Q4 2022 Summit Therapeutics Inc Earnings Call

Speaker 2: Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Summit 4th Quarter and Year-End 2022 Earnings Call. All lines have been placed on mute to prevent any background noise.

Speaker 2: After the speaker's remarks, there will be a question and answer session.

Speaker 2: If you'd like to ask a question at that time, simply press star followed by number one on your telephone keypad. If you would like to withdraw your question, again press star one. Thank you.

Speaker 2: It is now my pleasure to turn today's call over to Mr. Dave Gancars, Senior Vice President, Corporate Strategy and Stakeholder Relations. Sir, please go ahead.

Speaker 3: Good morning and thank you for joining us. Our press release was issued earlier this morning and is available on the homepage of our website. Today's call is being simultaneously webcast and an archived replay will also be available later today on our website, www.smmttx.org

Speaker 3: On the call with me today is Bob Duggan, our Chairman of the Board and Chief Executive Officer, Dr. Maki Zangene, our Co-CEO and President, and Ankur Dhingra, our Chief Financial Officer.

Speaker 3: Before we get started, I would like to note that some statements made by our management team and some responses to questions that we make today may be considered forward-looking statements based on our current expectations. Summit cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially.

Speaker 3: we will take questions from analysts and

Speaker 3: With that, I will turn the call over to Bob. Thank you, Dave. Good morning, everyone, and thank you for joining us today. I will provide an overview and perspective on our company overall, and then Anker will provide some updates regarding our financial position and outlook.

Speaker 4: First, I'm incredibly enthusiastic about the opportunity we have created at Team Summit. Our mission is something that is very important to us and something that I and all of us at Team Summit accept as our obligation to all of our stakeholders. By taking full responsibility for the development of Bnessimab, we intend to make a significant difference by improving the quality and potential duration.

Speaker 5: Amen.

Speaker 4: Ekeso is a company based in China. It is a pioneer in discovering and developing innovative antibodies and bi-specific antibodies. Ekeso is led by Dr. Michelle Shi, who founded the company in 2012 and is Ekeso's chairwoman and CEO . She has exceptional experience in leadership across scientific discovery.

Speaker 4: R&D, building and scaling manufacturing, and overall leadership through her experience at companies in the US, including cellular genomics, Vire, Crown Biosciences. At Crown, she served in a leadership role in joint venture with Pfizer. Dr. Sheehy has about 20 years of experience in the industry.

Speaker 4: in the pharmaceutical industry and academic research in the U.S. and the U.K., in addition to her deep experience in China, also leading EKESO. As a company, EKESO has a rich and diversified antibody drug pipeline with over 30 internally discovered drug candidates in various stages of development, including six bi-specific antibodies.

Speaker 4: V Kesser has taken part in over 80 clinical trials for 17 drug candidates, including 44 pivotal trials. V Kesser has two drugs approved for oncology indications in China, a PD-1 inhibitor and a novel PD-1 CTLA-4 specific antibody called Catalinumab. Catalinumab is the first PD-1 based bi-specific antibody approved in...

Speaker 4: is a bispecific antibody that brings two targets together in a single molecule, combining the immunotherapy effects of an anti PD-1 and the anti angiogenesis effects of an anti VEGF anti PD-1 therapy assists the immune system in killing tumors.

Speaker 4: Anti-VEGF therapy helps deplete the tumor of new blood vessels and allows the immune system to fight the tumor more effectively. Avanecimab is believed to be the PD-1 slash VEGF bispecific antibody that is first and most advanced in the clinic today.

Speaker 4: engineered with the Kesso's unique tetra-body technology to create bispecific antibodies that overcome manufacturing challenges such as low expression levels due to high molecular weight of bispecific antibodies, process development obstacles due to the structural heterogeneity of bispecific antibodies.

Speaker 4: lack of stability of bispecific antibodies. In view of the co-expression of VEGF and PD-1, the tumor microenvironment of Onisumab as a single agent to block these two targets intends to block these two pathways more effectively and enhance the anti-tumor activity.

Speaker 4: compared to combined therapy administering PD-1 and anti-VEGF agents individually. In China, EKESO has underway two phase three trials for Ibanezimab. Ibanezimab has a monotherapy for treatment naive, locally advanced or metastatic non-small cell lung cancer patients whose tumors have positive expression of PD.

Speaker 4: follows. The two indications that we just mentioned in which Okeso is currently engaged in phase 3 trials as well as Iveracimab in combination with chemotherapy for non-small cell lung cancer patients who have progressed after treatment with PD-1 inhibitor combined with platinum-based chemotherapy which is currently in phase 2 trials in China.

Speaker 4: of up to $1.05 billion and substantive commercialization milestones up to $3.45 billion. Acosta will receive low double-digit royalties on our net sales of SMT 112. Our intent is to begin our development of SMT 112 in North

Speaker 4: non small cell lung cancer indications. We have been in communication with the FDA and other health authorities in our licensed territories and we have multiple upcoming meetings scheduled with the FDA to discuss our proposed approach to multiple late-stage clinical trials in non small cell lung cancer.

Speaker 4: Based on FDA feedback, feedback from our expanding network of highly engaged key opinion leaders with whom we have met on multiple occasions over the past couple of months, and our own evaluation of the appropriate next steps, we will provide more color and context as to the specific indications that we intend to pursue in clinical trials over the next year on a timely basis.

Speaker 4: Operationally, as we build upon the excellent foundation laid by CASO and the deal we have consummated, we have begun to and are executed upon a number of different areas, including the work to begin clinical trials with different trial sites and vendors, readying clinical drug supply for trials in our territory.

Speaker 4: preparing to expand our supply chain channels long term with respect to having the opportunity to obtain clinical and commercial supply from multiple sources, as well as appropriately hiring in support of the scale-up and expansion needed to be a significant player in the late stage bispecific oncology space.

Speaker 4: Finally, we closed our fully subscribed 500 million rights offering last week. Ongro will provide additional details as to our financial position shortly. I'm extremely proud of the level of participation that we had in our rights offering. The offering was oversubscribed above the 500 million target with over 1,500 accounts requiring shares.

Speaker 4: Team Summit appreciates this expression of confidence. With that, I will turn things over to Ankur to give a bit more details on our financial position. Thank you!

Speaker 6: Thank you, Bob. We are very excited about the opportunity in different offers to develop iWAN SMM to its potential.

Speaker 6: Executing on this potential requires a significant shift from our previous operating model. We believe that we are well positioned financially to make and leverage this pivot in a bright future for all involved. Let me outline for you the steps we've taken to put Summit in a strong financial position.

Speaker 6: In conjunction with the signing of the collaboration and license agreement with the GESO in the beginning of December , Summit took three initial loans from Bob and McKee totaling $520 million. These initial loans allowed us to do two things.

Speaker 6: First, it demonstrated our ability and then executed on the initial upfront payments to a CASO. And second, it provided flexibility to begin scaling our operations to quickly execute on our trial strategy.

Speaker 6: In March, we have just concluded a rights offering of $500 million. As Bob mentioned, we're very pleased with the level of interest received.

Speaker 6: We have been putting this capital to use. We have paid a case of the upfront consideration of $500 million in line with our obligations under the agreement through cash payments of $474.9 million which were paid in two trenches in January and match this year.

Speaker 6: and Acaso elected to take 10 million shares of Summit common stock with a value equal to the remaining $25.1 million owed in the deal. Also, we have repaid two of the three initial loans, totaling $420 million. The third loan of $100 million becomes due in September of 2020.

Speaker 6: resources to fund our currently planned clinical trials for SMT 112 into the second half of 2024. This includes appropriately building an experienced oncology team capable of executing multiple large clinical trials and development work. Finally, as we are focusing our company completely towards oncology.

Speaker 6: non-cash charges, including impairments of our anti-infectives based intangible assets. In addition, in 2023, we will incur some closeout costs in order to affect the transition fully into a company focused solely on oncology.

Speaker 6: With all these actions, we've taken concrete steps to refocus the company towards development of SMT 112 and laid a solid financial foundation and some runway for our planned trials and development of Ibanezumab. And with that, I will hand it back over to Dave. Thank you, Bob and Ankur.

Speaker 3: We can now transition to see if there are any questions that we could answer.

Speaker 3: We have received a couple of questions in writing in advance, and we can start with those.

Speaker 3: Team, do you have rights to manufacture the product elsewhere besides China and continue research and development in case of any geopolitical-based interruptions? Yes, as part of our collaboration and license agreement, we have

Speaker 6: entered into both a supply agreement as well as an ability to put up manufacturing capabilities outside of China and specifically within our licensed territories. As part of our strategy, we do intend to lay the foundation for manufacturing, and estimate within our licensed territories.

Speaker 3: we have multiple meetings as Bob and Anker spoke to with the FDA. So at this point we currently are working through our development strategy and want to align with the US FDA and the other health authorities within our licensed territories. So we will plan to give more information on those but see an

Speaker 4: transaction is entirely specific to SMT 112.

Speaker 3: And then final question received, what percentage of Summit does a KESO currently own given the 10 million shares acquired as you spoke about, Ankur? Did they participate in the rights offering? Yeah, good question. Their participation in rights offering is not a public...

Speaker 6: as part of that upfront payment. That's what we published and included in our filings.

Speaker 4: And they were, do have the possibility to add shares in the offering. It's just not at this point in time a public record, but it soon will be, so look forward to looking at that.

Speaker 3: Thank you, Evan. Brent, if you could please open the line for questions, any that may be received at this point. Okay.

Speaker 2: At this time if you would like to ask a question please press star followed by the number one on your telephone keypad. We'll pause for a moment to compile a Q&A roster.

Speaker 2: There are no telephone questions at this time. I will turn the call back to Mr. Dave Gancars.

Speaker 4: This is Bob Duggan. I would like to make one comment. A few people have asked me why we're doing business with China and with the CASO, and I just point out that the two countries, the United States and China, have about a one trillion dollar annual...

Speaker 4: company, inter-country trading position is rather large. Our transaction was a half of a billion dollars. And we are dealing with importing drugs made by China for the benefit of humans around the world, including those in the USA. So we think transactions such as this are quite beneficial.

Speaker 3: to our forward relationship and we're really honored to be a part of this partnership. Thank you.

Speaker 3: An archived version of the webcast will be available on our website, www.smmttx.com.

Speaker 3: of the webcast will be available on our website www.smmttx.com. Thank you and enjoy the rest of your day.

Speaker 2: Ladies and gentlemen, this concludes today's conference call. You may now disconnect.