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SUMM Summit Therapeutics Plc

20.50
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
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 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Summit Therapeutics plc Summit Therapeutics Plc : 1st Quarter Results

14/06/2017 12:00pm

UK Regulatory


 
TIDMSUMM 
 
   Summit Therapeutics plc 
 
   ('Summit', the 'Company' or the 'Group') 
 
   SUMMIT THERAPEUTICS REPORTS FINANCIAL RESULTS FOR THE 
 
   FIRST QUARTERED 30 APRIL 2017 AND OPERATIONAL PROGRESS 
 
   Oxford, UK, 14 June 2017 - 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 unaudited financial results for the first 
quarter ended 30 April 2017. 
 
   Mr Glyn Edwards, Chief Executive Officer of Summit, commented: "Over the 
past quarter and in recent months, we have made meaningful advances in 
both our DMD and CDI programmes to bring these programmes closer to the 
patients in need. We continue to progress our PhaseOut DMD clinical 
trial of our lead utrophin modulator, ezutromid, in the treatment of 
DMD. We achieved a major milestone in the programme with the completion 
of enrolment into PhaseOut DMD, triggering a $22 million payment from 
Sarepta. In addition, we have made provisions for patients in the trial 
to remain on ezutromid beyond the initial 48-weeks of the trial, which 
will allow us to monitor safety and efficacy data related to longer-term 
dosing. We look forward to reporting 24-week biopsy, MRI and functional 
data in the first quarter of 2018 for what could be the first disease 
modifying treatment for all patients with DMD. 
 
   "As we continue to prepare our other lead product candidate, 
ridinilazole, for Phase 3 clinical development, a recent Lancet 
Infectious Diseases publication highlighted the novel antibiotic's 
differentiation and promise as a potential treatment for CDI, as 
evidenced by the Phase 2 CoDIFy clinical data. We believe the robust 
design of the Phase 3 clinical programme, which has received input from 
the US Food and Drug Administration and European Medicines Agency, has 
the potential to underpin ridinilazole as a potential front-line 
treatment for CDI." 
 
   Utrophin Modulation Programme for DMD 
 
   Ezutromid Highlights 
 
 
   -- Completed enrolment into PhaseOut DMD in May 2017. PhaseOut DMD is a 
      48-week, open label Phase 2 clinical trial that has enrolled 40 patients 
      at sites in the UK and US. The trial aims to establish proof of concept 
      of ezutromid and is evaluating a range of muscle structure, muscle health 
      and functional endpoints. 
 
   -- Expecting to report full 24-week data analysis from PhaseOut DMD in Q1 
      2018. This data set will include 24-week biopsy data from all patients 
      who provide a 24-week biopsy sample (approximately 20). In addition, 
      Summit expects to report 24-week MRI and functional data from all 40 
      patients in the trial. Top-line data from the complete 48-week clinical 
      trial are expected in Q3 2018. 
 
   -- Received support from an Independent Data Monitoring Committee for the 
      extension of PhaseOut DMD following its interim review of safety and 
      tolerability data. The extension phase will allow Summit to continue to 
      gather long-term safety and efficacy data and is expected to last until 
      ezutromid either receives marketing approval in relevant countries or its 
      development is discontinued. In May 2017, Summit received the necessary 
      regulatory approvals for the extension phase. 
 
 
   CDI Programme 
 
   Ridinilazole Highlights 
 
 
   -- Outlined Phase 3 development programme for the novel antibiotic 
      ridinilazole following input from the US Food and Drug Administration and 
      European Medicines Agency. The primary endpoint of the Phase 3 trials is 
      expected to test for superiority in sustained clinical response compared 
      to vancomycin as the Company seeks to further differentiate ridinilazole 
      from currently marketed CDI treatments and those in late-stage 
      development. Preparation for the Phase 3 clinical trials is ongoing with 
      the trials planned to start H1 2018. 
 
   -- Continuing to explore various funding options for the Phase 3 development 
      programme as the Company seeks to maximize the value of ridinilazole. 
      Options include potentially entering into a collaboration with a third 
      party or securing meaningful non-dilutive funding from government 
      entities and philanthropic, non-government and not for profit 
      organisations. 
 
   -- Published Phase 2 CoDIFy clinical trial results in The Lancet Infectious 
      Diseases. CoDIFy evaluated ridinilazole against the standard of care 
      antibiotic, vancomycin, for the treatment of CDI. The results showed 
      ridinilazole demonstrated substantial clinical benefit over vancomycin. 
      This included ridinilazole achieving statistical superiority over 
      vancomycin in sustained clinical response, a composite endpoint of cure 
      at the end of treatment and no recurrence 30 days after treatment, a 
      result which was driven by a large numerical reduction in recurrent 
      disease. 
 
   -- Planning to report data from an exploratory Phase 2 clinical trial 
      evaluating ridinilazole against the antibiotic fidaxomicin later this 
      year. A key objective of the trial is to determine the relative impact on 
      the patients' microbiomes of treatment with ridinilazole compared to 
      fidaxomicin. 
 
 
   Operational 
 
 
   -- Strengthened R&D team with Chief Operating Officer Dr David Roblin 
      expanding his role to include serving as Chief Medical Officer and 
      appointments of Dr Anne Heatherington as Head of Clinical Development and 
      Quantitative Sciences and Dr Dave Powell as Head of Research. These 
      appointments, announced in May 2017, will help ensure the Company has the 
      leadership, depth of knowledge and expertise needed to support its 
      clinical and preclinical pipeline. 
 
 
   Financial Highlights 
 
 
   -- Cash and cash equivalents at 30 April 2017 of GBP19.4 million compared to 
      GBP28.1 million at 31 January 2017. 
 
   -- $22 million milestone payment to Summit triggered in May 2017, post the 
      period under review, under the terms of the licence and collaboration 
      agreement with Sarepta Therapeutics Inc. ('Sarepta'). 
 
   -- Loss for the three months ended 30 April 2017 of GBP4.8 million compared 
      to a loss of GBP5.4 million for the three months ended 30 April 2016. 
 
   About Summit Therapeutics 
 
   Summit 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 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 / Lauren Kettle 
MacDougall Biomedical Communications 
 (US media contact)                            Tel: +1 781 235 3060 
 Karen Sharma                                  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 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 GBP1.7 million for the three months ended 30 April 2017 
compared to GBPnil for the three months ended 30 April 2016. This 
increase resulted from the exclusive licence and collaboration agreement 
entered into with Sarepta in October 2016, from which the Company 
received an upfront payment of GBP32.8 million ($40 million). Of this 
amount GBP4.0 million in the aggregate has been recognised to date. The 
remaining GBP28.8 million of the upfront payment is classified as 
deferred revenue and will continue to be recognised as revenue over the 
development period. 
 
   Other Operating Income 
 
   There were no sources of other operating income during the three months 
ended 30 April 2017 compared to GBP0.06 million recognised during the 
three months ended 30 April 2016. The decrease is due to the Company's 
withdrawal from the Innovate UK funding agreement in September 2016 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 increased by GBP0.2 million to GBP5.0 
million for the three months ended 30 April 2017 from GBP4.8 million for 
the three months ended 30 April 2016. The increase is driven by an 
overall increase in investment in the DMD programme of GBP0.7 million 
and an increase of GBP0.1 million in research and development related 
staffing costs offset by a decrease in CDI clinical programme related 
activities of GBP0.6 million. 
 
   General and Administration Expenses 
 
   General and administration expenses increased by GBP1.0 million to 
GBP2.4 million for the three months ended 30 April 2017 from GBP1.4 
million for the three months ended 30 April 2016. This increase was 
primarily due to a net negative movement of GBP0.5 million in exchange 
rate variance, an increase of GBP0.3 million in staff related costs and 
an increase of GBP0.2 million in legal and professional fees. 
 
   Finance Costs 
 
   Following an International Financial Reporting Standards Interpretations 
Committee agenda decision in May 2016 on the application of 
International Accounting Standards 20 'Government Grants,' the Company 
has changed its accounting policy regarding charitable funding 
arrangements from the Wellcome Trust and US not for profit organisations 
for the year ended 31 January 2017. See Note 1 - 'Change in accounting 
policy' below. This change in accounting policy has been reflected 
retrospectively in the comparative financial statements for the three 
months ended 30 April 2016. Finance costs relate to the subsequent 
re-measurement of the financial liability recognised in respect of 
income arrangements and the unwinding of the discounts associated with 
the liabilities. Finance costs remained consistent at GBP0.2 million for 
the three months ended 30 April 2017 and for the three months ended 30 
April 2016 (adjusted). 
 
   Cash Flows 
 
   Operating Activities 
 
   Net cash used in operating activities for the three months ended 30 
April 2017 was GBP8.0 million compared to GBP6.4 million for the three 
months ended 30 April 2016. This movement of GBP1.6 million was driven 
by an increase in research and development expenses and general and 
administrative expenses during the three months ended 30 April 2017. 
 
   Investing Activities 
 
   Net cash used in investing activities for the three months ended 30 
April 2017 was GBP0.3 million compared to GBP4,000 for the three months 
ended 30 April 2016. This includes the net amount of bank interest 
received on cash deposits less amounts paid to acquire property, plant 
and equipment. During the three months ended 30 April 2017, the Group 
relocated its UK offices. 
 
   Financing Activities 
 
   Net cash inflow from financing activities for the three months ended 30 
April 2017 of GBP0.01 million relates to proceeds from the exercise of 
warrants and the exercise of share options. For the three months ended 
30 April 2016, the Company received proceeds of GBP0.1 million from the 
exercise of warrants. 
 
   Financial position 
 
   As at 30 April 2017, total cash and cash equivalents were GBP19.4 
million compared to GBP28.1 million at 31 January 2017. 
 
   Due to the recognition of deferred revenue associated with the Sarepta 
agreement and the recognition of a financial liability on funding 
arrangements resulting from a change in accounting policy, the 
Consolidated Statement of Financial Position continues to be in a net 
liability position. 
 
   Glyn Edwards               Erik Ostrowski 
 
   Chief Executive Officer Chief Financial Officer 
 
   14 June 2017 
 
 
 
   FINANCIAL STATEMENTS 
 
   CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited) 
 
   For the three months ended 30 April 2017 
 
 
 
 
                                                                              Three 
                                                              Three months    months            Three 
                                                                  ended       ended             months 
                                                                30 April     30 April            ended 
                                                                  2017         2017     30 April 2016 Adjusted* 
                                                        Note     $000s       GBP000s           GBP000s 
 
Revenue                                                              2,236      1,728                         - 
 
Other operating income                                                   -          -                        59 
 
Operating expenses 
 Research and development                                          (6,515)    (5,035)                   (4,806) 
 General and administration                                        (3,149)    (2,434)                   (1,432) 
Total operating expenses                                           (9,664)    (7,469)                   (6,238) 
 
Operating loss                                                     (7,428)    (5,741)                   (6,179) 
 
Finance income                                                           2          1                         3 
Finance cost                                               1         (290)      (224)                     (194) 
 
Loss before income tax                                             (7,716)    (5,964)                   (6,370) 
 
Income tax                                                           1,556      1,203                       935 
 
 
  Loss for the period                                              (6,160)    (4,761)                   (5,435) 
 
Other comprehensive loss 
Items that may be reclassified subsequently to profit 
 or loss 
 
Exchange differences on translating foreign operations                (20)       (15)                       (5) 
Total comprehensive loss for the period                            (6,180)    (4,776)                   (5,440) 
Basic and diluted loss per Ordinary Share from           2 
 operations                                                      (10)cents   (8)pence                  (9)pence 
 
 
   * See Note 1 - 'Change in accounting policy' 
 
   CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited) 
 
   As at 30 April 2017 
 
 
 
 
                                               30 April   30 April  31 January 
                                                  2017      2017       2017 
                                         Note    $000s    GBP000s    GBP000s 
ASSETS 
Non-current assets 
Goodwill                                             859       664         664 
Intangible assets                                  4,440     3,432       3,470 
Property, plant and equipment                        611       472         116 
                                                   5,910     4,568       4,250 
Current assets 
Prepayments and other receivables                  1,952     1,509       1,027 
Current tax receivable                             7,071     5,466       4,248 
Cash and cash equivalents                         25,050    19,362      28,062 
                                                  34,073    26,337      33,337 
 
Total assets                                      39,983    30,905      37,587 
 
LIABILITIES 
Non-current liabilities 
Deferred revenue                                (28,317)  (21,887)    (23,615) 
Financial liabilities on funding 
 arrangements                               1    (7,948)   (6,143)     (5,919) 
Provisions for other liabilities and 
 charges                                           (129)     (100)        (85) 
Deferred tax liability                             (731)     (565)       (565) 
                                                (37,125)  (28,695)    (30,184) 
Current liabilities 
Trade and other payables                         (4,130)   (3,192)     (3,984) 
Provisions for other liabilities and 
 charges                                           (110)      (85)           - 
Deferred revenue                                 (8,942)   (6,912)     (6,912) 
                                                (13,182)  (10,189)    (10,896) 
 
Total liabilities                               (50,307)  (38,884)    (41,080) 
 
Net liabilities                                 (10,324)   (7,979)     (3,493) 
 
EQUITY 
Share capital                                        801       619         618 
Share premium account                             60,073    46,432      46,420 
Share-based payment reserve                        7,003     5,413       5,136 
Merger reserve                                   (2,513)   (1,943)     (1,943) 
Special reserve                                   25,867    19,993      19,993 
Currency translation reserve                          45        35          50 
Accumulated losses reserve                     (101,600)  (78,528)    (73,767) 
Total deficit                                   (10,324)   (7,979)     (3,493) 
 
   CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) 
 
   For the three months ended 30 April 2017 
 
 
 
 
                                                               Three          Three 
                                                            months ended   months ended  Three months ended 
                                                              30 April       30 April         30 April 
                                                                2017           2017        2016 Adjusted* 
                                                               $000s         GBP000s          GBP000s 
Cash flows from operating activities 
Loss before income tax                                           (7,716)        (5,964)             (6,370) 
 
Adjusted for: 
Finance income                                                       (1)            (1)                 (3) 
Finance cost                                                         290            224                 194 
Foreign exchange loss                                                612            473                  45 
Depreciation                                                          30             23                  11 
Amortisation of intangible fixed assets                                3              2                   2 
Loss on disposal of assets                                            48             37                   - 
Movement in provisions                                                 -              -                   7 
Research and development expenditure credit                            -              -                 (3) 
Share-based payment                                                  358            277                 336 
Adjusted loss from operations before changes in working 
 capital                                                         (6,376)        (4,929)             (5,781) 
 
Increase in prepayments and other receivables                      (624)          (482)               (509) 
Decrease in deferred revenue                                     (2,236)        (1,728)                   - 
Decrease in trade and other payables                             (1,034)          (798)                (78) 
Cash used by operations                                         (10,270)        (7,937)             (6,368) 
 
Taxation paid                                                       (19)           (15)                   - 
 
Net cash used by operating activities                           (10,289)        (7,952)             (6,368) 
 
Investing activities 
Purchase of property, plant and equipment                          (362)          (280)                 (7) 
Interest received                                                      1              1                   3 
Net cash used in investing activities                              (361)          (279)                 (4) 
 
Financing activities 
Proceeds from exercise of warrants                                    13             10                 107 
Proceeds from exercise of share options                                4              3                   - 
Net cash generated from financing activities                          17             13                 107 
 
Decrease in cash and cash equivalents                           (10,633)        (8,218)             (6,265) 
 
 
Effect of exchange rates in cash and cash equivalents              (624)          (482)                (50) 
 
 
Cash and cash equivalents at beginning of the period              36,307         28,062              16,304 
 
Cash and cash equivalents at end of the period                    25,050         19,362               9,989 
 
 
   * See Note 1 - 'Change in accounting policy' 
 
 
 
   CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited) 
 
   Three months ended 30 April 2017 
 
 
 
 
 
                                                                                                                                   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 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) 
 
 
   Year ended 31 January 2017 
 
 
 
 
 
                                                                                                                                   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                    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 
 from exercise of 
 warrants                               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) 
 
 
   Three months ended 30 April 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 2016                    613                 46,035                        3,757         (1,943)           19,993             21                    (52,396)    16,080 
Loss for the period                     -                      -                            -               -                -              -                     (5,435)   (5,435) 
Currency translation 
 adjustment                             -                      -                            -               -                -            (5)                           -       (5) 
Total comprehensive loss 
 for the period                         -                      -                            -               -                -            (5)                     (5,435)   (5,440) 
New share capital issued 
 from exercise of 
 warrants                               2                    105                            -               -                -              -                           -       107 
Share-based payment                     -                      -                          336               -                -              -                           -       336 
At 30 April 2016                      615                 46,140                        4,093         (1,943)           19,993             16                    (57,831)    11,083 
 
 
   *See Note 1 - 'Change in accounting policy' 
 
   NOTES TO THE FINANCIAL STATEMENTS 
 
   For the three months ended 30 April 2017 
 
   1. Basis of accounting 
 
   The unaudited consolidated interim financial statements of Summit and 
its subsidiaries (the 'Group') for the three months ended 30 April 2017 
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 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 Company's auditors delivered an unqualified audit report, will 
be 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 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 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 30 April 2017 and the $22 million 
development milestone now due as detailed in Note 4, 'Subsequent events, 
' 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 month periods ended 30 April 
2017 and 2016 are unaudited. 
 
   Solely for the convenience of the reader, unless otherwise indicated, 
all pound sterling amounts stated in the Consolidated Balance Sheet as 
at 30 April 2017, in the Consolidated Income Statement and in the 
Consolidated Cash Flow Statement for the three months ended 30 April 
2017 have been translated into US dollars at the rate on 28 April 2017 
of $1.2938 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 14 June 
2017. 
 
   Change in accounting policy 
 
   Following an IFRS IC agenda decision in May 2016 on the application of 
International Accounting Standard 20 'Government Grants,' the Company 
changed its accounting policy regarding charitable funding arrangements 
from the Wellcome Trust and US not for profit organisations during the 
year ended 31 January 2017. 
 
   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 
organisations. 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 
the comparative financial statements for the three months ended 30 April 
2016. The opening position as at 1 February 2016 is in line with 
comparative amounts disclosed in the financial statements for the year 
ended 31 January 2017. 
 
   The impact of this change in accounting policy on the unaudited 
condensed 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 Statement of Comprehensive    Three months ended 30 April 2016   Three months ended 30 April 2016    Impact 
 Income                                                           GBP000                             GBP000                 GBP000 
 
Finance costs                                                                       -                              (194)     (194) 
                                                                                    -                              (194)     (194) 
 
 
                                                                             Original                           Adjusted 
                                                     Three months ended 30 April 2016   Three months ended 30 April 2016    Impact 
Impact on Consolidated Statement of Cash Flows                                 GBP000                             GBP000    GBP000 
Loss before income tax                                                        (6,176)                            (6,370)     (194) 
Adjusted for: 
Finance costs                                                                       -                                194       194 
Impact on net cash used in operating activities                               (6,368)                            (6,368)         - 
 
 
   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 three months ended 30 April 2017: 61,883,701 (for the three 
months ended 30 April 2016: 61,324,182). 
 
   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 22 February 2017, 50,000 Ordinary Shares were issued following the 
exercise of warrants at an exercise price of 20 pence per share. The 
issue of shares raised net proceeds of GBP10,000. 
 
   On 10 April 2017, 16,667 Ordinary Shares were issued following the 
exercise of options. The exercise of options raised net proceeds of 
GBP3,000. 
 
   Following the exercise of the above warrants and share options, the 
number of Ordinary Shares in issue was 61,908,233. 
 
   All new Ordinary Shares rank pari passu with existing Ordinary Shares. 
 
   4. Subsequent events 
 
   In May 2017, the Group announced the first dosing of the last patient in 
its ongoing Phase 2 clinical trial of ezutromid which triggered a $22 
million milestone payment due to Summit as part of the Group's licence 
and collaboration agreement with Sarepta. 
 
   This announcement contains inside information for the purposes of 
Article 7 of EU Regulation 596/2014 (MAR). 
 
   -- 
 
   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

June 14, 2017 07:00 ET (11:00 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

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