Summit Therapeutics Inc. Q2 FY2023 Earnings Call

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 made available later today on our website, www.smmttx.com. Joining me on the call today is Bob Duggan, our Chairman of the Board and Co-Chief Executive Officer; Dr. Maky Zanganeh, our Co-Chief Executive Officer and President; Ankur Dhingra, our Chief Financial Officer; and Dr. Allen Yang, who I'm happy to introduce is our new Head of Research and Development. Welcome, Allen. 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 from those indicated in the forward-looking statements. Please refer to our SEC filings for information about these statements, risks and uncertainties. Summit undertakes no obligation to update these forward-looking statements, except as required by law. Following comments from Bob, Maky and Ankur, we will take questions.

Thank you, Dave. Good morning, everyone. Thank you for joining us today. I'd like to say a few words about what our amazing team has accomplished, then I will hand it over to Maky to add more context and then Ankur will provide some updates regarding our financial positions and outlook. In terms of blending high-quality work output with speed and efficiency, you can match the skills of Team Summit. In January 2023, we closed our transaction with Akeso to in-license ivonescimab. And since that time, we have launched 2 Phase III clinical trials both with registrational intent, and most importantly, in alignment with our Summit mission statement to improve the quality of the lives of patients with all due speed. As I spoke about last quarter, at the end of our business development process in 2022, we chose ivonescimab to be the foundation of Summit moving forward and Akeso chose Team Summit as the caretaker of their premier pipeline product candidate in the major Western markets. Team Summit takes full responsibility for maximizing the beneficial impact of ivonescimab in the United States, Europe and Japan, all the while making significant differences for the betterment of the lives of the patients we treat. We take full responsibility for developing ivonescimab in the United States, Canada, Europe and Japan, and all should make that significant difference in patients' lives. This is our commitment. We continue to build upon the established and continuing success and patient results created by Akeso. Our team has made multiple visits to Akeso in the past few months and spent meaningful time in person with Akeso's leadership over the past year, including our most recent trip to China during the second quarter. As we propel our collaboration forward, we continue to work together to achieve the best possible results and realize the potential of ivonescimab. Our clearly aligned missions, each of which focus on the needs of patients and improving patient lives, allow for coordinated actions within our partnership as we curate the future of our business map. In a highly positive manner, Team Akeso has changed the paradigm in patient care in specific cancers and continues to make this progress every day. Continuing with this trend, Team Summit has 1 multiregional Phase III clinical trial underway, and we are about to dose our first patient in the second multiregional Phase III trial. We have chosen to work with Akeso in each trial not because we had to, but because we wanted to and it's in the best interest of all stakeholders. And they have collaborated fully in working with us. In our second Phase III trial for first-line squamous cell carcinoma lung, they have their own trial in a similar setting specific to China. But alongside that, they've chosen to participate and enroll patients to participate in the Summit-led multiregional trial as well. This demonstrates their dedication to the partnership, their commitment to becoming a worldwide biopharmaceutical company, and their desire to bring ivonescimab to as many patients as possible as quickly as possible. We chose the right partner, and we believe they chose a pretty good one as well. And we are excited about our intent to accomplish with ivonescimab in the coming couple of years.

Thank you, Bob, and good morning, everyone. I'm incredibly enthusiastic about ivonescimab, its potential and what we have already accomplished. In the past 6 months since we closed our deal with Akeso in January, we have held interactions, including 3 large meetings, with the FDA surrounding 3 separate non-small cell lung cancer indications. In addition, we have communicated with other major health authorities and regulatory bodies in each of our other licensed territories: Europe, Canada and Japan. We have launched 1 Phase III clinical trial and will soon treat patients in a second Phase III clinical trial for non-small cell lung cancer in the United States, Canada and Europe, and we plan to begin dosing patients with ivonescimab in Japan early next year. We have 2 Phase III clinical trials for ivonescimab. The first patient treated in the United States in our first Phase III trial was during the second quarter, just over 4 months after the deal closed. We previously announced that we would treat our first patient in the second Phase III trial in the second half of this year, and we are actively working to open up sites within the next month. With true conviction and purpose, our belief in ivonescimab to help accomplish our mission to benefit patients facing difficult odds with unmet medical needs comes with the incredible running power of Team Summit, achieved at speed accomplished by few, if any, in the biotech space. Our conviction has been in place since we were working through our due diligence on ivonescimab and Akeso. Obviously, our upfront payment of $500 million to Akeso spoke volumes about our conviction and belief in ivonescimab. However, at ASCO 2023, some of the data that backs up that conviction was displayed. Last year, at ASCO 2022, amongst other data, Phase II data for 43 patients in frontline treatment of non-small cell lung cancer who received ivonescimab plus chemotherapy was released. At this year's ASCO in June, for the Phase II study, AK112-201 data was updated to display results to data for 135 patients in China with a median follow-up time of over 13 months. While over 825 patients have received ivonescimab in clinical studies in China and Australia, this was a good look into a larger subset of these patients, well over 100 in a single-arm study to speak to the potential of ivonescimab. Of this 135 treatment-naive patients in this Phase II study, 63 patients had squamous cell carcinoma of the lung and received a combination of ivonescimab and chemotherapy. Two-thirds of these patients experienced a response to the combination, and there was a 93% disease control rate. Of the 67% of patients who responded to the treatment in the Phase II study, the median duration of response was 15 months. The median progression-free survival rate for the 63 patients was 11 months. The 95% confidence interval for progression-free survival ranges from 9.5 months to 16.8 months. While overall survival was not yet reached after a median follow-up time of 13.3 months, the estimated 9 months overall survival rate for these 63 patients was 93.2%. We believe the safety profile of ivonescimab plus chemotherapy has thus far been acceptable, with the most common treatment-related adverse events being anemia, decreased neutrophil counts, and hair loss in this population. We believe that this very promising study data, when considering the current standard of care, pembrolizumab plus chemotherapy, helps support our decision to move forward directly into first-line therapy with our second Phase III clinical trial. We are extremely encouraged by what we continue to see with ivonescimab, and our speed is based on our continuously growing conviction regarding its potential to make a significant difference in patients.

Thank you, Maky. I'm incredibly optimistic about the great opportunity we have in front of us with ivonescimab and the progress that we have made as a team. I'll give you an update on the financial developments during the quarter and our financial position as of the end of the quarter. About the P&L. Net loss for the quarter was $14.7 million compared to a net loss of $16.8 million in the second quarter of 2022. As mentioned, we have engaged in 2 Phase III clinical trials for ivonescimab, and the majority of our spending now reflects investments in the development of this molecule. At the same time, we continue to ensure that we are focused and remain well-disciplined with our spending to extend our cash runway as long as possible. Speaking about our cash position, we exited the quarter with $220 million in cash, investments, and receivables. We believe this is sufficient to fund our operating costs and working capital needs with currently planned clinical trials for ivonescimab going into the second half of 2024. This includes appropriately building an experienced oncology team capable of executing multiple large clinical trials and the development work, as well as initial investments to begin setting up manufacturing for ivonescimab in our territory. We have a loan of $100 million on our balance sheet that becomes due in September 2024 and the ability to repay in certain scenarios if we complete a capital-raising transaction prior to September 2024. Our cash equivalents and short-term investments are held in highly liquid and highly-rated money market funds on U.S. treasuries. Our cash is held in large, reputable U.S. and European banks. I feel very good about our overall financial position at the company.

Thank you, Bob, Maky, and Ankur. We can now transition into the Q&A session. I will start, as we've received a number of questions already. And then from there, I will hand it back over to the operator who may open the line for live participants.

I'll take that, Dave. So we don't give specifics on enrollment numbers, but I will say that we're enrolling well to plan. And then the completion of the study will be in the first half of next year. This is the 301 study, yes.

Sure. Let me address both. So regarding the cost, I can't provide specifics, but it is a Phase III trial in the U.S. and Europe in the lung cancer space. As you know, there are several trials that broadly happen in this area, so it's not going to be materially different. You can estimate the cost for about 400 patients in our lung cancer Phase III clinical trial. Regarding the financing question, as I just mentioned, we have $220 million in cash and receivables at the end of the quarter, which is sufficient to fund both the trials that we have announced and some more, at least for the next 12 months. We've also mentioned that our strategy is to continue to expand our development program for ivonescimab beyond the 2 trials that we have announced. So any financing plans and decisions that we will make will consider both these trials as well as any other plans that we have for ivonescimab, and we'll discuss accordingly.

Yes. The fact that the patients are still alive is a terrific thing. And I think you're asking about the approvability of this product; that's ultimately decided by the FDA. But one of the reasons I joined Summit is that when I looked at that data, I was very excited about the performance of this molecule, and that's why we're conducting these Phase III studies. There's good clinical and scientific rationale for the 2 studies that we're doing right now, so I'm very excited.

So for the first study, 301, in our region in North America and Europe, we're planning to enroll 150 patients. And then for the Phase III, the 303, which is the frontline squamous non-small cell lung cancer study, the sample size, have we publicly disclosed it? 400? Yes. Yes. So I think you're referring to the Phase 1 that was run in Australia. That was an Akeso-run study, and they ultimately control that data. However, as part of an FDA package, in my experience, the FDA will want to see all the data, and so they'll probably want to see that in some form.

Yes. Ivonescimab is a really exciting molecule. I have a lot of experience with bispecifics. This one is unique. It takes 2 validated targets, PD-1 and VEGF. So if you think of pembrolizumab and bevacizumab, they are well-validated targets in oncology. What people don't realize is that there's cooperative binding between the 2 target sites. So binding of one ligand increases the binding affinity of the other ligand. So what you have is when VEGF binds, PD-1 binding increases many fold. That means that the highest affinity binding for both targets will be at places where both targets are highly expressed. This is exciting in the mechanism of action. We will disclose additional information on the mechanism of action as it comes out, and there’s other data that we have that's also very exciting.

I want to thank everyone very much for attending our call this morning. As I mentioned earlier, an archived version of this webcast will remain available on our website, www.smmttx.com. Thank you very much for your participation, and hope you enjoy the rest of your day.

This will conclude today's conference call. Thank you for joining us. You may now disconnect.