smmt-20230930

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, 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 October 31, 2023, there were 700,842,898 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, 2023 and December 31, 2022	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 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	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
PART II
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5	Other Information	38
Item 6.	Exhibits	39
Signatures		39

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)


	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	23,792	$	348,607
Restricted cash	—		300,000
Short-term investments	175,153		—
Accounts receivable	—		349

Prepaid expenses	5,074		1,504
Other current assets	120		486
Research and development tax credit receivable	812		5,766
Total current assets	204,951		656,712

Non-current assets:
Research and development tax credit receivable	747		—
Property and equipment, net	229		906
Right-of-use assets	6,403		4,175
Goodwill	1,814		1,798

Other assets	4,332		577
Total assets	$	218,476	$	664,168

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	3,314	$	355
Accrued expenses	3,654		10,664
Accrued compensation	3,510		5,641
Lease liabilities	2,780		1,690

Other current liabilities	484		662
Promissory note payable to a related party	100,000		19,770
Total current liabilities	113,742		38,782

Non-current liabilities:
Lease liabilities, net of current portion	3,879		2,763
Other non-current liabilities	1,476		1,429
Promissory note payable to a related party	—		494,540
Total liabilities	119,097		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 September 30, 2023 and December 31, 2022, respectively	—		—
Common stock, $0.01 par value: 1,000,000,000 shares authorized; 697,851,308 and 211,091,425 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	6,978		2,110
Additional paid-in capital	1,051,415		504,767
Accumulated other comprehensive loss	(2,323)		(1,893)
Accumulated deficit	(956,691)		(378,330)
Total stockholders' equity	99,379		126,654
Total liabilities and stockholders' equity	$	218,476	$	664,168

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

Summit Therapeutics Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue	$	—	$	220	$	—	$	705
Operating expenses:
Research and development	15,323		17,049		34,657		46,613
In-process research and development	—		—		520,915		—
General and administrative	5,434		5,573		18,690		19,165

Total operating expenses	20,757		22,622		574,262		65,778
Other operating income, net	265		5,462		822		13,283
Operating loss	(20,492)		(16,940)		(573,440)		(51,790)
Other (expense) income, net	(776)		(4,445)		(4,921)		(7,763)


Net loss	$	(21,268)	$	(21,385)	$	(578,361)	$	(59,553)

Net loss per share:
Basic and diluted	$	(0.03)	$	(0.10)	$	(0.98)	$	(0.37)
Weighted-average shares used to compute net loss per share:
Basic and diluted	697,739,477		208,909,351		592,366,880		161,846,345

Comprehensive loss:
Net loss	$	(21,268)	$	(21,385)	$	(578,361)	$	(59,553)

Other comprehensive (loss) income:
Foreign currency translation adjustments	108		(49)		(20)		(1,020)
Reclassification of cumulative currency translation gain to other (expense) income, net	—		—		(419)		—
Net changes related to short-term investments	6		—		9		—
Comprehensive loss	$	(21,154)	$	(21,434)	$	(578,791)	$	(60,573)

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, 2023
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at June 30, 2023	697,685,365	$	6,976	$	1,050,483	$	(2,437)	$	(935,423)	$	119,599

Issuance of common stock under stock purchase plans and exercise of stock options	165,943	2		227		—		—		229

Stock-based compensation	—	—		705		—		—		705

Net changes related to short-term investments	—	—		—		6		—		6

Foreign currency translation adjustment	—	—		—		108		—		108
Net loss	—	—		—		—		(21,268)		(21,268)
Balance at September 30, 2023	697,851,308	$	6,978	$	1,051,415	$	(2,323)	$	(956,691)	$	99,379

	Nine Months Ended September 30, 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	569,412	6		874		—		—		880
Issuance of common stock in lieu of cash for Akeso upfront payment	10,000,000	100		45,800		—		—		45,900
Stock-based compensation	—	—		5,355		—		—		5,355

Net changes related to short-term investments	—	—		—		9		—		9
Reclassification of cumulative translation gain (Note 8)	—	—		—		(419)		—		(419)
Foreign currency translation adjustment	—	—		—		(20)		—		(20)
Net loss	—	—		—		—		(578,361)		(578,361)
Balance at September 30, 2023	697,851,308	$	6,978	$	1,051,415	$	(2,323)	$	(956,691)	$	99,379


	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

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)


	Nine Months Ended September 30,
	2023		2022
Cash flows used in operating activities:
Net loss	$	(578,361)	$	(59,553)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense	6,171		853
Amortization of discount on short-term investments	(1,716)		—
Unrealized foreign exchange loss (gain)	(370)		4,271
Reclassification of currency translation gain	(419)		—
Impairment of fixed assets	474		—
Amortization of operating right-of-use assets	1,277		960
Depreciation	168		261
Amortization of intangible assets	—		697
Gain on disposal of assets	(111)		—
Stock-based compensation	5,355		9,290
In-process research and development expense	520,915		—
Change in operating assets and liabilities:
Accounts receivable	359		2,387
Prepaid expenses	(3,554)		5,006
Other current and long-term assets	(3,378)		558
Research and development tax credit receivable	4,346		(3,675)
Deferred revenue and other income	—		(7,554)
Accounts payable	2,935		(1,763)
Accrued liabilities	(7,728)		4,817
Accrued compensation	(2,145)		(2,437)
Operating lease liabilities	(1,519)		(891)
Net cash used in operating activities	(57,301)

SEC Form 10-Q filed by Summit Therapeutics Inc.