On August 6, 2024 Summit Therapeutics Inc. (NASDAQ: SMMT) ("Summit," "we," or the "Company") reported its financial results and provides an update on its operational progress for the second quarter and six months ended June 30, 2024 (Press release, Summit Therapeutics, AUG 6, 2024, View Source [SID1234645448]).
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Operational & Corporate Updates
Our operational progress continues with ivonescimab (SMT112), an investigational, potentially first-in-class bispecific antibody combining the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects associated with blocking VEGF into a single molecule:
In January 2023, we closed our Collaboration and License Agreement with Akeso Inc. (Akeso, HKEX Code: 9926.HK) for ivonescimab (SMT112), with which over 1,800 patients have now been treated in clinical studies globally. At the initial time of the deal, Summit received rights to develop and commercialize ivonescimab in the United States, Canada, Europe, and Japan.
In June 2024, the agreement was amended and, as a result, expanded to also include Latin America, including Mexico and all countries in Central America, South America, and the Caribbean, the Middle East, and Africa to Summit’s license territories for ivonescimab. Akeso retains development and commercialization rights for the rest of the world, including China.
Since in-licensing ivonescimab, we have launched a late-stage clinical development program in non-small cell lung cancer (NSCLC) and are actively enrolling two registrational Phase III trials in the following proposed indications:
HARMONi: Ivonescimab combined with chemotherapy in patients with epidermal growth factor receptor (EGFR)-mutated, locally advanced or metastatic non-squamous NSCLC who have progressed after treatment with a third-generation EGFR tyrosine kinase inhibitor (TKI), with enrollment completion expected in the second half of 2024, and
HARMONi-3: Ivonescimab combined with chemotherapy in first-line metastatic squamous NSCLC patients, with the first patient having been treated in the fourth quarter of 2023.
In late May 2024, positive results were announced from the Phase III HARMONi-A trial which were subsequently presented at the 2024 Annual Meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) (ASCO 2024) and published in the Journal of the American Medical Association (JAMA). HARMONi-A, a single-region, randomized, double-blinded Phase III study in patients with NSCLC who have progressed following an EGFR-TKI, achieved its primary endpoint of progression-free survival (PFS) for patients receiving ivonescimab in combination with doublet chemotherapy (pemetrexed and carboplatin). The HARMONi-A trial was conducted in China and sponsored by Akeso with data generated and analyzed by Akeso. This is a clinical setting where PD-1 monoclonal antibodies have previously been unsuccessful in Phase III global clinical trials.
Patients (n=322) experienced a 54% reduction in disease progression or death as compared to placebo plus doublet chemotherapy (HR: 0.46, 95% CI: 0.34 – 0.62; p<0.001). In a pre-specified subgroup PFS analysis of patients who received a previous third-generation TKI, a hazard ratio of 0.48 was observed. The Phase III study was considered to have demonstrated a tolerable safety profile and a low discontinuation rate of ivonescimab for adverse events.
Additionally, on May 30, 2024, Akeso announced that HARMONi-2, in which ivonescimab was administered as a monotherapy, resulted in a statistically significant improvement in PFS when compared to monotherapy pembrolizumab in patients with previously untreated advanced or metastatic NSCLC whose tumors had positive PD-L1 expression (PD-L1 tumor proportion score, or TPS, ≥1%). The PFS benefit was demonstrated across clinical subgroups, including those with PD-L1 low expression (PD-L1 TPS 1-49%), PD-L1 high expression (PD-L1 TPS ≥50%), squamous and non-squamous histologies, as well as other high-risk patients.
These results are unprecedented as ivonescimab is the first known drug to achieve clinically meaningful efficacy benefit over pembrolizumab in a randomized Phase III clinical trial in NSCLC. The HARMONi-2 trial was conducted in China and sponsored by Akeso with data generated and analyzed by Akeso. Previously, Akeso announced that it intends to release the results from this study at an upcoming medical conference later in the year.
In July 2024, we announced a five-year strategic collaboration with The University of Texas MD Anderson Cancer Center (MD Anderson) to accelerate the development of ivonescimab in several solid tumors across multiple clinical trials. Under the agreement, MD Anderson will lead multiple clinical trials to evaluate the safety and potential clinical benefit of ivonescimab, including the possibility of identifying biomarkers through additional research activities. Leveraging the clinical infrastructure and research expertise of MD Anderson, the collaboration is designed to quickly discover opportunities for ivonescimab, including several tumors outside of the current development plan. Early work may include certain types of renal cell carcinoma, colorectal cancer, skin cancer, and breast cancer, as well as glioblastoma.
During the quarter ended June 30, 2024, we also strengthened our Board of Directors with the appointment of two new members:
In April 2024, the Company appointed Mostafa Ronaghi, PhD, to its Board of Directors. Dr. Ronaghi is the Co-Founder and Executive Board Member of Cellanome. He was previously the Chief Technology Officer at Illumina, Inc. from 2008 to 2021. While at Illumina, in 2016, Dr. Ronaghi co-founded GRAIL, a next-gen liquid biopsy platform for cancer detection. Dr. Ronaghi holds a Ph.D. in Biotechnology from Royal Institute of Technology in Stockholm, Sweden.
In June 2024, the Company appointed Jeff Huber to its Board of Directors. Mr. Huber is the Co-Founder and General Partner of Triatomic Capital Private LP, a venture capital firm. Prior to founding Triatomic, Mr. Huber was the Founding CEO and Vice Chairman of GRAIL, Inc. Prior to GRAIL, he was a Senior Vice President at Alphabet Inc. (formerly Google Inc.). Mr. Huber holds a B.S. in Computer Engineering from the University of Illinois and an M.B.A. from Harvard Business School.
Financial Highlights
Cash and Cash Equivalents, Restricted Cash, & Short-term Investments
In June 2024, we received and accepted an unsolicited offer from an institutional investor to purchase 22,222,222 shares of the Company’s common stock at $9.00 per share, a premium to the closing price on Friday, May 31, 2024, for aggregate gross and net proceeds to the Company of approximately $200.0 million.
On August 6, 2024, we intend to file a Form S-3 in order to register the above referenced 22.2 million shares that were purchased in June 2024.
Aggregate cash and cash equivalents, restricted cash, and short-term investments were $325.8 million and $186.2 million at June 30, 2024 and December 31, 2023, respectively. Research and development tax credits were $1.3 million and $1.8 million at June 30, 2024 and December 31, 2023, respectively.
Updated Cash Guidance
Based on the Company’s current operating plans and its existing cash, cash equivalents, and short-term investments, we updated our cash guidance. We believe we have sufficient cash to fund operations into the fourth quarter of 2025.
GAAP and Non-GAAP Research and Development (R&D) Expenses
GAAP R&D expenses according to generally accepted accounting principles in the U.S. ("GAAP") were $30.8 million for the second quarter of 2024, compared to $9.5 million for the same period of the prior year.
Non-GAAP R&D expenses were $27.3 million for the second quarter of 2024, compared to $8.8 million for the same period of the prior year.
GAAP Acquired In-Process Research and Development (Acquired IPR&D) Expenses
GAAP Acquired IPR&D expenses were $15.0 million for the second quarter of 2024, compared to zero for the same period of the prior year. Second quarter 2024 GAAP Acquired IPR&D expenses of $15.0 million related to our upfront consideration pursuant to the June 2024 license agreement amendment with Akeso.
GAAP and Non-GAAP General and Administrative (G&A) Expenses
GAAP G&A expenses were $14.0 million for the second quarter of 2024, compared to $6.3 million for the same period of the prior year.
Non-GAAP G&A expenses were $6.4 million for the second quarter of 2024, compared to $5.2 million for the same period of the prior year.
GAAP and Non-GAAP Operating Expenses
GAAP operating expenses were $59.8 million for the second quarter of 2024, compared to $15.8 million for the same period of the prior year. Second quarter 2024 GAAP R&D expenses included $15.0 million acquired in-process research and development expense related to our upfront consideration pursuant to the June 2024 license agreement amendment with Akeso.
Non-GAAP operating expenses were $33.7 million for the second quarter of 2024, compared to $13.9 million for the same period of the prior year. The increase is primarily due to expansion of clinical study and development costs related to ivonescimab and increases in people cost as we continue to build out our R&D team.
GAAP and Non-GAAP Net Loss
GAAP net loss in the second quarter of 2024 and 2023 was $60.4 million or $(0.09) per basic and diluted share, and $14.7 million or $(0.02) per basic and diluted share, respectively.
Non-GAAP net loss in the second quarter of 2024 and 2023 was $34.3 million or $(0.05) per basic and diluted share, and $12.8 million or $(0.02) per basic and diluted share, respectively.
Use of Non-GAAP Financial Measures
This release includes measures that are not in accordance with U.S. generally accepted accounting principles ("Non-GAAP measures"). These Non-GAAP measures should be viewed in addition to, and not as a substitute for, Summit’s reported GAAP results, and may be different from Non-GAAP measures used by other companies. In addition, these Non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Summit management uses these non-GAAP measures for internal budgeting and forecasting purposes and to evaluate Summit’s financial performance. Summit management believes the presentation of these Non-GAAP measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. For further information regarding these Non-GAAP measures, please refer to the tables presenting reconciliations of our Non-GAAP results to our U.S. GAAP results and the "Notes on our Non-GAAP Financial Information" that accompany this press release.
Second Quarter 2024 Earnings Call
Summit will host an earnings call this morning, Tuesday, August 6, 2024, at 9:00am ET. The conference call will be accessible by dialing (888) 210-3702 (toll-free domestic) or (646) 960-0191 (international) using conference code 5785899. A live webcast and instructions for joining the call are accessible through Summit’s website www.smmttx.com. An archived edition of the webcast will be available on our website after the call.
About Ivonescimab
Ivonescimab, known as SMT112 in Summit’s license territories, the United States, Canada, Europe, Japan, Latin America, including Mexico and all countries in Central America, South America, and the Caribbean, the Middle East, and Africa, and as AK112 in China and Australia, is a novel, potential first-in-class investigational bispecific antibody combining the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects associated with blocking VEGF into a single molecule. Ivonescimab displays unique cooperative binding to each of its intended targets with multifold higher affinity when in the presence of both PD-1 and VEGF.
This could differentiate ivonescimab as there is potentially higher expression (presence) of both PD-1 and VEGF in tumor tissue and the tumor microenvironment (TME) as compared to normal tissue in the body. Ivonescimab’s tetravalent structure (four binding sites) enables higher avidity (accumulated strength of multiple binding interactions) in the TME with over 18-fold increased binding affinity to PD-1 in the presence of VEGF in vitro, and over 4-times increased binding affinity to VEGF in the presence of PD-1 in vitro (Zhong, et al, SITC (Free SITC Whitepaper), 2023). This tetravalent structure, the intentional novel design of the molecule, and bringing these two targets into a single bispecific antibody with cooperative binding qualities have the potential to direct ivonescimab to the tumor tissue versus healthy tissue. The intent of this design, together with a half-life of 6 to 7 days (Zhong, et. al., SITC (Free SITC Whitepaper), 2023), is to improve upon previously established efficacy thresholds, in addition to side effects and safety profiles associated with these targets.
Ivonescimab was engineered by Akeso Inc. (HKEX Code: 9926.HK) and is currently engaged in multiple Phase III clinical trials. Over 1,800 patients have been treated with ivonescimab in clinical studies globally.
Summit has begun its clinical development of ivonescimab in non-small cell lung cancer (NSCLC), commencing enrollment in 2023 in two multi-regional Phase III clinical trials, HARMONi and HARMONi-3.
HARMONi is a Phase III clinical trial which intends to evaluate ivonescimab combined with chemotherapy compared to placebo plus chemotherapy in patients with EGFR-mutated, locally advanced or metastatic non-squamous NSCLC who have progressed after treatment with a 3rd generation EGFR TKI (e.g., osimertinib).
HARMONi-3 is a Phase III clinical trial which is designed to evaluate ivonescimab combined with chemotherapy compared to pembrolizumab combined with chemotherapy in patients with first-line metastatic squamous NSCLC.
In addition, Akeso has recently had positive read-outs in two single-region (China), randomized Phase III clinical trials for ivonescimab in NSCLC, HARMONi-A and HARMONi-2.
HARMONi-A was a Phase III clinical trial which evaluated ivonescimab combined with chemotherapy compared to placebo plus chemotherapy in patients with EGFR-mutated, locally advanced or metastatic non-squamous NSCLC who have progressed after treatment with an EGFR TKI.
HARMONi-2 is a Phase III clinical trial evaluating monotherapy ivonescimab against monotherapy pembrolizumab in patients with locally advanced or metastatic NSCLC whose tumors have positive PD-L1 expression (PD-L1 TPS >1%).
Ivonescimab is an investigational therapy that is not approved by any regulatory authority in Summit’s license territories, including the United States and Europe. Ivonescimab was approved for marketing authorization in China in May 2024.
About Lung Cancer
Lung cancer is believed to impact approximately 600,000 people across the United States, United Kingdom, Spain, France, Italy, Germany, and Japan.1 NSCLC is the most prevalent type of lung cancer and represents approximately 80% to 85% of all incidences.2 Among patients with non-squamous NSCLC, approximately 15% have EGFR-sensitizing mutations in the United States and Europe.3 Patients with squamous histology represent approximately 25% to 30% of NSCLC patients.