference between the accounting treatment of the Sarepta
development milestone payment and development cost share income
under IAS 18 and IFRS 15, as described above, and will be
recognised as revenue over the remainder of the development
period.
Impact on Unaudited Condensed Consolidated Statement of
Financial Position |
Original Year ended 31 January 2018£000 |
|
|
AdjustedYear ended 31 January 2018£000 |
|
|
Impact£000 |
|
Non-current liabilities |
|
|
|
|
|
Deferred revenue |
(18,033 |
) |
|
(27,270 |
) |
|
(9,237 |
) |
Current liabilities |
|
|
|
|
|
Deferred revenue |
(10,012 |
) |
|
(13,834 |
) |
|
(3,822 |
) |
Accumulated losses reserve |
(80,898 |
) |
|
(93,957 |
) |
|
(13,059 |
) |
The Group will continue to monitor
interpretations released by the IFRS Interpretations Committee and
amendments to IFRS 15 and, as appropriate, will adopt these from
the effective dates.
2. Revenue
Analysis of revenue by category |
Three months ended 30 April 2018£000 |
|
Three months ended 30 April2017£000 |
Licensing agreements |
3,628 |
|
1,728 |
Research collaboration agreement |
246 |
|
- |
|
3,874 |
|
1,728 |
The Group elected to adopt IFRS 15 effective 1
February 2018. For details on the performance obligations
identified and judgments exercised by management in the application
of IFRS 15 see Note 1 ‘Basis of Accounting - Adoption of IFRS 15
Revenue from contracts with customers.’
3. Loss per Share
Calculation
The loss per share has been calculated using the
loss for the period and dividing this by the weighted average
number of ordinary shares in issue during the three months ended 30
April 2018: 76,571,101 (for the three months ended 30 April 2017:
61,883,701).
Since the Group has reported a net loss, diluted
loss per share is equal to basic loss per share.
4. Issue of Share Capital
On 29 March 2018, the Group completed an equity placing on the
AIM market of the London Stock Exchange, issuing 8,333,333 new
ordinary shares at a price of 180 pence per share. Total gross
proceeds of £15.0 million were raised and directly attributable
transaction costs of £0.9 million were incurred and accounted for
as a deduction from equity.
During the three months ended 30 April 2018, the following
exercises of share options took place:
Date |
Number of optionsexercised |
16 March 2018 |
4,216 |
18 April 2018 |
38,850 |
23 April 2018 |
48,981 |
|
92,047 |
The total net proceeds from exercised share
options during the year was £0.1 million.
All new ordinary shares rank pari passu with
existing ordinary shares.
Following the above placing and exercise of
share options, the number of ordinary shares in issue was
81,989,004 as of 30 April 2018.
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