UPDATE: Summit Corp reveals new sharper strategic focus

Biotechnology group Summit’s (LON:SUMM) new strategic focus on commercial development rather than early-stage research will increase the chance of success at its flagship drug programmes, according to Singer Capital.

The firm is to focus its attention on the development of two drugs – one for Duchenne Muscular Dystrophy, the other for C. difficile infections.

It will end discovery-stage research, which will affect around half the company’s workforce.

House broker Singer said the Summit had a very busy first half with the appointment of a new chief executive and considerable scientific and commercial progress as SMT C1100 (DMD) entered Phase-I trials and SMT 19969 (C. difficile) moved towards the start of Phase-I trials by the end of 2012.

Chief executive Glyn Edwards said: “Summit has two promising clinical stage programmes targeting areas of high unmet medical need and this change in strategy is intended to provide the company with greater focus and resources to accelerate their development.

“Our aim is to provide best value for our shareholders by developing high-value franchises in the DMD and C. difficile therapy areas and seeking to maximise the therapeutic and commercial potential of these two programmes.”

Summit said it “remains enthusiastic” about the potential of second generation immunosugars, or Seglins for short, and in particular the OGA inhibitor programme.

OGA, or O-linked N-acetylglucosaminidase, segues very neatly into the latest research on Alzheimer’s. 

Two new studies seem to show it spreads like an infection from brain cell to brain cell. 

But instead of viruses or bacteria, what is being propagated is a distorted protein known as tau.

“The OGA programme will continue to progress as planned through to an important technical milestone after which the company will evaluate its options for taking this forward,” the company said this morning. 

“Summit will however be unable to sustain the general development of Seglin technology or other programmes and will seek alternative ways for realising value from these assets.”

The most advanced of Summit’s portfolio is SMT C1100 for DMD, a fatal and thankfully rare genetic muscle wasting disorder that affects boys.

Today Summit said it will “seek to expand partnerships with leading academics, clinicians and community advocacy foundations” to support the development of SMT C1100. 

This potentially first-in-class utrophin upregulator is currently in a Phase I clinical trial.

Results are expected by the end of the year.  Its highly potent anti-biotic SMT 19969, meanwhile, is expected to enter clinical trials by the end of the year.

As would be expected of a company at this stage in its development, Summit posted a loss for the half year to July 31. The shortfall was £1.7 million.

It had cash of £4.8 million at the period-end following a £5 million fundraising.

This money provides a ‘cash runway’ for the company through to third quarter of its 2013 and possibly into 2014 following the restructuring, said Singer.

The broker added it maintained its positive view on the stock and awaits further progress.