TIDMSUMM
Summit Therapeutics plc
('Summit', the 'Company' or the 'Group')
Summit Therapeutics Reports Financial Results and Operational Progress
for the Second Quarter and Six Months Ended 31 July 2019
-- Reported Additional Positive Phase 2 Data Showing Ridinilazole Improved
Quality of Life and Microbiome Preservation Compared to Standard of Care
-- Appointed Key Marketing Hires Focused on Potential US Commercialisation
for Ridinilazole
-- Conference Call Today at 1:00pm BST / 8:00am EDT
Oxford, UK, and Cambridge, MA, US, 11 October 2019 - Summit Therapeutics
plc (NASDAQ: SMMT, AIM: SUMM) today reports its financial results and
provides an update on its operational progress for the second quarter
and six months ended 31 July 2019.
"It has been a quarter of strong progress across the clinical,
scientific and commercial functions as we focus on our key mission of
bringing to market our precision antibiotic, ridinilazole, as a
potential new front-line treatment for patients with CDI," said Glyn
Edwards, Chief Executive Officer of Summit. "With our landmark designed
Phase 3 clinical trials for ridinilazole continuing on schedule, we have
taken steps to secure a bright future for Summit as a leader in
antibiotic innovation through the appointment of key hires to support
the potential commercialisation of this new class antibiotic. Their
experience in leading successful antibiotic launches, combined with the
compelling clinical and microbiome data generated to date gives us
confidence that, if approved, ridinilazole will be well positioned to
become the treatment of choice for patients with C. difficile
infection."
Ridinilazole for C. difficile Infection ('CDI') Programme
-- Ri-CoDIFy Phase 3 landmark clinical trials aim to support adoption of the
precision antibiotic ridinilazole as the new standard of care treatment
for CDI by:
1. showing superiority over the current standard of care, vancomycin,
using a composite endpoint measuring sustained clinical response;
2. generating health economic data to help support ridinilazole's
commercial launch, if approved; and
3. undertaking deep microbiome analysis that aims to show
ridinilazole's preservation of the gut microbiome.
-- The Phase 3 clinical programme remains on track for expected reporting of
top-line data in the second half of 2021. The trial initiation phase is
progressing well with 17 countries open for enrolment (including 9 new
countries in August and September), more than half of the 300 planned
clinical trial sites opened, and patient enrolment at 73 and accelerating
at the end of September 2019.
-- Reported new Phase 2 clinical trial data that showed ridinilazole
improved patients' quality of life compared to vancomycin, including
demonstrating statistically significant early and longer-term
improvements in measurements of physical and mental health. Additional
data highlighted mechanistic insights into how ridinilazole preserves the
healthy function of the gut microbiome in patients with CDI. These new
results were reported at the ID Week Conference held in Washington DC in
early October 2019.
-- BARDA increased the total value of its award supporting the clinical and
regulatory development of ridinilazole to up to $63.7 million in June
2019. Under this award, BARDA exercised a $9.6 million option related to
patient enrolment and dosing in the Phase 3 clinical trials, bringing the
total committed funding to $53.6 million.
-- Expanded commercial team to undertake preparatory activities to support
Summit's strategy of commercialising ridinilazole in the United States,
if approved.
-- Appointed Ms Anna Diaz Triola as Vice President, Marketing. Ms
Triola has over 20 years industry experience, including working on
the marketing strategy of the blockbuster antibiotic Cubicin(R) at
Cubist.
-- Appointed Mr Kevin McDermott as Vice President, Market Access. Mr
McDermott joins Summit from Insmed, where he led Global Market
Access to Arikayce(R), the first antibiotic to receive US FDA
approval through the limited population pathway for antibacterial
and antifungal drugs ('LPAD').
Discuva Platform
SMT-571 for Gonorrhoea
-- Presented data at ASM Microbe and STI & HIV World Congress that showed
our new class antibiotic SMT-571 had consistently high potency across
over 200 clinically relevant strains of Neisseria gonorrhoeae, including
numerous multi-drug resistant and extensively-drug resistant strains.
-- IND-enabling studies are ongoing, with the development of SMT-571 being
supported by an award of up to $4.5 million from CARB-X.
DDS-04 for Enterobacteriaceae
-- DDS-04 compound series is a new class of antibiotics in lead optimisation
that acts via the novel bacterial target LolCDE with the potential to
treat infections caused by the Gram-negative bacteria,
Enterobacteriaceae.
-- In vivo proof of concept has been demonstrated with a DDS-04 series
compound in pneumonia, sepsis and urinary tract infection ('UTI'). UTI
data were presented at ECCMID in April, and data from all three disease
models were presented at the ASM/ESCMID Conference held in September.
Financial Highlights
-- Cash and cash equivalents at 31 July 2019 of GBP20.9 million compared to
GBP26.9 million at 31 January 2019.
-- Loss for the three months ended 31 July 2019 of GBP5.2 million compared
to a profit of GBP26.6 million for the three months ended 31 July 2018.
The profit recorded in the three months ended 31 July 2018 was driven by
an accelerated release of deferred revenues related to a former licence
agreement.
This announcement contains inside information for the purposes of
Article 7 of EU Regulation 596/2014 (MAR).
Conference Call and Webcast Information
Summit will host a conference call and webcast to review the financial
results for the second quarter and six months ended 31 July 2019 today
at 1:00pm BST / 8:00am EDT. To participate in the conference call,
please dial +44 (0)844 5718 892 (UK and international participants) or
+1 631 510 7495 (US local number) and use the confirmation code 4281539.
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 presentation
finishes.
About Summit Therapeutics
Summit Therapeutics is a leader in antibiotic innovation. Our new
mechanism antibiotics are designed to become the new standards of care
for the benefit of patients and create value for payors and healthcare
providers. We are currently developing new mechanism antibiotics to
treat infections caused by C. difficile, N. gonorrhoeae and
Enterobacteriaceae and are using our proprietary Discuva Platform to
expand our pipeline. For more information, visit www.summitplc.com and
follow us on Twitter @summitplc.
For more information:
Summit Tel: +44 (0)1235 443 951
Glyn Edwards / Richard Pye (UK office) +1 617 225 4455
Michelle Avery (US office)
Cairn Financial Advisers LLP (Nominated Adviser) Tel: +44 (0)20 7213 0880
Liam Murray / Tony Rawlinson / Ludovico Lazzaretti
N+1 Singer (Joint Broker) Tel: +44 (0)20 7496 3000
Aubrey Powell / Jen Boorer, Corporate Finance
Tom Salvesen, Corporate Broking
Bryan Garnier & Co Limited (Joint Broker) Tel: +44 (0)20 7332 2500
Phil Walker / Dominic Wilson
MSL Group (US) Tel: +1 781 684 6652
Erin Anthoine summit@mslgroup.com
---------------------------
Consilium Strategic Communications (UK) Tel: +44 (0)20 3709 5700
Mary-Jane Elliott / Sue Stuart / summit@consilium-comms.com
Sukaina Virji / Lindsey Neville
---------------------------
Forward Looking Statements
Any statements in this press release about the Company's future
expectations, plans and prospects, including but not limited to,
statements about the potential benefits and future operation of the
BARDA or CARB-X contract, including any potential future payments
thereunder, the clinical and preclinical development of the Company's
product candidates, the therapeutic potential of the Company's product
candidates, the potential of the Discuva Platform, the potential
commercialisation of the Company's product candidates, the sufficiency
of the Company's cash resources, the timing of initiation, completion
and availability of data from clinical trials, the potential submission
of applications for marketing approvals 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 ability of BARDA or CARB-X to
terminate our contract for convenience at any time, the uncertainties
inherent in the initiation of future clinical trials, availability and
timing of data from ongoing and future preclinical studies and clinical
trials and the results of such studies and 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 or preclinical
studies will be indicative of the results of later clinical trials,
expectations for regulatory approvals, laws and regulations affecting
government contracts, availability of funding sufficient for the
Company's foreseeable and unforeseeable operating expenses and capital
expenditure requirements and other factors discussed in the "Risk
Factors" section of filings that the Company makes with the Securities
and Exchange Commission, including the Company's Annual Report on Form
20-F for the fiscal year ended 31 January 2019. Accordingly, readers
should not place undue reliance on forward-looking statements or
information. In addition, any forward-looking statements included in
this press release represent the Company's views only as of the date of
this release and should not be relied upon as representing the Company's
views as of any subsequent date. The Company specifically disclaims any
obligation to update any forward-looking statements included in this
press release.
FINANCIAL REVIEW
Other Operating Income
Other operating income was GBP4.1 million for the three months ended 31
July 2019, as compared to GBP2.7 million for the three months ended 31
July 2018. Other operating income was GBP9.0 million for the six months
ended 31 July 2019, as compared to GBP6.2 million for the six months
ended 31 July 2018. These increases resulted primarily from the
recognition of operating income from Summit's funding contract with
BARDA for the development of ridinilazole, which was GBP3.5 million for
the three months ended 31 July 2019 as compared to GBP2.0 million for
the three months ended 31 July 2018 and GBP8.1 million for the six
months ended 31 July 2019 as compared to GBP5.3 million for the six
months ended 31 July 2018. To date, an aggregate of GBP23.0 million
($30.1 million) of the total committed BARDA funding of $53.6 million
has been recognised.
The Group also recognised operating income related to the Group's CARB-X
award supporting the development of SMT-571 for the treatment of
gonorrhoea of GBP0.1 million during the three months ended 31 July 2019
as compared to GBP0.2 million for the three months ended 31 July 2018
and GBP0.4 million during the six months ended 31 July 2019 as compared
to GBP0.3 million for the six months ended 31 July 2018.
Revenue
Revenue was GBP0.1 million for the three months ended 31 July 2019
compared to GBP38.0 million for the three months ended 31 July 2018.
Revenue was GBP0.4 million for the six months ended 31 July 2019
compared to GBP41.8 million for the six months ended 31 July 2018.
Revenue of GBP0.1 million recognised during the three months ended 31
July 2019 and GBP0.2 million recognised during the six months ended 31
July 2019 related to the receipt of a $2.5 million (GBP1.9 million)
upfront payment in respect of the licence and commercialisation
agreement signed with Eurofarma Laboratórios SA in December 2017
for the exclusive right to commercialise ridinilazole in specified Latin
American and Caribbean countries.
The decreases in revenue recognised are principally due to the reduction
in revenue related to the Sarepta licence and collaboration agreement
following the Group's decision to discontinue development of ezutromid
in June 2018. Revenue relating to the cost-share arrangement under the
Sarepta agreement recognised during the three months ended 31 July 2019
amounted to GBPnil and during the six months ended 31 July 2019 amounted
to GBP0.1 million, as compared to total revenues relating to the upfront
payment, development milestone payment and cost-share arrangement
recognised during the three months ended 31 July 2018 of GBP37.8 million
and during the six months ended 31 July 2018 of GBP41.3 million.
Effective as of August 2019, the agreement with Sarepta has been
terminated with no material ongoing obligations for either party.
Operating Expenses
Research and Development Expenses
Research and development expenses decreased by GBP0.7 million to GBP9.2
million for the three months ended 31 July 2019 from GBP9.9 million for
the three months ended 31 July 2018. Research and development expenses
decreased by GBP3.9 million to GBP17.5 million for the six months ended
31 July 2019 from GBP21.4 million for the six months ended 31 July 2018.
These decreases reflect decreases in both Duchenne muscular dystrophy
('DMD') clinical programme costs, as a result of the discontinuation of
the development of ezutromid in June 2018, and research and development
related staffing costs, offset by increased CDI clinical programme
costs.
Expenses related to the CDI programme increased by GBP4.1 million to
GBP12.5 million for the six months ended 31 July 2019 from GBP8.4
million for the six months ended 31 July 2018. This increase primarily
related to clinical operations and supply manufacturing activities
related to the ongoing Ri-CoDIFy Phase 3 clinical trials of ridinilazole
that commenced in February 2019.
Investment in the Group's preclinical antibiotic pipeline was GBP1.2
million for the six months ended 31 July 2019 compared to GBP0.4 million
for the six months ended 31 July 2018. This increase primarily related
to preclinical development activities for SMT-571 for the treatment of
gonorrhoea and the DDS-04 series for the treatment of Enterobacteriaceae
infections.
Expenses related to the DMD programme decreased to GBP0.2 million for
the six months ended 31 July 2019 from GBP7.8 million for the six months
ended 31 July 2018. The Group does not expect to incur further
significant costs for this programme.
Other research and development expenses decreased by GBP1.2 million to
GBP3.6 million during the six months ended 31 July 2019 as compared to
GBP4.8 million during the six months ended 31 July 2018, which was
driven by a decrease in staffing and facilities costs reflecting the
implementation of cost-cutting measures following the decision to
discontinue development of ezutromid in June 2018.
General and Administration Expenses
General and administration expenses decreased by GBP1.1 million to
GBP1.2 million for the three months ended 31 July 2019 from GBP2.3
million for the three months ended 31 July 2018. General and
administration expenses decreased by GBP1.8 million to GBP2.9 million
for the six months ended 31 July 2019 from GBP4.7 million for the six
months ended 31 July 2018. These decreases were driven by a reduction in
staff and facilities related costs and legal and professional fees, as
well as a net positive movement in exchange rate variances.
Finance Costs
Finance costs recognised during the three and six months ended 31 July
2019 relate to lease liability interest payable and the unwinding of the
discount associated with provisions. Finance costs were GBP0.1 million
for the three months ended 31 July 2019 compared to GBP0.2 million for
the three months ended 31 July 2018. Finance costs were GBP0.1 million
for the six months ended 31 July 2019 compared to GBP0.4 million for the
six months ended 31 July 2018. This decrease relates to the cessation of
the unwinding of the discount following the remeasurement of the
financial liabilities on funding arrangements relating to DMD-related US
not for profit organisations to GBPnil in June 2018.
Taxation
The income tax credit for the three months ended 31 July 2019 was GBP1.1
million as compared to a net income tax expense of GBP0.5 million for
the three months ended 31 July 2018. The income tax credit for the six
months ended 31 July 2019 was GBP1.9 million as compared to GBP0.5
million for the six months ended 31 July 2018. These changes in income
tax during the three and six months ended 31 July 2019 as compared to
during the three and six months ended 31 July 2018 were driven by the
Group's de-recognition of its accrued UK research and development tax
credit during the three months ended 31 July 2018, as it was not certain
that the Group would have sufficient losses in the prior year to remain
eligible to receive this research and development tax credit. The
Group's current net tax credit for the periods reflects the accrued UK
research and development tax credit based on management's estimate of
the qualifying expenditure relating to research and development
activities carried out by the Group, the taxes relating to the US
operations and the release of deferred tax liabilities associated with
the amortisation of intangible assets.
Losses
Loss before income tax was GBP6.2 million for the three months ended 31
July 2019 compared to a profit before income tax of GBP27.1 million for
the three months ended 31 July 2018. Loss before income tax was GBP11.1
million for the six months ended 31 July 2019 compared to a profit
before income tax of GBP20.3 million for the six months ended 31 July
2018.
Net loss for the three months ended 31 July 2019 was GBP5.2 million with
a basic loss per share of 3 pence compared to a net profit of GBP26.6
million for the three months ended 31 July 2018 with a basic earnings
per share of 32 pence. Net loss for the six months ended 31 July 2019
was GBP9.2 million with a basic loss per share of 6 pence compared to a
net profit of GBP20.8 million for the six months ended 31 July 2018 with
a basic earnings per share of 26 pence.
The profits recorded during the three and six months ended 31 July 2018
were due to the recognition of all remaining deferred revenue related to
the Sarepta agreement following the Group's decision to discontinue the
development of ezutromid.
Cash Flows
The Group had a net cash outflow of GBP7.3 million for the six months
ended 31 July 2019 as compared to a net cash outflow of GBP3.8 million
for the six months ended 31 July 2018.
Operating Activities
For the six months ended 31 July 2019, net cash used in operating
activities was GBP6.9 million compared to GBP17.8 million for the six
months ended 31 July 2018. This positive movement of GBP10.9 million was
driven by an increase in cash received from licensing agreements and
funding arrangements of GBP0.8 million, an increase in taxation cash
inflows of GBP5.0 million due to the timing of receipt of the Group's
research and development tax credits receivable on qualifying
expenditure in respect of financial years ended 31 January 2017 and
2018, and a decrease in operating costs of GBP5.1 million as a result of
the Group's decision to discontinue development of ezutromid.
Investing Activities
Net cash used in investing activities was GBP0.2 million for the six
months ended 31 July 2019 as compared to GBP0.1 million for the six
months ended 31 July 2018. Net cash used in investing activities for the
six months ended 31 July 2019 includes amounts paid to acquire property,
plant and equipment and intangible assets, offset by bank interest
received on cash deposits.
Financing Activities
Net cash used in financing activities for the six months ended 31 July
2019 of GBP0.2 million primarily relates to lease liability repayments.
Net cash generated from financing activities for the six months ended 31
July 2018 of GBP14.1 million was primarily driven by GBP14.1 million of
proceeds, net of transaction costs, received following the Group's
equity placing in March 2018.
Financial Position and Cash Runway Guidance
As at 31 July 2019, total cash and cash equivalents held were GBP20.9
million (31 January 2019: GBP26.9 million).
The Group believes that its existing cash and cash equivalents,
anticipated payments from BARDA under its contract for the development
of ridinilazole and anticipated payments from CARB-X under its contract
for the development of its gonorrhoea antibiotic candidate, will be
sufficient to enable the Group to fund its operating expenses and
capital expenditure requirements through to at least 31 January 2020.
Glyn Edwards
Chief Executive Officer
11 October 2019
FINANCIAL STATEMENTS
Condensed Consolidated Statement of Comprehensive Income (unaudited)
For the three months ended 31 July 2019
Three months ended Three months ended Three months ended
31 July 2019 31 July 2019 31 July 2018
(Adjusted*)
Note $000s GBP000s GBP000s
------------------------------------------------------- ----- -------------------- -------------------- --------------------
Revenue 154 126 37,958
Other operating income 5,053 4,135 2,699
Operating expenses
Research and development (11,262) (9,216) (9,854)
General and administration (1,471) (1,204) (2,327)
Impairment of goodwill and intangible assets -- -- (3,986)
----------- ------- ----------- ------- ----------- ------
Total operating expenses (12,733) (10,420) (16,167)
--------------------------------------------------------------- ----------- ------ ----------- ------ ----------- ------
Operating (loss) / profit (7,526) (6,159) 24,490
Finance income -- -- 2,785
Finance costs (76) (62) (150)
(Loss) / profit before income tax (7,602) (6,221) 27,125
Income tax 1,298 1,062 (491)
(Loss) / profit for the period (6,304) (5,159) 26,634
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss
Exchange differences on translating foreign operations 22 18 12
Total comprehensive (loss) / profit for the period (6,282) (5,141) 26,646
Basic and diluted (loss) / earnings per ordinary share 2 (4) cents (3) pence 32 pence
from operations
------------------------------------------------------- ------ -------------------- -------------------- --------------------
* See Note 1 - 'Basis of Accounting - Adoption of IFRS 16 'Leases"
Condensed Consolidated Statement of Comprehensive Income (unaudited)
For the six months ended 31 July 2019
Six months ended Six months ended Six months ended
31 July 2019 31 July 2019 31 July 2018
(Adjusted*)
Note $000s GBP000s GBP000s
------------------------------------------------------- ----- ------------------ ------------------ ------------------
Revenue 458 375 41,832
Other operating income 11,005 9,006 6,154
Operating expenses
Research and development (21,372) (17,489) (21,444)
General and administration (3,494) (2,859) (4,655)
Impairment of goodwill and intangible assets -- -- (3,986)
---------- ------ ---------- ------ ---------- -----
Total operating expenses (24,866) (20,348) (30,085)
--------------------------------------------------------------- ---------- ----- ---------- ----- ---------- -----
Operating (loss) / profit (13,403) (10,967) 17,901
Finance income 2 2 2,786
Finance costs (150) (123) (350)
(Loss) / profit before income tax (13,551) (11,088) 20,337
Income tax 2,327 1,904 455
(Loss) / profit for the period (11,224) (9,184) 20,792
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss
Exchange differences on translating foreign operations 26 21 19
Total comprehensive (loss) / profit for the period (11,198) (9,163) 20,811
Basic and diluted (loss) / earnings per ordinary share 2 (7) cents (6) pence 26 pence
from operations
------------------------------------------------------- ------ ------------------ ------------------ ------------------
* See Note 1 - 'Basis of Accounting - Adoption of IFRS 16 'Leases"
Condensed Consolidated Statement of Financial Position (unaudited)
As at 31 July 2019
31 July 2019 31 July 2019 31 January 2019
(Adjusted*)
$000s GBP000s GBP000s
ASSETS
Non-current
assets
Goodwill 2,217 1,814 1,814
Intangible assets 12,574 10,290 10,604
Property, plant and
equipment 1,668 1,365 1,540
16,459 13,469 13,958
Current assets
Trade and other
receivables 13,049 10,679 13,491
Current tax
receivable 4,166 3,409 6,328
Cash and cash
equivalents 25,498 20,866 26,858
42,713 34,954 46,677
----------------- ----------- ----------- --------------
Total assets 59,172 48,423 60,635
------------------- ----------- ----------- --------------
LIABILITIES
Non-current
liabilities
Lease liabilities (594) (486) (647)
Deferred revenue (711) (582) (831)
Provisions for
other liabilities
and charges (2,391) (1,957) (1,851)
Deferred tax
liability (1,970) (1,612) (1,675)
(5,666) (4,637) (5,004)
Current
liabilities
Trade and other
payables (7,938) (6,496) (8,733)
Lease liabilities (437) (358) (358)
Deferred revenue (3,846) (3,147) (3,374)
Contingent
consideration (98) (80) (629)
------------------- ----------- ----------- --------------
(12,319) (10,081) (13,094)
----------------- ----------- ----------- --------------
Total liabilities (17,985) (14,718) (18,098)
------------------- ----------- ----------- --------------
Net assets 41,187 33,705 42,537
------------------- ----------- ----------- --------------
EQUITY
Share capital 1,961 1,605 1,604
Share premium
account 113,409 92,806 92,806
Share-based payment
reserve 1,333 1,091 1,148
Merger reserve 3,699 3,027 3,027
Special reserve 24,431 19,993 19,993
Currency
translation
reserve 94 77 56
Accumulated losses
reserve (103,740) (84,894) (76,097)
-----------
Total equity 41,187 33,705 42,537
------------------- ----------- ----------- --------------
* See Note 1 - 'Basis of Accounting - Adoption of IFRS 16 'Leases"
Condensed Consolidated Statement of Cash Flows (unaudited)
For the six months ended 31 July 2019
Six months ended Six months ended Six months ended
31 July 2019 31 July 2019 31 July 2018
(Adjusted*)
$000s GBP000s GBP000s
Cash flows from operating activities
(Loss) / profit before income tax (13,551) (11,088) 20,337
(13,551) (11,088) 20,337
Adjusted for:
Gain on re-measurement of financial liabilities on
funding arrangements -- -- (539)
Finance income (2) (2) (2,786)
Finance costs 150 123 350
Foreign exchange gain (1,612) (1,319) (839)
Depreciation 347 284 324
Amortisation of intangible fixed assets 506 414 415
Loss on disposal of assets 12 10 24
Impairment of goodwill and intangible assets -- -- 3,986
Share-based payment 403 330 1,163
---------- ------ ---------- ------
Adjusted (loss) / profit from operations before changes
in working capital (13,747) (11,248) 22,435
Decrease / (increase) in prepayments and other
receivables 3,581 2,930 (327)
Decrease in deferred revenue (582) (477) (37,519)
Decrease in trade and other payables (3,032) (2,482) (2,378)
Cash used in operations (13,780) (11,277) (17,789)
Contingent consideration paid (671) (549) --
Taxation received / (paid) 5,984 4,897 (53)
Net cash used in operating activities (8,467) (6,929) (17,842)
--------------------------------------------------------- ---------- ----- ---------- ----- ---------- -----
Investing activities
Purchase of property, plant and equipment (144) (118) (50)
Purchase of intangible assets (122) (100) (5)
Interest received 2 2 2
Net cash used in investing activities (264) (216) (53)
--------------------------------------------------------- ---------- ----- ---------- ----- ---------- -----
Financing activities
Proceeds from issue of share capital -- -- 15,000
Transaction costs on share capital issued -- -- (858)
Proceeds from exercise of share options 1 1 100
Repayment of lease liabilities (218) (179) (159)
--------------------------------------------------------- ---------- ----- ---------- ----- ---------- -----
Net cash (used in) / generated from financing activities (217) (178) 14,083
--------------------------------------------------------- ---------- ----- ---------- ----- ---------- ------
Decrease in cash and cash equivalents (8,948) (7,323) (3,812)
Effect of exchange rates in cash and cash equivalents 1,626 1,331 839
Cash and cash equivalents at beginning of the period 32,820 26,858 20,102
Cash and cash equivalents at end of the period 25,498 20,866 17,129
--------------------------------------------------------- ---------- ------ ---------- ------ ---------- ------
* See Note 1 - 'Basis of Accounting - Adoption of IFRS 16 'Leases"
Condensed Consolidated Statement of Changes in Equity (unaudited)
Six months ended 31 July 2019
Currency
translation
Share capital Share premium account Share-based payment reserve Merger reserve Special reserve reserve Accumulated losses reserve Total
Group GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------------------------------------------------------ ------------- --------------------- ----------------------------- -------------- --------------- ------------ ---------------------------- ----------
At 31 January 2019 (as previously reported) 1,604 92,806 1,148 3,027 19,993 56 (76,092) 42,542
Change in accounting policy (full retrospective application
IFRS 16) -- -- -- -- -- -- (5) (5)
At 31 January 2019 (Adjusted*) 1,604 92,806 1,148 3,027 19,993 56 (76,097) 42,537
------------------------------------------------------------- ------------- --------------------- -------------- ------------- -------------- --------------- ------------ --------------- ---------- -------
Loss for the period -- -- -- -- -- -- (9,184) (9,184)
Currency translation adjustment -- -- -- -- -- 21 -- 21
------------------------------------------------------------- ------------- --------------------- -------------- ------------- -------------- --------------- ------------ --------------- ----------- -------
Total comprehensive loss for the period -- -- -- -- -- 21 (9,184) (9,163)
Share options exercised 1 -- -- -- -- -- -- 1
Share-based payment -- -- 330 -- -- -- -- 330
Share-based payment reserve transfer -- -- (387) -- -- -- 387 --
-------------------------------------------------------------
At 31 July 2019 1,605 92,806 1,091 3,027 19,993 77 (84,894) 33,705
------------------------------------------------------------- ------------- --------------------- -------------- ------------- -------------- --------------- ------------ --------------- ---------- -------
Year ended 31 January 2019
Currency
translation
Share capital Share premium account Share-based payment reserve Merger reserve Special reserve reserve Accumulated losses reserve Total
Group GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------------------------------------------------------ ------------- ----------------------- ----------------------------- -------------- --------------- ------------ ---------------------------- ----------
At 31 January 2018 (as previously reported) 736 60,237 6,743 3,027 19,993 37 (93,957) (3,184)
Change in accounting policy (full retrospective application
IFRS 16) -- -- -- -- -- -- 32 32
-------------------------------------------------------------
At 31 January 2018 (Adjusted*) 736 60,237 6,743 3,027 19,993 37 (93,925) (3,152)
------------------------------------------------------------- ------------- ------------ --------- --------------- ------------ -------------- --------------- ------------ --------------- ---------- -------
Profit for the year (Adjusted*) -- -- -- -- -- -- 7,490 7,490
Currency translation adjustment -- -- -- -- -- 19 -- 19
------------------------------------------------------------- ------------- ------------ --------- --------------- ------------ -------------- --------------- ------------ --------------- ----------- -------
Total comprehensive profit for the period (Adjusted*) -- -- -- -- -- 19 7,490 7,509
New share capital issued 864 33,784 -- -- -- -- -- 34,648
Transaction costs on share capital issued -- (1,313) -- -- -- -- -- (1,313)
Share options exercised 4 98 -- -- -- -- -- 102
Share-based payment -- -- 4,743 -- -- -- -- 4,743
Share-based payment reserve transfer -- -- (10,338) -- -- -- 10,338 --
------------------------------------------------------------- ------------- ------------ --------- --------------- ----------- -------------- --------------- ------------ --------------- ----------- -------
At 31 January 2019 (Adjusted*) 1,604 92,806 1,148 3,027 19,993 56 (76,097) 42,537
------------------------------------------------------------- ------------- ------------ --------- --------------- ------------ -------------- --------------- ------------ --------------- ---------- -------
Six months ended 31 July 2018
Currency
translation
Share capital Share premium account Share-based payment reserve Merger reserve Special reserve reserve Accumulated losses reserve Total
Group GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------------------------------------------------------ ------------- ----------------------- --------------------------- -------------- --------------- ------------ ---------------------------- ----------
At 31 January 2018 (as previously reported) 736 60,237 6,743 3,027 19,993 37 (93,957) (3,184)
Change in accounting policy (full retrospective application
IFRS 16) -- -- -- -- -- -- 32 32
At 31 January 2018 (Adjusted*) 736 60,237 6,743 3,027 19,993 37 (93,925) (3,152)
------------------------------------------------------------- ------------- ------------ --------- --------------------------- -------------- --------------- ------------ --------------- ---------- -------
Profit for the period (Adjusted*) -- -- -- -- -- -- 20,792 20,792
Currency translation adjustment -- -- -- -- -- 19 -- 19
------------------------------------------------------------- ------------- ------------ --------- --------------------------- -------------- --------------- ------------ --------------- ----------- -------
Total comprehensive profit for the period (Adjusted*) -- -- -- -- -- 19 20,792 20,811
New share capital issued 83 14,917 -- -- -- -- -- 15,000
Transaction costs on share capital issued -- (858) -- -- -- -- -- (858)
Share options exercised 2 98 -- -- -- -- -- 100
Share-based payment -- -- 1,163 -- -- -- -- 1,163
-------------------------------------------------------------
At 31 July 2018 (Adjusted*) 821 74,394 7,906 3,027 19,993 56 (73,133) 33,064
------------------------------------------------------------- ------------- ------------ --------- --------------------------- -------------- --------------- ------------ --------------- ---------- -------
* See Note 1 - 'Basis of Accounting - Adoption of IFRS 16 'Leases"
The accompanying notes form an integral part of these condensed
consolidated interim financial statements.
NOTES TO THE FINANCIAL INFORMATION
For the three and six months ended 31 July 2019
1. Basis of Accounting
The unaudited condensed consolidated interim financial statements of
Summit Therapeutics plc ('Summit') and its subsidiaries (together, the
'Group') for the three and six months ended 31 July 2019 have been
prepared in accordance with International Financial Reporting Standards
('IFRS') and International Financial Reporting Interpretations Committee
('IFRIC') interpretations as issued by the International Accounting
Standards Board and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS including those applicable
to accounting periods ending 31 January 2020 and the accounting policies
set out in Summit's consolidated financial statements. There have been
no changes to the accounting policies as contained in the annual
consolidated financial statements as of and for the year ended 31
January 2019 other than as described below. During the year ended 31
January 2019, the Group re-assessed the allocation of certain staff
related expenses, totalling GBP0.4 million during the three months ended
31 July 2018 and GBP0.7 million during the six months ended 31 July
2018. These costs were previously reported as general and administration
expenses but are now presented as research and development expenses.
These condensed consolidated interim financial statements do not include
all information required for full statutory accounts within the meaning
of section 434 of Companies Act 2006 and should be read in conjunction
with the consolidated financial statements of the Group as at 31 January
2019 (the '2019 Accounts'). The 2019 Accounts, on which the Company's
auditors delivered an unqualified audit report, are available on the
Group's website at www.summitplc.com and were delivered to the Registrar
of Companies following the 2019 Annual General Meeting. The auditor's
report did not contain any statement under section 498 of the Companies
Act 2006 but did contain a statement from the auditors drawing the
shareholders' attention to the Group's need to raise additional capital
as noted below.
Whilst the financial information included in this announcement has been
prepared in accordance with IFRS and IFRIC interpretations as issued by
the International Accounting Standards Board and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS, this
announcement does not itself contain sufficient information to comply
with IFRS.
The interim financial statements have been prepared assuming the Group
will continue on a going concern basis. Based on management's forecasts,
the Group's existing cash and cash equivalents, anticipated payments
from BARDA under its contract for the development of ridinilazole and
anticipated payments from CARB-X under its contract for the development
of its gonorrhoea antibiotic candidate are expected to be sufficient to
enable the Group to fund its operating expenses and capital expenditure
requirements through to at least 31 January 2020. The Group will need to
raise additional funding in order to support, beyond this date, its
planned research and development efforts, its preparatory
commercialisation related activities should ridinilazole receive
marketing approval, as well as to support activities associated with
operating as a public company in the United States and the United
Kingdom.
The Group is evaluating various options 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.
Whilst the Group believes that funds would be available in this manner
before the end of January 2020, there can be no assurance that the Group
will be able to generate funds, on terms acceptable to the Group, on a
timely basis or at all, which would impact the Group's ability to
continue as a going concern.
Management has identified specific mitigating actions which it would be
required to take in the near future should the Group be unable to raise
additional funding, including, amongst others, a slow-down of its
ongoing Phase 3 clinical trials and suspending its Discuva Platform
activities and associated research programmes. Should the Group be
required to take these steps, it is currently expected that its current
and anticipated cash and cash equivalents would be sufficient through to
at least 31 October 2020. The failure of the Group to obtain sufficient
funds on acceptable terms when needed would therefore have a material
adverse effect on the Group's business, results of operations and
financial condition.
These circumstances represent a material uncertainty which may cast and
raise significant doubt on the Group's ability to continue as a going
concern. The interim financial statements do not contain any adjustments
that might result if the Group was unable to continue as a going
concern.
The financial information for the three and six month periods ended 31
July 2019 and 2018 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 2019, the Consolidated Statement of
Comprehensive Income for the three and six months ended 31 July 2019 and
Consolidated Statement of Cash Flows for the six months ended 31 July
2019 have been translated into US dollars at the rate on 31 July 2019 of
$1.2220 to GBP1.00. 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 11
October 2019.
Adoption of IFRS 16 'Leases'
IFRS 16 specifies how to recognise, measure, present and disclose
leases. The standard provides a single lessee accounting model,
requiring lessees to recognise assets and liabilities for all leases
unless the lease term is 12 months or less or the underlying asset has a
low value. The standard is effective for reporting periods beginning on
or after 1 January 2019 and replaces the accounting standard IAS 17
'Leases'. Two adoption methods are permitted for transition:
retrospectively to all prior reporting periods presented in accordance
with IAS 8 'Accounting Policies, Changes in Accounting Estimates and
Errors', with certain practical expedients permitted; or retrospectively
with the cumulative effect of initially applying the standard recognised
at the date of initial application.
Accounting policy
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease based on whether the contract conveys the right to
control the use of an identified asset for a period of time in exchange
for consideration. The Group recognises a right-of-use asset within
property, plant and equipment and a lease liability at the lease
commencement date. The right-of-use asset is initially measured based on
the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received. The assets are
depreciated to the earlier of the end of the useful life of the
right-of-use asset or the lease term using the straight-line method. The
lease term includes periods covered by an option to extend if the Group
is reasonably certain to exercise that option and periods covered by an
option to terminate if it is reasonably certain not to exercise that
option. The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, the Group's incremental borrowing
rate. The lease liability is subsequently measured at amortised cost
using the effective interest method and is remeasured when there is a
change in future contractual lease payments or if the Group changes its
assessment of whether it will exercise a purchase, extension or
termination option.
The Group adopted this new standard effective 1 February 2019, as
required, using the full retrospective transition method in accordance
with IAS 8 'Accounting Policies, Changes in Accounting Estimates and
Errors'. Under this method, the Group will adjust its results for the
years ended 31 January 2018, and 2019, and applicable interim periods,
as if IFRS 16 had been effective for those periods. The Group has
assessed the effect of adoption of this standard as it relates to its UK
leased properties in Oxford and Cambridge and has concluded that any
other contracts are not within the scope of IFRS 16 or are of low value,
for which the Group has elected not to apply the requirement of IFRS 16.
Due to the adoption of IFRS 16, the Group has recognised both
right-of-use assets and lease liabilities related to its UK leased
properties. The Group no longer recognises a lease incentive accrual and
has reclassified some costs from research and development expenses and
general and administration expenses to finance costs, being the interest
expense on lease liabilities. In addition, some amounts previously
presented as cash outflows from operating activities in the Group's
Consolidated Statement of Cash Flows are now presented as cash flows
from investing or financing activities.
This change in accounting policy has been reflected retrospectively in
the comparative Statement of Financial Position for the year ended 31
January 2019, the comparative Statement of Comprehensive Income,
Statement of Cash Flows and Statement of Changes in Equity for the six
months ended 31 July 2018, including the opening accumulated losses
reserve at 1 February 2018 and 1 February 2019.
The impact of the change in accounting policy to IFRS 16 discussed above
on the comparatives to the unaudited condensed consolidated interim
financial statements is disclosed in the following tables.
Impact on
Unaudited
Condensed Original Adjusted
Consolidated Year ended 31 January 2019 Year ended 31 January 2019 Impact
Statement of
Financial
Position GBP000s GBP000s GBP000s
----------------- ----------------------------- ----------------------------- ---------
Non-current
assets
Property, plant
and equipment 616 1,540 924
Current assets
Trade and other
receivables 13,547 13,491 (56)
Non-current
liabilities
Lease liabilities -- (647) (647)
Current
liabilities
Trade and other
payables (8,865) (8,733) 132
Lease liabilities -- (358) (358)
Equity
Accumulated
losses reserve (76,092) (76,097) (5)
----------------- -------------------- ------ -------------------- ------ ------
Original
Impact on Unaudited Three months Adjusted
Condensed ended Three months ended
Consolidated 31 July 2018 31 July 2018 Impact
Statement of
Comprehensive
Income GBP000s GBP000s GBP000s
---------------------- ------------- --------------------- ----------
Operating expenses
Research and
development (9,846) (9,854) (8)
General and
administration (2,330) (2,327) 3
Operating profit 24,495 24,490 (5)
Finance costs (140) (150) (10)
Profit for the period 26,649 26,634 (15)
---------------------- ------------ ----------------- ------
Original
Six months Adjusted
Impact on Unaudited ended Six months ended
Condensed Consolidated 31 July 2018 31 July 2018 Impact
Statement of
Comprehensive Income GBP000s GBP000s GBP000s
------------------------ ------------- ------------------- ----------
Operating expenses
Research and development (21,438) (21,444) (6)
General and
administration (4,661) (4,655) 6
Operating profit 17,901 17,901 --
Finance costs (328) (350) (22)
Profit for the period 20,814 20,792 (22)
------------------------ ------------ --------------- ------
Impact on Unaudited Original Adjusted
Condensed Six months ended Six months ended
Consolidated 31 July 2018 31 July 2018 Impact
Statement of Cash
Flows GBP000s GBP000s GBP000s
Profit before income
tax 20,359 20,337 (22)
Adjusted for:
Finance costs 328 350 22
Depreciation 157 324 167
Increase in trade
and other
receivables (336) (327) 9
Increase in trade
and other payables (2,361) (2,378) (17)
Financing activities
Repayment of lease
liabilities -- (159) (159)
-------------------- --------------- --------------- -------
Impact on net cash --
flows
-------------------- ------------------- ------------------- -------
The Group will continue to monitor interpretations released by the IFRS
Interpretations Committee and amendments to IFRS 16 and, as appropriate,
will adopt these from the effective dates.
2. (Loss) / earnings per Share Calculation
The calculation of (loss) / earnings per share is based on the following
data:
Three months ended Three months ended Six months ended Six months ended
31 July 2019 31 July 2018 31 July 2019 31 July 2018
(Adjusted*) (Adjusted*)
000s 000s 000s 000s
----------------------------------------------------------- -------------------- ------------------ ------------------ ------------------
(Loss) / profit for the period (5,159) 26,634 (9,184) 20,792
Weighted average number of ordinary shares for basic
(loss) / earnings per share 160,495 82,008 160,398 79,335
Effect of dilutive potential ordinary shares (share
options and warrants) -- 649 -- 628
Weighted average number of ordinary shares for diluted
(loss) / earnings per share 160,495 82,657 160,398 79,963
Basic (loss) / earnings per ordinary share from operations
GBP (0.03) 0.32 (0.06) 0.26
Diluted (loss) / earnings per ordinary share from
operations GBP (0.03) 0.32 (0.06) 0.26
----------------------------------------------------------- ----------- ------ ------------------ ---------- ----- ----------------
* See Note 1 - 'Basis of Accounting - Adoption of IFRS 16 'Leases"
Basic (loss) / earnings per ordinary share has been calculated by
dividing the (loss) / profit for the three and six months ended 31 July
2019 by the weighted average number of shares in issue during the three
and six months ended 31 July 2019. Diluted earnings 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 represent the
number of shares that could have been acquired at fair value based on
the monetary value of the subscription rights attached to share options
in-the-money compared with the number of shares that would have been
issued assuming the exercise of share options in-the-money.
IAS 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 loss per share. As the Group reported
net losses for the three and six months ended 31 July 2019, the weighted
average number of ordinary shares outstanding used to calculate the
diluted (loss) / earnings per ordinary share is the same as that used to
calculate the basic (loss) / earnings per ordinary share, as the
exercise of share options would have the effect of reducing loss per
ordinary share which is not dilutive.
3. Issue of Share Capital
On 23 April 2019, 104,877 ordinary shares were issued following the
exercise of restricted stock units ('RSUs'). This exercise of RSUs
raised net proceeds of GBP1,049.
The new ordinary shares issued in connection with the RSUs exercised
rank pari passu with existing ordinary shares.
As of 31 July 2019, the number of ordinary shares in issue was
160,494,758.
-END-
(END) Dow Jones Newswires
October 11, 2019 07:00 ET (11:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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