smmt-20220930

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 September 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 November 2, 2022, there were 201,321,175 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 September 30, 2022 and December 31, 2021	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 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	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
PART II
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
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 of and our ability to seek a partner or a divestiture of ridinilazole (formerly SMT19969), the Company's Phase III product candidate for the treatment of patients with Clostridioides difficile infection (formerly known as Clostridium difficile infection);

•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 our new mechanism antibiotics;

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

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

•our sales, marketing and distribution capabilities and strategy;

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

•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)


	September 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	121,971	$	71,791
Accounts receivable	140		1,464

Prepaid expenses	1,622		7,161
Other current assets	428		1,201
Research and development tax credit receivable	12,958		15,695
Total current assets	137,119		97,312

Non-current assets:
Research and development tax credit receivable	3,301		—
Property and equipment, net	930		694
Right-of-use assets	4,230		2,790
Goodwill	1,655		2,009
Intangible assets, net	7,952		10,399
Other assets	140		170
Total assets	$	155,327	$	113,374

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	1,431	$	4,374
Accrued expenses	11,141		7,197
Accrued compensation	2,509		4,125
Lease liabilities	1,392		1,091
Deferred revenue and other income	—		7,939
Other current liabilities	209		897

Total current liabilities	16,682		25,623

Non-current liabilities:
Lease liabilities, net of current portion	2,973		1,691
Other non-current liabilities	2,424		2,776

Total liabilities	22,079		30,090

Commitments and contingencies (Note 16)

Stockholders' equity:
Preferred stock, $0.01 par value, 20,000,000 shares authorized; none issued and outstanding at September 30, 2022 and December 31, 2021, respectively	—		—
Common stock, $0.01 par value: 350,000,000 shares authorized; 201,321,175 and 98,039,540 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	2,013		980
Additional paid-in capital	493,553		384,049
Accumulated other comprehensive loss	(3,217)		(2,197)
Accumulated deficit	(359,101)		(299,548)
Total stockholders' equity	133,248		83,284
Total liabilities and stockholders' equity	$	155,327	$	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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue	$	220	$	1,309	$	705	$	1,558
Operating expenses:
Research and development	17,049		19,943		46,613		62,245
General and administrative	5,573		5,662		19,165		15,831
Total operating expenses	22,622		25,605		65,778		78,076
Other operating income	5,462		4,810		13,283		16,379
Operating loss	(16,940)		(19,486)		(51,790)		(60,139)
Other expense, net	(4,445)		(113)		(7,763)		(1,364)


Net loss	$	(21,385)	$	(19,599)	$	(59,553)	$	(61,503)
Net loss per share:
Basic and diluted	(0.14)		(0.20)		$	(0.52)	$	(0.67)
Weighted-average shares used to compute net loss per share:
Basic and diluted	148,582,751		98,973,910		115,110,095		91,771,286

Comprehensive loss:
Net loss	$	(21,385)	$	(19,599)	$	(59,553)	$	(61,503)
Other comprehensive (loss) income:
Foreign currency translation adjustments	(49)		(863)		(1,020)		352

Comprehensive loss	$	(21,434)	$	(20,462)	$	(60,573)	$	(61,151)

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 September 30, 2022
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at June 30, 2022	98,122,356	$	981	$	391,220	$	(3,168)	$	(337,716)	$	51,317
Rights offering of common stock, net of offering costs of $111	103,092,783	1,031		98,858		—		—		99,889
Issuance of common stock under stock purchase plans and exercise of stock options	106,036	1		107		—		—		108
Stock-based compensation	—	—		2,798		—		—		2,798
Imputed interest on promissory note payable to a related party	—	—		570		—		—		570
Foreign currency translation adjustment	—	—		—		(49)		—		(49)

Net loss	—	—		—		—		(21,385)		(21,385)
Balance at September 30, 2022	201,321,175	$	2,013	$	493,553	$	(3,217)	$	(359,101)	$	133,248

	Nine Months Ended September 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
Rights offering of common stock, net of offering costs of $111	103,092,783	1,031		98,858		—		—		99,889
Issuance of common stock under stock purchase plans and exercise of stock options	188,852	2		293		—		—		295
Stock-based compensation	—	—		9,290		—		—		9,290
Imputed interest on promissory note payable to a related party	—	—		1,063		—		—		1,063
Foreign currency translation adjustment	—	—		—		(1,020)		—		(1,020)

Net loss	—	—		—		—		(59,553)		(59,553)
Balance at September 30, 2022	201,321,175	$	2,013	$	493,553	$	(3,217)	$	(359,101)	$	133,248


	Three Months Ended September 30, 2021
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at June 30, 2021	97,351,799	$	974	$	373,882	$	(2,579)	$	(252,850)	$	119,427
Rights offering of common stock, net of offering costs of $41	—	—		(41)		—		—		(41)
Issuance of common stock from exercise of stock options	276,712	2		728		—		—		730
Stock-based compensation	—	—		2,644		—		—		2,644
Foreign currency translation adjustment	—	—		—		(863)		—		(863)
Net loss	—	—		—		—		(19,599)		(19,599)
Balance at September 30, 2021	97,628,511	$	976	$	377,213	$	(3,442)	$	(272,449)	$	102,298

	Nine Months Ended September 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 $159	14,312,976	143		74,698		—		—		74,841
Issuance of common stock from exercise of stock options	740,471	7		1,861		—		—		1,868
Stock-based compensation	—	—		7,184		—		—

SEC Form 10-Q filed by Summit Therapeutics Inc.