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

Good afternoon, everybody. Welcome to the 42nd Annual JPMorgan Healthcare Conference. My name is Dan Delfico, one of the associates on the health care banking team here. Today, it's my pleasure to introduce the Summit Therapeutics team. So with us today, we have Dr. Maky Zanganeh, the CEO and President; Bob Duggan, Chairman and CEO. They’ll be handling the presentation. At the end of the presentation, we'll be doing a Q&A and we'll be passing around the mic. For the Q&A portion, we'll have a few other members of the team join us at the front, including Dave Gancarz, the Chief Business and Strategy Officer; Manmeet Soni, Chief Operating Officer; Dr. Allen Yang, Chief Medical Officer; and then Michelle Xia, CEO of Akeso, Inc., one of their collaboration partners. So with that, I'll turn it over to Dr. Zanganeh.

Thank you very much, Daniel. Thank you very much for the entire JPMorgan and especially Mike Gaito for having us today to present our company, Summit Therapeutics. Forward-looking statement, I'm sure all of you are very familiar with. I want to start first to talk about our company, Summit Therapeutics. We are a mission-focused company, led by Bob Duggan, myself, co-CEO. As you know, Bob Duggan is a Chairman of the Board as well as our lead investor in the company. We are supported by all of our leadership team with a proven track record, diverse background and unmatched high-speed execution. We in-licensed our product, ivonescimab, recently last year from our partner, Akeso, which I'm going to discuss a little bit further. And our lead compound, ivonescimab is the only Phase III PD-1 VEGF bispecific antibody in our licensed territory, which is United States, Canada, Japan and Europe. We have 100 employees, over 100 employees. We have 3 offices in Florida, California and U.K. Our market cap as of today, I can say, is around 2 billion, and the cash position as of the end of the year, 186 million. We have kind of a very solid capital foundation to support all of our clinical development plan as well as expand our company. Our focus in 2024 is to execute our 2 Phase II clinical trials and expand our clinical development plan. I would like to discuss about our partner, Akeso, is one of the leading pharma -- biopharma company in China, led by Dr. Michelle Xia, who is -- she is here today, our -- is Co-Founder, Chairwoman and President and CEO. Company Akeso has over 3,000 employee end-to-end in-house capability. They have a valuation of USD 5 billion. They have 30 compounds discovered in-house. Three of them, the main compound is already from this discovery to commercializations. And the one, we said bispecific -- PD-1 bispecific antibody is cadonilimab and is already commercialized in China. And ivonescimab is one of the bispecific antibody that we in-license it in 2023. They have over 120 worldwide clinical trials, 19 clinical stage candidates and 6 of them is a bispecific antibody. They have an impressive manufacturing capabilities with over 160,000 liter of current and short-term plant capacity for this clinical and commercial antibody. We are planning to have multiple supply chain in our territory for ivonescimab as well. As you see, they have more than 1,600 patients already treated with ivonescimab across 19 clinical trials and that allow us to start right away our 2 Phase III programs this year, HARMONi and HARMONi-3. I would like to give you a little bit update what we have done in the past year 2023. As mentioned, we got our product in early January 2023 and we started our development program. We started with our communications with the FDA for our ivonescimab, 3 proposed across multiple indications. And we started our 2 Phase III program, one of them, HARMONi. We enrolled our first patient in early 20 -- quarter 2 2023. It was a record time in 4 months from the start of getting the molecule till the first patient in. We raised USD 500 million, 1,500 individual investors participated. And I want to say, I'm very proud to say that the company the cost for raising this USD 500 million was just USD 0.5 million. We presented our clinical data Phase II from Akeso at ASCO, our mechanism of action in multiple conferences, SITC or AACR. And we started our second Phase III program later in the quarter -- I mean early quarter 4, and we enrolled the first patients. At the same time, we got different IST program proposal, and we are in the process to accepting some of them so that we can start it this year. Let me discuss about the mechanism of action of ivonescimab. And later on during the Q&A, I would like that our Chief Medical Officer, Dr. Yang -- Dr. Allen Yang, to present a little bit more about the mechanism of action. Ivonescimab is a first-in-class PD-1 VEGF bispecific antibody that was intentionally designed to improve upon the safety and efficacy standards of 2 established and approved targets. Ivonescimab cooperative binding increases the binding site of each target in the presence of the other targets. In other words, cooperative binding allow for strong simultaneous blocking of both PD-1 and VEGF, which are present at their highest concentration in and around the tumor. Because ivonescimab binding site or affinity to each other is highest in the presence of both targets and both PD-1 and VEGF are in their highest concentration in and around the tumor. It is believed that ivonescimab is effectively activated in the tumor microenvironment, where ivonescimab is designed to be and can drive its antitumor activity. In addition, concentrating in the tumor microenvironment is believed to reduce certain adverse events, which may occur from binding to PD-1 or VEGF outside of the tumor macroenvironment, including bleeding risk associated with some VEGF antibody. Ivonescimab goes where it is intent to go, optimizing antitumor activity and safety profile. And as you see, our ivonescimab is the most advanced PD-1 VEGF bispecific antibody and the only Phase III in our territory, which is, again, Europe, Canada, Japan and United States. But let me get a little bit more in details of this cooperative binding and the basis for the mechanism of ivonescimab. You can see from the image here, ivonescimab not only performs the function of both an anti-PD-1 agent and an anti-VEGF antibody, but it optimizes the activities of both in such a unique way. It is effectively a unique mechanism of action from anything developed historically. It is greater than the sum of its individual parts. The presence of VEGF increases ivonescimab affinity to PD-1 by over 18-fold. The same is true of PD-1 increasing ivonescimab-binding affinity to VEGF in this case by four-fold. With PD-1 and VEGF highly concentrated in many tumor types, ivonescimab binding site is then activated in tumor microenvironment. This is a critical component to explain the promising data we've seen in Phase II clinical trials today. By concentrating in the tumor microenvironment, it enhances the activity of T-cell, both elements of ivonescimab work together to stimulate the immune system, because VEGF is often found as a dimer and ivonescimab has the ability to bind to multiple VEGF protein through its tetravalent structure. It cannot only concentrate in the tumor microenvironment, but also cluster or daisy chained together as illustrated here, further enhancing the PD-1 inhibition of the checkpoint on T-cell and allowing the immune system to further destroy tumor cells. So this is a critical component of bispecific design. This is something that cannot be replicated by co-administrating anti-PD-1 and anti-VEGF as separately. But let me discuss as well right now the ivonescimab clinical data which has been presented by Akeso at ASCO 2023. And recently as well, they announced in their press release their updated data. And based on this Phase II data that has been generated, we decided to start 2 Phase III program. The study is AK112-201 study. And if you look at it, this is at a different cohort. The cohort 1 is a frontline advanced metastatic squamous non-small cell lung cancer, and you can see the waterfall plot that we have -- I'm sorry. Sorry, I was the one, I go so fast. Looking at the waterfall plot on the left, only 2 patients saw minimal increase in tumor burden, the remaining patients saw a reduction of the tumor burden often significant, leading to a 95% disease control rate and a 67% response rate under RECIST 1.1 criteria. The progression-free survival in the 63 patients single-arm Phase II trial exceeded standard of care. Showing you, both a global trial that led the approval of combination of pembro and doublet chemotherapy and the Chinese extension of that trial, you can see that the data generated by our partner at Akeso in China is very promising, and this help us move directly into Phase III program. Their recent data of overall response rate is presented 2 days ago by press release by Akeso that announced both 12 months and 24 months overall survival rate of patients looking very promising in this setting. Over 85% of patients in this study were alive after 1 year, which would exceed what has been seen by the standard of care, historically. While median overall response -- overall survival has not yet been reached after a median follow-up time of 21 months, you can start to see with the lower bound of the 95% confidence interval of 22.5 months that we believe that there is a significant opportunity here. We're evaluating ivonescimab in frontline metastatic squamous non-small cell lung cancer in order to demonstrate its efficacy and safety profile. I would like to remind you that the overall survival is our primary endpoint in our HARMONi's Phase III study. Importantly, from a safety perspective, ivonescimab plus doublet chemotherapy was generally well tolerated, highlighted by the fact that there were no treatment-related adverse event leading to death in the Phase II trial. What makes this so critical is that certain prior anti-VEGF antibody such as Avastin were not able to be developed in this common non-small cell lung cancer setting because of the risk of the severe bleeding. The fact that ivonescimab across 63 patients, specifically in the squamous cell carcinoma setting has not seen the same issue previously observed, further amplifies the notion that ivonescimab mechanism is unique from previous compound or combinations. Taking a look at the Phase II trial data supporting those patients who have progressed after an EGFR tyrosine kinase inhibitor, such as osimertinib. We find that there is promise in space in which there is little effective therapy approved after the front-line TKI. This is data that supports in part our HARMONi Phase III clinical trial. We have included data related to ivonescimab in Phase II setting as well as recently released data from trials that read out in 2023, in this setting. Note that the chemotherapy arm of one of these trials shown in the final column on the right is representation of the current second-line standard of care after progression from [ osimertinib ] or the third-generation EGFR-TKI. This regimen placebo plus platinum doublet chemotherapy is the same regimen as our control arm in HARMONi study. The Phase II data for ivonescimab plus chemotherapy is very encouraging. Should the Phase II data translate into a Phase III trial in the way in which we believe it will. It will be another example of the differentiation of ivonescimab from the PD-1 inhibitor and immunotherapy agents or a combination of PD-1 and another agent, ivonescimab shows, again, based on his unique mechanism of action has tons of potential. Finally, presented here is updated data recently released by Akeso with respect to overall survival from the Phase II study in this setting. Again, the control arm of our HARMONi study is a placebo plus chemotherapy. We are highly encouraged by the potential for ivonescimab to help accomplish our mission, and we are testing ivonescimab plus chemo in this setting to demonstrate the efficacy and safety of combination for patients with a significant unmet medical need. From a safety perspective, ivonescimab plus chemo therapy was generally well tolerated in this setting. I want to talk a little bit about the safety. Ivonescimab has been generally well tolerated in chemotherapy across the 2 Phase II setting in which we spoke. Treatment-related adverse event leading to the discontinuation of ivonescimab in -- was 11% and 0% in patients with frontline squamous cell carcinoma and EGFR-positive patients progressing after a TKI, respectively. Let's talk about the opportunity of ivonescimab. There are over 50-plus approved indication in PD-1 and VEGF therapy. There are no PD-1 VEGF bispecific antibody approved in -- approved or in Phase III in Summit's licensing territory. Per Cowen -- TD Cowen, they estimated that the worldwide PD-1 cells will exceed 64 billion by 2027, either in combinations or in the various tumor types. So it's a lot of great opportunity for ivonescimab. Recently, we are all in the non-small cell lung cancer. And you see we have over 600,000 patients right now in the lung cancer, either in U.S., Europe and Japan. And our 2 Phase III program, HARMONi or HARMONi-3, respectively, estimated 40,000 in HARMONi and 80,000 on the HARMONi-3 study. Actually, I like this slide a lot, is our clinical trials, combinations, us and Akeso. Akeso, as mentioned, they enroll over 1,600 patients with ivonescimab. 19 clinical trials going on, 4 Phase III, 13 Phase II and 2 Phase I, beside of non-small cell lung cancer in 7 other indications. You can look at it, it’s the gynecological cancer, breast cancer, colorectal cancer, several digestive cancer as well as a head and neck squamous cell carcinoma. And R2 study is a HARMONi and HARMONi-3, both of them on the -- in the Phase III as explained on the frontline metastatic squamous non-small cell lung cancer and EGFR resistance patient populations. We are very, very -- actually recently, we discussed, as I mentioned, with a different academic regarding IST program and very soon, we are going to start our IST program as well. Let's discuss the catalyst of the expected 2024. We are going -- that's very important year for us. In the next 6 to 12 months, we are going to discuss the results of AK112-301 study, and that is our partner, Akeso, they will present it in China this study, the result and they already submitted in Chinese regulatory authority. And we are going as well to present the interim analysis of the study -- 303 study, which is a monotherapy comparing ivonescimab to pembro in a lung cancer with the tumors with positive PD-L1 expression, which is an important study for us as well as we are going to finishing our enrollment of the last patient in our HARMONi study by second half of this year. With that, I would like to ask... [Presentation]

That was a summary of my talk in one minute made by Shelley. I just want to thank all of my team that they are here, and I would like to open the floor for Q&A. And Dr. Michelle Xia please, our CEO at Akeso. Please, Allen, our Chief Medical Officer; Dave, our Chief Business Officer; Manmeet, Chief Operating Officer. And where is our JPMorgan person? Please go ahead. Any question? Okay.

I know you mentioned, can you elaborate a little bit on the mechanism of action for ivonescimab as well as what differentiates it from other compounds?

Allen?

Yes. Sure, [ David ]. I'll take that question. So as the video elegantly described and what Maky had described, I think people don't appreciate the engineering that Akeso bio put into this molecule, right? So it binds both PD-1 and VEGF, which are validated oncology targets, but the binding of VEGF increases the binding of PD-1 by 17-fold. The binding of PD-1 increases the binding of VEGF by 4-fold, right? And so you get an increase in affinity when both ligands are present, which we believe to be the tumor microenvironment. The thing that's a little bit harder to follow is beyond the affinity is the avidity play. So what Maky described as well, as described in the literature for bevacizumab because VEGF is a dimer, you can cross-link 2 bevacizumab molecules. In fact, as they are developing VEGF agents for eye disease, that's actually counterproductive, and that's why they develop the VEGF trap molecule that will just bind a single VEGF module. We believe in oncology that actually plays a positive role because you can cross-link multiple ivonescimab molecules and now present very high affinity PD-1 sites, multiple together, right? So that's an avidity compound play there. So there's an affinity cooperativity and an avidity cooperativity, which I think is very important for this molecule, very elegantly designed bispecific, spend a lot of time working on bispecifics. This is the only one I know that does this. Yes.

And then maybe to take that a step further, you mentioned in the presentation that the bispecific makes the sum or greater than the sum of the parts. Can you maybe talk on why you can't dose sequentially just an anti-PD-1 and then an anti-VEGF?

Do you want me to take that? Sure. Thanks for the question, [ David ]. So you could, right? And so there is data that these are validated targets. I think part of it was hampered by Roche having atezolizumab. So they did some bevacizumab -- atezolizumab data. It does look to be additive there. There's data coming out from the ORIENT-31 that looked at PD-1 and a biosimilar bevacizumab. So we know that both targets are validated. They probably work together in an additive effect. The cooperativity however, is the key here. And I think that's going to help both not only in PD-1 attacking VEGF, but improving the way that you would address PD-1, and I think that's the secret sauce and the elegance in the engineering that Akeso bio has done. Yes.

And then maybe one more for me, for the team broadly. Could you touch on your primary plan for 2024? And will that be prioritizing additional NSCLC trials?

Thanks for the question. I think, I'll take that. So from 2024 perspective, and I think Maky spoke to this a little bit earlier, but one, executing on our current Phase III clinical trials is paramount. But then 2, expanding the opportunity. So there was -- Maky spoke to a multitude of opportunities that exist both in and outside of non-small cell lung cancer because of the data being generated by our partners at Akeso, we can rapidly move into Phase III, both in additional non-small cell lung cancer settings, which we intend to do, but also we plan to go outside of non-small cell lung cancer as well to really emphasize the opportunity here. Whether that's 2024 or shortly thereafter, but that really becomes our short- to medium-term play in terms of really expanding what we have currently.

Maky, I have a question.

I knew that.

So from an investor point of view, how did the company move from less than $100 million market cap, 3 or 4 years ago to today, $2.3 billion market cap and an Olympian opportunity, strike a partnership with a country in China, when the U.S. and China were politically and media-wise at loggerheads raised $500 million in 48 hours at a cost of less than $0.5 million, and attract leading attention from top executives, including our partners at Akeso, which I think you're looking at 2 women here are -- the 2 top leading biotech women with a plan. I thought that would bring a smile. It's a deserve smile, just incredible. And we have -- probably most of you know, we have, I think, more women in our company. We do have more women than men. But it's not because we shoot for that. It's just because they're good at what they do, and we go after what's good and not anything else. So how did that happen? Because it made me curious about what made that happen? I see Daniel not in his...

Yes, yes.

So I'll answer that question. We had to think big, and we had to come to a reality on existing circumstances. We took an all-in approach that if we brought together the top minds that we would come up with a plan and an opportunity that honored their ability and their past experience. So we had done big things in the past. I think over the years, we've created our core team here has created over $150 billion in market value. And we brought to the world of health care, the concept of patient-friendly. And when we bought it, it was somewhat near that like you've never been in an operating room or you've never taken a drug. And I've been in both plenty of times, heart bypass surgery and seeing family and other friends take drugs. But I knew that as an idealistic goal that friendly was the direction that we needed to head. And if you look at the third definition in a good dictionary friendly, it's an ally and support of a cause of struggle. And I would say those are your best friends. Those are friends that they help you that way once, you never forget them. So those were our targets. And when you set targets like that with men and women of top scientific background, science is Latin word, scienta means knowledge as opposed to ignorance, that have -- they were able to strive in their life to achieve the highest level of knowledge that they could attain through school, through experience in the real world, through reading and through asking people, that know what they're doing. And so a high level of curiosity is engaged and involved. When you bring a team that gets acknowledged for that and validated for that, and you leverage the ability of all human beings to imagine a better future. So we're always focused on a better future. We say focus on your success and keep going. That's where 10 books to describe the word drive, focus on your success and keep going, don't [ introvert ] on your losses, don't get stalled out based on what other people say. If it's true for you, pursue what's true for you. So having done that, and then Michelle had been a part of a company that finally had to give up on IMBRUVICA. And I think if not a tear in her eye, with a slight break in her heart, that drug went out the door because top management could not conviviality get along with each other. So they lost a tremendous opportunity, and it was acquired by a company Maky and I were stockholders in, and we were able to bring it to the market. Just following instincts, one step after the next, is it friendly? Is it caregiver-friendly? Can it be well priced? So I'd like to mention one other thing, too. You hear the concept of we're going into an election period in a few months and the drugs and the pricing of drugs. If you look at drugs and their value over time, I'll just pull one out, Jonas Salk, the Salk vaccine. And if you suffered from Polio, you're worried about poor your kids, your relatives, your grandchildren. Nobody is. Well, I was there when it was something you worried about. You couldn't go to the local swimming pool because somebody was in it, they had a cough or cold, maybe that you have [ polyps ], it would float on the top of the surface there. And insidious, pernicious and a real bother to young kids like myself at the time. If you have that problem now, $70, and that's taken care of in a vaccine, all drugs will go that way. There's a 20-year time line. When you're covered, you just monopolistic prices and you just do what we've done. I've got $750 million into Summit, where did I get it. Well, I made $3.5 billion with my previous company, that's where I got it. And the rest of the team, Maky and others are doing the same thing. We put back into the same opportunities that gave us the right and the ability to invest in forward life for human kind. So that's the way we're thinking. Big picture. We love doing business with China. I was there in 1987. I saw the Chinese people, they -- it was kind of fun, they all wore the same blue and none of them had a car and none of them did wheelies in the street, but -- they walked to work and they rode a bike. They were just coming up. But boy, did they ever appreciate seeing I was one of the first Caucasians someone have ever seen, and they greeted me with not like who's this guy should we be scared of him, it was like, "Hey, I want to thank you. I have cousin, a relative in your country and you're teaching them. You're sending books over here. And our country wants to rise up to it, show you guys what we're all about it." Boy, did they ever do that. And boy, I've received a lot of joy and complements for helping them do that. These are my fellow human beings. They just a little bit different nationality. But anybody has got 1.3 billion people in their nationality, has got to have done something right or I'm making a mistake here. So yes, I think that's the approach. Think big, work hard, be smart, validate others that are doing the same thing, share profits and go for the best, go from making a significant difference for the better and you wind up where you are now. I know many of you in the crowd, you're incredibly successful, but share that mantra with others. It's a very workable formula, and then be lucky to find a Maky Zanganeh or Michelle Xia and get them to partner with you and you're looking pretty good.

Thank you.