If you’ve even the faintest interest in the biotech space, we suspect you’ve heard about Summit Therapeutics PLC’s (LON:SUMM) recent licensing agreement with Sarepta Therapeutics (NASDAQ:SRPT).
For those of you who aren’t aware, the pair inked a deal – which could be worth more than US$522mln – that will see them collaborate on Summit’s potentially breakthrough treatment for Duchenne Muscular Dystrophy (DMD).
The science behind the treatment is, as you’d expect, quite complex.
Essentially, what Summit’s discovery aims to do is to make up for a lack of dystrophin (which produces the protein essential for maintaining healthy muscle function) in DMD patients, by increasing the levels of another, similar protein called utrophin.
The bulletin boards have been alight with questions about what the deal means and what the future of the discovery could be.
Sheena has kindly agreed to share her expertise.
Q: Can you put the licensing agreement into context? Is it a good deal on an international scale?
A: Yes, on an international scale it is a very good deal. It covers Europe, Turkey and the Commonwealth of Independent States. Sarepta also has an option to license Latin America. Summit retains commercialisation rights to the rest of the world, including the US.
Q: When are the next milestones?
A: The first milestone following the US$40m upfront is US$22m upon the first dosing of the last patient in Summit’s ongoing Phase II clinical trial (referred to as PhaseOut DMD) of ezutromid. The US$22m milestone is payable on or after 1 April 2017. In relation to ezutromid, Summit is eligible to receive up to a further US$20m in specified development milestones, up to US$150m in specified regulatory milestones and up to US$330m in sales milestones. Details of what triggers the milestone and its quantum are undisclosed.Summit is also eligible to escalating royalties ranging from low to high teens percentage of net sales in the licensed territories as well as additional milestones on its next-generation utrophin modulators. If Sarepta elects to exercise its option for Latin American rights, Summit would be entitled to additional fees, milestones and royalties.
Q: Do you think the Summit drug has blockbuster potential?
A: Yes it does have blockbuster potential. Summit’s DMD programme involves developing small molecule utrophin modulators for the treatment of the genetic muscle wasting disease. Ezutromid is the group’s lead utrophin modulator. It has orphan drug designation in Europe and the US which offers accelerated development timelines and market exclusivity. Due to the regulatory support and more favourable reimbursement practices in the orphan drug market, prices are generally set at higher levels than comparable non-designated orphan drugs, offering blockbuster potential in rare diseases. Summit’s utrophin modulation programmes are a potential disease modifying approach that could potentially be used by 100% of DMD patients and in combination with other agents.
Q: Why would Sarepta, which already has a DMD drug, agree to pay so much for another one?
A: EXONDYS 51, Sarepta’s DMD drug that recently received accelerated approval from the FDA, has been approved for the treatment of DMD patients who have a confirmed mutation in the DMD gene that is amenable to exon 51 skipping. This represents up to 13% of the DMD market. Trials of exon 45 and 53 are ongoing, which represents up to an additional 16% (8% for each) of the DMD market. Summit’s utrophin modulation programmes are a potential disease modifying approach that could potentially be used by 100% of DMD patients and in combination with other agents. By entering into a licence and collaboration agreement with Summit Therapeutics, Sarepta has created a presence in the entire DMD market in Europe and the additional regions of the deal.
Q: At some point as Ezutromid completes clinical trials, would it not make more sense for Sarepta to acquire Summit?
A: It is a theoretical possibility, particularly since the deal does not include the US. The structure of the deal enables Sarepta to benefit from the significant potential upside of Summit’s utrophin modulation programme without the substantial initial outflow of an acquisition.
Q: Might there be a reset to the pace of clinical trials?
A: Currently Summit’s development plans are still on track with the first muscle biopsy data from the ongoing PhaseOut DMD trial in Q2/Q3 2017.
Q: Is Summit just a one-trick pony?
A: Summit is certainly not just a one-trick pony as it currently has two very different programmes. One being utrophin modulation for DMD and the other a small novel antibiotic (ridinilazole) that is being developed to treat the infections caused by the hospital ‘superbug’ C. difficile. Summit announced positive data from its Phase II proof of concept trial of ridinilazole in November 2015.
Q: Will this deal have any effect on the C-Diff programme?
A: Summit has stated that it continues to evaluate all options for progressing ridinilazole (C-Diff) into Phase III trials with its preferred path forward to seek a partner. The deal with Sarepta provides Summit with an upfront milestone of US$40m, strengthening Summit’s balance sheet and enabling it to continue partnership discussions from a strong position.