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Summit Therapeutics PLC: THE INVESTMENT CASE

Summit Therapeutics chief keeps his eyes on two big prizes

We take a look back at the progress made by Summit in the five years since we first spoke to chief executive Glyn Edwards
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INVESTMENT OVERVIEW: SUMM The Big Picture
50,000 boys and young men are affected by the muscle wasting disease Duchenne Muscular Dystrophy - Summit may have a breakthrough

It is almost five years to the day Proactive first spoke to Glyn Edwards following his appointment as chief executive of a company called Summit Corporation, known today as Summit Therapeutics PLC (LON:SUM, NASDAQ:SMMT).

In that time a lot more has changed than just the name. Setting out his stall in 2012, the Summit CEO took the decision to jettison discovery-stage research to focus on just two drug candidates.

They were C1100 for Duchenne Muscular Dystrophy, a rare muscle wasting disease that affects boys, and SMT 19969, a next-generation antibiotic.

Progress

Today, C1100 has morphed into Ezutromid, which is undergoing Phase II clinical trials with US biotech Sarepta as partner and funder. It also has fast-track designation from the US Food & Drug Administration (FDA).

Ready to enter final-stage trials, SMT 19969 is the most advanced of the two drugs and is now known as Ridinilazole.

It is thought to be effective against multiple different strains of the difficult-to-treat infection c.difficile (CDI).

It is also believed to be superior to existing medications, such as vancomycin and metronidazole. 

Eye-catching

What’s eye-catching about Summit’s progress has been its ability to raise money at crucial junctures of its development – something British companies of Summit’s size and ilk have often failed to do.

On Thursday it unveiled a fully underwritten US share issue that will bring in up to US$20mln of new cash, landing in the process Lansdowne Partners, one of Europe’s longest-established hedge funds, as a cornerstone investor.

READ: Summit Therapeutics' US fundraiser should secure drug developer's long-term financial future

This would be quite impressive were it not for the fact Summit has secured funding commitments of up to US$62mln from a US government agency called BARDA (that stands for the Biomedical Advanced Research and Development Authority) to support work on Ridinilazole.

Summit’s partner, Sarepta, meanwhile, ‘ponied up’ US$22mln in May as part of a milestone and royalties deal worth more than half a billion dollars.

There are two observations to make at this stage: first, Edwards and his team have negotiated firm funding and commitments worth more than US$100mln this year alone.

The second point relates directly to the US$522mln Sarepta agreement. Summit’s market cap is roughly half that figure, which means the American giant might be better off bidding for its smaller rival than paying up the contract in full.

Building on early promise

That, of course, relies on Ezutromid building on its early promise.

The treatment recently completed enrolment for its PhaseOut Phase II clinical trial, which triggered the payment from partner Sarepta.

READ: Summit Therapeutics antibiotic delivers encouraging clinical trial results

The study recruited 40 patients in the US and UK and will take 48 weeks to complete.

Researchers will assess how it affects muscle structure, health and function.

Data from the half-way stage is expected in the first quarter of next year with the trial set to close in the third quarter.

Duchenne Muscular Dystrophy, or DMD, is one of the most common, fatal genetic disorders diagnosed in children around the world.

Unmet medical need

It predominantly affects boys and it results in the progressive wasting of muscles throughout the body.

The disease has an estimated incidence of 1 in 5,000 and a patient population in the developed world of around 50,000. Patients typically don’t live beyond their late 20s.

It is caused by different genetic faults in the gene that encodes dystrophin, a protein that is essential for the healthy function of all muscles.

Utrophin protein is functionally and structurally similar to dystrophin and in preclinical studies the continued expression of utrophin had a meaningful, positive effect on muscle performance.

Talking recently about the Ezutromid clinical trial, corporate affairs director Richard Pye said: “We are very excited by our approach.

50,000 affected worldwide

“We estimate there are around 50,000 boys and young men suffering this condition [worldwide].

“It is a relatively small patient population, but what you can get with orphan drugs is premium pricing.

“So we can see this being a multi-billion dollar market if you have a drug that is shown to be effective. That’s what we are wanting to establish with our phase II trial – the potential clinical benefit of our approach.

“We can see this really making a difference to the boys and young men living with this condition, because currently there is no approved treatment that would benefit all the patients. There is a huge unmet medical need here.”

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Summit Therapeutics PLC Timeline

Newswire
October 04 2017

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