Summit Therapeutics Q1 2023 Earnings Call Transcript

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May 11, 2023

There are 6 speakers on the call.

Operator

Good morning, and welcome to the Summit Therapeutics First Quarter 2023 Earnings and Update Call. All participants will be able to listen only until the question and answer portion of this call. We do not expect any technical difficulties today. However, in the event that we were to lose the webcast connection and are unable to provide any updates. Please wait up to 10 minutes for resolution.

Operator

Please refer to the company's website for updates. Please note that today's call is being recorded. If you would like to withdraw your question, again, press the star and one. At this time, I would like to introduce the call to Dave Gankars, Senior Vice President of Stakeholder Relations, Business Development and Corporate Strategy. You may proceed.

Speaker 1

Good morning and thank you for joining us. Our press release was issued earlier this morning and is available on the homepage of our website. Today's call is being simultaneously webcast And an archived replay will also be made available later today on our website, www.smmttx .com. On the call with me today is Bob Duggan, our Chairman of the Board and Co Chief Executive Officer Doctor. Mackie Zangadeh, Our Co Chief Executive Officer and President, Ankur Dhingra, our Chief Financial Officer as well as Doctor.

Speaker 1

Alta Geico, Our Head of Regulatory Safety and Quality at Summit. Before we get started, I would like to note that some statements made by our management team Responses to questions that we make today may be considered forward looking statements based on our current expectations. Public cautions that these forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in forward looking statements. Please refer to our SEC filings for information about these risks and uncertainties. Summit undertakes no obligation to update these forward looking statements, except as required by law.

Speaker 1

Following comments from Bob McKee and Ankur, We will take questions. With that, I will turn the call over to Bob.

Speaker 2

Thank you, Dave. It's a pleasure to be on the call with each of you this morning. I'm incredibly proud of the accomplishments of Team Summit over the past few months Since we closed our transaction with the world class partners at Acheso. Our relationship discussions With Akesso begin in July of 2022 through our business development channels. By October, we had achieved a vision and A concept of what a partnership with the Akesso, including their bispecific drug, ivonasumab, could potentially generate under Team Summit's stewardship.

Speaker 2

Throughout November, we gained additional data and evaluated it properly on not only the company, but the product itself. As we gained additional direct experience with Aquesto's team leadership and specifically with Doctor. Michelle Shaw, Acasto's CEO, Founder and Sharewoman. We were able to then lead on to a December 5th truly historic day and transaction for all of us. We signed a $5,000,000,000 $500,000,000 upfront transaction with Queso.

Speaker 2

Upon entering into this transaction, we committed to our stakeholders consistent with our mission statement To take full responsibility for the development of bonestemab along with that, we intend stated that we intended to make a significant positive difference for human healthcare by improving the quality of patient lives and potentially the duration patient lives from those patients who may benefit from this medicine. I'm proud to say that we are making significant strides towards fulfilling that commitment and Mackie will provide us with additional details shortly regarding our progress on that. Finally, from a corporate governance perspective, we are proud to have added Doctor. Michelle Shaw to our Board of Directors this quarter in conjunction with closing the Acasto transaction. As you may know, but it's worth repeating if you do, Doctor.

Speaker 2

Shaw, Who founded Ocasio in 2012 is their Chairwoman and CEO. She has exceptional experience in leadership across scientific discovery, R and D, building and scaling manufacturing and overall leadership through her experience at companies in the U. S, including Celera Genomics, Bayer and Crown Biosciences. At Crown, she played a decisive role in constructing the company's platform as she served In a leadership role in a joint venture with Pfizer, Doctor. Shaw has about 20 years of experience in the pharmaceutical industry and academic research in the U.

Speaker 2

S. And U. K, in addition to her deep experience in leading the Chinese company, Acasto. And with that, I would like to hand it over to Mickey to provide additional context as to our accomplishments and next steps. Mickey?

Speaker 3

Thank you, Bob, and good morning, everyone. I'm incredibly enthusiastic about our collaboration with Ekoso. Eketyl has a rich and diversified antibody drug pipeline with over 30 internally discovered drug candidates In various stages of development, including 6 bispecific antibodies. AKESO has taken part in over 80 clinical trials For 17 drug candidates, including 14 pivotal trials. AKESO has 2 drugs approved for oncology indication in China, A PD-one inhibitor and a novel PD-one CTL-four bispecific antibody called cadalinumab.

Speaker 3

Caselimab is the 1st PD-one based bispecific antibody approved in any major market, demonstrating AKSO expertise and innovation in this space. EKESO has over 2,400 employees who perform end to and functions of a fully integrated biopharma company from drug discovery through to manufacturing and commercialization And is publicly listed in Hong Kong with a valuation approaching US5 $1,000,000,000 Specific to our product candidate, abanizumab is an innovative, potentially first in class bispecific antibody That is intended change to change the standard of care across several oncological indications. Abonizumab combines the effect of immunotherapy via a blockade of PD-one with the anti angiogenesis effects associated with VEGF into a single molecule. Anti PD-one therapy assists the immune system in killing tumor cells. Anti VEGF therapy helps deplete the tumor of new blood vessels and allows the immune system to fight the tumor.

Speaker 3

Abonizumab tetravalent structures enables higher avidity, which is the accumulated stress of multiple binding interactions, With over 10 times the binding affinity to PD-one in the presence of VJF in vitro in tumor cells. These tetravalent structures, the design of the molecule and bringing these two targets into a single bispecific antibody have the potential to steer abonizumab to the tumor tissue versus healthy tissue, which could lead to reduced adverse events associated with these targets when administered individually. It also has the potential to focus the antitumor activity of both targets as compared to separate anti PD-one anti VJF compounds dosed together. As Bob said, I'm extremely proud of the work and accomplishment of TeamSummit Over the past several months since we have reached an agreement with EKESO. We began our work formulating our ideas On the development of Ivanissima during our due diligence process in the second half of last year.

Speaker 3

Once We signed the deal in December and the agreement went effective in January. We have pushed very hard on bringing to life The vision that we set out at the start of this collaboration. We immediately engaged with health authorities in our licensed territories, Including the U. S. FDA.

Speaker 3

We held multiple meetings with the FDA to discuss multiple Phase 3 clinical trials as part of our late stage development plan in a non small cell lung cancer for Ibonizumab. We appreciated and incorporated the feedback from the FDA when finalizing the design of our 2 clinical studies, which we announced last week. They are ivanizumab combined with chemotherapy in patients with EGFR mutated, locally advanced or metastatic non squamous non small cell lung cancer who have progressed after treatment with a 3rd generation EGFR TKI such as osimertinib, Which we refer to as the HARMONY trial. The second trial, ivonizumab combined with chemotherapy In first line metastatic squamous non small cell lung cancer patients, which we call the HARMONY-three trial. The study will combine patients enrolled in China along with patients enrolled in United States, Canada and Europe as a multiraginal, randomized, double blind study enrolling over 400 patients across this region.

Speaker 3

In supporting these clinical trials, we are executing upon a number of different areas, Including the work to begin clinical trials with different trial sites and vendors, such as preparing clinical study sites to enroll patients And all of the foundational work needed to launch a clinical study, including contracts, institutional review board approvals and quality reviews. Critical to all of this is the engagement with key opinion leaders and aligning feedback from this highly engaged physician With the data generated from AKASO, having treated over 7 50 patients with ifonissimab to date in China and Australia, In addition to preparing clinical drug supply for trials in our territory, we have been actively preparing to expand our supply chain channel long term with respect to having the opportunity to obtain clinical and commercial supply from multiple sources. Because of the hard work and effort across our entire team and the support from our partner at EKESO, we have initiated our first clinical study in our territory, HARMONY. We were thrilled to announce earlier this week that we have enrolled our first patient in the HARMONY study, the FEED accomplished in about 3.5 months after our deal closed with Excessor. We are following up on the achievement with our intent initiate HARMONY 3 and enrolled patient in this study in the second half of this year.

Speaker 3

As we have stated since the announcement of the deal, in conjunction with our actions and following through of our commitments to start in a non small cell lung cancer. These two clinical trials are only the first step with respect to our plans for Ivanizumab. We have confidence in ivonizumab to continue to expand both within additional indication in non small cell lung cancer and in other solid tumors during its development life cycle. Our deal was constructed with this mindset as is evident from the number of indications For which regulatory milestones are scheduled to be paid as well as the size of the potential milestone, we believe strongly in the potential Of Ibonizumab. As a reminder, our collaboration and license agreement provide us with the rights to Ibonizumab in the United States, Canada, Europe and Japan.

Speaker 3

In exchange for this rights, we paid $500,000,000 upfront to AKESO, and AKESO is eligible to receive regulatory milestone of up $2,050,000,000 and commercialization milestone of up to $3,450,000,000 EKESO will receive low double digit royalty on our net sales of SMT-one hundred and twelve. We continue to build up and establish actions and data Our team has made multiple visits to EKESO in the past next few months and spend meaningful time in person with the EKSO leadership over the past 8 months in order to continue to build the success of AKESOL earlier stage clinical trials and propel our collaboration to the next level as we continue to work together to achieve the best results and realize the potential of ivonizumab. Our aligned missions, each of which focus on patient's needs and improved patient lives allow for aligned intention within our partnership and the future of Ibonizumab. My confidence cannot be higher in Team Summit's ability to make a meaningful impact on the lives of patients who can benefit from this innovative therapy, both in non small cell lung cancer and on other solid tumors. This is just the beginning.

Speaker 3

Now I will let Ankur give some more details on our financial position and outlook.

Speaker 4

Thank you, Matthew. These are very exciting times at Summit. With Ibanezumab, we have a great opportunity in front of us to improve patients' lives. And I'm very pleased with the progress that team has made in this short duration of time. I will now give you an update on the financial developments during the quarter and our financial position as of the end of the quarter.

Speaker 4

During the quarter, we completed significant purchasing and financing transactions. First, we completed the in licensing deal with Acheso and paid them $500,000,000 as upfront consideration. This was paid via approximately $475,000,000 in cash and 10,000,000 shares of Summit's common stock. 2nd, we successfully completed our rights offering of $500,000,000 This offering was oversubscribed with broad based participation. 3rd, we repaid $420,000,000 of the loans this quarter and are left with $100,000,000 of loan on our balance sheet, which becomes due in September 2024.

Speaker 4

4th, we announced that we are ceasing investment in our anti infectives business, focusing our resources on development of Ibenacimab. And most importantly, we did all the foundational work that Mackie described towards initiation of 2 Phase 3 clinical trials. It's been a busy quarter. Now about the P and L. Net loss for the quarter was $542,400,000 Included therein is $520,900,000 of IP R and D expenses, Which reflects the upfront payment made to Akastel for in licensing of Ibenasimab, comprising of $474,900,000 cash payment and 10,000,000 shares issued to Caso with accounting valuation of $45,000,000 Reflecting market price on the date the shares were issued.

Speaker 4

Excluding this one time payment, pro form a net loss was about $22,000,000 Of which our operating expenses were $16,800,000 Talking about our cash position, We exited the quarter with $242,000,000 in cash and investments. We believe this is sufficient to fund our operating costs and working capital needs for currently planned clinical trials for SMT-one hundred and twelve Going into the second half of twenty twenty four. This includes appropriately building an experienced oncology team capable of executing multiple large clinical trials and the related development work. We have a loan of $100,000,000 on our balance sheet that becomes due on September 2024 and have ability to prepay in certain scenarios If we complete a capital raise transaction prior to September 2024. Also to note, All our cash equivalents and investments are held in highly liquid and highly rated money market funds or U.

Speaker 4

S. Treasuries. And the cash is held in large U. S. And European banks.

Speaker 4

To sum up, in last few months, we've taken significant actions Since closing the deal for in licensing of imenasumab, a significant amount of groundwork leading to announcement of 2 late stage multi region trials treatment of 1st patient in our first trial. We've also laid a solid financial foundation for investment in our planned clinical studies and the development of Ibanezumab. And with that, I will hand it back over to Dave.

Speaker 1

Thank you, Bob, Nikkya and Ankur. We can now transition if there are any questions that we could answer. If we could please open the line for questions.

Operator

And will pause for just a moment to compile the Q and A roster.

Speaker 1

Thank you, Kayla. And we have received a couple of questions first. So I'll start with those questions and then we can transition to those on the phone. The first question It has been compiled and generated by Akesso, as opposed to just that data that has been generated by Summit. So I'll take the first part of that question, then I'll hand it over to Ulta, who's our Head of Regulatory Safety and Quality.

Speaker 1

So our HARMONY trial will enroll patients in the United States, Canada, Europe and China. Those patients coming from China will be enrolled by our partners at Akesso. So our intent is to include data that is generated by our partners at

Speaker 5

Yes. Hi. This is Alta Geico. Yes, we will definitely be able to utilize information coming from both PKASO side as well as the data that we are generating. The most important part for the restation is that we have appropriately designed Align trials, that's the important health authority for the U.

Speaker 5

S. Obviously the FDA and that they're in the context of multi regional studies. We have actually discussed exactly how to do this appropriately for our Phase 3 studies and have given an agreement on that, specifically with FDA and are executing in this context.

Speaker 1

Thank you, Ulta. And one additional question that we've received with respect to Certain designations from the FDA, such as breakthrough therapy designation, fast track designation. What can the company Do in order to seek to achieve those designations if they're appropriate.

Speaker 5

So I think both of these designations are first and likely relevant for Ibanezumab, so FasTrack first. So I think we are a strong candidate for FasTrack and are likely to pursue this designation. We have also started, as it relates to breakthrough designation, consultation with FDA specifically What kind of data set would be most appropriate to pursue that designation? And we will continue this consultation with FDA. So both of them are very relevant for us and we are likely candidates.

Speaker 1

Thank you, Alta. Kayla, any additional questions?

Operator

At this time, there are no questions on the phone line. Call and there are no audio questions at this time. Dave, I'll turn the call back to you.

Speaker 1

Perfect. Thank you very much. I would like to thank you for your participation And with that, there will be an archived version of this webcast that will be available on our website, www .smmttx.com. Thank you, and we wish you a great day.

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