Summit Therapeutics plc (AIM:SUMM) (NASDAQ:SMMT), the drug
discovery and development company advancing therapies for Duchenne
muscular dystrophy (‘DMD’) and C. difficile infection (‘CDI’),
today reports its financial results for the second quarter and half
year ended 31 July 2017.
Mr Glyn Edwards, Chief Executive Officer
of Summit, commented: “It has been a strong first half of
the year with progress being made across all areas of the business.
Ezutromid, our lead utrophin modulator for DMD, achieved an
important development milestone following completion of enrolment
into our clinical trial called PhaseOut DMD, triggering a $22
million payment from our licence and collaboration partner Sarepta
Therapeutics. PhaseOut DMD aims to show proof of concept for
ezutromid, and we look forward to reporting 24-week data from the
trial in the first quarter of 2018.
“Ridinilazole, our highly selective and potent
antibiotic for the treatment of C. difficile infection, also
continues to progress as we prepare the asset to start Phase 3
clinical trials in the first half of 2018. We believe
ridinilazole can become a new, urgently needed frontline therapy
for this serious infectious disease.
“We look forward to an exciting and important
period ahead as we continue advancing these two assets that have
the potential to improve the quality of life of patients and
families living with DMD and CDI.”
Utrophin Modulation Programme for
DMD
Ezutromid - Highlights
- Completed enrolment into PhaseOut DMD in May 2017, which
triggered a $22.0 million development milestone payment as part of
Summit’s licence and collaboration agreement with Sarepta
Therapeutics, Inc (‘Sarepta’). PhaseOut DMD is a 48-week, open
label Phase 2 clinical trial that has enrolled 40 patients at sites
in the UK and US. The trial aims to establish proof of concept of
ezutromid and is evaluating a range of muscle structure, muscle
health and functional endpoints.
- Expecting to report full 24-week data analysis from PhaseOut
DMD in Q1 2018. This data set will include 24-week biopsy data from
all patients who provide a 24-week biopsy sample (approximately 20
patients). In addition, Summit expects to report 24-week MRI and
functional data from all 40 patients in the trial. Top-line data
from the complete 48-week clinical trial are expected in Q3
2018.
CDI Programme
Ridinilazole - Highlights
- Presented preclinical data at ASM Microbe 2017, including data
showing that ridinilazole was very active against all 200 clinical
isolates of C. difficile and was more potent than the marketed
broad-spectrum antibiotics vancomycin and metronidazole. In
addition, it was reported that a low-level, stable ridinilazole
mutant resistant strain was developed to help further elucidate
ridinilazole’s mechanism of action.
- Exploring various funding options for the Phase 3 development
programme as the Company seeks to maximize the value of
ridinilazole. These possible options include entering into a
collaboration with a third party and/or securing meaningful
non-dilutive funding from government entities and philanthropic,
non-government and not for profit organisations.
- Planning to report data from an exploratory Phase 2 clinical
trial evaluating ridinilazole against the antibiotic fidaxomicin
later this year. A key objective of the trial is to determine the
relative impact on the patients’ microbiomes following treatment
with ridinilazole compared to fidaxomicin.
Operational Highlights
- Strengthened R&D team with Chief Operating Officer Dr David
Roblin expanding his role to include serving as Chief Medical
Officer and the appointments of Dr Anne Heatherington as Head of
Clinical Development & Quantitative Sciences and Dr Dave Powell
as Head of Research. These appointments, announced in May 2017,
will help ensure the Company has the leadership, depth of knowledge
and expertise needed to support its clinical and preclinical
pipeline.
Financial Highlights
- Cash and cash equivalents at 31 July 2017 of £28.3 million
compared to £28.1 million at 31 January 2017.
- Cash balance at 31 July 2017 reflects receipt of $22.0 million
(£17.2 million) development milestone payment from Sarepta during
the three months ended 31 July 2017.
- Profit for the six months ended 31 July 2017 of £6.2 million
compared to a loss of £11.9 million for the six months ended 31
July 2016 (adjusted).
Conference Call and Webcast
Information Summit will host a conference call and webcast
to review the financial results for the second quarter and half
year ended 31 July 2017 today at 1:00pm BST / 8:00am EDT. To
participate in the conference call, please dial +44(0)20 3427 1916
(UK and international participants) or +1 212 444 0412 (US local
number) and use the conference confirmation code 9691365. Investors
may also access a live audio webcast of the call via the investors
section of the Company’s website www.summitplc.com. A replay of the
webcast will be available shortly after the completion of the
call.
About Summit TherapeuticsSummit
is a biopharmaceutical company focused on the discovery,
development and commercialisation of novel medicines for
indications for which there are no existing or only inadequate
therapies. Summit is conducting clinical programmes focused on the
genetic disease Duchenne muscular dystrophy and the infectious
disease C. difficile infection. Further information is available at
www.summitplc.com and Summit can be followed on Twitter
(@summitplc).
For more information, please
contact:
Summit
Therapeutics Glyn Edwards / Richard Pye (UK office)Erik
Ostrowski / Michelle Avery (US office) |
Tel: +44 (0)1235 443
951 +1 617 225 4455 |
|
|
Cairn Financial
Advisers LLP (Nominated Adviser)Liam Murray / Tony
Rawlinson |
Tel: +44 (0)20 7213
0880 |
|
|
N+1
Singer(Broker)Aubrey Powell / Lauren Kettle |
Tel: +44 (0)20 7496
3000 |
MacDougall
Biomedical Communications(US media contact)Karen
Sharma |
Tel: +1 781 235 3060
ksharma@macbiocom.com |
|
|
Consilium
Strategic Communications (Financial public relations, UK)
Mary-Jane Elliott / Jessica Hodgson / Philippa Gardner / Rosie
Philips |
Tel: +44 (0)20 3709
5700summit@consilium-comms.com |
Forward Looking StatementsAny
statements in this press release about our future expectations,
plans and prospects, including statements about the development and
potential commercialisation of our product candidates, the
therapeutic potential of our product candidates, the timing of
initiation, completion and availability of data from clinical
trials, the potential benefits and future operation of the
collaboration with Sarepta including any potential future payments
thereunder, any other potential third-party collaborations and
expectations regarding the sufficiency of our cash balance to fund
operating expenses and capital expenditures, and other statements
containing the words "anticipate," "believe," "continue," "could,"
"estimate," "expect," "intend," "may," "plan," "potential,"
"predict," "project," "should," "target," "would," and similar
expressions, constitute forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those indicated by such
forward-looking statements as a result of various important
factors, including: the uncertainties inherent in the initiation of
future clinical trials, availability and timing of data from
ongoing and future clinical trials and the results of such trials,
whether preliminary results from a clinical trial will be
predictive of the final results of that trial or whether results of
early clinical trials will be indicative of the results of later
clinical trials, expectations for regulatory approvals,
availability of funding sufficient for our foreseeable and
unforeseeable operating expenses and capital expenditure
requirements and other factors discussed in the "Risk Factors"
section of filings that we make with the Securities and Exchange
Commission, including our Annual Report on Form 20-F for the fiscal
year ended 31 January 2017. In addition, any forward-looking
statements included in this press release represent our views only
as of the date of this release and should not be relied upon as
representing our views as of any subsequent date. We specifically
disclaim any obligation to update any forward-looking statements
included in this press release.
FINANCIAL REVIEW
Revenue
Revenue was £18.9 million for the three months
ended 31 July 2017 compared to £nil for the three months ended 31
July 2016. Revenue was £20.7 million for the six months ended 31
July 2017 compared to £nil for the six months ended 31 July 2016.
These increases were principally due to the receipt, and
recognition in full, of a £17.2 million ($22.0 million) development
milestone paid by Sarepta during the three months ended 31 July
2017, pursuant to Summit’s exclusive licence and collaboration
agreement with Sarepta. In addition, £1.7 million relating to the
upfront payment of £32.8 million ($40.0 million) made by Sarepta in
October 2016 was recognised in the three months ended 31 July 2017.
To date an aggregate of £5.8 million of the upfront payment has
been recognised while the remaining £27.0 million is classified as
deferred revenue and will continue to be recognised as revenue over
the development period.
Other Operating Income
There were no sources of other operating income
during the three and six months ended 31 July 2017. Operating
income recognised in comparative periods relates to the Innovate UK
funding agreement, from which the Company withdrew in order to
enable it to take advantage of more tax efficient opportunities
related to research and development expenditure, and the Wellcome
Trust funding agreement, for which all monies and income have been
received and accounted for in connection with the completion of our
CoDIFy Phase 2 clinical trial of ridinilazole.
Operating Expenses
Research and Development ExpensesResearch and development
expenses increased by £1.2 million to £6.6 million for the three
months ended 31 July 2017 from £5.4 million for the three months
ended 31 July 2016. Research and development expenses increased by
£1.4 million to £11.6 million for the six months ended 31 July 2017
from £10.2 million for the six months ended 31 July 2016. These
increases reflected the increased investment in the DMD programme
and an increase in research and development related staffing costs,
offset by a decrease in CDI clinical programme related activities.
General and Administration ExpensesGeneral and
administration expenses increased by £0.6 million to £2.5 million
for the three months ended 31 July 2017 from £1.9 million for the
three months ended 31 July 2016. General and administration
expenses increased by £1.6 million to £4.9 million for the six
months ended 31 July 2017 from £3.3 million for the six months
ended 31 July 2016. These increases were primarily due to a net
negative movement in exchange rate variances and increased
staff-related costs, offset by a decrease in legal and professional
fees.
Finance CostsFollowing an International
Financial Reporting Standards Interpretations Committee agenda
decision in May 2016 on the application of International Accounting
Standards 20 'Accounting for Government Grants and Disclosure of
Government Assistance', the Company changed its accounting policy
regarding charitable funding arrangements from the Wellcome Trust
and US not for profit organisations for the year ended 31 January
2017. See Note 1 – ‘Change in accounting policy in respect of July
2016 comparatives’ below. This change in accounting policy has been
reflected retrospectively in the comparative financial statements
for the three and six months ended 31 July 2016. Finance costs
relate to the subsequent re-measurement of the financial liability
recognised in respect of income arrangements and the unwinding of
the discounts associated with the liabilities. Finance costs
remained consistent at £0.2 million for the three months ended 31
July 2017 and for the three months ended 31 July 2016 (adjusted).
Finance costs remained consistent at £0.4 million for the six
months ended 31 July 2017 and for the six months ended 31 July 2016
(adjusted).
Taxation
The income tax credit increased by £0.2 million
to £1.3 million for the three months ended 31 July 2017 from £1.1
million for the three months ended 31 July 2016. The income tax
credit increased by £0.5 million to £2.5 million for the six months
ended 31 July 2017 from £2.0 million for the six months ended 31
July 2016. These increases were as a result of increased
expenditure on research and development.
Profit / (Loss)
Total comprehensive income for the three months
ended 31 July 2017 was £10.9 million with a basic earnings per
share of 18 pence compared to a total comprehensive loss of £6.4
million for the three months ended 31 July 2016 (adjusted) and a
basic loss per share of 10 pence. Total comprehensive income for
the six months ended 31 July 2017 was £6.2 million with a basic
earnings per share of 10 pence compared to a total comprehensive
loss of £11.8 million for the six months ended 31 July 2016
(adjusted) and a basic loss per share of 19 pence.
Cash Flows
Operating ActivitiesFor the six months ended 31
July 2017, the Company generated £1.5 million in cash from
operating activities. This compares to net cash used in operating
activities of £9.5 million for the six months ended 31 July 2016
(adjusted). This net movement of £11.0 million was primarily driven
by the receipt of a £17.2 million ($22.0 million) development
milestone payment from Sarepta, offset by an increase of £3.0
million in research and development expenses and general and
administration expenses and a decrease of £3.1 million in research
and development tax credits received due to timing, as the Company
expects to receive this year’s research and development tax credit
payment in the next quarter.
Investing ActivitiesNet cash used in investing
activities for the six months ended 31 July 2017 and the six months
ended 31 July 2016 includes the net amount of bank interest
received on cash deposits less amounts paid to acquire property,
plant and equipment. Amounts paid to acquire property, plant and
equipment during the six months ended 31 July 2017 relate to the
Company’s relocation of its UK offices, for which the Company
signed a ten-year lease in February 2017.
Financing ActivitiesNet cash inflow from
financing activities for the six months ended 31 July 2017 relates
to proceeds of £0.03 million received following the exercise of
warrants and the exercise of share options. For the six months
ended 31 July 2016, the Company received net proceeds of £0.11
million following the exercise of warrants and share options.
Financial Position
As at 31 July 2017, cash and cash equivalents
were £28.3 million compared to £28.1 million as at 31 January
2017.
Glyn Edwards
Erik Ostrowski Chief Executive Officer
Chief Financial Officer
31 August 2017
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited) For the three months ended 31 July 2017 |
|
|
Threemonths ended 31 July 2017 |
Threemonths ended 31 July2017 |
Threemonths ended 31 July 2016Adjusted* |
|
Note |
$000s |
£000s |
£000s |
|
|
|
|
|
Revenue |
2 |
25,009 |
|
18,952 |
|
- |
|
|
|
|
|
|
Other operating
income |
|
- |
|
- |
|
13 |
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
Research and
development |
|
(8,720 |
) |
(6,608 |
) |
(5,399 |
) |
General and administration |
|
(3,284 |
) |
(2,488 |
) |
(1,910 |
) |
Total operating
expenses |
|
(12,004 |
) |
(9,096 |
) |
(7,309 |
) |
|
|
|
|
|
Operating
profit / (loss) |
|
13,005 |
|
9,856 |
|
(7,296 |
) |
|
|
|
|
|
Finance income |
|
1 |
|
1 |
|
2 |
|
Finance costs |
|
(289 |
) |
(219 |
) |
(210 |
) |
|
|
|
|
|
Profit / (loss)
before income tax |
|
12,717 |
|
9,638 |
|
(7,504 |
) |
|
|
|
|
|
Income
tax |
|
1,693 |
|
1,283 |
|
1,076 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit / (loss)
for the period |
|
14,410 |
|
10,921 |
|
(6,428 |
) |
|
|
|
|
|
Other
comprehensive income / (loss) |
|
|
|
|
Exchange
differences on translating foreign operations |
|
9 |
|
7 |
|
21 |
|
Total comprehensive income / (loss) for the
period |
|
14,419 |
|
10,928 |
|
(6,407 |
) |
Basic earnings / (loss) per Ordinary Share from
operations |
3 |
23 cents |
18 pence |
(10)pence |
Diluted earnings / (loss) per Ordinary Share from
operations |
3 |
22 cents |
17 pence |
- |
|
* See Note 1 – ‘Change in Accounting Policy in respect of July
2016 comparatives'
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited) For the six months ended 31 July 2017 |
|
|
Six months ended 31 July 2017 |
Six months ended 31 July 2017 |
Six months ended 31 July 2016Adjusted* |
|
Note |
$000s |
£000s |
£000s |
|
|
|
|
|
Revenue |
2 |
27,289 |
|
20,680 |
|
- |
|
|
|
|
|
|
Other operating
income |
|
- |
|
- |
|
72 |
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
Research and
development |
|
(15,364 |
) |
(11,643 |
) |
(10,204 |
) |
General and administration |
|
(6,496 |
) |
(4,922 |
) |
(3,342 |
) |
Total operating
expenses |
|
(21,860 |
) |
(16,565 |
) |
(13,546 |
) |
|
|
|
|
|
Operating
profit / (loss) |
|
5,429 |
|
4,115 |
|
(13,474 |
) |
|
|
|
|
|
Finance income |
|
3 |
|
2 |
|
5 |
|
Finance costs |
|
(585 |
) |
(443 |
) |
(404 |
) |
|
|
|
|
|
Profit / (loss)
before income tax |
|
4,847 |
|
3,674 |
|
(13,873 |
) |
|
|
|
|
|
Income
tax |
|
3,280 |
|
2,486 |
|
2,011 |
|
|
|
|
|
|
Profit/(loss)
for the period |
|
8,127 |
|
6,160 |
|
(11,862 |
) |
|
|
|
|
|
Other
comprehensive income / (loss) |
|
|
|
|
Exchange
differences on translating foreign operations |
|
(11 |
) |
(8 |
) |
16 |
|
Total comprehensive income / (loss) for the
period |
|
8,116 |
|
6,152 |
|
(11,846 |
) |
Basic earnings / (loss) per Ordinary Share from
operations |
3 |
13 cents |
10 pence |
(19)pence |
Diluted earnings / (loss) per Ordinary Share from
operations |
3 |
13 cents |
10 pence |
- |
|
* See Note 1 – ‘Change in Accounting Policy in respect of July
2016 comparatives’
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(unaudited)As at 31 July 2017 |
|
|
31 July2017 |
31
July 2017 |
31 January2017 |
|
|
$000s |
£000s |
£000s |
ASSETS |
|
|
|
|
Non-current
assets |
|
|
|
|
Goodwill |
|
876 |
|
664 |
|
664 |
|
Intangible assets |
|
4,526 |
|
3,430 |
|
3,470 |
|
Property,
plant and equipment |
|
739 |
|
560 |
|
116 |
|
|
|
6,141 |
|
4,654 |
|
4,250 |
|
Current
assets |
|
|
|
|
Prepayments and other
receivables |
|
1,818 |
|
1,378 |
|
1,027 |
|
Current tax
receivable |
|
9,019 |
|
6,835 |
|
4,248 |
|
Cash and
cash equivalents |
|
37,333 |
|
28,291 |
|
28,062 |
|
|
|
48,170 |
|
36,504 |
|
33,337 |
|
|
|
|
|
|
Total assets |
|
54,311 |
|
41,158 |
|
37,587 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Non-current
liabilities |
|
|
|
|
Deferred revenue |
|
(26,602 |
) |
(20,159 |
) |
(23,615 |
) |
Financial liabilities
on funding arrangements |
|
(8,395 |
) |
(6,362 |
) |
(5,919 |
) |
Provisions for other
liabilities and charges |
|
(198 |
) |
(150 |
) |
(85 |
) |
Deferred tax
liability |
|
(745 |
) |
(565 |
) |
(565 |
) |
|
|
(35,940 |
) |
(27,236 |
) |
(30,184 |
) |
Current liabilities |
|
|
|
|
Trade and other
payables |
|
(4,632 |
) |
(3,510 |
) |
(3,984 |
) |
Deferred revenue |
|
(9,121 |
) |
(6,912 |
) |
(6,912 |
) |
|
|
(13,753 |
) |
(10,422 |
) |
(10,896 |
) |
|
|
|
|
|
Total liabilities |
|
(49,693 |
) |
(37,658 |
) |
(41,080 |
) |
|
|
|
|
|
Net assets/(liabilities) |
|
4,618 |
|
3,500 |
|
(3,493 |
) |
|
|
|
|
|
EQUITY |
|
|
|
|
Share capital |
|
817 |
|
619 |
|
618 |
|
Share premium
account |
|
61,299 |
|
46,453 |
|
46,420 |
|
Share-based payment
reserve |
|
7,842 |
|
5,943 |
|
5,136 |
|
Merger reserve |
|
(2,564 |
) |
(1,943 |
) |
(1,943 |
) |
Special reserve |
|
26,383 |
|
19,993 |
|
19,993 |
|
Currency translation
reserve |
|
55 |
|
42 |
|
50 |
|
Accumulated losses reserve |
|
(89,214 |
) |
(67,607 |
) |
(73,767 |
) |
|
|
|
|
|
|
|
|
Total equity/(deficit) |
|
4,618 |
|
3,500 |
|
(3,493 |
) |
CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
For the six months ended 31 July 2017 |
|
|
Six months ended 31
July2017 |
Six months ended31 July
2017 |
Six monthsended 31 July2016Adjusted* |
|
|
$000s |
£000s |
£000s |
Cash flows from
operating activities |
|
|
|
|
Profit / (loss) before
income tax |
|
4,847 |
|
3,674 |
|
(13,873 |
) |
|
|
4,847 |
|
3,674 |
|
(13,873 |
) |
Adjusted for: |
|
|
|
|
Finance income |
|
(3 |
) |
(2 |
) |
(5 |
) |
Finance costs |
|
585 |
|
443 |
|
404 |
|
Foreign exchange loss /
(gain) |
|
1,312 |
|
994 |
|
(60 |
) |
Depreciation |
|
77 |
|
58 |
|
23 |
|
Amortisation of
intangible fixed assets |
|
5 |
|
4 |
|
5 |
|
Loss on disposal of
assets |
|
55 |
|
42 |
|
- |
|
Research and
development expenditure credit |
|
- |
|
- |
|
(3 |
) |
Share-based payment |
|
1,065 |
|
807 |
|
764 |
|
Adjusted profit /
(loss) from operations before changes in working capital |
|
7,943 |
|
6,020 |
|
(12,745 |
) |
|
|
|
|
|
(Increase) / decrease
in prepayments and other receivables |
|
(463 |
) |
(351 |
) |
135 |
|
(Decrease) / increase
in trade and other payables |
|
(630 |
) |
(478 |
) |
122 |
|
(Decrease) / increase
in provisions for other liabilities and charges |
|
(112 |
) |
(85 |
) |
12 |
|
Decrease in deferred
revenue |
|
(4,561 |
) |
(3,456 |
) |
- |
|
Cash generated from / (used in) operations |
|
2,177 |
|
1,650 |
|
(12,476 |
) |
Taxation
(paid) / received |
|
(135 |
) |
(102 |
) |
3,005 |
|
Net cash generated from / (used in) operating
activities |
|
2,042 |
|
1,548 |
|
(9,471 |
) |
|
|
|
|
|
Investing
activities |
|
|
|
|
Purchase of property,
plant and equipment |
|
(471 |
) |
(357 |
) |
(28 |
) |
Interest
received |
|
3 |
|
2 |
|
5 |
|
Net cash used in investing activities |
|
(468 |
) |
(355 |
) |
(23 |
) |
|
|
|
|
|
Financing
activities |
|
|
|
|
Proceeds from exercise
of warrants |
|
13 |
|
10 |
|
107 |
|
Exercise of share
options |
|
32 |
|
24 |
|
3 |
|
Cash received from
funding arrangements accounted for as financial liabilities |
|
- |
|
- |
|
23 |
|
Net cash generated from financing activities |
|
45 |
|
34 |
|
133 |
|
|
|
|
|
|
Increase/
(decrease) in cash and cash equivalents |
|
1,619 |
|
1,227 |
|
(9,361 |
) |
|
|
|
|
|
Effect of
exchange rates in cash and cash equivalents |
|
(1,317 |
) |
(998 |
) |
53 |
|
|
|
|
|
|
Cash and cash
equivalents at beginning of the period |
|
37,031 |
|
28,062 |
|
16,304 |
|
|
|
|
|
|
Cash and cash equivalents at end of the
period |
|
37,333 |
|
28,291 |
|
6,996 |
|
* See Note 1 – ‘Change in Accounting Policy in respect of July
2016 comparatives’
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY (unaudited) Six months ended 31 July
2017 |
Group |
|
Sharecapital£000s |
Sharepremiumaccount£000s |
Share-basedpaymentreserve£000s |
Mergerreserve£000s |
Specialreserve£000s |
Currencytranslationreserve£000s |
Accumulatedlossesreserve£000s |
Total £000s |
At 1 February 2017 |
|
618 |
46,420 |
5,136 |
(1,943 |
) |
19,993 |
50 |
|
(73,767 |
) |
(3,493 |
) |
Profit for the
period |
|
- |
- |
- |
- |
|
- |
- |
|
6,160 |
|
6,160 |
|
Currency
translation adjustment |
|
- |
- |
- |
- |
|
- |
(8 |
) |
- |
|
(8 |
) |
Total comprehensive
income for the period |
|
- |
- |
- |
- |
|
- |
(8 |
) |
6,160 |
|
6,152 |
|
New share capital
issued from exercise of warrants |
|
1 |
9 |
- |
- |
|
- |
- |
|
- |
|
10 |
|
Share options
exercised |
|
- |
24 |
- |
- |
|
- |
- |
|
- |
|
24 |
|
Share-based payment |
|
- |
- |
807 |
- |
|
- |
- |
|
- |
|
807 |
|
At 31
July 2017 |
|
619 |
46,453 |
5,943 |
(1,943 |
) |
19,993 |
42 |
|
(67,607 |
) |
3,500 |
|
Year ended 31 January 2017 |
Group |
|
Sharecapital£000s |
Sharepremiumaccount£000s |
Share-basedpaymentreserve£000s |
Mergerreserve£000s |
Specialreserve£000s |
Currencytranslationreserve£000s |
Accumulatedlossesreserve£000s |
Total £000s |
At 1 February 2016 |
|
613 |
46,035 |
3,757 |
(1,943 |
) |
19,993 |
21 |
(52,396 |
) |
16,080 |
|
Loss for the year |
|
- |
- |
- |
- |
|
- |
- |
(21,371 |
) |
(21,371 |
) |
Currency
translation adjustment |
|
- |
- |
- |
- |
|
- |
29 |
- |
|
29 |
|
Total comprehensive
loss for the year |
|
- |
- |
- |
- |
|
- |
29 |
(21,371 |
) |
(21,342 |
) |
New share capital
issued |
|
2 |
105 |
- |
- |
|
- |
- |
- |
|
107 |
|
Share options
exercised |
|
3 |
280 |
- |
- |
|
- |
- |
- |
|
283 |
|
Share-based payment |
|
- |
- |
1,379 |
- |
|
- |
- |
- |
|
1,379 |
|
At 31
January 2017 |
|
618 |
46,420 |
5,136 |
(1,943 |
) |
19,993 |
50 |
(73,767 |
) |
(3,493 |
) |
Six months ended 31 July 2016
(adjusted*) |
Group |
|
Sharecapital£000s |
Sharepremiumaccount£000s |
Share-basedpaymentreserve£000s |
Mergerreserve£000s |
Specialreserve£000s |
Currencytranslationreserve£000s |
Accumulatedlossesreserve£000s |
Total £000s |
At 1 February 2016 |
|
613 |
46,035 |
3,757 |
(1,943 |
) |
19,993 |
21 |
(52,396 |
) |
16,080 |
|
Loss for the
period |
|
- |
- |
- |
- |
|
- |
- |
(11,862 |
) |
(11,862 |
) |
Currency
translation adjustment |
|
- |
- |
- |
- |
|
- |
16 |
- |
|
16 |
|
Total comprehensive
loss for the period |
|
- |
- |
- |
- |
|
- |
16 |
(11,862 |
) |
(11,846 |
) |
New share capital
issued |
|
2 |
105 |
- |
- |
|
- |
- |
- |
|
107 |
|
Share options
exercised |
|
- |
3 |
- |
- |
|
- |
- |
- |
|
3 |
|
Share-based payment |
|
- |
- |
764 |
- |
|
- |
- |
- |
|
764 |
|
At 31
July 2016 |
|
615 |
46,143 |
4,521 |
(1,943 |
) |
19,993 |
37 |
(64,258 |
) |
5,108 |
|
* See Note 1 – ‘Change in Accounting Policy in respect of July
2016 comparatives’
NOTES TO THE FINANCIAL STATEMENTSFor the three
and six months ended 31 July 2017
1. Basis of accounting
The unaudited condensed consolidated interim
financial statements of Summit Therapeutics plc and its
subsidiaries (the ‘Group’) for the three and six months ended 31
July 2017 have been prepared in accordance with International
Financial Reporting Standards (‘IFRS’) and International Financial
Reporting Standards Interpretations Committee (‘IFRIC’)
interpretations as issued by the International Accounting Standards
Board and as adopted by the European Union and with those parts of
the Companies Act 2006 applicable to companies reporting under IFRS
including those applicable to accounting periods ending 31 January
2017 and the accounting policies set out in Summit’s consolidated
financial statements. They do not include all the statements
required for full annual financial statements, and should be read
in conjunction with the consolidated financial statements of the
Group as at 31 January 2017 (the ‘2017 Accounts’). The 2017
Accounts, on which the Group’s auditors delivered an unqualified
audit report, have been delivered to the Registrar of Companies
following the 2017 Annual General Meeting.
The interim financial statements are prepared in
accordance with the historical cost convention. Whilst the
financial information included in this announcement has been
prepared in accordance with IFRS as issued by the International
Accounting Standards Board and adopted for use in the European
Union, this announcement does not itself contain sufficient
information to comply with IFRS.
The Group expects it will need to raise
additional funding in the future in order to support research and
development efforts, potential commercialisation related activities
if any of its product candidates receive marketing approval, as
well as to support activities associated with operating as a public
company in both the United States and the United Kingdom.
Management expects to finance its cash needs through a combination
of some, or all, of the following: equity offerings,
collaborations, strategic alliances, grants and clinical trial
support from government entities, philanthropic, non-government and
not for profit organisations and patient advocacy groups, debt
financings, and marketing, distribution or licensing
arrangements.
After review of the future operating costs of
the business in conjunction with the cash held at 31 July 2017,
management is confident about the Group’s ability to continue as a
going concern and accordingly the interim financial statements have
been prepared on a going concern basis.
The financial information for the three and six
months ended 31 July 2017 and 2016 are unaudited.
Solely for the convenience of the reader, unless
otherwise indicated, all pound sterling amounts stated in the
Consolidated Statement of Financial Position as at 31 July 2017, in
the Consolidated Statement of Comprehensive Income for the three
and six months ended 31 July 2017 and in the Consolidated Statement
of Cash Flows for the six months ended 31 July 2017 have been
translated into US dollars at the rate on 31 July 2017 of $1.3196
to £1.00. These translations should not be considered
representations that any such amounts have been, could have been or
could be converted into US dollars at that or any other exchange
rate as at that or any other date.
The Board of Directors of the Company approved
this statement on 31 August 2017.
Change in accounting policy in respect
to July 2016 comparatives
Following an IFRIC agenda decision in May 2016
on the application of International Accounting Standard 20
'Accounting for Government Grants and Disclosure of Government
Assistance', the Group changed its accounting policy regarding
charitable funding arrangements from the Wellcome Trust and US not
for profit organisations during the year ended 31 January 2017.
In exchange for the funding provided, these
arrangements require the Group to pay royalties on potential future
revenues generated from these projects and also give the
counterparties certain rights over the intellectual property if the
compound is not exploited. The IFRIC decision has clarified that
such arrangements result in a financial liability. The estimate of
the financial liability is initially recognised at fair value using
a discounted cash flow model with the difference between the fair
value of the liability and the cash received considered to
represent a charitable grant.
When determining the fair value on initial
recognition, the significant assumptions in the model include the
estimation of the timing and the probability of successful
development leading to commercialisation of the project related
results and related estimates of future cash flows. Estimated
future cash flows include expected sources of revenue (including
commercial sales and upfront payments, milestone payments and
royalties from potential licensing arrangements) and are calculated
using estimated geographical market share and associated
pricing.
The financial liability is subsequently measured
at amortised cost using a discounted cash flow model which
calculates the risk adjusted present values of estimated potential
future cash flows for the respective projects related to the
Wellcome Trust and US not for profit organisations. The financial
liability is re-measured when there is a specific significant event
that provides evidence of a significant change in the probability
of successful development such as the completion of a phase of
research or changes in use or market for a product. The model will
be updated for changes in the clinical probability of success and
other associated assumptions with the discount factor to remain
unchanged within the model.
Re-measurements of the financial liability are
recognised in the Consolidated Statement of Comprehensive Income as
finance costs. Grant income is recognised as other operating income
in accordance with International Accounting Standard 20 ‘Accounting
for Government Grants and Disclosure of Government Assistance’, at
the same time as the underlying expenditure is incurred, provided
that there is reasonable assurance that the Group will comply with
the conditions.
This change in accounting policy has been
reflected retrospectively in the comparative financial statements
for the three and six months ended 31 July 2016. The opening
position as at 1 February 2016 is in line with comparative amounts
disclosed in the financial statements for the year ended 31 January
2017.
The impact of this change in accounting policy
on the unaudited condensed consolidated interim financial
statements is a reduction in other income historically recognised,
a change in the level of accrued income accounted for as grant
income and the recognition of a financial liability and finance
costs associated with the unwinding of the discount.
Impact on Unaudited Condensed Consolidated Interim
Statement of Comprehensive Income |
OriginalThreemonthsended 31July 2016£000 |
|
AdjustedThreemonthsended 31July 2016£000 |
|
Impact£000 |
|
|
|
|
|
|
Other
operating income |
17 |
|
|
13 |
|
|
(4 |
) |
Finance costs |
- |
|
|
(210 |
) |
|
(210 |
) |
|
17 |
|
|
(197 |
) |
|
(214 |
) |
|
|
|
|
|
|
Impact on Unaudited Condensed Consolidated Interim
Statement of Comprehensive Income |
Original Six monthsended 31July 2016£000 |
|
AdjustedSix monthsended 31July 2016£000 |
|
Impact£000 |
|
|
|
|
|
|
Other
operating income |
76 |
|
|
72 |
|
|
(4 |
) |
Finance costs |
- |
|
|
(404 |
) |
|
(404 |
) |
|
76 |
|
|
(332 |
) |
|
(408 |
) |
|
|
|
|
|
|
Impact on Unaudited Condensed Consolidated Interim
Statement of Cash Flows |
Original Six monthsended 31July 2016£000 |
|
AdjustedSix monthsended 31July 2016£000 |
|
Impact£000 |
Loss
before income tax |
(13,465 |
) |
|
(13,873 |
) |
|
(408 |
) |
Adjusted for: |
|
|
|
|
|
Finance costs |
- |
|
|
404 |
|
|
404 |
|
Decrease in prepayments and other receivables |
154 |
|
|
135 |
|
|
(19 |
) |
Net cash used in operating activities |
(9,448 |
) |
|
(9,471 |
) |
|
(23 |
) |
Cash
received from funding arrangements accounted for as financial
liabilities |
- |
|
|
23 |
|
|
23 |
|
Net cash generated from financing activities |
110 |
|
|
133 |
|
|
23 |
|
2. Revenue
Analysis of revenue by category |
Threemonthsended 31July 2017£000 |
Threemonthsended 31July 2016£000 |
|
Sixmonthsended 31July 2017£000 |
|
Six monthsended 31July 2016£000 |
Licence and collaboration agreement |
18,952 |
- |
|
20,680 |
|
- |
|
18,952 |
- |
|
20,680 |
|
- |
On 4 October 2016 the Group entered into an
exclusive licence and collaboration agreement with Sarepta. Under
the terms of the agreement, Summit received an upfront payment of
$40.0 million (£32.8 million) from Sarepta. The terms of the
agreement have been assessed and the Group believes the development
services to be indistinguishable and thus the upfront payment has
been initially reported as deferred revenue in the Consolidated
Statement of Financial Position and is being recognised as revenue
over the development period. Revenue recognised relating to the
upfront payment was £1.7 million in the three months ended 31 July
2017 (three months ended 31 July 2016: £nil) and £3.4 million in
the six months ended 31 July 2017 (six months ended 31 July 2016:
£nil). In May 2017, the Group announced the first dosing of the
last patient in its ongoing Phase 2 clinical trial of ezutromid
which triggered a $22.0 million (£17.2 million) development
milestone payment due to Summit under the agreement. The Group
believes this development milestone has been achieved, hence the
payment has met the recognition criteria of International
Accounting Standard 18 ‘Revenue’, and has been recognised as
revenue in full during the three months ended 31 July 2017.
3. Earnings / (Loss) per share
calculation
The calculation of earnings/(loss) per share is
based on the following data:
|
|
Threemonthsended 31July 2017 000’s |
Threemonthsended 31July 2016Adjusted*000’s |
|
Sixmonthsended 31July 2017 000’s |
|
Six monthsended 31July 2016Adjusted*000’s |
Profit / (loss) for the period |
|
£10,921 |
£(6,428) |
|
£6,160 |
|
£(11,862) |
Weighted average number of Ordinary Shares for basic earnings /
(loss) per share |
|
61,915 |
61,474 |
|
61,900 |
|
61,399 |
Effect of dilutive potential Ordinary Shares (share options and
warrants) |
|
2,881 |
- |
|
1,918 |
|
- |
Weighted average number of Ordinary Shares for diluted earnings /
(loss) per share |
|
64,796 |
- |
|
63,818 |
|
- |
Basic earnings
/ (loss) per Ordinary Share from operations |
|
18 pence |
(10) pence |
|
10 pence |
|
(19) pence |
Diluted earnings / (loss) per Ordinary Share from
operations |
|
17 pence |
- |
|
10 pence |
|
- |
Basic earnings/(loss) per Ordinary Share has
been calculated by dividing the profit/(loss) for the three and six
months ended 31 July 2017 by the weighted average number of shares
in issue during the three and six months ended 31 July 2017.
Diluted earnings/(loss) per Ordinary Share has been calculated by
adjusting the weighted average number of Ordinary Shares
outstanding to assume conversion of all potentially dilutive
Ordinary Shares. Potentially dilutive Ordinary Shares represents
the number of shares that could have been acquired at fair value
based on the monetary value of the subscription rights attached to
the share options compared with the number of shares that would
have been issued assuming the exercise of the share options.
International Accounting Standard 33 ‘Earnings
per Share’ requires the presentation of diluted earnings per share
where a company could be called upon to issue shares that would
decrease net profit or increase net loss per share. No diluted
earnings/(loss) per share has been calculated for the three and six
months ended 31 July 2016 as the Group reported a net loss and
therefore the exercise of the share options would have the effect
of reducing loss per Ordinary Share which is not dilutive.
4. Issue of share capital
On 22 February 2017, 50,000 Ordinary Shares were
issued following the exercise of warrants at an exercise price
of 20 pence per share. The issue of shares raised net
proceeds of £10,000.
On 10 April 2017, 16,667 Ordinary Shares were
issued following the exercise of options. The exercise of options
raised net proceeds of £3,333.
On 27 June 2017, 19,425 Ordinary Shares were
issued following the exercise of options. The exercise of options
raised net proceeds of £20,396.
Following the exercise of the above warrants and
share options, the number of Ordinary Shares in issue was
61,927,658.
All new Ordinary Shares rank pari passu with
existing Ordinary Shares.
This announcement contains inside information
for the purposes of Article 7 of EU Regulation 596/2014 (MAR).
-END-
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