Summit Therapeutics Inc. Q1 FY2024 Earnings Call

Good morning, ladies and gentlemen, and thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Summit Therapeutics First Quarter 2024 Earnings Conference Call. Also, please note that today's call is being recorded. Thank you. And I would now like to turn the conference over to Mr. Dave Gancarz, Chief Business and Strategy Officer. You may begin.

Thank you. Good morning, and thank you for joining us. Our press release was issued this morning and is available on the homepage of our website. Our Form 10-Q was also filed earlier this morning and is available on our website. Today's call is being simultaneously webcast, and an archived replay will be 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 and 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 of the statements made by our management team and some of the 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 the 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 Manmeet, we will take questions. With that, I would like to turn the call over to Bob.

Thank you, Dave. Good morning, everyone, and thank you for joining us today. Before handing the call over to Maky and Manmeet, I'd like to say a few words about our progress and the recent accomplishments of Team Summit. As a reminder, we are enrolling patients in our two multiregional registrational Phase III clinical trials, HARMONi and HARMONi-3. Along with our partners at Akeso, we have had ivonescimab data featured at multiple medical meetings, including ASCO, the American Society of Clinical Oncology; SITC, the Society for Immunotherapy of Cancer; and the European Lung Cancer Conference or ELCC, as well as the ENA Triple meeting, the annual joint meeting of the European Organization for Research and Treatment of Cancer, the U.S. National Cancer Institute, and the American Association of Cancer Research. This is in addition to more focused meetings where the potential of ivonescimab has been discussed, including the Targeted Therapies of Lung Cancer 2024 meeting and the 2024 Texas Lung Cancer Conference. These have been excellent settings to allow some of the nation and world's leading Key Opinion Leaders (KOLs) to come together to discuss the future of cancer therapy, including the potential for ivonescimab. We continue to receive inbound interest in Investigator-Sponsored Trials (IST) proposals for ivonescimab, and we are moving forward with accepting multiple IST proposals to allow these investigators to start these trials with ivonescimab in multiple different settings, including non-lung settings. This is in addition to our continued collaboration with our partner, Akeso, who continues to generate data in Phase II settings in both lung cancer and solid tumors outside of lung cancer, data which can help support additional late-stage clinical trials. These conferences have been foundational to our 2024 goals of successfully executing on our registrational Phase III trials while expanding our clinical development plan. Additionally, I'd like to take a moment to acknowledge that we strengthened our excellent team recently with the appointment of renowned executive and genomicist, Dr. Mostafa Ronaghi to our Board of Directors. Dr. Ronaghi has played a leading role in the development of technologies that have helped improve the odds for cancer patients, including biomarker-driven diagnostics such as next-generation sequencing technology and platforms. He has co-founded several companies, as well as serving as Illumina's Chief Technology Officer from 2008 to 2021. In addition to his unmatched technical prowess and passion for improving the lives of cancer patients, Dr. Ronaghi has 25 years of experience in the oncology space and is a great business leader in addition to being one of the world's most accomplished scientists. We are fortunate to have his perspective and expertise joining us now. On today's call, in addition to covering ivonescimab's differentiated mechanism of action and our financial results for the quarter, we will provide details and context around what drives our belief and conviction regarding ivonescimab's potential in non-small cell lung cancer and beyond. We are a mission-driven organization with a collective goal to improve quality of life, increase potential duration of life, and resolve serious unmet medical needs. We believe we have the right team and the right platform molecule in ivonescimab to help us realize this goal. Maky and I are thrilled with our progress as Team Summit continues to drive our development path forward and make every effort to efficiently reach critical milestones faster. With data expected this quarter from Akeso's Phase II AK112/301 trial, also known as HARMONi-A, we remain eager to share additional details that will inform both near- and longer-term development strategies for ivonescimab. With that, I will turn the call over to Maky for additional context and recent highlights for consideration. Maky?

Thank you, Bob, and good morning, everyone. As Bob mentioned, we remain incredibly enthusiastic about the accomplishments of Team Summit only one year into our partnership with Akeso. Before touching on ivonescimab's unique mechanism of action and clinical highlights, I would like to remind you of the clinical work that has been conducted to date with ivonescimab. Over 1,600 patients have been treated with ivonescimab. Currently, between Summit and Akeso, there are 19 clinical trials around the globe evaluating ivonescimab, four of which are Phase III clinical trials, along with 15 Phase I or II trials; seven of these 19 trials are evaluating ivonescimab in solid tumor settings beyond non-small cell lung cancer. We are sponsoring two of these clinical trials, HARMONi and HARMONi-3, two Phase III clinical trials in non-small cell lung cancer. We are fortunate to have created such a strong partnership and foster an ongoing collaboration with Akeso and the ability to leverage data from multiple solid tumor studies to support and inform Summit on clinical development in our licensed territories. As a reminder, ivonescimab is our lead investigational compound and the only PD-1, VEGF bispecific antibody in Phase III in the U.S., Canada, Europe, or Japan, or licensed territories. Ivonescimab brings these two highly validated mechanisms together into one novel molecule targeting both PD-1 and VEGF. What differentiates ivonescimab and its intentional design is its cooperative binding characteristics. Basically, in the presence of VEGF, the binding affinity of ivonescimab to PD-1 in vitro increases by 18-fold. In the presence of PD-1, the binding affinity for VEGF increases by over fourfold in vitro. In addition to the half-life of ivonescimab, which is approximately six to seven days compared to the estimated half-life of bevacizumab of 20 days or pembrolizumab of 23 days, combined with the cooperative binding characteristics of ivonescimab and its purposely engineered structure, we believe ivonescimab can go beyond the sequential administration of anti-PD-1 and anti-VEGF therapy. Our goal is to improve upon previously established efficacy standards and safety profiles associated with these two targets, and we believe ivonescimab has the potential to achieve this. Next, I would like to review our two ongoing Phase III trials, HARMONi and HARMONi-3, that are designed with registrational intent. As Bob mentioned, our partner, Akeso, is expecting Phase III data this quarter, which will play a key role in supporting and informing our own clinical development efforts. Starting with our registrational Phase III HARMONi trial, this is our fast-to-market approach where we are evaluating ivonescimab as a second-line treatment 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. In addition, our partners at Akeso have run a parallel trial known as HARMONi-A or AK112-301. This is a trial run specifically in China, evaluating patients who have progressed after an EGFR TKI, a very similar population. Akeso completed enrollment in HARMONi-A, performed its PFS analysis, its primary endpoint, and submitted its NDA application for marketing approval in China to the Chinese regulatory authority, the CDE. Akeso has previously announced earlier this year that we expect to receive a decision from the CDE in this quarter, the second quarter of 2024. If approved by the CDE, we anticipate the result of HARMONi-A to be disclosed along with an approved label. This decision, we believe, could be a catalyst event for ivonescimab and therefore, Summit for two reasons: one, the HARMONi-A trial is conducted in a very similar patient population as our Phase III HARMONi trial, and two, recall that earlier, we discussed that our HARMONi trial is a multiregional trial enrolling patients in North America, Europe, and China. For those patients coming from China, given the overlapping patient population and similar clinical trial design, a large number of those patients enrolled by Akeso in the HARMONi-A trial are also intended to be included in our analysis for our HARMONi trial. We expect to include all patients except those who did not receive a third-generation TKI in China into our analysis for our HARMONi trial. That means we would include approximately 80% to 85% of the HARMONi-A patients from China in our HARMONi trial. Therefore, while we are adding additional patients from North America and Europe, we believe a positive readout and result for the trial in China by our partners at Akeso could be a positive signal for our multiregional HARMONi trial. As previously discussed, we expect to complete enrollment of our multiregional HARMONi trial in the second half of this year. Moving next to our Phase III HARMONi-3 trial, we are evaluating ivonescimab as frontline treatment 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 began enrollment in this trial in the fourth quarter of 2023 and are continuing to open sites and expand the reach of the clinical trial as quickly as possible. Across both these trials, we continue to work tirelessly to achieve our aggressive but realistic goals for ivonescimab and ultimately improve upon 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 III trials has come in part from data generated from Phase II clinical trials conducted by Akeso. Data announced in the first quarter this year and later presented in March at the European Lung Cancer Conference from Akeso's Phase II AK112-201 trial, evaluating ivonescimab plus chemotherapy in multiple lung cancer settings showed patients with first-line advanced or metastatic squamous non-small cell lung cancer without actionable genomic alterations, a patient population that aligns closely with our HARMONi-3 trial, achieving a median progression-free survival of 11.1 months. Median overall survival has not yet been reached after a median follow-up time of 22.1 months. In this cohort, treatment-related adverse events leading to the discontinuation of ivonescimab was 11%, and there were no treatment-related adverse events leading to death. In a separate cohort from this trial, which supports our HARMONi trial, patients with advanced or metastatic non-small cell lung cancer with tumors positive for EGFR mutations and having progressed following an EGFR TKI achieved a median progression-free survival of 8.5 months and a median overall survival of 22.5 months was observed. In this cohort, there were no treatment-related adverse events leading to the discontinuation of ivonescimab or death. In both settings, the Phase II data for ivonescimab plus chemotherapy shows favorably when considering the historical results seen from the standard of care in each setting. Also presented recently at ELCC 2024, ivonescimab has promising Phase II data in non-small cell lung cancer patients with brain metastasis. The analysis consisted of 35 patients from Akeso's Phase II trials, AK112-201 and AK112-202, with advanced or metastatic non-small cell lung cancer who had asymptomatic brain metastases at baseline and receive ivonescimab alone or in combination with chemotherapy. Across all patients analyzed, an intracranial response rate of 34% was achieved by renal criteria, and a median intracranial progression-free survival of 19.3 months was noted. All patients who did not achieve a response demonstrated stable disease or non-progression. No patient experienced intracranial disease progression at the time of the initial follow-up scan, and importantly, no cases of intracranial bleeding complications were observed in these patients. Promising development and improved therapy options are needed for patients with lung cancer as it’s expected that up to 20% will develop brain metastases across all types of lung cancer. And for those with common driver mutations such as EGFR mutation, it is expected that 50% to 60% may develop brain metastases over the course of their disease. We believe that the study data is very promising, especially when considering the current therapeutic options and standard of care in these settings. Ivonescimab's favorable Phase II data has supported and continues to support our decision to confidently move forward in both of our Phase III clinical trials and continue to build out our development strategy beyond lung cancer. While non-small cell lung cancer represents our initial development plan for ivonescimab, we will continue to expand our clinical program. HARMONi and HARMONi-3 represent the first step in our strategy, and we believe ivonescimab has strong potential to make a difference in several other solid tumors as well. We have received a high level of interest from key opinion leaders and other physician leaders regarding what ivonescimab may do to create a significant positive difference in and outside of lung cancer. We continue to receive and are considering multiple inquiries for potential investigator-sponsored trials or IST programs, and we expect to share additional information later in 2024. In addition, as we have been discussing this year, we plan to expand our reach beyond non-small cell lung cancer response studies as well. We continue to work with our partners at Akeso to review Phase II clinical trial data in order to determine our next steps forward. As you can see from this slide, there are a number of potential indications arising from gynecological tumors, head and neck cancer, triple-negative breast cancer, colorectal cancer, and other solid tumors where we may be able to explore ivonescimab further. We continue to be very optimistic about the promising potential of ivonescimab, including working through designing future clinical trials and working through the diligence process to optimize these trials while obtaining more clinical data. We are excited over the coming six to nine months to provide more details regarding our clinical development plan for ivonescimab. Finally, to capitalize on and expand our reach with physicians from KOL and academic leaders to community physicians and local caregivers, we continue to participate in key medical meetings, including the upcoming ASCO conference, where two ivonescimab abstracts for presentation have already been accepted, including the expected HARMONi-A trial data from China. We intend to educate and activate as many physicians and healthcare leaders as possible regarding ivonescimab and its potential. With that update, I will now ask Manmeet to provide details on our financial position and outlook.

Thank you, Maky and Bob, and good morning, everyone. We filed this morning our 10-Q for the first quarter of 2024. Today, I will provide you with an update on the operations and financial position. On the operations front, we continue to enroll both HARMONi and HARMONi-3 trials. We are on track to complete enrollment for patients in the HARMONi trial during the second half of this year. We have also initiated preparations for technology transfer to enable a second supply source for manufacturing of ivonescimab in our territories. On the financial front, I will discuss Summit's cash position, updated cash runway guidance, and provide some color on our operating expenses. Starting with cash, we ended our first quarter of 2024 with a strong cash position of $157 million. Based on our planned operations, we expect that we have sufficient cash to run our operations through the first quarter of 2025. Turning to expenses, I will speak to both GAAP and non-GAAP numbers. You can refer to our press release for a reconciliation of GAAP to non-GAAP financial measures. To remind, non-GAAP expenses exclude stock-based compensation and one-time charges related to in-process R&D. During the first quarter of 2024, our GAAP R&D expenses were $30.9 million compared to $24.8 million in the fourth quarter of 2023. Non-GAAP R&D expenses were $28.5 million in the first quarter of 2024 compared to $22.4 million for the fourth quarter of 2023. Turning to G&A, our first quarter 2024 GAAP G&A expenses totaled $11.7 million compared to $11.6 million in the fourth quarter of 2023. Non-GAAP G&A expenses were $4.6 million in the first quarter of 2024 compared to $5.3 million for the fourth quarter of 2023. Non-GAAP operating expenses were $33 million. Aligned with the company's focus, the majority of our spending is towards research and development, which is $28.3 million for the quarter on a non-GAAP basis, focused on the clinical development of ivonescimab, including the clinical trials and technology transfer. The G&A spend of $4.6 million for the quarter on a non-GAAP basis represents all the functions that provide infrastructure and support for this development. With that, I will hand it back over to Dave.

Thank you, Bob, Maky, and Manmeet. We'll now see if there are any questions that our team can help answer for anyone on the line. Operator, if you could please open the line for any questions.

And your first question comes from Brad Canino with Stifel.

A couple from me. First, can you start by framing how you view the Phase II updates at ELCC? I mean you made the strategic choice to pursue frontline squamous lung as that first Phase III where you're conducting head-to-head against KEYTRUDA, how do these data support that specific strategy?

Yes, Brad, I'll take the question. So a couple of things. First, the data is an update, and it's consistent. So I think that's important for the update. There weren't any major changes. I mean the data still remains strong at squamous as well as non-squamous cancer. I think the purpose for that update was really to make more European investigators aware since we'd only presented at ASCO previously. What was the second question, again?

Let me ask another question then. Given that you have the HARMONi-A cohort from your partner Akeso scheduled for presentation at ASCO on May 31, what does this indicate about the potential timing of the China CDE decision for your partner's second-line EGFR filing? Could the regulatory decision still occur after these data are presented?

Sure. Brad, this is Dave Gancarz. At this point, we don't have any additional insight beyond the update we've provided regarding the timing of the data we still expect in the second quarter based on the guidance from Akeso. This is their trial, and they are both sponsoring and analyzing the data for us, so we remain blinded to that aspect. We are working through the details as they become available, but we can only rely on the fact that they have announced the expected timing for Q2, and we are proceeding accordingly.

Okay. And then a similar type of question. Could I ask for a status update for Akeso's 303 interim analysis plan?

Sure, Brad. This is Dave again. I think that this is a trial that is sponsored, and the data will be analyzed on the Akeso side, which is separate from Summit. As of now, to our knowledge, no interim analysis has been performed yet. They have indicated that results are expected in the second quarter.

Okay. And then last for me, just a question on the broader plans for the company at ASCO. And what, if any, gating factors remain for the announcement of some broader pivotal development plan for ivonescimab in the U.S. and EU that was discussed on the call?

Yes. We're actively engaging health authorities to sort of put Phase III data or Phase III trials together, rather. Based on the upcoming Phase II data from Akeso, we've seen very exciting data coming out. We haven't disclosed it, but it should be done shortly.

And we will take our next question from Carter Gould with Barclays.

Maybe just to sort of follow up on Brad's question and maybe put a finer point to it. So just to be clear, when we think about sort of the disclosure that comes from Akeso in sort of Q2 on the back or in relation to 301. Essentially, are you going to be finding out that data at the same time as us? Or will there be some sort of gap there that we should be aware of? And I guess the follow-on to that is on the back of those data, have you contemplated any potential changes or amendments to HARMONi-1?

Yes. So let me take the second question. No, we're not contemplating any changes to the HARMONi study. We'll become aware of the HARMONi data when you become aware of it. We became aware of the abstract title release. We'll be eagerly looking for the abstract releases as well as attending the presentation. With that said, the other potential public disclosure is if there's an approval, there would be a release of the label as well in China.

And with no further questions at this time, I would now like to turn the call back to Mr. Dave Gancarz for closing remarks.

I'd like to thank everybody for taking the time to join us this morning on our quarterly earnings call. I hope you have a wonderful day, and thank you very much for your time.

Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.