smmt-20230331

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 March 31, 2023


☐			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)

650-460-8308

(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 May 4, 2023, there were 697,685,365 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 March 31, 2023 and December 31, 2022	4
	Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2023 and 2022	5
	Condensed Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
PART II
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5	Other Information	33
Item 6.	Exhibits	34
Signatures		34

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 ability to develop a successful product candidate under the License Agreement (as defined below);

•our ability to raise sufficient additional funds to make payments under the License Agreement (as defined below);

•the timing of and the ability to start and effectively execute clinical development of ivonescimab;

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

•our ability to advance and conduct, through partners, research and development of SMT-738, the Company's preclinical product candidate for combating multidrug resistant infections, specifically carbapenem-resistant Enterobacteriaceae (“CRE”) infections;

•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 rate and degree of market acceptance and clinical utility of our product candidates;

•our estimates regarding the potential market opportunity for our product candidates;

•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)


	March 31, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	70,969	$	348,607
Restricted cash	—		300,000
Short-term investments	170,963		—
Accounts receivable	—		349

Prepaid expenses	1,186		1,504
Other current assets	409		486
Research and development tax credit receivable	4,500		5,766
Total current assets	248,027		656,712

Non-current assets:
Research and development tax credit receivable	535		—
Property and equipment, net	412		906
Right-of-use assets	3,928		4,175
Goodwill	1,839		1,798

Other assets	156		577
Total assets	$	254,897	$	664,168

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	710	$	355
Accrued expenses	12,304		10,664
Accrued compensation	2,416		5,641
Lease liabilities	1,693		1,690

Other current liabilities	320		662
Promissory note payable to a related party	—		19,770
Total current liabilities	17,443		38,782

Non-current liabilities:
Lease liabilities, net of current portion	2,491		2,763
Other non-current liabilities	1,481		1,429
Promissory note payable to a related party	100,000		494,540
Total liabilities	121,415		537,514

Commitments and contingencies (Note 17)

Stockholders' equity:
Preferred stock, $0.01 par value, 20,000,000 shares authorized; none issued and outstanding at March 31, 2023 and December 31, 2022, respectively	—		—
Common stock, $0.01 par value: 1,000,000,000 shares authorized; 697,685,365 and 211,091,425 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	6,976		2,110
Additional paid-in capital	1,048,608		504,767
Accumulated other comprehensive loss	(1,396)		(1,893)
Accumulated deficit	(920,706)		(378,330)
Total stockholders' equity	133,482		126,654
Total liabilities and stockholders' equity	$	254,897	$	664,168

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 March 31,
		2023		2022
Revenue		$	—	$	250
Operating expenses:
Research and development		9,883		20,556
In-process research and development		520,915		—
General and administrative		6,940		6,659

Total operating expenses		537,738		27,215
Other operating income		584		4,807
Operating loss		(537,154)		(22,158)
Other (expense) income, net		(5,222)		761


Net loss		$	(542,376)	$	(21,397)

Net loss per share:
Basic and diluted		$	(1.43)	$	(0.15)
Weighted-average shares used to compute net loss per share:
Basic and diluted		378,163,980		140,040,370

Comprehensive loss:
Net loss		$	(542,376)	$	(21,397)
Other comprehensive (loss) income:
Foreign currency translation adjustments		(51)		(1,760)
Reclassification of cumulative currency translation gain to other (expense) income, net		(419)		—
Unrealized gain on investments		968		—
Comprehensive loss		$	(541,878)	$	(23,157)

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 March 31, 2023
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at December 31, 2022	211,091,425	$	2,110	$	504,767	$	(1,893)	$	(378,330)	$	126,654
Rights offering of common stock, net of offering costs of $619	476,190,471	4,762		494,619		—		—		499,381
Issuance of common stock under stock purchase plans and exercise of stock options	403,469	4		647		—		—		651
Issuance of common stock in lieu of cash for Akeso upfront payment	10,000,000	100		45,800		—		—		45,900
Stock-based compensation	—	—		2,775		—		—		2,775

Other comprehensive income	—	—		—		497		—		497
Net loss	—	—		—		—		(542,376)		(542,376)
Balance at March 31, 2023	697,685,365	$	6,976	$	1,048,608	$	(1,396)	$	(920,706)	$	133,482













	Three Months Ended March 31, 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	—	—		3,996		—		—		3,996
Imputed interest on promissory note payable to a related party	—	—		97		—		—		97
Foreign currency translation adjustment	—	—		—		(1,760)		—		(1,760)
Net loss	—	—		—		—		(21,397)		(21,397)
Balance at March 31, 2022	98,122,356	$	981	$	388,328	$	(3,957)	$	(320,945)	$	64,407

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)


	Three Months Ended March 31,
	2023		2022
Cash flows used in operating activities:
Net loss	$	(542,376)	$	(21,397)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense	6,123		198
Unrealized foreign exchange loss (gain)	(470)		1,037
Reclassification of currency translation gain	(419)		—
Impairment of fixed assets	474		—
Amortization of operating right-of-use assets	285		298
Depreciation	90		69
Amortization of intangible assets	—		248
Stock-based compensation	2,775		3,996
In-process research and development expense	520,915		—
Change in operating assets and liabilities:
Accounts receivable	350		455
Prepaid expenses	331		2,682
Other current and long-term assets	508		(370)
Research and development tax credit receivable	850		(1,666)
Deferred revenue and other income	—		(2,658)
Accounts payable	308		2,759
Accrued liabilities	730		(832)
Accrued compensation	(3,238)		(3,523)
Operating lease liabilities	(367)		(297)
Net cash used in operating activities	(13,131)		(19,001)

Cash flows used in investing activities:
Purchases of property and equipment	(53)		(361)
Purchase of short-term investments	(169,995)		—
Payments to Akeso for upfront milestone payments and associated direct transaction costs	(475,015)		—
Net cash used in investing activities	(645,063)		(361)

Cash flows provided by financing activities:
Proceeds from the issuance of common stock for rights offering	104,686		—
Transaction costs related to the issuance of common stock for rights offering	(539)		—
Proceeds from related party promissory notes	—		25,000

Repayment of related party promissory notes	(24,686)		—

Proceeds received related to employee stock awards	651		187
Net cash provided by financing activities	80,112		25,187
Effect of exchange rate changes on cash	444		(166)
(Decrease) increase in cash and cash equivalents	(577,638)		5,659
Cash at beginning of the period	648,607		71,791
Cash and cash equivalents at end of the period	$	70,969	$	77,450



Supplemental Disclosure of Cash Flow Information:
Cash paid for interest on related party promissory notes	$	1,306	$	—

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Consideration for the issuance of common stock for rights offering used to satisfy a portion of a related party promissory note (Note 14)	$	395,314	$	—
Issuance of common stock pursuant to the Akeso License Agreement (Note 8)	$	45,900	$	—
Transaction costs included in accrued expenses	$	80	$	—

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

Summit Therapeutics Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except share and per share data)

1. Nature of Business and Operations and Recent Events

Nature of Business and Operations

Summit Therapeutics, Inc ("we", "Summit" or the "Company") is a biopharmaceutical company focused on the discovery, development, and commercialization of patient-, physician-, caregiver- and societal-friendly medicinal therapies intended to improve quality of life, increase potential duration of life, and resolve serious unmet medical needs. The Company's pipeline of product candidates is designed with

SEC Form 10-Q filed by Summit Therapeutics Inc.