smmt-20220630

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 10-Q

_________________


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________

Commission File Number: 001-36866

_______________________________

Summit Therapeutics Inc.

(Exact name of registrant as specified in its charter)

_____________________


Delaware						37-1979717
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

2882 Sand Hill Road, Suite 106,

Menlo Park, CA

(Address of principal executive offices)

94025

(Zip Code)

617-514-7149

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address and former fiscal year, if changed since last report)

_________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	SMMT	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 4, 2022, there were 98,122,356 shares of common stock, par value $0.01 per share, outstanding.


		Page

PART I
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of June 30 , 2022 and December 31, 2021	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30 , 2022 and 2021	5
	Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended June 30 , 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30 , 2022 and 2021	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5	Other Information	30
Item 6.	Exhibits	31
Signatures		31

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or this Report, contains forward-looking statements that involve substantial risks and uncertainties. All statements contained in this Report, other than statements of historical fact, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The forward-looking statements in this Report include, among other things, statements about:

•the timing and evaluation of next steps with respect to our lead product candidate, ridinilazole (formerly SMT19969), for the treatment of patients with Clostridioides difficile infection (formerly known as Clostridium difficile infection) based upon our review of the topline results for the Phase III Ri-CoDIFy study announced in December 2021, including exploring potential partnership opportunities;

•the timing of and our ability to obtain marketing approval of ridinilazole, and the ability of ridinilazole to meet existing or future regulatory standards;

•the timing and conduct of clinical trials for any other product candidates;

•the potential benefits of our Discuva Platform to identify new bacterial targets for drug discovery and development;

•our plans to conduct research and development and advance potential new mechanism antibiotic compounds identified and developed under our Discuva Platform;

•the potential benefits and future operation of our collaboration with the Biomedical Advanced Research and Development Authority, or BARDA;

•the potential benefits and future operation of our license and commercialization agreement with Eurofarma Laboratórios SA, or Eurofarma;

•our plans with respect to possible future collaborations and partnering arrangements;

•the potential benefits of possible future acquisitions or investments in other businesses, products or technologies;

•our plans to pursue research and development of other future product candidates;

•the potential advantages of ridinilazole and our other new mechanism antibiotics;

•the rate and degree of market acceptance and clinical utility of ridinilazole and our other new mechanism antibiotics;

•our estimates regarding the potential market opportunity for ridinilazole and our other new mechanism antibiotics;

•our sales, marketing and distribution capabilities and strategy;

•our ability to establish and maintain arrangements for manufacture of ridinilazole;

•our intellectual property position;

•our estimates regarding expenses, future revenues, capital requirements and needs for additional financing;

•the impact of government laws and regulations;

•our competitive position;

•the need to raise additional capital to fund ongoing operations and capital needs; and

•the impact of the novel coronavirus pandemic (COVID-19) and the response to it.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Report, particularly in the “Risk Factors” section in this Report, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

You should read this Report and the documents that we have filed as exhibits to this Report completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Summit Therapeutics Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)


	June 30, 2022		December 31, 2021
Assets
Current assets:
Cash	$	57,335	$	71,791
Accounts receivable	238		1,464
Prepaid expenses	5,393		7,161
Other current assets	2,300		1,201
Research and development tax credit receivable	14,132		15,695
Total current assets	79,398		97,312

Non-current assets:
Research and development tax credit receivable	2,323		—
Property and equipment, net	1,095		694
Right-of-use assets	2,017		2,790
Goodwill	1,806		2,009
Intangible assets, net	8,900		10,399
Other assets	179		170
Total assets	$	95,718	$	113,374

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	3,574	$	4,374
Accrued expenses	5,513		7,197
Accrued compensation	1,906		4,125
Lease liabilities	684		1,091
Deferred revenue and other income	3,231		7,939
Other current liabilities	265		897

Total current liabilities	15,173		25,623

Non-current liabilities:
Lease liabilities, net of current portion	1,322		1,691
Other non-current liabilities	2,594		2,776
Promissory note payable to a related party	25,312		—
Total liabilities	44,401		30,090

Commitments and contingencies (Note 15)

Stockholders' equity:
Preferred stock, $0.01 par value, 20,000,000 shared authorized; none issued and outstanding at June 30, 2022 and December 31, 2021, respectively	—		—
Common stock, $0.01 par value: 250,000,000 shares authorized; 98,122,356 and 98,039,540 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	981		980
Additional paid-in capital	391,220		384,049
Accumulated other comprehensive loss	(3,168)		(2,197)
Accumulated deficit	(337,716)		(299,548)
Total stockholders' equity	51,317		83,284
Total liabilities and stockholders' equity	$	95,718	$	113,374

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

Summit Therapeutics Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue	$	235	$	57	$	485	$	249
Operating expenses:
Research and development	9,008		23,923		29,564		42,302
General and administrative	6,933		5,984		13,592		10,169
Total operating expenses	15,941		29,907		43,156		52,471
Other operating income	3,014		6,120		7,821		11,569
Operating loss	(12,692)		(23,730)		(34,850)		(40,653)
Other expense, net	(4,079)		(686)		(3,318)		(1,251)


Net loss	$	(16,771)	$	(24,416)	$	(38,168)	$	(41,904)
Net loss per share:
Basic and diluted	$	(0.17)	$	(0.27)	$	(0.38)	$	(0.48)
Weighted-average shares used to compute net loss per share:
Basic and diluted	99,654,092		92,065,957		99,627,701		88,110,285

Comprehensive loss:
Net loss	$	(16,771)	$	(24,416)	$	(38,168)	$	(41,904)
Other comprehensive (loss) income:
Foreign currency translation adjustments	789		540		(971)		1,215
Comprehensive loss	$	(15,982)	$	(23,876)	$	(39,139)	$	(40,689)

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

Summit Therapeutics Inc.

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except share data)

(Unaudited)


	Three Months Ended June 30, 2022
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at March 31, 2022	98,122,356	981		388,328		(3,957)		(320,945)		64,407
Stock-based compensation	—	—		2,496		—		—		2,496
Imputed interest on promissory note payable to a related party	—	—		396		—		—		396
Foreign currency translation adjustment	—	—		—		789		—		789
Net loss	—	—		—		—		(16,771)		(16,771)
Balance at June 30, 2022	98,122,356	$	981	$	391,220	$	(3,168)	$	(337,716)	$	51,317

	Six Months Ended June 30, 2022
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at December 31, 2021	98,039,540	980		384,049		(2,197)		(299,548)		83,284
Issuance of common stock under stock purchase plans and exercise of stock options	82,816	1		186		—		—		187
Stock-based compensation	—	—		6,492		—		—		6,492
Imputed interest on promissory note payable to a related party	—	—		493		—		—		493
Foreign currency translation adjustment	—	—		—		(971)		—		(971)
Net loss	—	—		—		—		(38,168)		(38,168)
Balance at June 30, 2022	98,122,356	$	981	$	391,220	$	(3,168)	$	(337,716)	$	51,317


	Three Months Ended June 30, 2021
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at March 31, 2021	82,919,522	$	829	$	295,129	$	(3,119)	$	(228,434)	$	64,405
Rights offering of common stock, net of offering costs of $118	14,312,976	143		74,739		—		—		74,882
Issuance of common stock from exercise of stock options	119,301	2		239		—		—		241
Stock-based compensation	—	—		3,672		—		—		3,672
Imputed interest on promissory note payable to a related party	—	—		103		—		—		103
Foreign currency translation adjustment	—	—		—		540		—		540
Net loss	—	—		—		—		(24,416)		(24,416)
Balance at June 30, 2021	97,351,799	$	974	$	373,882	$	(2,579)	$	(252,850)	$	119,427

	Six Months Ended June 30, 2021
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at December 31, 2020	82,575,064	$	826	$	293,367	$	(3,794)	$	(210,946)	$	79,453
Rights offering of common stock, net of offering costs of $118	14,312,976	143		74,739		—		—		74,882
Issuance of common stock from exercise of stock options	463,759	5		1,133		—		—		1,138
Stock-based compensation	—	—		4,540		—		—		4,540
Imputed interest on promissory note payable to a related party	—	—		103		—		—		103
Foreign currency translation adjustment	—	—		—		1,215		—		1,215
Net loss	—	—		—		—		(41,904)		(41,904)
Balance at June 30, 2021	97,351,799	$	974	$	373,882	$	(2,579)	$	(252,850)	$	119,427

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

Summit Therapeutics Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)


	Six Months Ended June 30,
	2022		2021
Cash flows used in operating activities:
Net loss	$	(38,168)	$	(41,904)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense	941		315
Unrealized foreign exchange loss (gain)	2,366		(1,495)
Amortization of operating right-of-use assets	558		470
Depreciation	168		170
Amortization of intangible assets	480		512
Stock-based compensation	6,492		4,540
Change in operating assets and liabilities:
Accounts receivable	1,160		(704)

SEC Form 10-Q filed by Summit Therapeutics Inc.