A US healthcare entrepreneur is set to take a large stake in Summit Therapeutics PLC (LON:SUMM) after agreeing to pump US$25mln into the antibiotics specialist.
Robert Duggan was the chief executive and chairman of Pharmacyclics before it was sold to pharma giant AbbVie Inc (NYSE:ABBV) for US$21bn in 2015.
Through Pharmacyclics, the billionaire oversaw the development of ibrutinib (Imbruvica), a cancer drug which notched up sales of more than US$2.5bn last year.
READ: Summit well-funded as it gears up for ridinilazole phase III trial
He has agreed to pay US$1.60 for 15.63mln Summit American depositary shares – a 32% premium to the quoted Nasdaq price on Friday. The deal is equivalent to 78.13mln ordinary shares at roughly 25p each.
The purchase will take Duggan’s stake, which sat at just 0.2% before, to 48.8%.
Typically, any shareholder who owns more than 30% of a company’s shares is required to make a formal offer to the other investors.
Duggan doesn’t want to do that this time though, and his investment is conditional upon shareholders voting to approve a waiver allowing him to not make such an offer.
Assuming investors vote with the board and the investment goes ahead as planned, Summit will use the money to begin patient enrolment into the phase III clinical trial of its ridinilazole C Difficile treatment.
The fresh capital will also go towards completing investigational new drug (IND) application-enabling studies for SMT-571 – the company’s gonorrhoea candidate.
Duggan’s investment ‘speaks volumes’
On top of all that, it will also be used to accelerate the development of treatments for hospital-acquired superbugs, known as ESKAPE pathogens.
Summit estimates that the investment will extend its cash runway through to the end of January 2020.
“Mr Duggan is a seasoned healthcare entrepreneur and investor whose proposed investment into our company speaks volumes about the potential that our new mechanism antibiotics have in addressing serious infectious diseases,” said chief executive Glyn Edwards.
“We are thrilled with his commitment to Summit and look forward to advancing our programmes targeting infections caused by C. difficile, N. gonorrhoea and ESKAPE pathogens and showing significant advantages over current standards of care.”
In a separate statement, Summit confirmed chief financial officer Erik Ostrowski is to step down from his role at the end of the month to pursue another opportunity.