Summit Therapeutics plc (AIM:SUMM)(NASDAQ:SMMT), the drug discovery
and development company advancing therapies for Duchenne muscular
dystrophy (‘DMD’) and C. difficile infection (‘CDI’), today reports
its financial results for the third quarter and nine months ended
31 October 2017, and reports on operational progress.
Glyn Edwards, Chief Executive Officer of Summit,
commented: “Next year holds the potential to be
transformative for our utrophin modulation programme. We remain on
track to report during the first quarter of 2018 the 24-week data
from PhaseOut DMD, our ongoing Phase 2 clinical trial evaluating
our lead utrophin modulator ezutromid. Ezutromid is a potentially
disease-modifying treatment for all patients with DMD and we look
forward to reporting these initial data from this proof of concept
trial.
“In this period there has also been continued momentum in the
development of our precision CDI antibiotic, ridinilazole.
Ridinilazole achieved another positive Phase 2 clinical trial
result, further highlighting its potential to both treat the
infection and preserve the microbiome to reduce the risk of
recurrent disease. The award of a contract worth up to $62 million
from BARDA during the period will support in part the Phase 3
clinical and regulatory development of ridinilazole was a major
achievement, one which we believe provides important validation of
its potential. We are looking forward to initiating the Phase 3
clinical programme for ridinilazole in the first half of 2018 as we
seek to bring this urgently needed treatment to patients.
“The ongoing support of our shareholders is
allowing us to continue to advance these two therapies that have
the potential to enhance the quality of life of patients and
families living with the burden of DMD and CDI.”
Utrophin Modulation Programme: A
Universal Treatment for DMD
- PhaseOut DMD is the Phase 2 proof of concept clinical trial
that is seeking to establish proof of mechanism for Summit’s lead
utrophin modulator ezutromid by evaluating a range of muscle
structure, muscle health and functional endpoints. PhaseOut DMD has
enrolled a total of 40 patients at sites in the UK and US.
Following the 48 weeks of treatment, patients have the option to
continue onto an extension phase. The extension phase will be used
to gather long term safety and efficacy data and is expected to
last until ezutromid either receives marketing approval in the
relevant country or its development is discontinued.
- Completed initial 24 weeks of dosing of ezutromid and remain
on-track to report interim 24-week data during Q1 2018 from
PhaseOut DMD. These data will include 24-week biopsy results from
all patients who provided a 24-week biopsy sample (approximately 20
patients). Summit also expects to report 24-week MRI and functional
data from all other patients in the trial. Top-line data from the
complete 48-week clinical trial are expected in Q3 2018.
- Presented a series of posters at the 22nd International
Congress of the World Muscle Society that included highlighting
validation data of muscle biopsy biomarkers designed to assess
utrophin modulator activity in clinical trials. These biomarkers
use automated techniques that are capable of analysing thousands of
muscle fibres in whole muscle biopsy sections and they have been
developed in collaboration with Flagship Biosciences, a leader in
quantitative tissue-based biomarkers. These techniques will be used
to analyse the biopsy samples in PhaseOut DMD.
- Publication of preclinical data by scientific adviser and
co-founder Professor Kay Davies highlighting the benefits of
utrophin modulation on muscle health in preclinical models of
disease. The data showed how continuous expression of
utrophin in a dystrophin deficient animal model reduced
mitochondrial aberration and oxidative stress, mechanisms that
contribute to muscle damage.
- Joined the Collaborative Trajectory Analysis Project, or cTAP,
a community wide coalition in DMD that is developing a natural
history database to support clinical trial design and
analysis.
CDI Programme: Ridinilazole, a Precision
Investigational Antibiotic
- Awarded contract from Biomedical Advanced Research and
Development Authority (‘BARDA’), worth up to $62 million to support
the clinical and regulatory development of ridinilazole for the
treatment of CDI. Summit is initially eligible to receive $32
million from BARDA to partially fund activities related to the two
planned Phase 3 clinical trials of ridinilazole including
initiating enrolment and dosing of patients through to the
potential submission of applications for marketing approval. Summit
is eligible for further funding of up to $30 million if BARDA
exercises in full three option work segments. Summit is continuing
to explore various additional funding options for the Phase 3
development programme.
- Reported positive data from an exploratory Phase 2 clinical
trial that supported ridinilazole as a highly selective, precision
antibiotic for the treatment of CDI. During the trial’s ten-day
treatment period, the microbiomes of ridinilazole-treated patients
were markedly preserved as measured by overall bacterial diversity
and key changes in bacterial families, when compared to patients
treated with fidaxomicin, a marketed narrow-spectrum antibiotic.
The primary endpoint of the trial was safety, as measured by the
number of treatment emergent adverse events and serious adverse
events. During the trial, no new or unexpected safety signals were
identified and ridinilazole was generally well-tolerated.
Operational Highlights
- Held successful R&D Day for investors and analysts in New
York City in October 2017. The event reviewed the DMD and CDI
programmes and included presentations from key opinion leaders in
both fields of research. A webcast of the event is available on
Summit’s website.
Financial Highlights
- Public offering of 1,677,850 American Depositary Shares
(‘ADS’), representing 8,389,250 ordinary shares of one penny
nominal value, with new and existing institutional investors, and
raised gross proceeds of $20.1 million (£14.9 million). The public
offering, including the underwriters exercise in full of their
over-allotment option, closed in September 2017.
- Cash and cash equivalents at 31 October 2017 of £31.8 million
compared to £28.1 million at 31 January 2017.
- Profit for the nine months ended 31 October 2017 of £4.4
million compared to a loss of £16.4 million for the nine months
ended 31 October 2016 reflecting receipt and recognition of a $22.0
million (£17.2 million) development milestone payment received from
Sarepta Therapeutics Inc. (‘Sarepta’) in June 2017.
This announcement contains inside information
for the purposes of Article 7 of EU Regulation 596/2014 (MAR).
About Summit TherapeuticsSummit
is a biopharmaceutical company focused on the discovery,
development and commercialisation of novel medicines for
indications for which there are no existing or only inadequate
therapies. Summit is conducting clinical programmes focused on the
genetic disease Duchenne muscular dystrophy and the infectious
disease C. difficile infection. Further information is available at
www.summitplc.com and Summit can be followed on Twitter
(@summitplc).
For more information, please
contact:
Summit |
|
|
Glyn
Edwards / Richard Pye (UK office) |
Tel: |
44
(0)1235 443 951 |
Erik
Ostrowski / Michelle Avery (US office) |
|
+1
617 225 4455 |
|
|
|
Cairn Financial Advisers LLP (Nominated
Adviser) |
Tel: |
+44
(0)20 7213 0880 |
Liam
Murray / Tony Rawlinson |
|
|
|
|
|
N+1 Singer (Joint Broker) |
Tel: |
+44
(0)20 7496 3000 |
Aubrey Powell / Jen Boorer |
|
|
|
|
|
Panmure Gordon (Joint Broker) |
Tel: |
+44
(0)20 7886 2500 |
Freddy Crossley, Corporate Finance |
|
|
Tom
Salvesen, Corporate Broking |
|
|
|
|
|
MacDougall Biomedical Communications (US) |
Tel: |
+1
781 235 3060 |
Karen
Sharma |
|
ksharma@macbiocom.com |
|
|
|
Consilium Strategic Communications (UK) |
Tel: |
+44
(0)20 3709 5700 |
Mary-Jane Elliott / Jessica Hodgson / |
|
summit@consilium-comms.com |
Philippa Gardner/ Rosie Phillips |
|
|
Forward Looking StatementsAny statements in
this press release about our future expectations, plans and
prospects, including statements about the development and potential
commercialisation of our product candidates, the therapeutic
potential of our product candidates, the timing of initiation,
completion and availability of data from clinical trials, the
potential benefits and future operation of the collaboration with
Sarepta including any potential future payments thereunder, the
potential benefits and future operation of the BARDA contract
including any potential future payments thereunder, any other
potential third-party collaborations and expectations regarding the
sufficiency of our cash balance to fund operating expenses and
capital expenditures, and other statements containing the words
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"intend," "may," "plan," "potential," "predict," "project,"
"should," "target," "would," and similar expressions, constitute
forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995. Actual results may differ
materially from those indicated by such forward-looking statements
as a result of various important factors, including: the
uncertainties inherent in the initiation of future clinical trials,
availability and timing of data from ongoing and future clinical
trials and the results of such trials, whether preliminary results
from a clinical trial will be predictive of the final results of
that trial or whether results of early clinical trials will be
indicative of the results of later clinical trials, the ability of
BARDA to terminate its contract with us for convenience at any
time, expectations for regulatory approvals, availability of
funding sufficient for our foreseeable and unforeseeable operating
expenses and capital expenditure requirements and other factors
discussed in the "Risk Factors" section of filings that we make
with the Securities and Exchange Commission, including our Annual
Report on Form 20-F for the fiscal year ended 31 January 2017. In
addition, any forward-looking statements included in this press
release represent our views only as of the date of this release and
should not be relied upon as representing our views as of any
subsequent date. We specifically disclaim any obligation to update
any forward-looking statements included in this press release.
FINANCIAL REVIEW
Revenue
Revenue was £1.7 million for the three months
ended 31 October 2017 compared to £0.6 million for the three months
ended 31 October 2016. Revenue was £22.4 million for the nine
months ended 31 October 2017 compared to £0.6 million for the nine
months ended 31 October 2016. These increases were principally due
to income received pursuant to Summit’s exclusive licence and
collaboration agreement with Sarepta Therapeutics, Inc.
(‘Sarepta’). During the three months ended 31 October 2017, £1.7
million relating to the upfront payment of £32.8 million ($40.0
million) made by Sarepta in October 2016 was recognised. To date,
an aggregate of £7.5 million of the upfront payment has been
recognised while the remaining £25.3 million is classified as
deferred revenue and will continue to be recognised as revenue over
the development period. Revenue during the nine months ended 31
October 2017 reflects the receipt of a development milestone of
£17.2 million ($22.0 million) paid by Sarepta which was recognised
in full.
Other Operating Income
Other operating income was £1.6 million for the
three and nine months ended 31 October 2017, compared to £nil for
the three months ended 31 October 2016 and £0.1 million for the
nine months ended 31 October 2016. These increases resulted from
the recognition of £0.7 million pursuant to Summit’s funding
contract with the Biomedical Advanced Research and Development
Authority ('BARDA') that was awarded to the Group in September 2017
and £0.9 million resulting from the derecognition of a part of
Summit’s financial liabilities on funding arrangements, which is
further discussed in Note 6 – ‘Financial liabilities on funding
arrangements.’
Other operating income recognised in comparative
periods related to the Innovate UK funding agreement, from which
the Company withdrew in May 2016 to take advantage of more tax
efficient opportunities related to research and development
expenditure, and the Wellcome Trust Translational Award funding
agreement.
Operating Expenses
Research and Development Expenses
Research and development expenses increased by
£3.4 million to £7.4 million for the three months ended 31 October
2017 from £4.0 million for the three months ended 31 October 2016.
Research and development expenses increased by £4.9 million to
£19.1 million for the nine months ended 31 October 2017 from £14.2
million for the nine months ended 31 October 2016. These increases
reflected the greater investment in both the DMD and CDI clinical
programmes, as well as an increase in research and development
related staffing costs.
General and Administration ExpensesGeneral and
administration expenses increased by £0.1 million to £2.0 million
for the three months ended 31 October 2017 from £1.9 million for
the three months ended 31 October 2016. General and administration
expenses increased by £1.6 million to £6.9 million for the nine
months ended 31 October 2017 from £5.3 million for the nine months
ended 31 October 2016. These increases were primarily due to a net
negative movement in exchange rate variances and increased
staff-related costs, offset by a decrease in legal and professional
fees.
Finance income Finance income was £3.1 million
for the three and nine months ended 31 October 2017 and related to
the derecognition of a part of Summit’s financial liabilities on
funding arrangements, specifically the re-measurements and
discounts associated with the liabilities since initial
recognition, which is further discussed in Note 6 – ‘Financial
liabilities on funding arrangements.’ Finance income recognised in
comparative periods relates to interest received.
Finance costsFinance costs relate to the
subsequent re-measurement and unwinding of the discounts associated
with the financial liability recognised in respect of charitable
funding arrangements. Finance costs remained consistent at £0.2
million for the three months ended 31 October 2017 and for the
three months ended 31 October 2016. Finance costs remained
consistent at £0.7 million for the nine months ended 31 October
2017 and £0.6 million for the nine months ended 31 October
2016.
Taxation
The income tax credit increased by £0.6 million
to £1.5 million for the three months ended 31 October 2017 from
£0.9 million for the three months ended 31 October 2016. The income
tax credit increased by £1.0 million to £4.0 million for the nine
months ended 31 October 2017 from £3.0 million for the nine months
ended 31 October 2016. These increases were the result of higher
research and development expenditure.
Profit / (Loss)
Total comprehensive loss for the three months
ended 31 October 2017 was £1.8 million with a basic loss per share
of 3 pence compared to a total comprehensive loss of £4.6 million
for the three months ended 31 October 2016 and a basic loss per
share of 8 pence. Total comprehensive income for the nine months
ended 31 October 2017 was £4.4 million with a basic earnings per
share of 7 pence compared to a total comprehensive loss of £16.4
million for the nine months ended 31 October 2016 and a basic loss
per share of 27 pence.
Cash Flows
Operating ActivitiesFor the nine months ended 31
October 2017, net cash used in operating activities was £8.9
million. This compares to net cash generated from operating
activities of £17.9 million for the nine months ended 31 October
2016. This net negative movement of £26.8 million was primarily
driven by the receipt of the £32.8 million ($40.0 million) upfront
payment from Sarepta during the nine months ended 31 October 2016,
offset by the receipt of a £17.2 million ($22.0 million)
development milestone payment from Sarepta during the nine months
ended 31 October 2017; this resulted in a net reduction in cash
received from Sarepta during the nine months ended 31 October 2017
of £15.6 million, compared to during the nine months ended 31
October 2016. In addition, an increase of £6.5 million in research
and development and general and administration expenses, and a £3.0
million reduction in research and development tax credits received
(due to timing) during the nine months ended 31 October 2017 as
compared to the nine months ended 31 October 2016, contributed to
the net movement.
Investing ActivitiesNet cash used in investing
activities for the nine months ended 31 October 2017 and the nine
months ended 31 October 2016 includes the net amount of bank
interest received on cash deposits less amounts paid to acquire
property, plant and equipment. Amounts paid to acquire property,
plant and equipment during the nine months ended 31 October 2017 of
£0.4 million related primarily to the Company’s relocation of its
UK offices, for which the Company signed a ten-year lease in
February 2017.
Financing ActivitiesNet cash generated from
financing activities for the nine months ended 31 October 2017
includes £13.5 million of proceeds, net of transaction costs,
received following the Company’s underwritten public equity
offering in September 2017 and £0.4 million received following the
exercise of warrants and share options. For the nine months ended
31 October 2016, the Company received net proceeds of £0.4 million
following the exercise of warrants and share options.
Financial Position
As at 31 October 2017, cash and cash equivalents
were £31.8 million compared to £28.1 million as at 31 January
2017.
Glyn Edwards
Erik
Ostrowski Chief Executive Officer
Chief Financial Officer
6 December 2017
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited) For the three months ended 31 October 2017
|
|
Three months ended 31 October
2017 |
Three months ended 31 October
2017 |
Three months ended 31 October 2016 |
|
Note |
$000s |
£000s |
£000s |
|
|
|
|
|
Revenue |
2 |
2,294 |
|
1,727 |
|
576 |
|
|
|
|
|
|
Other operating
income |
3 |
2,090 |
|
1,574 |
|
- |
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
Research and
development |
|
(9,861 |
) |
(7,425 |
) |
(3,955 |
) |
General and administration |
|
(2,631 |
) |
(1,981 |
) |
(1,906 |
) |
Total operating
expenses |
|
(12,492 |
) |
(9,406 |
) |
(5,861 |
) |
|
|
|
|
|
Operating
loss |
|
(8,108 |
) |
(6,105 |
) |
(5,285 |
) |
|
|
|
|
|
Finance income |
6 |
4,098 |
|
3,085 |
|
1 |
|
Finance costs |
|
(299 |
) |
(225 |
) |
(243 |
) |
|
|
|
|
|
Loss before
income tax |
|
(4,309 |
) |
(3,245 |
) |
(5,527 |
) |
|
|
|
|
|
Income
tax |
|
1,957 |
|
1,473 |
|
945 |
|
|
|
|
|
|
Loss for the period |
|
(2,352 |
) |
(1,772 |
) |
(4,582 |
) |
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
Exchange
differences on translating foreign operations |
|
4 |
|
3 |
|
28 |
|
Total comprehensive loss for the period |
|
(2,348 |
) |
(1,769 |
) |
(4,554 |
) |
Basic loss per Ordinary Share from operations |
4 |
(4) cents |
(3) pence |
(8) pence |
Diluted earnings per Ordinary Share from
operations |
4 |
- |
|
- |
|
- |
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited) For the nine months ended 31 October 2017
|
|
Nine months ended 31 October 2017 |
Nine months ended 31 October
2017 |
Nine months ended 31 October 2016 |
|
Note |
$000s |
£000s |
£000s |
|
|
|
|
|
Revenue |
2 |
29,759 |
|
22,407 |
|
576 |
|
|
|
|
|
|
Other operating
income |
3 |
2,090 |
|
1,574 |
|
72 |
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
Research and
development |
|
(25,324 |
) |
(19,068 |
) |
(14,160 |
) |
General and administration |
|
(9,168 |
) |
(6,903 |
) |
(5,250 |
) |
Total operating
expenses |
|
(34,492 |
) |
(25,971 |
) |
(19,410 |
) |
|
|
|
|
|
Operating
loss |
|
(2,643 |
) |
(1,990 |
) |
(18,762 |
) |
|
|
|
|
|
Finance income |
6 |
4,100 |
|
3,087 |
|
7 |
|
Finance costs |
|
(887 |
) |
(668 |
) |
(647 |
) |
|
|
|
|
|
Profit / (loss)
before income tax |
|
570 |
|
429 |
|
(19,402 |
) |
|
|
|
|
|
Income
tax |
|
5,259 |
|
3,959 |
|
2,956 |
|
|
|
|
|
|
Profit / (loss) for the period |
|
5,829 |
|
4,388 |
|
(16,446 |
) |
|
|
|
|
|
Other
comprehensive (loss) / income |
|
|
|
|
Exchange
differences on translating foreign operations |
|
(7 |
) |
(5 |
) |
43 |
|
Total comprehensive income / (loss) for the
period |
|
5,822 |
|
4,383 |
|
(16,403 |
) |
Basic earnings / (loss) per Ordinary Share from
operations |
4 |
9 cents |
7 pence |
(27) pence |
Diluted earnings per Ordinary Share from
operations |
4 |
9 cents |
7 pence |
- |
|
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION (unaudited)As at 31 October 2017
|
|
31 October2017 |
|
31
October 2017 |
31 January2017 |
|
Note |
$000s |
|
£000s |
£000s |
ASSETS |
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
Goodwill |
|
882 |
|
664 |
|
664 |
|
Intangible assets |
|
4,551 |
|
3,427 |
|
3,470 |
|
Property,
plant and equipment |
|
753 |
|
567 |
|
116 |
|
|
|
6,186 |
|
4,658 |
|
4,250 |
|
Current
assets |
|
|
|
|
|
Prepayments and other
receivables |
|
5,071 |
|
3,818 |
|
1,027 |
|
Current tax
receivable |
|
11,136 |
|
8,385 |
|
4,248 |
|
Cash and
cash equivalents |
|
42,250 |
|
31,812 |
|
28,062 |
|
|
|
58,457 |
|
44,015 |
|
33,337 |
|
|
|
|
|
|
|
Total assets |
|
64,643 |
|
48,673 |
|
37,587 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
Deferred revenue |
|
(24,478 |
) |
(18,431 |
) |
(23,615 |
) |
Financial liabilities
on funding arrangements |
6 |
(3,446 |
) |
(2,595 |
) |
(5,919 |
) |
Provisions for other
liabilities and charges |
|
(199 |
) |
(150 |
) |
(85 |
) |
Deferred tax
liability |
|
(750 |
) |
(565 |
) |
(565 |
) |
|
|
(28,873 |
) |
(21,741 |
) |
(30,184 |
) |
Current liabilities |
|
|
|
|
Trade and other
payables |
|
(5,200 |
) |
(3,916 |
) |
(3,984 |
) |
Deferred revenue |
|
(9,180 |
) |
(6,912 |
) |
(6,912 |
) |
|
|
(14,380 |
) |
(10,828 |
) |
(10,896 |
) |
|
|
|
|
|
Total liabilities |
|
(43,253 |
) |
(32,569 |
) |
(41,080 |
) |
|
|
|
|
|
Net assets / (liabilities) |
|
21,390 |
|
16,104 |
|
(3,493 |
) |
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
Share capital |
|
938 |
|
706 |
|
618 |
|
Share premium
account |
|
80,001 |
|
60,237 |
|
46,420 |
|
Share-based payment
reserve |
|
8,560 |
|
6,445 |
|
5,136 |
|
Merger reserve |
|
(2,580 |
) |
(1,943 |
) |
(1,943 |
) |
Special reserve |
|
26,553 |
|
19,993 |
|
19,993 |
|
Currency translation
reserve |
|
60 |
|
45 |
|
50 |
|
Accumulated losses reserve |
|
(92,142 |
) |
(69,379 |
) |
(73,767 |
) |
Total equity /
(deficit) |
|
21,390 |
|
16,104 |
|
(3,493 |
) |
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited) For the nine months ended 31 October 2017
|
|
Nine months ended 31 October
2017 |
Nine months ended 31 October
2017 |
Nine months ended 31 October 2016 |
|
Note |
$000s |
£000s |
£000s |
Cash flows from
operating activities |
|
|
|
|
Profit / (loss) before
income tax |
|
570 |
|
429 |
|
(19,402 |
) |
|
|
570 |
|
429 |
|
(19,402 |
) |
Adjusted
for: |
|
|
|
|
Other operating income
on derecognition of financial liabilities on funding
arrangements |
6 |
(1,206 |
) |
(908 |
) |
- |
|
Finance income |
6 |
(4,100 |
) |
(3,087 |
) |
(7 |
) |
Finance costs |
|
887 |
|
668 |
|
647 |
|
Foreign exchange loss /
(gain) |
|
1,155 |
|
870 |
|
(201 |
) |
Depreciation |
|
124 |
|
93 |
|
37 |
|
Amortisation of
intangible fixed assets |
|
8 |
|
6 |
|
8 |
|
Loss on disposal of
assets |
|
56 |
|
42 |
|
- |
|
Research and
development expenditure credit |
|
- |
|
- |
|
(3 |
) |
Share-based payment |
|
1,738 |
|
1,309 |
|
1,037 |
|
Adjusted loss from
operations before changes in working capital |
|
(768 |
) |
(578 |
) |
(17,884 |
) |
|
|
|
|
|
(Increase) / decrease
in prepayments and other receivables |
|
(3,702 |
) |
(2,788 |
) |
581 |
|
Decrease in trade and
other payables |
|
(109 |
) |
(82 |
) |
(40 |
) |
(Decrease) / increase
in deferred revenue |
|
(6,885 |
) |
(5,184 |
) |
32,255 |
|
(Decrease) / increase
in provisions for other liabilities and charges |
|
(113 |
) |
(85 |
) |
12 |
|
Cash generated from / (used in) operations |
|
(11,577 |
) |
(8,717 |
) |
14,924 |
|
Taxation
(paid) / received |
|
(238 |
) |
(179 |
) |
3,005 |
|
Net cash generated from / (used in) operating
activities |
|
(11,815 |
) |
(8,896 |
) |
17,929 |
|
|
|
|
|
|
Investing
activities |
|
|
|
|
Purchase of property,
plant and equipment |
|
(530 |
) |
(399 |
) |
(43 |
) |
Interest
received |
|
4 |
|
3 |
|
7 |
|
Net cash used in investing activities |
|
(526 |
) |
(396 |
) |
(36 |
) |
|
|
|
|
|
Financing
activities |
|
|
|
|
Proceeds from issue of
share capital |
|
19,830 |
|
14,931 |
|
- |
|
Transaction costs on
share capital issued |
|
(1,897 |
) |
(1,428 |
) |
- |
|
Proceeds from exercise
of warrants |
|
13 |
|
10 |
|
107 |
|
Exercise of share
options |
|
522 |
|
392 |
|
268 |
|
Cash received from
funding arrangements accounted for as financial liabilities |
|
- |
|
- |
|
23 |
|
Net cash generated from financing activities |
|
18,468 |
|
13,905 |
|
398 |
|
|
|
|
|
|
Increase in
cash and cash equivalents |
|
6,127 |
|
4,613 |
|
18,291 |
|
|
|
|
|
|
Effect of
exchange rates in cash and cash equivalents |
|
(1,146 |
) |
(863 |
) |
37 |
|
|
|
|
|
|
Cash and cash
equivalents at beginning of the period |
|
37,269 |
|
28,062 |
|
16,304 |
|
|
|
|
|
|
Cash and cash equivalents at end of the
period |
|
42,250 |
|
31,812 |
|
34,632 |
|
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY (unaudited)
Nine months ended 31 October 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 |
) |
Profit for the
period |
|
- |
- |
|
- |
- |
|
- |
- |
|
4,388 |
|
4,388 |
|
Currency
translation adjustment |
|
- |
- |
|
- |
- |
|
- |
(5 |
) |
- |
|
(5 |
) |
Total comprehensive
income for the period |
|
- |
- |
|
- |
- |
|
- |
(5 |
) |
4,388 |
|
4,383 |
|
New share capital
issued |
|
84 |
14,847 |
|
- |
- |
|
- |
- |
|
- |
|
14,931 |
|
Transaction costs on
share capital issued |
|
- |
(1,428 |
) |
- |
- |
|
- |
- |
|
- |
|
(1,428 |
) |
New share capital
issued from exercise of warrants |
|
1 |
9 |
|
- |
- |
|
- |
- |
|
- |
|
10 |
|
Share options
exercised |
|
3 |
389 |
|
- |
- |
|
- |
- |
|
- |
|
392 |
|
Share-based payment |
|
- |
- |
|
1,309 |
- |
|
- |
- |
|
- |
|
1,309 |
|
At 31
October 2017 |
|
706 |
60,237 |
|
6,445 |
(1,943 |
) |
19,993 |
45 |
|
(69,379 |
) |
16,104 |
|
Year ended 31 January 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 2016 |
|
613 |
46,035 |
3,757 |
(1,943 |
) |
19,993 |
21 |
(52,396 |
) |
16,080 |
|
Loss for the year |
|
- |
- |
- |
- |
|
- |
- |
(21,371 |
) |
(21,371 |
) |
Currency
translation adjustment |
|
- |
- |
- |
- |
|
- |
29 |
- |
|
29 |
|
Total comprehensive
loss for the year |
|
- |
- |
- |
- |
|
- |
29 |
(21,371 |
) |
(21,342 |
) |
New share capital
issued |
|
2 |
105 |
- |
- |
|
- |
- |
- |
|
107 |
|
Share options
exercised |
|
3 |
280 |
- |
- |
|
- |
- |
- |
|
283 |
|
Share-based payment |
|
- |
- |
1,379 |
- |
|
- |
- |
- |
|
1,379 |
|
At 31
January 2017 |
|
618 |
46,420 |
5,136 |
(1,943 |
) |
19,993 |
50 |
(73,767 |
) |
(3,493 |
) |
Nine months ended 31 October 2016
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 2016 |
|
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 |
|
NOTES TO THE FINANCIAL STATEMENTSFor the three
and nine months ended 31 October 2017
1. Basis of accounting
The unaudited condensed consolidated interim
financial statements of Summit Therapeutics plc and its
subsidiaries (the ‘Group’) for the three and nine months ended 31
October 2017 have been prepared in accordance with International
Financial Reporting Standards (‘IFRS’) and International Financial
Reporting Standards 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
2018 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 2017 (the ‘2017 Accounts’). The 2017
Accounts, on which the Group’s auditors delivered an unqualified
audit report, have been delivered to the Registrar of Companies
following the 2017 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 IFRS 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 IFRS.
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.
After review of the future operating costs of
the business in conjunction with the cash held at 31 October 2017,
management is confident about the Group’s ability to continue as a
going concern and accordingly the interim financial statements have
been prepared on a going concern basis.
The financial information for the three and nine
months ended 31 October 2017 and 2016 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 31 October 2017,
in the Consolidated Statement of Comprehensive Income for the three
and nine months ended 31 October 2017 and in the Consolidated
Statement of Cash Flows for the nine months ended 31 October 2017
have been translated into US dollars at the rate on 31 October 2017
of $1.3281 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 6 December 2017.
2. Revenue
Analysis of revenue by category |
Three months ended 31 October 2017£000 |
Three months ended 31 October 2016£000 |
|
Nine months ended 31 October 2017£000 |
|
Nine months ended 31 October 2016£000 |
Licence and collaboration agreement |
1,727 |
576 |
|
22,407 |
|
576 |
|
1,727 |
576 |
|
22,407 |
|
576 |
On 4 October 2016, the Group entered into an
exclusive licence and collaboration agreement with Sarepta. Under
the terms of the agreement, Summit received an upfront payment of
$40.0 million (£32.8 million) from Sarepta. The terms of the
agreement have been assessed and the Group believes the development
services to be indistinguishable and thus the upfront payment has
been initially reported as deferred revenue in the Consolidated
Statement of Financial Position and is being recognised as revenue
over the development period. Revenue recognised relating to the
upfront payment was £1.7 million in the three months ended 31
October 2017 (three months ended 31 October 2016: £0.6 million) and
£5.2 million in the nine months ended 31 October 2017 (nine months
ended 31 October 2016: £0.6 million). In May 2017, the Group
announced the first dosing of the last patient in PhaseOut DMD, its
ongoing Phase 2 clinical trial of ezutromid, which triggered a
$22.0 million (£17.2 million) development milestone payment to
Summit under the agreement. The Group believes this development
milestone has been achieved, hence the payment has met the
recognition criteria of International Accounting Standard 18
‘Revenue,’ and has been recognised as revenue in full during the
nine months ended 31 October 2017.
3. Other operating income
Analysis of other operating income by
category |
Three months ended 31 October 2017£000 |
Three months ended 31 October 2016£000 |
|
Nine months ended 31 October 2017£000 |
|
Nine months ended 31 October 2016£000 |
Income recognised in
respect of BARDA |
666 |
- |
|
666 |
|
- |
Income on derecognition
of the Wellcome Trust financial liability |
908 |
- |
|
908 |
|
- |
Income recognised in
respect of the Wellcome Trust |
- |
- |
|
- |
|
13 |
Grant income |
- |
- |
|
- |
|
56 |
Research and
development credit |
- |
- |
|
- |
|
3 |
|
1,574 |
- |
|
1,574 |
|
72 |
On 8 September 2017, the Group was awarded a
funding contract with BARDA, an agency of the US government's
Department of Health and Human Services' Office of the Assistant
Secretary for Preparedness and Response, worth up to $62 million.
The BARDA contract provides for a cost-sharing arrangement under
which BARDA funds a specified portion of estimated costs for
specified activities related to the continued clinical and
regulatory development of ridinilazole for the treatment of CDI.
Under the terms of the contract, Summit is initially eligible to
receive $32 million from BARDA to fund, in part, obtaining
regulatory approval for and commencing enrollment and dosing into
Summit's two planned Phase 3 clinical trials of
ridinilazole. In addition, Summit is eligible for additional
funding under the contract pursuant to three independent option
work segments, which may be exercised by BARDA in its sole
discretion upon the achievement of certain development and other
milestones for ridinilazole. If the three option work segments are
exercised in full, Summit would be eligible for an additional $30
million from BARDA. During the three and nine months ended 31
October 2017 the Group recognised funding income from BARDA of £0.6
million for the CDI programme (three and nine months ended 31
October 2016: £nil). Income is recognised in respect of BARDA as
the underlying research and development expenditure is
incurred.
During the three and nine months ended 31
October 2017, the Group also recognised £0.9 million of other
operating income related to the derecognition of the Wellcome Trust
financial liability (three and nine months ended 31 October 2016:
£nil). See note 6 – ‘Financial liabilities on funding arrangements’
below.
4. Earnings / (Loss) per share
calculation
The calculation of earnings / (loss) per share
is based on the following data:
|
Three months ended 31 October 2017000’s |
Three months ended 31 October 2016000’s |
Nine months ended 31 October 2017000’s |
Nine months ended 31 October 2016000’s |
(Loss) / profit for the
period |
£(1,772) |
£(4,582) |
£4,388 |
£(16,446) |
Weighted average number
of Ordinary Shares for basic earnings / (loss) per share |
65,994 |
61,571 |
63,270 |
61,457 |
Effect of dilutive
potential Ordinary Shares (share options and warrants) |
- |
- |
1,869 |
- |
Weighted
average number of Ordinary Shares for diluted earnings per
share |
- |
- |
65,139 |
- |
Basic earnings
/ (loss) per Ordinary Share from operations |
(3) pence |
(8) pence |
7 pence |
(27) pence |
Diluted earnings per Ordinary Share from
operations |
- |
- |
7 pence |
- |
Basic earnings / (loss) per Ordinary Share has
been calculated by dividing the profit/(loss) for the three and
nine months ended 31 October 2017 by the weighted average number of
Ordinary Shares in issue during the three and nine months ended 31
October 2017. Diluted earnings per Ordinary Share has been
calculated by adjusting the weighted average number of Ordinary
Shares outstanding to assume conversion of all potentially dilutive
Ordinary Shares. Potentially dilutive Ordinary Shares represents
the number of shares that could have been acquired at fair value
based on the monetary value of the subscription rights attached to
the share options compared with the number of shares that would
have been issued assuming the exercise of the share options.
International Accounting Standard 33 ‘Earnings
per Share’ requires the presentation of diluted earnings per share
where a company could be called upon to issue shares that would
decrease net profit per share. No diluted earnings per share has
been calculated for the three and nine months ended 31 October 2016
as the Group reported a net loss and therefore the exercise of the
share options would have the effect of reducing loss per Ordinary
Share which is not dilutive.
5. Issue of share capital
On 18 September 2017, the Group completed an
underwritten public offering on the NASDAQ Global Market issuing
1,459,000 American Depositary Shares (‘ADS’) at a price of $12.00
per ADS. The underwriters also exercised in full their
over-allotment option to purchase an additional 218,850 ADSs on the
same terms which was also completed on 18 September 2017. Each ADS
represents five Ordinary Shares of one penny nominal value each in
the capital of the Company, meaning 8,389,250 new Ordinary Shares
were issued. Total gross proceeds of $20.1 million (£14.9 million)
were raised and directly attributable transaction costs of £1.4
million were incurred.
On 22 February 2017, warrants over 50,000
Ordinary Shares were exercised at a price of 20 pence per
share. The issue of shares raised net proceeds of £10,000.
During the nine months ended 31 October 2017,
the following exercises of share options took
place.
Date |
|
|
Number of options exercised |
10
April 2017 |
|
|
16,667 |
27
June 2017 |
|
|
19,425 |
28
September 2017 |
|
|
32,500 |
29
September 2017 |
|
|
94,425 |
2
October 2017 |
|
|
97,199 |
4
October 2017 |
|
|
88,320 |
|
|
|
348,536 |
The total net proceeds from exercised share
options during the period was £0.39 million.
All new Ordinary Shares rank pari passu with
existing Ordinary Shares.
Following the public offering and exercise of
the over-allotment option, as well as the exercise of the above
share options and warrants, the number of Ordinary Shares in issue
was 70,629,352 as of 31 October 2017.
6. Financial liabilities on funding
arrangements
|
|
Nine months ended 31 October 2017£000 |
|
Year ended 31 January 2017£000 |
At February 1, |
|
5,919 |
|
|
5,034 |
Unwinding of discount
factor |
|
668 |
|
|
862 |
Derecognition of financial liabilities – Finance income |
|
(3,084 |
) |
|
- |
Total net finance
(income) / costs in Unaudited Condensed Consolidated Interim
Statement of Comprehensive Income |
|
(2,416 |
) |
|
862 |
Derecognition of
financial liabilities – Other operating income |
|
(908 |
) |
|
- |
Cash received from
funding arrangements accounted for as financial liabilities |
|
- |
|
|
23 |
|
|
2,595 |
|
|
5,919 |
The Group has entered into charitable funding
arrangements with the Wellcome Trust and the US not for profit
organisations, the Muscular Dystrophy Association (‘MDA’) and
Duchenne Partners Fund Inc., (‘DPF’). In exchange for the funding
provided, these arrangements require the Company to pay royalties
on potential future revenues generated from the CDI and DMD
programmes respectively. Under IFRS, when such arrangements
also give the counterparties rights over unexploited intellectual
property this results in a financial liability, recognised in the
Statement of Financial Position.
In October 2017, the Company and the Wellcome
Trust entered into an equity and revenue sharing agreement (‘RS
Agreement’). This was a follow-on to Summit’s October 2012
Translational Award funding agreement with the Wellcome Trust ('TA
Agreement'), which provided funding for the now completed Phase 1
and Phase 2 clinical trials for ridinilazole. The commercial terms
in the RS Agreement replaced those in the TA Agreement. Under the
RS Agreement, the Wellcome Trust also agreed to terminate all of
its rights under the TA Agreement pertaining to the exploitation of
intellectual property related to the CDI programme, meaning the
arrangement no longer meets the definition of a financial liability
under IFRS. Therefore, the portion of the financial liability on
the Company’s Statement of Financial Position related to the
Wellcome Trust funding has been derecognised in full as a credit to
the Statement of Comprehensive Income, with a portion classified as
Other income and a portion classified as Finance income. The
portion of the derecognised financial liability presented as Other
income during the three and nine months ended 31 October 2017
represents the component of the funding received from the Wellcome
Trust not previously credited to the Statement of Comprehensive
Income upon initial recognition of the financial liability. The
portion of the derecognised financial liability presented as
Finance income during the three and nine months ended 31 October
2017 relates to previous re-measurements and discounts associated
with the financial liability which were recognised as finance
costs.
The value of the estimated financial liabilities
on funding arrangements as of 31 October 2017 amounted to £2.6
million (31 January 2017: £5.9 million) relating to the charitable
funding arrangements with the MDA and DPF. Since initial
recognition, the remaining estimated financial liabilities were
re-measured following key clinical milestones in the associated
clinical programmes. The financial liability has not been
re-measured in either of the periods presented, other than
described above.
-END-
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