Summit Therapeutics Inc. (SMMT) Earnings Call Transcript & Summary

Welcome, everyone, to the 40th Annual JPMorgan Healthcare Conference. My name is Tess Romero. I'm one of the senior biotech analysts here at JPMorgan. I'm joined by Taylor Hanley from my team. I'm pleased to present our next presenting company, Summit Therapeutics. And speaking on behalf of the company, we have CEO, Bob Duggan; and COO Maky Zanganeh. Before I turn it over to the team, I just wanted to highlight to all of our listeners to please submit a question via the ask a question feature on the portal, and I will ask the question on your behalf. With that, I'm going to turn it over to the team. Turn it over to you guys.

Thank you, Tessa. And it's a real pleasure to be in front of all of you today at the JPMorgan Annual Healthcare Conference 2022. Let me begin by reviewing reading to you the Summit mission statement our resin statement is integral to our operating basis at team Summit, we review it almost weekly, and it's something that we really live by. So it's -- you'll enjoy what we -- what it includes. But it touches on why we do what we do, how and with whom we do that. And to what effect we expect to create. So let me jump right in. The team Summit mission statement to build a viable, long-lasting health care organization that assumes full responsibility for identifying, designing, developing, trial execution and enrollment regulatory submission and approval, successful commercialization of patient, physician, caregiver and societal friendly medicinal therapy intended to improve quality of life, increased potential duration of life and resolve serious unmet medical needs. To it, the first 4 words are to build a viable. We take this with more than just a grain of salt. It is something we live by every day and it build means to create to get engaged and to be responsible for when we say take full responsibility, we mean we own the outcome. We own the process. It's on us, not on some outside third party. So it's a sense of high responsibility, but it also is something that we find very invigorating. Now how do we do this? And with whom do we do it? And why do we do it? Well, to identify and control promising product candidates based on exceptional scientific development and administrative expertise develop our products in a rapid, cost-efficient manner and commercialize and/or engage in development partners when appropriate. If you look back at my own history with Computer Motion, as well as Pharmacyclics, we did just that. At the appropriate time, we reached out and cooperated with partners and with Pharmacyclics and McKee was with me in both companies, we not only achieved an early partnership to bring the product to market worldwide, but ultimately, we wound up with an unbelievably great partner in AbbVie to carry IMBRUVICA on to notable success. Now to what effect? We accomplished our effects by building a team of world-class professional scientists and business administrators that apply their experience and knowledge to the mission at hand. Team Summit exists to pose, strategize and execute a path forward in medicinal therapeutic health care that places Summit in a well-deserved top market share leadership position. Team Summit assumes full responsibility for stimulating continuous expansion of knowledge, ability, capability and well-being for all involved stakeholders and highly valued shareholders. And now I'll turn it over to Maky.

Thank you very much, Bob. I'm Maky Zanganeh, Chief Operating Officer at Summit. I had the honor and pleasure in the past 20 years to work with Bob. And as Bob mentioned, together, we invested in Pharmacyclics, and we joined Pharmacyclics in 2008 when the value of the company was cost $15 million market cap. We hired top executive. We worked hard. We brought IMBRUVICA in record time in a hand of patients, and we sold the company in 2015 to AbbVie for $21 billion. In December 2019, again, for the third time, Bob and I decided to work again together for our third adventure in Summit therapeutic. We started to invest in Summit, an anti-infection company. After being in oncology for many years and experiencing myself cancer, I realize that majority of patients are not dying from cancer, but from the side effect of cancer, one of them infection. But unfortunately, many pharmaceutical companies have given up in developing antibiotic for many unjustified reason. And today is less and less innovation in the field of anti-infection and anti anaerobe. And I believe more than ever, after this 2 years of pandemic, the world's realized that we need new treatment to fight against this invisible bacs and viruses that can kill thousands of people around the world got COVID-19. So I joined the company, joined Bob and together, we are going to find a new paradigm, new drug to fight infection and cancer. In late December 2020, a lot of our team from Pharmacyclics have decided to go on board with us along with leaders from other industry, including robotics, health care and IT. They are all high achievers, gold-oriented producers and experts at knowing how to collapse time. They all have a lot of experience in the field of pharma and medical devices. And I want to thank all of employee and executive who trusted us and join us at Summit. Today, our biggest asset at Summit is our team. Any drug in their hands will be developed and commercialized in record time, and we intend a broad impact. As you know, we are -- as you know, we are a company -- a publicly traded company, Summit and our offices is in 4 different locations in Menlo Park, Cambridge and U.K. But let me give you a little bit background about Summit. In 2017, Summit started the trial design for 2 Phase III for treatment of C.diff infection with our narrow spectrum antibiotic and which is ridinilazole. The first patients have been enrolled in February 2019. In December 2019, Bob and I invested in the company. Together, we owned 70% of the company. He in April -- around April 2020, become the CEO of the company, and I became COO around November 2020. After many discussions, actually, the choice has a -- it was 2 Phase II study in total around 1,300 patients. But once the team joined around late 2020. We had a lot of internal communications. And after many internal discussion, we decided in August 2021 to combine these 2 trials that give us to reduce the time to access data at minimum 2 years ahead of schedule and make a significant decisions by having access to more adequate data for the trial design. So let me discuss a little bit the top line design and how the team come up to this conclusion and a key learning on our side. This study showed ridinilazole resulted in a higher sustained clinical response rate than vancomycin, but did not meet the study primary endpoint for superiority. Patients treated with ridinilazole experienced substantial less recurrence of C.diff infection as compared to patient-administered vancomycin. Immunocompromised and dose patients with a history of COVID infection, receiving ridinilazole showed substantial reduction in recurrence. And overall, safety profile of ridinilazole is similar to vancomycin. We will continue to discuss and evaluate data, including the impact on the microbiome. Full results will be presented at upcoming medical conferences. But all in all, what was our finding and on -- what is the future. For us, the future is microbiome. And let me give you a little bit some examples why we come to this conclusion that we are talking, and we are going to continue to discuss today. C.diff -- as you know, the C.diff is the inflammation of the colon caused by the bacteria named Casedio Difficile and its designated urgent threat by the CDC. It's approximately 500,000 U.S. cases per year, 20,000 to 30,000 deaths per year, is demand a lot of isolation quarantine for the patients, prolong hospitalization is really the best pieces with a lot of emotional and physical impact to the patients and an estimated of $5.4 billion annual acute care costs. But that is not all, a lot is the significant complication associated to the CDI, like a bowel surgery, colectomy, heart failure, sepsis and mortality. But the most important one and the major complication of the CDI is the recurrence. When we use broad-spectrum antibiotic, we may increase the chance of recurrence. The data showed that 25% of patients can experience recurrence on their first infection. Of those, 45% of them can experience a second recurrence. And of those 65% can experience a third infection. So it's not a small task. But what can cause this recurrence? What's the reason behind it? What is the impact of the broad spectrum antibiotic on the microbiome? As you know, a healthy microbiome is critical to our health is over trillion of microbe, including good and bad bacteria, all in balance. So any change in balance of microbiome can cause dysbiosis. And this dysbiosis is the delicate imbalance of microbiome, which can be associated with various diseases in the human body and they impact overall help. So we learned a lot about the power of microbiome, the role of the microbiome and the effect of the microbiome in the body. Let me illustrate in one of our examples, the role of the microbiome and dysbiosis. As you see in the healthy microbiome, we have a lot of good and bad bacteria. Some people have a C.diff spores that in a normal situation, don't do harm. However, by giving broad-spectrum antibiotic, we can increase dysbiosis of microbiome potentially leading to CDI. The C.diff spores transform to C.diff vegetative cells, and these cells have the ability to grow and produce toxin, which then lead to CDI -- C.diff infection. But how we can change the paradigm? What we can do? We have to bring a narrow spectrum antibiotic with rapid bedside diagnostic, and we need to treat the right box with the right drugs. And that is where we want to be and we should be because we should avoid a lot of side effect and recurrence of complications. And exactly to COVID-19, the way that they brought the diagnostic in such a short period of time in 10, 15 minutes or less than 24 hours, we can know if somebody has COVID. We have to do the same thing in the antibiotic field and not letting the patients be treated with a broad spectrum that brought a lot of side effects and recurrence and complications. So -- but this dysbiosis is not just -- it's a problem of recurrence. Dysbiosis can be this imbalance of microbiome cannot only cause their recurrence. But they can also go far beyond by having a lot of role in different disease, as you can see here, like a COVID-19, like a cancer, all of the Parkinson, Alzheimer's diseases, cardiovascular allergy or many other diseases. At the end of the day, if you look at it umbrella under all this business, the umbrella is the effect of the microbiome and the balance of the microbiome. So we have to bring this awareness and this paradigm shift and any awareness in paradigm shift to become the awareness of economic opportunities. So what we are going to do at Summit and why we are in Summit. That is where we are going to push the boundary of breakthrough therapy. And as mentioned, we have our experienced team. We have access to the money, access to capital, and we want to focus on innovation engine; broader, faster, further, what that mean, broader application across multiple therapeutic area, faster means faster commercialization through collaboration and acquisition, further means involving the focus on human health with new era patient-friendly medicinal therapy. And all in all, we have one goal, one mission, one purpose: to optimize human health conditions. But how we want to do that? The power of the microbiome to treat patients either with drug associated to microbiome or treat patients with microbiome-based therapeutics in the field of anti-infection, oncology or other therapeutic area. That is going to be our focus at Summit. We are working very diligently to bring the right products into our company and in the hands of our team to bring forward patient-friendly medicine that is efficacious, we drive durability with minimum side effect. And as always, patients are waiting and hoping until the last minute to get back to their normal life, which we could call it the magic of normal. And with that, I give it to Bob to continue to validate. I was talking all of the time.

Thank you, Maky. It really is wonderful to participate along with you here today. Bottom line team Summit, the knowledge, team Summit had acquired over the past 18 months on our ReCoDIFy clinical trial is priceless. In spite of multiple headwinds, including COVID-19 and its ramifications our team succeeded in bringing overall ReCoDIFy enrollment to approximately 750 patients. I remind you that the original ReCoDIFy 1 and 2 trials each targeted approximately 680 patients. Our decision to combine 2 very similar trials into one single trial with a patient count approximately 10% greater than either single trial but with an approximately even balance of patients from each treatment arm allowed us to evaluate our data roughly 2 years earlier than otherwise would likely have been possible. The conservation of roughly $150 million in addition to that is also a positive. And this was the result of a very advanced and highly professional team looking at every opportunity to do what we intend to do make a difference for the patient. And by collapsing time to patient access to drug is a viable part of that. We feel the combined trial outcome properly and adequately reflects the reality of either ReCoDIFy 1 or ReCoDIFy 2 as well as the combination of the 2 trials, if they had gone along and enrolled as earlier planned. The trial outcome we discussed today poses important health care data points relating to the treatment of C. diff cell infections, including issues relating to disease recurrence, the impact of COVID-19 the serious -- and serious, immunocompromised patients and overall microbiome condition relevance. As it turns out, the antibacterias that people take when they are in later stage of life or at any point in time, immediately and dramatically have an impact on the balance of the microbiome. Mircrobiome is said to contain upwards of 100 trillion, that's with a T, 100 trillion particles. And much like the wings of the jet airplane any little alteration or change in the overall condition is going to bring potentially dramatically positive or negative impact. If there ever was a question about the vital role of a roughly this multitrillion particle gut microbiome on the homeostasis of Optimum Human Health, there should be no question now that maintaining a balanced microbiome supports internal systemic stability and overall human health. As doctors Giovanni, Schneider, Calder and Dr. Fauci noted within the recent research article, "Refocusing from refocusing human microbiome research in infectious and immune-mediated diseases advancing to the next stage." as published within the Journal of Infectious Disease and now, "The influence of the microbiota, the gut microbiota in particular, on infectious and immune-mediated diseases is well established." Changes in its composition and diversity have been shown to be associated with disease susceptibility, development and maintenance of the host immune system and responses to therapeutic intervention. They can tend and continue. The importance of a healthy gut microbiota is made evident by the effects of antibiotics, which can wreak havoc by altering the composition and diversity of the gut microbiota and disrupt the ability to prevent colonization by pathogens. Antibiotics can increase susceptibility to bacterial enteric infections, including infections with Casedio Difficile, coxiella, pneumonia, E. coli and antibiotic-resistant pathogens, such as vancomycin-resistant enterococci. In addition, reduced bacterial diversity of the human gut microbiome as they stated, is associated with COVID-19 infection as the end of the quote. The ability of a balanced microbiome to behave and function cooperatively to produce the desired result of normal body function demand support of and engendering of a healthy microbiome balance. Going forward, good drugs and good medicine will need to pass this bar, the bar of help, not hurt. The bar strengthened, not weakened, the bar of support not suppress the microbiome. The opportunity to improve the quality of life from the newly born to the last days of life is work worth doing. Factually, this work and related scientific research has been ongoing for the past 10 years. Now research will accelerate. This presents a very dynamic opportunity. Team Summit fully anticipates playing a meaningful role. The opportunity exists for a significant improvement of the quality of human life and we are on the way to make that happen. So now we'd like to turn this over to question-and-answer. If any of you have questions or comments, we'll be happy to take them.

Sure. Thanks so much, Bob and Maky. We appreciate the presentation. I'll just start with the first one. You recently top lined the Phase III ReCoDIFy trial data last month. I think you've noted that the study fell short of superiority on the primary endpoint. What are the next steps for the program? And do you believe this is a fileable data set with regulators?

Let me answer on that, is actually what we are going -- we are doing right now, the team, they are analyzing the data, and we're still continuing to analyzing the data and especially a lot of other information that we are gathering on microbiome and [ aerobic ] acid and sometimes by -- and during this quarter or end of the quarter, we can, a little bit give more information, what's going to be our next step for any further discussion on the clinical trials or any other applications.

And Tessa to that, I'd like to add that our team inherited, and I originated a mine into the ReCoDIFy trial and into team -- into Summit. So I'm fully aware that I'm responsible for what then goes on. But the endpoints, the primary and the secondary, had we to do it again and had we known then what we know now, clearly, the elephant and it was a ghost elephant, in the room is recurrence. Recurrences, that's the breakthrough that has occurred because of the work of this trial and the Dr. Fauci and his associates are asking not just what is associated with the microbiome and drug treatment. But what are causal effects. And clearly, recurrence is insidious and because the very active reducing the quality of the microbiome allowed C. diff to occur in the first place. C. diff is a normal bacteria that is in every human body. It's when it gets out of control and grows too fast, all cancer cells growing faster than they should, and then colonizing takes over, the toxic effects occur. So one should be very careful not to treat the disease with that which can, in a sense, retrospectively cause the disease, which don't do anything to endanger the microbiome. That's why we say there's an opportunity here to readdress how we treat diseases and what the role that the antibiotics play. Ridinilazole is an antibiotic. And we're not saying throw all antibiotics out. We are just saying that the new bar will ask the serious question, what impact does your drug have on the stability and homeostasis of the microbiome? And then that recurrence, as we'll note later as we move through the data, we were major winners in that regard. Unfortunately, that was not our primary outcome. I only wish that it was, but we have to deal with that.

Okay. And have you engaged with any key opinion leaders on the data set? And what has their feedback been? Anything else you'd note beyond what we've just sort of talked a little bit about here? And, yes, go ahead.

Actually, Tessa, now because actually everything has happened in the past few weeks, and we are going to engage our opinion leader as we are moving on. It's just the data show up before Christmas time, and we just get all together in this week. So we will continue to work with our opinion leaders and get back to the market.

Tessa, what we have done as we worked through this issue and with the key opinion leaders is we've received their thoughts on the importance and relevance of recurrence. And it's one for one that recurrence is the ghost in the room. And what can you do to reduce it. We've stated that our ultimate goal is to be able to treat with an antibiotic that has 0 recurrence. Now that may be very star high, but you don't get to the top of the tree, if you don't shoot for the moon, we're shooting there. And you will see as we break out all factors that we were, on a comparative basis, performed quite nicely in that arena. So all key opinions are the same mind. Handle this recurrence. Because their view is that suffering from C. difficile is not incomparable to suffering from COVID. It is not something you would like. It is not easy to experience. And as you get one recurrence and then two, get one, it's a 15% to 25% chance. The second one then becomes a 40% chance. You're taking a nasty acute disease and turn it into something that's chronic. So we are really dedicated to erasing that.

Okay. Okay. That's helpful. And are there any natural medical meetings or scientific conferences this year, that could make sense for additional presentation of the data that you've been collecting?

Well, the answer to that is absolutely yes. And we will now be presenting. It was really a strong company together. It's a very professional people that allowed us to report as we have. So we don't have all of that set up but we are making inroads and much like we did at Pharmacyclics, we'll be very busy in communication. We live and work with our peers and on behalf of our peers. They are the doctors, and they are the teams that deliver medicine. We're the team that delivers to them, what we like to call, a real ally as they face forward with their patient, we want to provide them with a product that they're really comfortable with. And so we have some excellent relationships and we'll continue to build those out, but that's a good question.

Okay. Okay. Helpful. Great. And last question for me is just a little bit broader. You talked about some of the potential broader indications that could be in focus. I guess, how does the company decide which indications to target next? And anything you'd want to point out in terms of kind of broader pipeline development from the platform.

Let me just begin and Maky can wrap up. When we took on Pharmacyclics, we inherited a product called Metaxa and Gadolinium. And while she and I were both enthusiastic about that as we approach the company and I eventually bought shares became on the Board and was asked to run the company or those that are running at left, so they had no choice but me. We had to examine everything that they had. And we're doing that here. We have a couple of products in the early stages that we think are, again, going to be very low creators of recurrence if they may even hit the target of nonrecurrence. So we will look and examine what is out there. We invite partnerships. We feel the quality of team that we have and the professionalization, we get our hands on a good product, we will bring it correctly to market. We know how to manufacture. We know how to enroll. We know how to establish trials. We know how to run trials. As we showed right through COVID, we were right at the top of the market, bringing enrollment in. And we're able to define a way to, say, 2 years and a significant amount of money, all on behalf of patients and our stakeholders. So I can just say this, we are looking with a really good team. And when you really look you tend to find, and I can't tell you that what's in that net field, but there'll be an Easter egg there somewhere, and we're going to get on it. Maky, over to you.

As mentioned, the expertise of the team is mostly into oncology and anti-infection, and that is the two, honestly passion that I personally have, but it doesn't mean that we are not going to be in other area that is going to be the future, but main focus would be in these 2 category under umbrella of microbiome.

Great. Well, Bob, Maky, I really appreciate you both joining us for the health care conference this year. I really appreciate it. I hope you both have a great rest of the conference, great rest of the week, and thanks to all the listeners for joining as well. Yes, thanks.

Yes. It's been our pleasure.

Thank you very, very much.

Look forward to further communications.

Bye-bye.

Bye-bye now.

Bye-bye.