Summit Therapeutics - Q1 2024

Transcript

Operator (participant)

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. All lines have been placed on mute to prevent any background noise, and after the speaker's remarks, there will be a Q&A session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. We do not expect any technical difficulties today. However, in the event that we lose the webcast connection and are unable to provide any updates, please wait up to 10 minutes for resolution. Please refer to the company's website for updates.

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.

Dave Gancarz (Chief Business and Strategy Officer)

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.smttx.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.

Bob Duggan (Chairman and CEO)

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 multi-regional, registrational phase III clinical trials, HARMONi and HARMONi-3. Along with our partners at Akeso, we have had ivonescimab data featured in multiple medical meetings, including ASCO, American Society of Clinical Oncology, SITC, 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, NCI, and the American Association for Cancer Research, AACR.

This is in addition to more focused meetings where the potential of ivonescimab has been discussed, including Targeted Therapies of Lung Cancer 2024 meeting and the 2024 Texas Lung Cancer Conference. These have been excellent settings to allow for some of the nation's and world's leading KOLs to come together to discuss the future of cancer therapy, including the potential for ivonescimab. We continue to receive inbound interest in 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 partners at Akeso, who continue 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 accomplishments have been foundational to our 2024 goals of successfully executing on our registrational phase III trials while expanding our clinical development plan. In addition, 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 which have helped improve the odds for patients with cancer, including biomarker-driven diagnostics, such as next-generation sequencing technology and platforms. He has co-founded several companies, as well as being an illustrious chief technology officer from 2008 to 2021.

In addition to his unmatched technical prowess, passion for improving the lives of cancer patients, and his 25 years of experience in the oncology space, Dr. Ronaghi is also 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 around 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 making every effort to crash time and reach critical milestones faster.

With data expected this quarter from Akeso's phase II, AK112-301 trial, otherwise known as HARMONi-A, we remain eager to share additional details which will inform both the 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?

Maky Zanganeh (CEO and President)

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 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, supporting and informing 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, our 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 characteristic. Specifically, 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 VEGF increases by over 4-fold 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 a cooperative binding characteristic of ivonescimab and its purposely engineered structure, we believe that 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 they 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 we earlier discussed that our HARMONi trial is a multi-regional 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%-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 read out and result for the trial in China by our partners at Akeso in China could be a positive signal for our multi-regional HARMONi trial. As previously discussed, we expect to complete enrollment of our multi-regional 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, 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 aligned 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 discontinuation of ivonescimab was 11%, and there were no treatment-related adverse events leading to death.

In a separate cohort from this trial, which support our HARMONi trial, patient with advanced or metastatic non-small cell lung cancer with tumors positive for EGFR mutations and having progressed following an EGFR TKI, achieved 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 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 had promising phase II data in non-small cell lung cancer patients with brain metastasis.

The analysis consisted of 35 patients from Akeso phase II trials, AK112-201 and AK112-202, with advanced or metastatic non-small cell lung cancer, who had asymptomatic brain metastasis at baseline and received ivonescimab alone or in combination with chemotherapy. Across all patients analyzed, an intracranial response rate of 34% was achieved by RANO criteria, and median intracranial progression-free survival of 19.3 months. 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 complication were observed in these patients. Promising developments and improved therapy options are needed for patients with lung cancer, as it is expected that up to 20% will develop brain metastasis across all type of lung cancer.

For those with common driver mutations, such as EGFR mutation, it is expected that 50%-60% may develop brain metastasis over the course of their disease. We believe that this 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 continue 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 indication 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 high level of interest from key opinion leaders and other physician leaders for what ivonescimab may do make 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 extend our reach beyond non-small cell lung cancer sponsored 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, ranging from gynecological tumors, head and neck cancer, triple-negative breast cancer, colorectal cancer, and other solid tumors where we may be able to further explore ivonescimab.

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 mature clinical trial 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 and will participating in an upcoming ASCO conference, where two ivonescimab abstract 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.

Manmeet Soni (COO and CFO)

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 HARMONi trial during second half of this year. We have also initiated to prepare for technology transfer to enable the second supply source for manufacturing of ivonescimab in our territories. On the financial front, I'll discuss for 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 reconciliation of GAAP to non-GAAP financial measures. To remind, non-GAAP expenses excludes 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. Our 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 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. Its focus towards clinical development of ivonescimab, including the clinical trials and technology transfer. The G&A spend for $4.6 million for the quarter on 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.

Dave Gancarz (Chief Business and Strategy Officer)

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.

Operator (participant)

Thank you. We will now begin the Q&A session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, it is star one if you would like to join the queue. Your first question comes from Brad Canino with Stifel. Your line is open.

Brad Canino (Equity Research Analyst)

Hey, good morning, and thanks for the questions. A couple from me. First, can you start by framing how you view the phase two updates at ELCC? I mean, you made the strategic choice to pursue frontline squamous lung as that first phase three, where you're conducting head-to-head against KEYTRUDA. How do these data support that specific strategy?

Bob Duggan (Chairman and CEO)

Yeah, Brad, I, I'll take the question. Thanks. So, a couple 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 in 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?

Brad Canino (Equity Research Analyst)

Well, let me ask another question then, because you've got the HARMONi-A cohort, your partner Akeso, set for presentation at ASCO on May thirty-first. The question is: What does this imply about the potential China CDE decision timing for your partner's second-line EGFR filing? And could the regulatory decision still come after these data?

Dave Gancarz (Chief Business and Strategy Officer)

Yeah. Sure. Hey, Brad, this is Dave Gancarz. I think so we don't at this point have any insight beyond the update that we've given with respect to the timing of the data. We still expect it in the second quarter, based on the guidance that's been given from Akeso at this point. So I think that, you know, this is again Akeso's trial that they've both sponsored and analyzed the data for. So we remain blinded from that front. But we're working through the details as they become available. But at this point, we can only go on the fact that they have announced that the Q2 timing is expected, and so we're proceeding as is.

Brad Canino (Equity Research Analyst)

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

Dave Gancarz (Chief Business and Strategy Officer)

Sure, Brad, this is Dave again. So I think again, that is a trial that's sponsored and the data would then be analyzed on the Akeso side, so that's separate from Summit. But at this point, as far as we're aware, we have not. As far as we know, there's been no interim analysis performed yet at this point. Again, they've guided to the second quarter generally on that point.

Brad Canino (Equity Research Analyst)

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

Bob Duggan (Chairman and CEO)

Yeah, we're actively engaging health authorities to sort of put phase three data or phase three trials together, rather. You know, it's based on the upcoming phase two data from Akeso. We've seen very exciting data coming out. We haven't disclosed it, but it should be done shortly.

Operator (participant)

We will take our next question from Carter Gould with Barclays. Your line is open.

Carter Gould (Analyst)

Good morning. Thanks for taking the questions. 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 2Q, on the back of or in relation to 301, essentially, are you gonna be finding out that data 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 one?

Bob Duggan (Chairman and CEO)

Yeah. So, let me take the second question. No, we're not contemplating any changes to the HARMONi study. You know, we'll become aware of the HARMONi data when you become aware of it. You know, 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, you know, there would be a release of the label as well in China.

Brad Canino (Equity Research Analyst)

Thank you.

Operator (participant)

As a reminder, just star one if you would like to ask a question. With no further questions at this time, I would now like to turn the call back to Mr. Dave Gancarz for closing remarks.

Dave Gancarz (Chief Business and Strategy Officer)

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.

Operator (participant)

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