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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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TIDMSUMM
Summit Therapeutics plc
('Summit', the 'Company' or the 'Group')
Summit Therapeutics Reports Financial Results and Operational Progress
for the First Quarter Ended 30 April 2019
Oxford, UK, and Cambridge, MA, US, 12 June 2019 - Summit Therapeutics
plc (NASDAQ: SMMT, AIM: SUMM) today reports its financial results and
provides an update on its operational progress for the first quarter
ended 30 April 2019.
"As global leaders are sounding the alarm for new antibiotics, we are
proud to be taking a leadership role in discovering and developing new
classes of antibiotics with the potential to help combat the rising
threat posed by antibiotic resistance," said Mr Glyn Edwards, Chief
Executive Officer of Summit. "We believe these new class antibiotics
have the potential to transform patient lives and that it is possible to
show clear advantages over standard of care treatments and cost
effectiveness during development. With this differentiated approach, we
believe we will have the opportunity to be commercially successful.
"Ridinilazole is the exemplar of this strategy. It is a precision,
microbiome preserving antibiotic that aims to sustain cures of C.
difficile infection to improve outcomes for patients. We were excited to
initiate our landmark Ri-CoDIFy Phase 3 clinical programme in February
2019. If successful, we believe our two Phase 3 clinical trials of
ridinilazole will deliver clinical and economic data to support
ridinilazole as the new standard of care for patients with C. difficile
infection.
"Our Discuva Platform is enabling us to expand our leadership role as
innovators in infectious disease. In April
2019, we announced the addition to our pipeline of another new class
antibiotic programme targeting Enterobacteriaceae infections. With this
new discovery-stage programme, our preclinical programme for N.
gonorrhoeae and ridinilazole for C. difficile, our pipeline now targets
the three most urgent bacterial threats as defined by the US Centers for
Disease Control and Prevention with new classes of antibiotics."
Programme Highlights
Strategy
-- Through its scientific focus, Summit is discovering new classes of
antibiotics to treat serious infectious diseases. Through creative
development programmes, Summit aims to show its new classes of
antibiotics offer significant advantages over current standards of care.
Through demonstrating economic advantages, Summit aims to provide
compelling value for payors and healthcare systems and achieve commercial
success.
Ridinilazole for C. difficile Infection ('CDI')
-- RiCoDIFy Phase 3 clinical trial programme initiated in February 2019,
which aims to support adoption of ridinilazole as the new standard of
care treatment for C. difficile infection.
-- These landmark design clinical trials aim to: i) show superiority over
the current standard of care, vancomycin, using a composite endpoint
measuring sustained clinical response; ii) generate health economic data
to help support the commercial launch, if approved; and iii) undertake
deep microbiome analysis that aims to show ridinilazole's preservation of
the gut microbiome.
-- Recruitment of patients into the two Phase 3 clinical trials is ongoing,
and the programme remains on-track for expected reporting of top-line
data in H2 2021.
-- Clinical and regulatory development of ridinilazole is supported by a
BARDA contract worth up to $62 million.
SMT-571 for Gonorrhoea
-- SMT-571 is a new class antibiotic that is designed to treat infections
caused by Neisseria gonorrhoeae.
-- In February 2019, preclinical data was published in the Journal of
Antimicrobial Chemotherapy that showed SMT-571 had consistently high
potency across over 200 clinically relevant strains of N. gonorrhoeae,
including numerous multi-drug resistant and extensively-drug resistant
strains.
-- IND-enabling studies are ongoing and expected to continue through the
second half of the year. The Phase 1 clinical trial is no longer expected
to initiate in H2 2019. Summit is evaluating the design of a clinical
trial programme with the potential to shorten the overall clinical
development timeline of SMT-571, subject to regulatory approvals. Further
updates on the design and timelines for the start of the clinical
programme to be provided when available.
-- SMT-571 development is being supported by an award of up to $4.5 million
from CARB-X.
DDS-04 for Enterobacteriaceae
-- Identification of DDS-04 compound series, a new class of antibiotics that
acts via the novel bacterial target LolCDE with the potential to treat
infections caused by the gram-negative bacteria, Enterobacteriaceae.
-- In vivo proof of concept demonstrated with a DDS-04 series compound cured
infection in a translationally-relevant animal model of urinary tract
infection, while therapeutic concentrations were also achieved in the
lungs and bloodstream showing potential to treat other major
Enterobacteriaceae infection sites. These data were presented at the 20th
European Congress of Clinical Microbiology & Infectious Diseases.
Financial Highlights
-- Cash and cash equivalents at 30 April 2019 of GBP28.3 million compared to
GBP26.9 million at 31 January 2019.
-- Loss for the three months ended 30 April 2019 of GBP4.0 million compared
to a loss of GBP5.8 million for the three months ended 30 April 2018.
This announcement contains inside information for the purposes of
Article 7 of EU Regulation 596/2014 (MAR).
About Summit Therapeutics
Summit Therapeutics is a leader in antibiotic innovation. Our new
mechanism antibiotics are designed to become the new standards of care
for the benefit of patients and create value for payors and healthcare
providers. We are currently developing new mechanism antibiotics to
treat infections caused by C. difficile, N. gonorrhoeae and
Enterobacteriaceae and are using our proprietary Discuva Platform to
expand our pipeline. For more information, visit www.summitplc.com and
follow us on Twitter @summitplc.
For more information:
Summit
Glyn Edwards / Richard Pye (UK office) Tel: +44 (0)1235 443 951
Michelle Avery (US office) +1 617 225 4455
Cairn Financial Advisers LLP (Nominated Tel: +44 (0)20 7213 0880
Adviser)
Liam Murray / Tony Rawlinson
N+1 Singer (Joint Broker) Tel: +44 (0)20 7496 3000
Aubrey Powell / Jen Boorer, Corporate
Finance
Tom Salvesen, Corporate Broking
Bryan Garnier & Co Limited (Joint Broker) Tel: +44 (0)20 7332 2500
Phil Walker / Dominic Wilson
MSL Group (US) Tel: +1 781 684 6557
Jon Siegal summit@mslgroup.com
---------------------------
Consilium Strategic Communications (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 the Company's future
expectations, plans and prospects, including but not limited to,
statements about the potential benefits and future operation of the
BARDA or CARB-X contract, including any potential future payments
thereunder, the clinical and preclinical development of the Company's
product candidates, the therapeutic potential of the Company's product
candidates, the potential of the Discuva Platform, the potential
commercialisation of the Company's product candidates, the sufficiency
of the Company's cash resources, the timing of initiation, completion
and availability of data from clinical trials, the potential submission
of applications for marketing approvals 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 ability of BARDA or CARB-X to
terminate our contract for convenience at any time, the uncertainties
inherent in the initiation of future clinical trials, availability and
timing of data from ongoing and future clinical trials and the results
of such trials, whether preliminary results from a clinical trial will
be predictive of the final results of that trial or whether results of
early clinical trials or preclinical studies will be indicative of the
results of later clinical trials, expectations for regulatory approvals,
laws and regulations affecting government contracts, availability of
funding sufficient for the Company's foreseeable and unforeseeable
operating expenses and capital expenditure requirements and other
factors discussed in the "Risk Factors" section of filings that the
Company makes with the Securities and Exchange Commission, including the
Company's Annual Report on Form 20-F for the fiscal year ended 31
January 2019. Accordingly, readers should not place undue reliance on
forward-looking statements or information. In addition, any
forward-looking statements included in this press release represent the
Company's views only as of the date of this release and should not be
relied upon as representing the Company's views as of any subsequent
date. The Company specifically disclaims any obligation to update any
forward-looking statements included in this press release.
FINANCIAL REVIEW
Revenue
Revenue was GBP0.2 million for the three months ended 30 April 2019
compared to GBP3.9 million for the three months ended 30 April 2018.
This decrease was principally due to the reduction in revenue related to
the Sarepta licence and collaboration agreement following the Group's
decision to discontinue development of ezutromid in June 2018. Revenue
recognised during the three months ended 30 April 2019 relating to the
cost-share arrangement under the Sarepta agreement amounted to GBP0.1
million.
The Group also recognised GBP0.1 million of revenue during the three
months ended 30 April 2019 relating to the receipt of a $2.5 million
(GBP1.9 million) upfront payment in respect of the licence and
commercialisation agreement signed with Eurofarma Laboratórios SA
('Eurofarma') in December 2017.
Other Operating Income
Other operating income was GBP4.9 million for the three months ended 30
April 2019, as compared to GBP3.5 million for the three months ended 30
April 2018. This increase resulted primarily from the recognition of
operating income from Summit's funding contract with BARDA for the
development of ridinilazole, which was GBP4.6 million for the three
months ended 30 April 2019 as compared to GBP3.3 million for the three
months ended 30 April 2018.
The Group also recognised operating income of GBP0.2 million during the
three months ended 30 April 2019 related to the Group's CARB-X award
supporting the development of SMT-571 for the treatment of gonorrhoea.
Operating Expenses
Research and Development Expenses
Research and development expenses decreased by GBP3.3 million to GBP8.3
million for the three months ended 30 April 2019 from GBP11.6 million
for the three months ended 30 April 2018.
Expenses related to the CDI programme increased by GBP0.8 million to
GBP5.8 million for the three months ended 30 April 2019 from GBP5.0
million for the three months ended 30 April 2018. This increase
primarily related to clinical and manufacturing activities related to
the Ri-CoDIFy Phase 3 clinical trials of ridinilazole that commenced in
February 2019.
Investment in the Group's antibiotic pipeline development activities was
GBP0.7 million for the three months ended 30 April 2019 compared to
GBP0.2 million for the three months ended 30 April 2018. This increase
primarily related to preclinical development activities for SMT-571 for
the treatment of gonorrhoea and the DDS-04 series for the treatment of
Enterobacteriaceae infections.
Expenses related to the Duchenne muscular dystrophy ('DMD') programme
decreased by GBP4.1 million to GBP0.1 million for the three months ended
30 April 2019 from GBP4.2 million for the three months ended 30 April
2018, as a result of the discontinuation of the development of ezutromid
in June 2018. The Group does not expect to incur further significant
cost for this programme.
Other research and development expenses decreased by GBP0.5 million to
GBP1.7 million during the three months ended 30 April 2019 as compared
to GBP2.2 million during the three months ended 30 April 2018, which was
driven by a decrease in staffing and facilities costs reflecting
implementation of cost-cutting measures following the decision to
discontinue development of ezutromid in June 2018.
General and Administration Expenses
General and administration expenses decreased by GBP0.6 million to
GBP1.7 million for the three months ended 30 April 2019 from GBP2.3
million for the three months ended 30 April 2018. This decrease was
driven by a reduction in staff related costs and legal and professional
fees, offset by a net negative movement in exchange rate variances.
Finance Costs
Finance costs recognised during the three months ended 30 April 2019
relate to lease liability interest payable and the unwinding of the
discount associated with provisions. Finance costs were GBP0.1 million
for the three months ended 30 April 2019 compared to GBP0.2 million for
the three months ended 30 April 2018. This decrease relates to the
cessation of the unwinding of the discount following the remeasurement
of the financial liabilities on funding arrangements relating to
DMD-related US not for profit organisations to GBPnil in June 2018.
Taxation
The income tax credit for the three months ended 30 April 2019 was
GBP0.8 million as compared to GBP0.9 million for the three months ended
30 April 2018. This net decrease was driven by a decrease in the Group's
accrued UK research and development tax credit, reflecting lower
research and development expenditure, offset by a net positive movement
in taxes relating to the US operations and the release of deferred tax
liabilities associated with the amortisation of intangible assets.
Losses
Loss before income tax was GBP4.9 million for the three months ended 30
April 2019 compared to a loss before income tax of GBP6.8 million for
the three months ended 30 April 2018. Net loss for the three months
ended 30 April 2019 was GBP4.0 million with a basic loss per share of 3
pence compared to a net loss of GBP5.8 million for the three months
ended 30 April 2018 with a basic loss per share of 8 pence.
Cash Flows
The Group had a net cash inflow of GBP1.3 million for the three months
ended 30 April 2019 as compared to GBP7.2 million for the three months
ended 30 April 2018.
Operating Activities
For the three months ended 30 April 2019, net cash generated from
operating activities was GBP1.4 million compared to net cash used in
operating activities of GBP7.0 million for the three months ended 30
April 2018. This net positive movement of GBP8.4 million was driven by
an increase in cash received from licensing agreements and funding
arrangements of GBP3.8 million and an increase in taxation cash inflows
of GBP4.9 million due to the timing of receipt of the Group's research
and development tax credits receivable on qualifying expenditure in
respect of financial years ended 31 January 2017 and 2018, offset by an
increase in operating costs of GBP0.3 million.
Investing Activities
Net cash used in investing activities for the three months ended 30
April 2019 and 30 April 2018 represents amounts paid to acquire property,
plant and equipment and intangible assets, net of bank interest received
on cash deposits.
Financing Activities
Net cash used in financing activities for the three months ended 30
April 2019 of GBP0.1 million primarily relates to lease liability
repayments of GBP0.1 million. Net cash generated from financing
activities for the three months ended 30 April 2018 of GBP14.2 million
included GBP14.1 million of proceeds, net of transaction costs, received
following the Group's equity placing on the AIM market of the London
Stock Exchange in March 2018 and GBP0.1 million received following the
exercise of restricted stock units and share options, offset by lease
liability repayments of GBP0.1 million.
Financial Position and Cash Runway Guidance
As at 30 April 2019, total cash and cash equivalents held were GBP28.3
million (31 January 2018: GBP26.9 million).
The Group believes that its existing cash and cash equivalents,
anticipated payments from BARDA under its contract for the development
of ridinilazole and anticipated payments from CARB-X under its contract
for the development of its gonorrhoea antibiotic candidate, will be
sufficient to enable the Group to fund its operating expenses and
capital expenditure requirements through 31 January 2020.
Glyn Edwards
Chief Executive Officer
12 June 2019
FINANCIAL STATEMENTS
Condensed Consolidated Statement of Comprehensive Income (unaudited)
For the three months ended 30 April 2019
Three months Three months Three months
ended ended ended
30 April 30 April 30 April
2019 2019 2018
(Adjusted*)
Note $000s GBP000s GBP000s
Revenue 324 249 3,874
Other operating income 6,347 4,871 3,455
Operating expenses
Research and development (10,780) (8,273) (11,590)
General and administration (2,156) (1,655) (2,328)
Total operating expenses (12,936) (9,928) (13,918)
--------------------------------------------------- --------- -------- --- ---------
Operating loss (6,265) (4,808) (6,589)
Finance income 3 2 1
Finance costs (79) (61) (200)
Loss before income tax (6,341) (4,867) (6,788)
Income tax 1,097 842 946
Loss for the period (5,244) (4,025) (5,842)
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss
Exchange differences on translating
foreign operations 4 3 7
Total comprehensive loss for the period (5,240) (4,022) (5,835)
Basic and diluted loss per ordinary 2 (4) cents (3) pence (8) pence
share from operations
* See Note 1 - 'Basis of Accounting - Adoption of IFRS 16 'Leases"
Condensed Consolidated Statement of Financial Position (unaudited)
As at 30 April 2019
30 April 30 April 31 January
2019 2019 2019
(Adjusted*)
$000s GBP000s GBP000s
ASSETS
Non-current assets
Goodwill 2,364 1,814 1,814
Intangible assets 13,547 10,397 10,604
Property, plant and equipment 1,812 1,391 1,540
17,723 13,602 13,958
Current assets
Trade and other receivables 12,324 9,458 13,491
Current tax receivable 2,967 2,277 6,328
Cash and cash equivalents 36,894 28,315 26,858
52,185 40,050 46,677
------------------------------------- -------- ------- ----------
Total assets 69,908 53,652 60,635
LIABILITIES
Non-current liabilities
Lease liabilities (739) (567) (647)
Deferred revenue (920) (706) (831)
Provisions for other liabilities and
charges (2,480) (1,903) (1,851)
Deferred tax liability (2,141) (1,643) (1,675)
(6,280) (4,819) (5,004)
Current liabilities
Trade and other payables (8,804) (6,757) (8,733)
Lease liabilities (466) (358) (358)
Deferred revenue (3,186) (2,445) (3,374)
Contingent consideration (819) (629) (629)
(13,275) (10,189) (13,094)
Total liabilities (19,555) (15,008) (18,098)
Net assets 50,353 38,644 42,537
EQUITY
Share capital 2,091 1,605 1,604
Share premium account 120,926 92,806 92,806
Share-based payment reserve 1,316 1,010 1,148
Merger reserve 3,944 3,027 3,027
Special reserve 26,051 19,993 19,993
Currency translation reserve 77 59 56
Accumulated losses reserve (104,052) (79,856) (76,097)
Total equity 50,353 38,644 42,537
-------------------------------------- -------- ----------
* See Note 1 - 'Basis of Accounting - Adoption of IFRS 16 'Leases"
Condensed Consolidated Statement of Cash flows (unaudited)
For the three months ended 30 April 2019
Three months Three months Three months
ended ended ended
30 April 30 April 30 April
2019 2019 2018
(Adjusted*)
$000s GBP000s GBP000s
Cash flows from operating activities
Loss before income tax (6,341) (4,867) (6,788)
(6,341) (4,867) (6,788)
Adjusted for:
Finance income (3) (2) (1)
Finance costs 79 61 200
Foreign exchange gain (201) (154) (457)
Depreciation 186 143 160
Amortisation of intangible fixed assets 270 207 208
Loss on disposal of assets 13 10 --
Research and development expenditure
credit -- -- (65)
Share-based payment 167 128 545
Adjusted loss from operations before
changes in working capital (5,830) (4,474) (6,198)
Decrease / (increase) in prepayments
and other receivables 5,272 4,047 (1,426)
Decrease in deferred revenue (1,373) (1,054) (2,339)
(Decrease) / increase in trade and other
payables (2,633) (2,021) 3,007
Cash used in operations (4,564) (3,502) (6,956)
Taxation received 6,381 4,897 --
Net cash generated from operating
activities 1,817 1,395 (6,956)
----------------------------------------- --------- --- --------- --- ---------
Investing activities
Purchase of property, plant and equipment (5) (4) (25)
Purchase of intangible assets -- -- (5)
Interest received 3 2 1
Net cash used in investing activities (2) (2) (29)
----------------------------------------- --------- --------- ---------
Financing activities
Proceeds from issue of share capital -- -- 15,000
Transaction costs on share capital issued -- -- (858)
Proceeds from exercise of share options 1 1 99
Repayment of lease liabilities (116) (89) (84)
Net cash used in financing activities (115) (88) 14,157
Increase in cash and cash equivalents 1,700 1,305 7,172
Effect of exchange rates in cash and
cash equivalents 198 152 411
Cash and cash equivalents at beginning
of the period 34,996 26,858 20,102
Cash and cash equivalents at end of
the period 36,894 28,315 27,685
----------------------------------------- --------- --- --------- --- --------- ---
* See Note 1 - 'Basis of Accounting - Adoption of IFRS 16 'Leases"
Condensed Consolidated Statement of Changes in Equity (unaudited)
Three months ended 30 April 2019
Share Share-based Currency Accumulated
Share premium payment Merger Special translation losses
capital account reserve reserve reserve reserve reserve Total
Group GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
At 31 January 2019 (as
previously reported) 1,604 92,806 1,148 3,027 19,993 56 (76,092) 42,542
Change in accounting
policy (full retrospective
application IFRS 16) -- -- -- -- -- -- (5) (5)
At 31 January 2019
(Adjusted*) 1,604 92,806 1,148 3,027 19,993 56 (76,097) 42,537
---------------------------- -------- -------- ------- ---- -------- -------- ------------ -------- -------
Loss for the period -- -- -- -- -- -- (4,025) (4,025)
Currency translation
adjustment -- -- -- -- -- 3 -- 3
Total comprehensive
loss for the period -- -- -- -- -- 3 (4,025) (4,022)
Share options exercised 1 -- -- -- -- -- -- 1
Share-based payment -- -- 128 -- -- -- -- 128
Transfer -- -- (266) -- -- -- 266 --
At 30 April 2019 1,605 92,806 1,010 3,027 19,993 59 (79,856) 38,644
-------- -------- ------- ---- -------- -------- ------------ -------- -------
Year ended 31 January 2019
Share Share-based Currency Accumulated
Share premium payment Merger Special translation losses
capital account reserve reserve reserve reserve reserve Total
Group GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
At 31 January 2018 (as
previously reported) 736 60,237 6,743 3,027 19,993 37 (93,957) (3,184)
Change in accounting
policy (full retrospective
application IFRS 16) -- -- -- -- -- -- 32 32
At 31 January 2018
(Adjusted*) 736 60,237 6,743 3,027 19,993 37 (93,925) (3,152)
-------- ------- -------- --- -------- -------- ------------ -------- -------
Profit for the year
(Adjusted*) -- -- -- -- -- -- 7,490 7,490
Currency translation
adjustment -- -- -- -- -- 19 -- 19
Total comprehensive
profit for the period
(Adjusted*) -- -- -- -- -- 19 7,490 7,509
New share capital issued 864 33,784 -- -- -- -- -- 34,648
Transaction costs on
share capital issued -- (1,313) -- -- -- -- -- (1,313)
Share options exercised 4 98 -- -- -- -- -- 102
Share-based payment -- -- 4,743 -- -- -- -- 4,743
Transfer -- -- (10,338) -- -- -- 10,338 --
At 31 January 2019
(Adjusted*) 1,604 92,806 1,148 3,027 19,993 56 (76,097) 42,537
Three months ended 30 April 2018
Share Share-based Currency Accumulated
Share premium payment Merger Special translation losses
capital account reserve reserve reserve reserve reserve Total
Group GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
At 31 January 2018 (as
previously reported) 736 60,237 6,743 3,027 19,993 37 (93,957) (3,184)
Change in accounting
policy (full retrospective
application IFRS 16) -- -- -- -- -- -- 32 32
At 31 January 2018
(Adjusted*) 736 60,237 6,743 3,027 19,993 37 (93,925) (3,152)
---------------------------- -------- ------- ----------- -------- -------- ------------ -------- -------
Loss for the period
(Adjusted*) -- -- -- -- -- -- (5,842) (5,842)
Currency translation
adjustment -- -- -- -- -- 7 -- 7
Total comprehensive
loss for the period
(Adjusted*) -- -- -- -- -- 7 (5,842) (5,835)
New share capital issued 83 14,917 -- -- -- -- -- 15,000
Transaction costs on
share capital issued -- (858) -- -- -- -- -- (858)
Share options exercised 1 98 -- -- -- -- -- 99
Share-based payment -- -- 545 -- -- -- -- 545
At 30 April 2018 (Adjusted*) 820 74,394 7,288 3,027 19,993 44 (99,767) 5,799
-------- ------- ----------- -------- -------- ------------ -------- -------
* See Note 1 - 'Basis of Accounting - Adoption of IFRS 16 'Leases"
The accompanying notes form an integral part of these condensed
consolidated interim financial statements.
NOTES TO THE FINANCIAL INFORMATION
For the three months ended 30 April 2019
1. Basis of Accounting
The unaudited condensed consolidated interim financial statements of
Summit Therapeutics plc ('Summit') and its subsidiaries (together, the
'Group') for the three months ended 30 April 2019 have been prepared in
accordance with International Financial Reporting Standards ('IFRS') and
International Financial Reporting Interpretations Committee ('IFRIC')
interpretations as issued by the International Accounting Standards
Board and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS including those applicable to accounting
periods ending 31 January 2020 and the accounting policies set out in
Summit's consolidated financial statements. There have been no changes
to the accounting policies as contained in the annual consolidated
financial statements as of and for the year ended 31 January 2019 other
than as described below. These condensed consolidated interim financial
statements do not include all information required for full statutory
accounts within the meaning of section 434 of Companies Act 2006 and
should be read in conjunction with the consolidated financial statements
of the Group as at 31 January 2019 (the '2019 Accounts'). The 2019
Accounts, on which the Company's auditors delivered an unqualified audit
report, are available on the Group's website at www.summitplc.com and
will be delivered to the Registrar of Companies following the 2019
Annual General Meeting. The auditor's report did not contain any
statement under section 498 of the Companies Act 2006 but did contain a
statement from the auditors drawing the shareholders' attention to the
Group's need to raise additional capital as noted below.
Whilst the financial information included in this announcement has been
prepared in accordance with IFRS and IFRIC interpretations as issued by
the International Accounting Standards Board and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS, this
announcement does not itself contain sufficient information to comply
with IFRSs.
The interim financial statements have been prepared assuming the Group
will continue on a going concern basis. Based on management's forecasts,
the Group's existing cash and cash equivalents, anticipated payments
from BARDA under its contract for the development of ridinilazole and
anticipated payments from CARB-X under its contract for the development
of its gonorrhoea antibiotic candidate are expected to be sufficient to
enable the Group to fund its operating expenses and capital expenditure
requirements through 31 January 2020. The Group will need to raise
additional funding in order to support, beyond this date, its planned
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 the United States and the United Kingdom. Should the Group be
unable to raise additional funding, management has the ability to take
mitigating action to fund its operating expenses and capital expenditure
requirements in relation to its clinical development activities for only
a short period beyond 12 months from the date of issuance of these
financial statements. These circumstances represent a material
uncertainty which may cast and raise significant doubt on the Group's
ability to continue as a going concern. The interim financial statements
do not contain any adjustments that might result if the Group was unable
to continue as a going concern.
The Group is evaluating various options 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.
Whilst the Group believes that funds would be available in this manner
before the end of January 2020, there can be no assurance that the Group
will be able to generate funds, on terms acceptable to the Group, on a
timely basis or at all, which would impact the Group's ability to
continue as a going concern. The failure of the Group to obtain
sufficient funds on acceptable terms when needed could have a material
adverse effect on the Group's business, results of operations and
financial condition.
The financial information for the three month periods ended 30 April
2019 and 2018 are unaudited.
Solely for the convenience of the reader, unless otherwise indicated,
all pound sterling amounts stated in the Consolidated Statement of
Financial Position as at 30 April 2019 and the Consolidated Statement of
Comprehensive Income and Consolidated Statement of Cash Flows for the
three months ended 30 April 2019 have been translated into US dollars at
the rate on 30 April 2019 of $1.303 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 12 June
2019.
Adoption of IFRS 16 'Leases'
IFRS 16 specifies how to recognise, measure, present and disclose
leases. The standard provides a single lessee accounting model,
requiring lessees to recognise assets and liabilities for all leases
unless the lease term is 12 months or less or the underlying asset has a
low value. The standard is effective for reporting periods beginning on
or after 1 January 2019 and replaces the accounting standard IAS 17
'Leases'. Two adoption methods are permitted for transition:
retrospectively to all prior reporting periods presented in accordance
with IAS 8 'Accounting Policies, Changes in Accounting Estimates and
Errors', with certain practical expedients permitted; or retrospectively
with the cumulative effect of initially applying the standard recognised
at the date of initial application.
Accounting policy
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease based on whether the contract conveys the right to
control the use of an identified asset for a period of time in exchange
for consideration. The Group recognises a right-of-use asset within
property, plant and equipment and a lease liability at the lease
commencement date. The right-of-use asset is initially measured based on
the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received. The assets are
depreciated to the earlier of the end of the useful life of the
right-of-use asset or the lease term using the straight-line method. The
lease term includes periods covered by an option to extend if the Group
is reasonably certain to exercise that option and periods covered by an
option to terminate if it is reasonably certain not to exercise that
option. The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, the Group's incremental borrowing
rate. The lease liability is subsequently measured at amortised cost
using the effective interest method and is remeasured when there is a
change in future contractual lease payments or if the Group changes its
assessment of whether it will exercise a purchase, extension or
termination option.
The Group adopted this new standard effective 1 February 2019, as
required, using the full retrospective transition method in accordance
with IAS 8 'Accounting Policies, Changes in Accounting Estimates and
Errors'. Under this method, the Group will adjust its results for the
years ended 31 January 2018, and 2019, and applicable interim periods,
as if IFRS 16 had been effective for those periods. The Group has
assessed the effect of adoption of this standard as it relates to its UK
leased properties in Oxford and Cambridge and has concluded that any
other contracts are not within the scope of IFRS 16 or are of low value,
for which the Group has elected not to apply the requirement of IFRS 16.
Due to the adoption of IFRS 16, the Group has recognised both
right-of-use assets and lease liabilities related to its UK leased
properties. The Group no longer recognises a lease incentive accrual and
has reclassified some costs from research and development expenses and
general and administration expenses to finance costs, being the interest
expense on lease liabilities. In addition, some amounts previously
presented as cash outflows from operating activities in the Group's
Consolidated Statement of Cash Flows are now presented as cash flows
from investing or financing activities.
This change in accounting policy has been reflected retrospectively in
the comparative Statement of Financial Position for the year ended 31
January 2019, the comparative Statement of Comprehensive Income,
Statement of Cash Flows and Statement of Changes in Equity for the three
months ended 30 April 2018, including the opening accumulated losses
reserve at 1 February 2018 and 1 February 2019.
During the year ended 31 January 2019, the Group re-assessed the
allocation of staff related expenses, totalling GBP0.3 million,
previously reported as general and administration expenses during the
three months ended 30 April 2018. These are now presented as research
and development expenses.
The impact of the change in accounting policy to IFRS 16 and the
allocation of the staff related expenses discussed above on the
comparatives to the unaudited condensed consolidated interim financial
statements is disclosed in the following tables.
Original Adjusted
Year ended Year ended
Impact on Unaudited Condensed 31 January 31 January
Consolidated 2019 2019 Impact
Statement of Financial Position GBP000s GBP000s GBP000s
-------------------------------------
Non-current assets
Property, plant and equipment 616 1,540 924
Current assets
Trade and other receivables 13,547 13,491 (56)
Non-current liabilities
Lease liabilities -- (647) (647)
Current liabilities
Trade and other payables (8,865) (8,733) 132
Lease liabilities -- (358) (358)
Equity
Accumulated losses reserve (76,092) (76,097) (5)
Original Adjusted
Three months Three months
ended ended
Impact on Unaudited Condensed 30 April 30 April
Consolidated 2018 2018 Impact
Statement of Comprehensive
Income GBP000s GBP000s GBP000s
--------------------------------
Operating expenses
Research and development (11,254) (11,590) (336)
General and administration (2,669) (2,328) 341
Operating loss (6,594) (6,589) 5
Finance costs (188) (200) (12)
Loss for the period (5,835) (5,842) (7)
-------------------------------- ------------ ------------ -------
Original Adjusted
Three months Three months
ended ended
Impact on Unaudited Condensed 30 April 30 April
Consolidated 2018 2018 Impact
Statement of Cash Flows GBP000s GBP000s GBP000s
Loss before income tax (6,781) (6,788) (7)
Adjusted for:
Finance costs 188 200 12
Depreciation 77 160 83
Increase in trade and other
receivables (1,434) (1,426) 8
Increase in trade and other
payables 3,019 3,007 (12)
Financing activities
Repayment of lease liabilities -- (84) (84)
Impact on net cash flows --
The Group will continue to monitor interpretations released by the IFRS
Interpretations Committee and amendments to IFRS 16 and, as appropriate,
will adopt these from the effective dates.
2. Loss per Share Calculation
The loss per share has been calculated using the loss for the period and
dividing this by the weighted average number of ordinary shares in issue
during the three months ended 30 April 2019: 160,398,130 (for three
months ended 30 April 2018: 76,571,101).
Since the Group has reported a net loss, diluted loss per ordinary share
is equal to basic loss per share.
3. Issue of Share Capital
On 23 April 2019, 104,877 ordinary shares were issued following the
exercise of restricted stock units ('RSUs'). This exercise of RSUs
raised net proceeds of GBP1,049.
The new ordinary shares issued in connection with the RSUs exercised
rank pari passu with existing ordinary shares.
As of 30 April 2019, the number of ordinary shares in issue was
160,494,758.
-END-
(END) Dow Jones Newswires
June 12, 2019 07:00 ET (11:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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