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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Summit Therapeutics Plc | LSE:SUMM | London | Ordinary Share | GB00BN40HZ01 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 20.50 | 18.00 | 23.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Summit Therapeutics plc
('Summit', the 'Company' or the 'Group')
SUMMIT THERAPEUTICS REPORTS FINANCIAL RESULTS FOR THE THIRD QUARTERED 31 OCTOBER 2016 AND OPERATIONAL PROGRESS
Oxford, UK, 15 December 2016 - 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 GBP34.6 million compared
to GBP16.3 million at 31 January 2016
-- Loss for the nine months ended 31 October 2016 of GBP16.4 million
compared to a loss of GBP13.0 million for the nine months ended 31
October 2015 (adjusted - see Note 1, 'Change in accounting policy')
About Summit Therapeutics
Summit 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 https://twitter.com/Summitplc ).
For more information, please contact:
Summit Therapeutics
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
(Broker) Tel: +44 (0)20 7496 3000
Aubrey Powell / Jen Boorer
MacDougall Biomedical Communications
(US media contact) Tel: +1 781 235 3060
Chris Erdman / Karen Sharma cerdman@macbiocom.com ksharma@macbiocom.com
Consilium Strategic Communications
(Financial public relations, UK) Tel: +44 (0)20 3709 5700
Mary-Jane Elliott / Sue Stuart / summit@consilium-comms.com
Jessica Hodgson / Lindsey Neville
Forward Looking Statements
Any 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 Trial
PhaseOut 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 Trial
Summit 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 Strategy
Summit 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 Biomarkers
As 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 21(st)
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 Designations
In 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 21(st) 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 Website
On 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 GBP32.9
million. Of this amount, GBP0.6 million was recognised during the three
months ended 31 October 2016. The remaining GBP32.3 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
GBPnil compared to GBP0.3 million for the three months ended 31 October
2015. Other operating income for the nine months ended 31 October 2016
was GBP0.07 million compared to GBP1.1 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 Expenses
Research and Development Expenses
Research and development expenses decreased by GBP0.5 million to GBP4.0
million for the three months ended 31 October 2016 from GBP4.5 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 GBP2.3 million to GBP14.2
million for the nine months ended 31 October 2016 from GBP11.9 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 Expenses
General and administration expenses increased by GBP0.6 million to
GBP1.9 million for the three months ended 31 October 2016 from GBP1.3
million for the three months ended 31 October 2015. General and
administration expenses increased by GBP1.8 million to GBP5.2 million
for the nine months ended 31 October 2016 from GBP3.4 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 Costs
Following 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 GBP0.3 million to GBP0.2 million for the three months
ended 31 October 2016 from GBP0.5 million for the three months ended 31
October 2015 (adjusted). Finance costs decreased by GBP0.1 million to
GBP0.7 million for the nine months ended 31 October 2016 from GBP0.8
million for the nine months ended 31 October 2015 (adjusted).
Cash Flows
Operating Activities
For the nine months ended 31 October 2016, the Company generated GBP17.9
million in cash from operating activities. This compares to net cash
used in operating activities of GBP11.2 million for the nine months
ended 31 October 2015. This net movement of GBP29.1 million was driven
by the receipt of a GBP32.9 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 GBP1.6 million increase in the
amount of research and development tax credit received during the nine
months ended 31 October 2016, which totalled GBP3.0 million.
Investing Activities
Net 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 Activities
Net 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 GBP34.6
million (31 January 2016: GBP16.3 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
Adjusted*
Three
Three months Three months months
ended ended ended
31 October 31 October 31 October
2016 2016 2015
Note $000s GBP000s GBP000s
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 2
per Ordinary Share from (9)cents (8)pence (9)pence
operations
*See Note 1 - 'Change in accounting policy'
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)
For the nine months ended 31 October 2016
Nine Adjusted*
Nine months months Nine
ended ended months
31 October 31 October ended
2016 2016 31 October 2015
Note $000s GBP000s GBP000s
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 2
per Ordinary Share from (33)cents (27)pence (22)pence
operations
*See Note 1 - 'Change in accounting policy'
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited)
As at 31 October 2016
31 October 31 October Adjusted*
2016 2016 31 January 2016
$000s GBP000s GBP000s
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)
1,330
Total equity 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
Adjusted*
Nine
Nine months ended Nine months ended months ended
31 October 2016 31 October 2016 31 October 2015
$000s GBP000s GBP000s
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
Currency
translation
Share capital Share premium account Share-based payment reserve Merger reserve Special reserve reserve Accumulated losses reserve Total
Group GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
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*)
Currency
translation
Share capital Share premium account Share-based payment reserve Merger reserve Special reserve reserve Accumulated losses reserve Total
Group GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
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*)
Currency
translation
Share capital Share premium account Share-based payment reserve Merger reserve Special reserve reserve Accumulated losses reserve Total
Group GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
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 STATEMENTS
For 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 GBP1.00.
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 policy
Following 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.
Original Adjusted
Impact on Consolidated Interim Statement of Comprehensive Nine months ended 31 October 2015 Nine months ended 31 October 2015 Impact
Income GBP000 GBP000 GBP000
Other operating income 1,208 1,058 (150)
Finance costs - (805) (805)
1,208 253 (955)
Original Adjusted
31 January 2016 31 January 2016 Impact
Impact on Consolidated Statement of Financial Position GBP000 GBP000 GBP000
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)
Original Adjusted
Nine months ended 31 October 2015 Nine months ended 31 October 2015 Impact
Impact on Consolidated Statement of Cash Flows GBP000 GBP000 GBP000
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 GBP0.1 million.
During the nine month period to 31 October 2016, the following exercise
of share options took place:
Date Number of options exercised
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 GBP0.27 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 (GBP32.9 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 -
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Summit Therapeutics plc via Globenewswire
http://www.summitplc.com/
(END) Dow Jones Newswires
December 15, 2016 07:00 ET (12:00 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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