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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 QUARTER AND
NINE MONTHSED 31 OCTOBER 2017 AND OPERATIONAL PROGRESS
Oxford, UK, 6 December 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 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 (GBP14.9 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 GBP31.8 million compared
to GBP28.1 million at 31 January 2017.
-- Profit for the nine months ended 31 October 2017 of GBP4.4 million
compared to a loss of GBP16.4 million for the nine months ended 31
October 2016 reflecting receipt and recognition of a $22.0 million
(GBP17.2 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 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
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 Statements
Any 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 GBP1.7 million for the three months ended 31 October 2017
compared to GBP0.6 million for the three months ended 31 October 2016.
Revenue was GBP22.4 million for the nine months ended 31 October 2017
compared to GBP0.6 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, GBP1.7 million relating to the upfront payment of GBP32.8 million
($40.0 million) made by Sarepta in October 2016 was recognised. To date,
an aggregate of GBP7.5 million of the upfront payment has been
recognised while the remaining GBP25.3 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 GBP17.2 million
($22.0 million) paid by Sarepta which was recognised in full.
Other Operating Income
Other operating income was GBP1.6 million for the three and nine months
ended 31 October 2017, compared to GBPnil for the three months ended 31
October 2016 and GBP0.1 million for the nine months ended 31 October
2016. These increases resulted from the recognition of GBP0.7 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 GBP0.9 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 GBP3.4 million to GBP7.4
million for the three months ended 31 October 2017 from GBP4.0 million
for the three months ended 31 October 2016. Research and development
expenses increased by GBP4.9 million to GBP19.1 million for the nine
months ended 31 October 2017 from GBP14.2 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 Expenses
General and administration expenses increased by GBP0.1 million to
GBP2.0 million for the three months ended 31 October 2017 from GBP1.9
million for the three months ended 31 October 2016. General and
administration expenses increased by GBP1.6 million to GBP6.9 million
for the nine months ended 31 October 2017 from GBP5.3 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 GBP3.1 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 costs
Finance 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 GBP0.2 million for the three months ended 31 October 2017
and for the three months ended 31 October 2016. Finance costs remained
consistent at GBP0.7 million for the nine months ended 31 October 2017
and GBP0.6 million for the nine months ended 31 October 2016.
Taxation
The income tax credit increased by GBP0.6 million to GBP1.5 million for
the three months ended 31 October 2017 from GBP0.9 million for the three
months ended 31 October 2016. The income tax credit increased by GBP1.0
million to GBP4.0 million for the nine months ended 31 October 2017 from
GBP3.0 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
GBP1.8 million with a basic loss per share of 3 pence compared to a
total comprehensive loss of GBP4.6 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 GBP4.4 million with
a basic earnings per share of 7 pence compared to a total comprehensive
loss of GBP16.4 million for the nine months ended 31 October 2016 and a
basic loss per share of 27 pence.
Cash Flows
Operating Activities
For the nine months ended 31 October 2017, net cash used in operating
activities was GBP8.9 million. This compares to net cash generated from
operating activities of GBP17.9 million for the nine months ended 31
October 2016. This net negative movement of GBP26.8 million was
primarily driven by the receipt of the GBP32.8 million ($40.0 million)
upfront payment from Sarepta during the nine months ended 31 October
2016, offset by the receipt of a GBP17.2 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 GBP15.6 million,
compared to during the nine months ended 31 October 2016. In addition,
an increase of GBP6.5 million in research and development and general
and administration expenses, and a GBP3.0 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 Activities
Net 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
GBP0.4 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 Activities
Net cash generated from financing activities for the nine months ended
31 October 2017 includes GBP13.5 million of proceeds, net of transaction
costs, received following the Company's underwritten public equity
offering in September 2017 and GBP0.4 million received following the
exercise of warrants and share options. For the nine months ended 31
October 2016, the Company received net proceeds of GBP0.4 million
following the exercise of warrants and share options.
Financial Position
As at 31 October 2017, cash and cash equivalents were GBP31.8 million
compared to GBP28.1 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
Three months Three months months
ended ended ended
31 October 31 October 31 October
2017 2017 2016
Note $000s GBP000s GBP000s
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 4 (4) cents (3) pence (8) pence
from operations
Diluted earnings per Ordinary 4
Share from operations - - -
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)
For the nine months ended 31 October 2017
Nine Nine
Nine months months months
ended ended ended
31 October 31 October 31 October
2017 2017 2016
Note $000s GBP000s GBP000s
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 4
Ordinary Share from operations 9 cents 7 pence (27) pence
Diluted earnings per Ordinary 4
Share from operations 9 cents 7 pence -
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited)
As at 31 October 2017
31 October 31 October
2017 2017 31 January 2017
Note $000s GBP000s GBP000s
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)
21,390
Total equity / (deficit) 16,104 (3,493)
CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
For the nine months ended 31 October 2017
Nine months ended Nine months ended Nine months ended
31 October 2017 31 October 2017 31 October 2016
Note $000s GBP000s GBP000s
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
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)
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
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 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
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 - - - - - - (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 STATEMENTS
For 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 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 6
December 2017.
2. Revenue
Three months ended Three months ended Nine months
Analysis of 31 October 31 October Nine months ended ended
revenue by 2017 2016 31 October 2017 31 October 2016
category GBP000 GBP000 GBP000 GBP000
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 (GBP32.8 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 GBP1.7 million in the three months ended 31
October 2017 (three months ended 31 October 2016: GBP0.6 million) and
GBP5.2 million in the nine months ended 31 October 2017 (nine months
ended 31 October 2016: GBP0.6 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 (GBP17.2
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
Nine months ended
Three months ended Three months ended Nine months ended 31 October
31 October 2017 31 October 2016 31 October 2017 2016
Analysis of other operating income by category GBP000 GBP000 GBP000 GBP000
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 GBP0.6 million
for the CDI programme (three and nine months ended 31 October 2016:
GBPnil). 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 GBP0.9 million of other operating income related to the
derecognition of the Wellcome Trust financial liability (three and nine
months ended 31 October 2016: GBPnil). 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 Three months ended Nine months
ended 31 October ended Nine months ended
31 October 2017 2016 31 October 2017 31 October 2016
000's 000's 000's 000's
(Loss) / profit for the period GBP(1,772) GBP(4,582) GBP4,388 GBP(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 (3) pence (8) pence 7 pence (27) pence
operations
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
(GBP14.9 million) were raised and directly attributable transaction
costs of GBP1.4 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 GBP10,000.
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 GBP0.39 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
Year
Nine months ended ended
31 October 31 January
2017 2017
GBP000 GBP000
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 GBP2.6 million (31 January 2017:
GBP5.9 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-
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 06, 2017 07:00 ET (12:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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