Summit Therapeutics Inc. Q4 FY2023 Earnings Call

Good morning and welcome to Summit's Fourth Quarter and Year End 2023 Earnings Call. Please refer to the company's website for updates. Please note that today's call is being recorded. At this time, I would like to turn the call over to Dave Gancarz, Summit Therapeutics Chief Business and Strategy Officer. You may now proceed, please.

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. Our forms 10-K and S-3 were also filed earlier this morning and are available on 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 Chief Executive Officer; Dr. Maky Zanganeh, our Chief Executive Officer and President; Manmeet Soni, our Chief Operating Officer; Ankur Dhingra, our Chief Financial Officer; and Dr. Allen Yang, our Chief Medical Officer. Before we get started with the rest of the call, I would like to note that some statements made by our management team and some responses to questions that we may 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 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. With that, I will turn the call over to Bob.

Thank you, Dave. Good morning everyone, and thank each of you for joining us today. I'd like to say a few words about our progress and what team Summit has accomplished. Then I will hand it over to Maky to add more color and then Ankur who will provide financial updates. It has been just one year since we closed on our partnership with Akeso and I'm very proud of the accomplishments and impressive progress team Summit has made in this period of time. Ivonescimab, our lead investigational compound and the only PD-1/VEGF bispecific antibody in Phase 3 in Summit’s territories, continues to actively enroll two registrational Phase 3 trials in non-small cell lung cancer: the HARMONi and HARMONi-3 trials. In HARMONi, we are looking at ivonescimab in combination with chemotherapy as a second-line treatment for non-small cell lung cancer patients with EGFR mutations with disease progression after receiving a third-generation TKI. In HARMONi-3, we are studying ivonescimab in combination with chemotherapy as first-line treatment for patients with squamous cell carcinoma of the lung in a head-to-head trial against the current standard of care. We treated our first patient in the HARMONi-3 study, our second Phase 3 study, in the fourth quarter of 2023. Combined, the two populations represented by these two clinical trials account for approximately 120,000 patients in our licensed territories for whom ivonescimab could potentially offer a better treatment option. Team Summit's conviction and our belief in ivonescimab continues to drive our progress forward in our efforts to collapse time and reach critical milestones faster. We approach these efforts with the intent of helping patients improve quality of life, increase the potential duration of life, and resolve serious medical needs in line with Summit's strongly held mission statement. Maky and I are appreciative and honored to be leading team Summit, where our accomplished leaders and team members have unparalleled track records for high-speed execution that delivers intended results. This experience and our expertise are foundational to achieving our goals for 2024 and beyond, continuing to execute on our Phase 3 clinical trials while expanding our clinical development plan. With that, I would like to turn it over to Maky to provide additional context for our accomplishments and next steps.

Thank you Bob and good morning everyone. As Bob discussed, I remain incredibly enthusiastic about ivonescimab and its potential, the strength of team Summit, and the accomplishments we have made just one year into our partnership with Akeso. Across the globe, over 1,600 patients have now been treated with ivonescimab. Currently, Akeso is conducting or participating in 19 clinical trials evaluating ivonescimab, four of which are in Phase 3, and seven trials are evaluating ivonescimab in solid tumor settings beyond non-small cell lung cancer. We are fortunate to have such a strong partnership, and ongoing collaboration with Akeso, including the ability to leverage data generated for ivonescimab across multiple solid tumors studies in support of Summit's own clinical development in our licensed territories, the U.S., Canada, Europe, and Japan. Turning specifically to Summit's own Phase 3 trial. Active enrollment continues in HARMONi and HARMONi-3. As a reminder, HARMONi, our fast-to-market approach, is in non-small cell lung cancer patients with EGFR mutations who have progressed following a third generation TKI such as osimertinib. We intend to complete enrollment in this trial in the second half of 2024. Our HARMONi-3 trial is seeking a frontline treatment indication for patients with squamous non-small cell lung cancer. This head-to-head trial is designed to compare ivonescimab plus chemotherapy against the current standard of care, pembrolizumab plus chemotherapy. We continue to progress, as well as collapse time in order to achieve our aggressive but realistic goals for ivonescimab to ultimately improve existing treatment options for the many lung cancer patients with serious ongoing unmet needs. Our conviction and belief in the potential of ivonescimab and our decision to quickly pursue two registrational Phase 3 trials has come in part from data generated from Phase 2 clinical trials conducted by Akeso. This data evaluating ivonescimab plus chemotherapy in multiple lung cancer settings, AK112-201, was updated by Akeso last month. Notably, in patients with first-line advanced or metastatic squamous non-small cell lung cancer without actionable genomic alterations in a Phase 2 population supporting our HARMONi-3 trial, a 24-month overall survival rate of 64.8% was observed. Median overall survival has not yet been reached after a median follow-up time of 21 months. Furthermore, in patients with advanced or metastatic non-small cell lung cancer with tumors positive for EGFR mutations, and having progressed following an EGFR TKI—the Phase 2 trial cohort supporting our HARMONi trial—a median overall survival of 22.5 months was observed. In both settings, ivonescimab has had an acceptable safety profile in the Phase 2 clinical trial. We believe that this study data is very promising. Also, when considering the current standard of care in this patient population, the Phase 2 data supports our decision to directly move forward in both of our Phase 3 clinical trials. I would also like to spend a moment to remind everyone of the differentiated mechanism of action of ivonescimab. To start, ivonescimab brings two highly validated mechanisms in oncology together into one novel molecule targeting both PD-1 and VEGF. And, as Bob mentioned earlier, we are the only Phase 3 PD-1 VEGF bispecific in unlicensed territories, making it the most clinically advanced compound of its kind in the U.S., Canada, Europe, and Japan. Our goal is to improve upon previously established efficacy standards, in addition to side effects and safety profile associated with these two targets. We believe ivonescimab has the potential to achieve this. Moving to meaningful near-term catalysts for ivonescimab, we are expecting multiple events to occur in 2024. Next quarter, there are two key milestones expected from randomized Phase 3 clinical trials in China from our partners at Akeso. Data from the Chinese patients enrolled in AK112-301—a large portion of which represent the Chinese patients included in the modified intent to treat population of our multiregional study, also known as HARMONi—was submitted to the Chinese regulatory authority, the CDE, last year specifically seeking marketing approval in China. A decision is expected in the second quarter of this year from the CDE. We also expect that Akeso will provide a data readout of the top-line results of their Phase 3 trial at this time. Additionally, Akeso has an interim analysis planned for next quarter for its study comparing ivonescimab to pembrolizumab in a monotherapy setting for first-line advanced lung cancer patients harboring tumors with positive PD-L1 expression referred to as AK112-303. This head-to-head trial against pembrolizumab is a major milestone for ivonescimab, both in differentiating ivonescimab from a PD-1 antibody, as well as illustrating the potential of its novel mechanism of action that does not exist in oncology therapeutics today. Given the direct implications of the AK112-301 results on our HARMONi study, as well as the potential ability to compare ivonescimab to pembrolizumab in AK112-303, we believe these events will be pivotal drivers in ivonescimab's development globally. Finally, to capitalize on and expand our reach with physicians from KOLs and academic leaders to community physicians and local caregivers, we are participating in a few upcoming conferences. We will be at the IASLC Targeted Therapies for Lung Cancer meeting later this week in Santa Monica, California. In addition, we plan to participate in the ESMO European Lung Cancer Congress 2024 next month in Prague, where we have submitted, along with our partners at Akeso, multiple abstracts for presentation on ivonescimab. We intend to educate and engage as many physicians as possible regarding ivonescimab and its potential as we ramp up Phase 3 clinical trials in the United States, Europe, Canada, and Japan. With that update, I will now ask Ankur to provide details on our financial position and outlook.

Thank you Maky and Bob, and good morning, everyone. Echoing the sentiment, we're very pleased with the speed of execution of team Summit and our partners at team Akeso, in the development of ivonescimab. Moving to slide 8. I'll give you an update on Summit's cash position, the extended cash runway guidance, and the P&L. We have a strong cash position with $186 million in cash and investments as of the end of the year 2023. This position provides us with a strong ability to continue our investments in the development of ivonescimab. In addition, we have taken steps to extend our cash runway going into the first quarter of 2025. As you may recall, our previous guidance for cash runway was going into September of 2024. As we announced earlier, we have amended the $100 million note to extend the maturity date to April 1st, 2025, and the future interest payments will also be paid at maturity. This extension, coupled with our strong cash position, provides funding to make significant progress in the development of ivonescimab, as well as covering some of the key milestones that Maky spoke about. Going to the P&L, I will speak about non-GAAP OpEx, which excludes stock-based compensation, in-process R&D, and certain impairment charges. You can refer to our press release for reconciliation of GAAP to non-GAAP financial measures. During the fourth quarter of 2023, our non-GAAP operating expenses were $27.7 million. Aligned with the company's focus, the majority of our spending is towards research and development, which is $22.4 million for the quarter on a non-GAAP basis, and is focused on the clinical development of ivonescimab, including the clinical trials, the technology transfer, and personnel costs. The G&A spend of $5.3 million for the quarter on a non-GAAP basis represents all the functions that provide infrastructure and support for this development. So, in summary, we're excited about the potential of ivonescimab and have made a lot of progress in its development during 2023. We have a strong cash position and we have extended our cash runway going into 2025. And with that, I will hand it back over to Dave.

Thank you, Bob, Maky, and Ankur. We can now transition to see if there are any questions that we could help answer. Operator, if you could please open the line for questions.

Our first question comes from Brad Canino from Stifel. Your line is now open.

Hi, good morning and thank you for the updates and having me on your call. I just wanted to get your thoughts on how to best interpret the upcoming Chinese regulatory action on ivonescimab for EGFR-mutant lung, particularly in relation to your ongoing HARMONi study, and I'm asking in light of some of the differences between the two studies, thinking about the third generation TKI pretreatment requirements, and then your study also adding the co-primary of survival. Thank you.

Hi Brad, thanks for the question. This is Allen Yang, the Chief Medical Officer. So I think you should view it positively, even the fact that, as you know, the Chinese version of the HARMONi study enrolled approximately 320 patients, of which about 50 of them received a first or second generation TKI, which is still considered standard care in China. We will be using about 270 patients of that data, which only received a third-generation TKI such as osimertinib. And that represents about 85% of the data. So I think the data should correlate pretty well for the global study. Now, remember, we're adding 150 patients from North America and Europe to that, and I'm not aware of any treatment differences between Chinese and U.S. patients. In addition, I think the key question is whether or not there is any difference in receiving a first or second-generation TKI prior to receiving a third-generation or receiving a third-generation TKI on the impact of chemo and immunotherapy. And the answer is, I'm not aware of any such data. I don't think that data exists. And then I think the last question you asked was around PFS and OS. And so PFS seems to track pretty well with OS. That's why it's used as a surrogate endpoint as often, especially in patients with shorter survival periods. The shorter the survival period, the more likely that PFS will correlate with OS. But it is an unknown at this time. And so the fact that we have co-primary endpoints is a little bit different than the Akeso study. Thanks for the question, Brad.

Great. Thank you very much.

Great. Thank you. Thanks for the questions. I just got a couple. One is your head-to-head study against the pembrolizumab and chemotherapy combo against non-small cell lung cancer. Can you just talk a little bit about what's the differentiation for ivonescimab and then maybe a little bit more into, I guess, what's the hurdle? Is it just the study on which pembrolizumab chemotherapy combo got approved? Just how to think about the hurdle that you're looking to either be equal to or surpass? And I just got a quick follow-up.

Hi, Hartaj. Thanks for the question. So I'll answer the second part first. Well, let me just review the two studies. As Maky mentioned earlier, there's the HARMONi study, which is our fast-to-market study. But that was Brad's question. In the second line, EGFR mutant population, the HARMONi-3 study, which is sort of the first frontline study in squamous non-small cell lung cancer. So the second question about the benchmark is pretty easy. It's the KEYNOTE 407 study. This is where Merck got approval for pembrolizumab in the similar population. In terms of what distinguishes ivonescimab, it’s a very clean study. It’s ivonescimab chemotherapy and then pembro using the same chemotherapy, which was based on the 407 study. So I think there’s a couple of ways that are different. ivonescimab has a VEGF component to it. So if you think about the two targets independently, pembrolizumab is PD-1, the second one is VEGF. We think that adds value to patients and is important for patients. Then there's the cooperativity that we believe accentuates not only the VEGF but also the PD-1. We know that Avastin was trying to be developed in this space, and after Phase 2, they halted development due to a concern about bleeding risks. Lung cancer patients in the squamous setting never really realized the potential of anti-VEGF. We believe that the safety profile demonstrated to date in the Phase 2, as well as in the large database, is supportive of developing a VEGF that has been attached to PD-1 with cooperative binding in this space. So there are several different aspects where we think we can have an advantage. What's your follow-up question, Hartaj?

Yes, great. Thank you so much. That's really good detail. If you can just kind of give us what are the next clinical and regulatory steps for HARMONi and HARMONi-3? I know HARMONi-3 might be a little bit into the future, but just not looking for guidance, but just a rough change of events there. Thank you.

Around HARMONi-3, I don't think we've disclosed this. I'll turn to Dave, but I'll just say that you can sort of calculate enrollment based on the KEYNOTE 407, which is the key benchmark. And what's interesting is that the squamous non-small cell lung cancer space has become a lot less crowded recently. So I think that will give us a lot of freedom to operate. I don't know, Dave, if you want to add anything to our disclosures.

Thanks, Allen. So, at this point, what we have disclosed is that the HARMONi studies, we plan to complete enrollment in the second half of 2024. We haven't given further guidance with respect to the regulatory process there, except that we have our co-primary endpoints. From a HARMONi-3 perspective, we just began enrollment in the fourth quarter of 2023, and we've yet to give guidance in terms of when that will complete, but we're currently enrolling and are excited about moving quickly in that setting as well.

Great. Thank you, everyone. Thanks for the updates.

Don't have any raised hands right now, so I'd now like to hand back over to Dave Gancarz. Thank you.

I just want to thank everyone for attending our call and your continued interest in Summit. An archived version of this webcast will be available later today on our website, www.smmttx.com. I want to thank everyone again and enjoy the rest of your day. Thank you.

Thank you so much for attending today's session. Have a wonderful day.