On February 20, 2024 Summit Therapeutics Inc. (NASDAQ: SMMT) ("Summit," "we," or the "Company") reported its financial results and provides an update on its operational progress for the fourth quarter and year-ended December 31, 2023 (Press release, Summit Therapeutics, FEB 20, 2024, View Source [SID1234640313]).
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Operational & Corporate Updates
Our operational progress continues with ivonescimab (SMT112), an investigational, potentially first-in-class bispecific antibody combining the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects associated with blocking VEGF into a single molecule:
We are actively engaged in development activities for ivonescimab. In just over one year since we closed our in-licensing transaction for ivonescimab, we have:
Held multiple meetings with the US Food & Drug Administration (FDA) regarding our planned Phase III clinical program and incorporated this feedback accordingly.
Begun our clinical development in non-small cell lung cancer (NSCLC) and are actively enrolling two Phase III trials in the following proposed indications:
HARMONi Phase III Trial: Ivonescimab combined with chemotherapy in patients with epidermal growth factor receptor (EGFR)-mutated, locally advanced or metastatic non-squamous NSCLC who have progressed after treatment with a third-generation EGFR tyrosine kinase inhibitor (TKI), with enrollment completion expected in the second half of 2024, and
HARMONi-3 Phase III Trial: Ivonescimab combined with chemotherapy in first-line metastatic squamous NSCLC patients, with the first patient having been treated in the fourth quarter of 2023.
In November 2023, a poster presentation was featured at the 38th Annual Meeting of the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) highlighting the novel mechanism of action and enhanced binding characteristics of ivonescimab. The tetravalent structure (four binding sites) of ivonescimab enables higher avidity (accumulated strength of multiple binding interactions) in the tumor microenvironment with over 18-fold increased binding affinity to PD-1 in the presence of VEGF in vitro, and over 4-times increased binding affinity to VEGF in the presence of PD-1 in vitro.1
In addition to promising Phase II data presented at the 2023 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting, Akeso announced updates to the Phase II data in January 2024. Notably, in patients with first line advanced or metastatic NSCLC without actionable genomic alterations (Cohort 1, n=63), a 24-month overall survival (OS) rate of 64.8% was observed. Additionally, in patients with advanced or metastatic NSCLC whose tumors are positive for EGFR mutations and have progressed following an EGFR TKI (Cohort 2, n=19), median OS of 22.5 months was achieved. Treatment-related adverse events leading to discontinuation of ivonescimab was 11% and 0% in the two populations, respectively; there were no treatment related adverse events leading to a patient’s death in either setting.2 AK112-201 is a study of Chinese subjects conducted and analyzed by our partners, Akeso, of which the updated data supports Summit’s HARMONi and HARMONi-3 Phase III clinical trials.
Recapping our Collaboration and License Agreement with Akeso Inc. (Akeso) for ivonescimab (SMT112):
On December 5, 2022, Summit and Akeso entered into a Collaboration and License Agreement for ivonescimab, which closed on January 17, 2023.
Summit received the rights to develop and commercialize ivonescimab in the United States, Canada, Europe, and Japan. Akeso retains the development and commercialization rights for the rest of the world, including China.
In exchange for these rights, Summit made an upfront payment of $500 million in 2023.
Akeso will be eligible to receive regulatory and commercial milestones of up to $4.5 billion. In addition, Akeso will receive low double-digit royalties on net sales in the Summit territories.
Over 1,600 patients have been treated with ivonescimab in clinical studies globally.
Akeso has a rich and diversified antibody drug pipeline with over 30 internally discovered drug candidates in various stages of development, including at least six bispecific antibodies. Akeso has taken part in over 120 clinical trials for 19 drug candidates. Akeso has two drugs approved for oncology indications in China: a PD-1 inhibitor and a novel PD-1 / CTLA-4 bispecific antibody. Akeso has over 2,800 employees.
Financial Highlights
Cash and Cash Equivalents, Restricted Cash, & Short-term Investments
Aggregate cash and cash equivalents, restricted cash, and short-term investments were $186.2 million and $648.6 million at December 31, 2023 and 2022, respectively. Accounts receivable and research and development tax credits were $1.8 million and $6.1 million at December 31, 2023 and 2022, respectively.
Our short-term investments consist of U.S. treasury securities.
Our current notes payable balance as of December 31, 2023 was $100.0 million, and matures April 1, 2025. On February 17, 2024, this $100.0 million note from Robert W. Duggan, Chairman & CEO, was amended, extending the maturity date from September 6, 2024 to April 1, 2025, and making interest payments due at maturity. For all applicable periods commencing February 17, 2024, interest shall accrue on the outstanding principal balance at the greater of 12% or the U.S. prime interest rate, as reported in the Wall Street Journal, plus 350 basis points, adjusted monthly, compounded quarterly.
Operating cash outflow for 2023 and 2022 was $76.8 million and $41.6 million, respectively.
Updated Cash Guidance
With the extension of the $100.0 million note, we updated our cash guidance such that we now have sufficient cash to operate into the first quarter of 2025. Our prior cash guidance was to have sufficient funds going into September 2024.
GAAP and Non-GAAP Research and Development (R&D) Expenses
R&D expenses according to generally accepted accounting principles in the U.S. ("GAAP") were $24.8 million for the fourth quarter of 2023, as compared to $5.4 million for the same period of the year prior. The increase is due to increases in clinical study and development costs related to ivonescimab and increases in people cost, including stock-based compensation, as we continue to build out R&D team.
Non-GAAP R&D expenses were $22.4 million for the fourth quarter of 2023, as compared to $4.4 million for the same period of the year period.
GAAP and Non-GAAP General and Administrative (G&A) Expenses
GAAP G&A expenses were $11.6 million for the fourth quarter of 2023, as compared to $7.6 million for the same period of the year prior. The increase is due to increase in stock-based compensation as we continue to build our team.
Non-GAAP G&A expenses were $5.3 million for the fourth quarter of 2023, as compared to $5.9 million for the same period of the year prior.
GAAP and Non-GAAP Net Loss
GAAP net loss in the fourth quarter of 2023 and 2022 was $36.6 million or $0.05 per basic and diluted share, and $19.3 million or $0.07 per basic and diluted share, respectively. Non-GAAP net loss in the fourth quarter of 2023 and 2022 was $27.9 million or $0.04 per basic and diluted share, and $8.1 million or $0.03 per basic and diluted share, respectively.
GAAP net loss in 2023 and 2022 was $614.9 million or $0.99 per basic and diluted share, and $78.8 million or $0.41 per basic and diluted share, respectively. The increase from prior year was primarily related to IPR&D expenses associated with the in-licensing of ivonescimab from Akeso and investments in the development of ivonescimab. Non-GAAP net loss in 2023 and 2022 was $79.9 million or $0.13 per basic and diluted share, and $58.4 million or $0.30 per basic and diluted share, respectively.
Use of Non-GAAP Financial Results
This release includes measures that are not in accordance with U.S. generally accepted accounting principles ("Non-GAAP measures"). These Non-GAAP measures should be viewed in addition to, and not as a substitute for, Summit’s reported GAAP results, and may be different from Non-GAAP measures used by other companies. In addition, these Non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Summit management uses these Non-GAAP measures for internal budgeting and forecasting purposes and to evaluate Summit’s financial performance. Summit management believes the presentation of these Non-GAAP measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. For further information regarding these Non-GAAP measures, please refer to the tables presenting reconciliations of our Non-GAAP results to our U.S. GAAP results and the "Notes on our Non-GAAP Financial Information" at the end of this press release.
Fourth Quarter and Year-end 2023 Earnings Call
Summit will host an earnings call this morning, Tuesday, February 20, 2024, at 9:00am ET. The conference call will be accessible by dialing (888) 210-3702 (toll-free domestic) or (646) 960-0191 (international) using conference code 5785899. A live webcast and instructions for joining the call are accessible through Summit’s website www.smmttx.com. An archived edition of the webcast will be available on our website after the call.
About Ivonescimab
Ivonescimab, known as SMT112 in Summit’s license territories, the United States, Canada, Europe, and Japan, and as AK112 in China and Australia, is a novel, potential first-in-class investigational bispecific antibody combining the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects associated with blocking VEGF into a single molecule. Ivonescimab displays unique cooperative binding to each of its intended targets with higher affinity when in the presence of both PD-1 and VEGF.
This could differentiate ivonescimab as there is potentially higher expression (presence) of both PD-1 and VEGF in tumor tissue and the tumor microenvironment (TME) as compared to normal tissue in the body. Ivonescimab’s tetravalent structure (four binding sites) enables higher avidity (accumulated strength of multiple binding interactions) in the tumor microenvironment with over 18-fold increased binding affinity to PD-1 in the presence of VEGF in vitro, and over 4-times increased binding affinity to VEGF in the presence of PD-1 in vitro.3 This tetravalent structure, the intentional novel design of the molecule, and bringing these two targets into a single bispecific antibody with cooperative binding qualities have the potential to direct ivonescimab to the tumor tissue versus healthy tissue. The intent of this design is to improve upon previously established efficacy thresholds, in addition to side effects and safety profiles associated with these targets.
Ivonescimab was discovered by Akeso Inc. (HKEX Code: 9926.HK) and is currently engaged in multiple Phase III clinical trials. Summit has begun its clinical development of ivonescimab in NSCLC, commencing enrollment in 2023 in its two Phase III clinical trials. Over 1,600 patients have been treated with ivonescimab in clinical studies globally.
Ivonescimab is an investigational therapy that is not approved by any regulatory authority.
About Lung Cancer
Lung cancer is believed to impact approximately 600,000 people across the United States, United Kingdom, Spain, France, Italy, Germany, and Japan.4 NSCLC is the most prevalent type of lung cancer and represents approximately 80% to 85% of all incidences.5 Among patients with non-squamous NSCLC, approximately 15% have EGFR-sensitizing mutations in the United States and Europe.6 Patients with squamous histology represent approximately 25% to 30% of NSCLC patients.