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

Good afternoon, and welcome to Day 1 of the Barclays Global Healthcare Conference. My name is Carter Gould covering analyst here in the U.S. biopharma space. We are pleased to welcome Summit Therapeutics to the stage. We've got a full house of leadership here. But before we start, Dr. Maky Zanganeh will make some opening presentation, and then we'll go from there.

Thank you very much. Thank you very much for inviting us for the presentation. I'm sure you are very familiar with all of the forward-looking statements, but let me talk a little bit about our company. Our company is a mission-focused company, led by Bob Duggan and myself as Co-CEOs. Bob invested in the company in December 2019, and I joined Bob around November 2020. As a reminder, the company at this time was exclusively an anti-infective company. Over the past 3 years, our leadership team joined us. It's a high-speed execution team with an unmatched proven track record. In 2022, we decided to fully transform from an anti-infective company into an oncology-focused company. We work more than -- we looked at more than 100 company and drug candidate. And finally, we decided to partner with Akeso and develop our ivonescimab. Ivonescimab is our lead compound, is the only Phase III PD-1 VEGF bispecific antibody in Summit-licensed territory, which is United States, Europe, Canada and Japan. Our headquarter office is in Miami, but we have other offices in California in Menlo Park as well as U.K. in Oxford. We have over 110 employees. As of today, I can say our market cap should be around $3.1 billion. Our cash position as of end of last year was $186 million. We have a solid capital foundation to support the company expansion as well as ivonescimab development. Our focus in 2024 will be execution of our 2 main Phase III clinical program for ivonescimab. Let me talk a little bit about our partner, Akeso. Akeso is a leading biopharmaceutical company in China with a valuation of approximately 5 billion led by Dr. Michelle Xia, who is a Co-Founder, Chairwoman, CEO and the President. And they have over 2,800 employees with an end-to-end in-house capability. They are a source of incredible innovations, having more than 30 compounds in-house, 120 clinical trials across -- over 120 clinical trials. Three of their drug got a regulatory approval in China. They discovered 6 bispecific antibody. Their first one, which is cadonilimab, which is a PD-1 CTL4 bispecific, got approval in China, is the world's first approval for bispecific. Ivonescimab was discovered using the same discovery platform as cadalimumab -- I'm sorry, as you can see, 1,600 patients is -- has been treated with ivonescimab across 19 clinical trials. That foundation from Akeso has allowed us to immediately start 2 Phase III trials in our licensed territory in nonsmall cell lung cancer, which is HARMONi and HARMONi-3. We are thrilled to have Akeso as our partner. What we did last year, let me talk a little bit about our achievement of last year. As soon as we finalized our partnership agreement with Akeso in January 2023, we accelerate our clinical development program with ivonescimab. We held multiple FDA meetings to discuss the design of multiple potential Phase III clinical trials for ivonescimab. In addition, we interact with EMA in Europe as well as PMDA in Japan. We raised $500 million in the first quarter of 2023. 1,500 individuals participated in the offering, and the cost was approximately USD 500,000. We launched our first Phase III clinical trial, HARMONi, in a record time from the day that we signed the agreement till the first patient enrolled was just 4 months. Details of Phase II of ivonescimab has been presented in different scientific present -- event. ASCO, Citi as well as all of the mechanism of action in a multiple event has been presented on multiple articles. We started our -- enroll our second Phase III clinical program, HARMONi-3 in fourth quarter 2023. And in both of our clinical trials, we are working together with Akeso to enroll patients in our licensed territory in addition to China, allowing us to collapse time, increase patient diversity and set up ivonescimab for global success. Beside of the lung cancer, we are trying -- we are working on going outside of the lung cancer for different therapeutic area. We received different proposal from our investigator for IST program, and we are giving a little bit update during this year. Let me talk a little bit about the mechanism of action. And after -- during the Q&A, Dr. Allen Yang, our CMO, will discuss further and more in details our mechanism of action. Ivonescimab is the first-in-class PD-1 VEGF bispecific antibody that was intentionally designed to improve the safety and efficacy standard of these 2 well-established targets in oncology. The question is why is ivonescimab unique? Why not simply administer the 2 targets sequentially? Ivonescimab is designed to be greater than the sum of its parts, and the answer is because of cooperative binding. This cooperative binding increases the binding rate of each target in the presence of the other target in vitro. In other words, cooperative binding allows for strong simultaneously blocking of both PD-1 and VEGF, which are present at their highest concentration in and around the tumor. Because ivonescimab binding straight or affinity to each target is highest in the presence of both targets and both PD-1, 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 advance events, which may occur from binding to PD-1 or VEGF outside of the tumor microenvironment, including bleeding risk associated with some VEGF inhibitors -- antibodies. Ivonescimab goes where it is intend to, optimizing its antitumor activity and safety profile. Let me explain a little bit our cooperative binding and the basis for the ivonescimab of -- mechanism of action 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 activity of both in such a unique way. It is intended to be greater than the sum of its individual parts. The presence of VEGF increases ivonescimab affinity to PD-1 by over 18-fold, and the presence of PD-1 increases ivonescimab binding affinity to VEGF by fourfold. With PD-1 and VEGF highly concentrated in many tumor types, ivonescimab binding straight is then activated in the tumor microenvironment. By concentrating in the tumor microenvironment, it enhances the activity of T cells. 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 micro environment but also cluster or [indiscernible] together as illustrated here, further enhancing the PD-1 inhibition of the checkpoint on the T cells and allowing the immune system to further destroy tumor cells. This is a critical component of the bispecific design. This is something that we believe cannot be replicated by co-administrating an anti-PD-1 and anti-VEGF separately. If you look at our pipeline and combined with Akeso, as mentioned, we are -- we enrolled over 1,600 patients. We are in the 19 clinical trials, 4 Phase III trials, 13 Phase II and 2 Phase I in 7 different indications outside the nonsmall cell lung cancer in gynecology cancer, breast cancer, colorectal cancer, several other GI cancer as well as head and neck squamous cell carcinoma. With over 1,600 patients treated with ivonescimab, we are quite quickly generating the proper path to advance ivonescimab in late-stage trials through the help and collaborations with our partners at Akeso. As data continue to mature from this study, we are planning to expand our current portfolio of clinical trials by initiating additional late-stage study. This is a key differentiator and value driver to our partnership. I would like to highlight that ivonescimab is being studied in 4 Phase III clinical trials in nonsmall cell lung cancer. The first Phase III trial is if you look at it, the first 2, actually, we are in combinations with Akeso. We are doing these 2 clinical trials. The first one is a EGFR mutation who have progressed after TKI. Akeso has completed the enrollment in China territory and submitted their analysis to the Chinese regulatory authority, CDE. Their primary endpoint is PFS. We have created a multiregional study in this population, which we call the HARMONi study. In this trial, we will take most of the patients from Akeso China specific study, about 270 of their 320 patients. Plan -- and we plan to enroll additional approximately 150 patients from North America and Europe and evaluate this multiregional population using co-primary endpoint, which is PFS and OS. The second Phase III trial indicated on the second star, the green one, is the frontline metastatic squamous nonsmall cell lung cancer, which we call it HARMONi-3. This multiregional study is evaluating the combination of ivonescimab with chemo versus pembro with -- across chemo. This multiregional study is being enrolled by both Summit and Akeso. The third Phase III trial is a sister study to HARMONi-3, is a Chinese-specific study in which Akeso is comparing ivonescimab plus chemo to tislelizumab plus chemo in the frontline squamous nonsmall cell lung cancer, sitting in order to compare against a PD-1 that was originally developed in China as well. The fourth Phase III, which is the most important one, is the monotherapy of ivonescimab versus pembro in frontline nonsmall cell lung cancer patients with PD-L1-positive tumor, a TPS score of 1 or greater. Let me give you a little bit update about ivonescimab clinical trial that presented at ASCO last year by Akeso, is based in part of the Phase II data generated by our partner, Akeso. And because of that, we initiated our multiple Phase III clinical trials. Here, I will go into more details on the data from the AK112-201 Phase II clinical trial. We will present on 2 of the cohorts from the trial that support our Phase III clinical trials, HARMONi and HARMONi-3. The first trial is a frontline advanced metastatic squamous nonsmall cell lung cancer. If you look at it at waterfall plot on the left, only 2 patients saw minimal increase in tumor burden. The remaining patients are a reduction of the tumor burden, often significant. Overall response rate is 67%. The PFS is over 11 months. In 63 patients, single-arm Phase II trial exceed historical benchmark data for the standard of care. Both in the Phase III trial you see on the global setting as well as a Phase III extension study conducted in China of KEYNOTE-407, the PFS is around 8 months or 8.3 months. I would like to give you an update on the overall survival. Both 12 months and 24 months overall survival rate of patients look very promising in this setting. Over 85% of patients in the study were alive after 1 year, which would exceed what has been seen by the standard of care historically. While median OS has not yet been reached after a median follow-up time of 21 months, you can start to see with a 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 front-line metastatic squamous cell -- nonsmall cell lung cancer in order to demonstrate its efficacy safety profile using OS in our primary endpoint in our HARMONi-3 Phase III trial. From a safety perspective, ivonescimab plus chemo was generally well tolerated, highlighted by the fact that there are no treatment-related adverse event leading to death in the Phase II trial. What makes this so critical is that certain prior anti-VEGF antibodies such as Avastin were not able to be developed the squamous nonsmall cell lung cancer because of the risk of severe bleeding. The fact that ivonescimab across 63 patients, specifically in the squamous cell carcinoma setting, has not seen the same issues that previously observed when an anti-VEGF agent was administered further amplified the notion that ivonescimab mechanism is unique from previous compound or combinations. Taking a look at the Phase II trial data supporting patients on the second-line EGFR-TKI progressor such as osimertinib. This is data that support in part our HARMONi Phase III clinical trial. Again, the setting, we are seeing a response rate and the durable result that exceed historical experience with the standard of care in this setting. Patients in this trial experienced a median PFS at 8.5 months. And we have included data related to ivonescimab in a Phase II setting as well as recently released data from trial that read out in 2023 in this setting. Note that the chemotherapy arm, which is on the last column, showed 27.3% overall response rate and around 5.5 months of PFS. On the overall survival, a median OS of 22.5 months was observed in the study after a median follow-up time of about 25.8 months. Again, the control arm of our HARMONi study is placebo plus chemo, where it's an observed benchmark in overall survival for chemo in this space have ranged 14.7 to 15.9 months. From a safety perspective, ivonescimab plus chemo was generally well tolerated in this setting. For additional safety program, if you look at the data, treatment-related events leading to the discontinuation of ivonescimab occurred in 11% of the frontline squamous patients and 0% on EGFR patients progressing after TKI. The result is quite encouraging. Ivonescimab opportunity. As we mentioned, we are in the 19 clinical trials, 15 indication is already approved drug by PD-1 VEGF therapy. According to TD Cowen, estimated PD-1 sales worldwide will exceed $64 billion by 2027. Lung cancer represents, based on TD Cowen, $20 billion for PD-1 and PD-L1 alone here. This provides a greater opportunity for ivonescimab based on the mechanism of action. The nonsmall cell lung cancer patients, approximately 600,000 patients, and you can see 40,000 of them is potential for HARMONi and 80,000 of them in HARMONi-3. To just give you the -- what is expected in the 2024 key catalyst for this coming year. This year, as we discussed, we have a data of AK112-301, a large majority of which represent the Chinese patient population of HARMONi study was submitted to Chinese authority. And we are expecting to get data sometimes in second half -- second quarter 2024 as well the results will be presented in around the same time. We plan to complete our enrollment of HARMONi study in the second half of 2024. And interim analysis planned for this year for upcoming trials, which is pembro versus ivonescimab, which is very, very important for us to continue our development of ivonescimab globally. And for sure, we are working on an investigation IST program for other indications, which we are going to tell you more about it. With that, I have 6 minutes to let my team answer all of the questions. Thank you.

Great. Thank you Maky. A number of places to go first. But maybe let's dig into that cooperative binding mechanism here. And maybe just help -- when we think about bispecifics, there's a dual binding aspect, but it seems like you're referencing something above and beyond that here. Can you maybe just dig into that a little bit and exactly how you kind of frame that for folks?

Yes, Carter, thanks for the question. So I've been working on bispecifics for quite some time, about 20 years actually. What people don't appreciate about ivonescimab is the targets are well validated, but the way they're arranging the molecule, there's cooperativity. And there's 2 types of cooperativity. There's an intramolecular and an intermolecular. The correct terminology is actually allosteric cooperativity and associative cooperativity. Let me go through that real quick. Allosteric cooperativity means when one ligand binds, there's a confirmational change so that the other bind -- there are other ligand binds tighter. So when PD-1 binds, VEGF binding increases by fourfold. When VEGF binds, PD-1 binding increases by greater than 18-fold. And so we get the optimal binding is going to be in the tumor microenvironment where both ligands are expressed. The other thing that's underappreciated is something called associative cooperativity. Because there's 4 binding sites and VEGF is a dimer, VEGF can actually cross-link ivonescimab to another ivonescimab molecule. And then you have a VEGF cross-linking back to another. So you have this daisy chaining of ivonescimab and VEGF. This is well described with the bevacizumab literature, which is sort of the parent molecule for ivonescimab. And that leads to multiple high-target PD-1 sites being sort of presented by this daisy chained ivonescimab VEGF binding to PD-1 on lymphocytes. And that leads to sort of an associative cooperativity, so intramolecular cooperativity.

Okay. And when we think about that, what that then means in terms of efficacy, does that -- because you have this sort of heterogeneity of binding, does that potentially complicate things or maybe that doesn't play out?

Yes. So there's a number of ways that can be effective, right? So you're going to get most of the binding in the tumor microenvironment. And that could lead to both efficacy and safety benefit, right? You're also going to lead to a clustering or the daisy chaining of these molecules in specific places, which is the tumor microenvironment, right? So you can imagine that collection occurring there. And then that will lead to better safety and efficacy. And then finally, when you have these daisy chaining and you have this associative cooperativity where you have multiple PD-1 sites, you actually enrich for binding to lymphocytes that have high PD-1 expression, which are known to be the most active in the tumor.

So when we think about the HARMONi data that's going to -- or essentially decision that's already coming out of -- going to come out of China, I'm sure when you acquired this asset, you had -- we know you had interactions with the agency thereafter. And just how the agency is going to look at that data relative to the data that's coming from U.S. and Western Europe? And we've seen the agency take a tough stance on past Chinese data.

Yes. So Carter, I think you're asking like for our fast-to-market strategy, which is the HARMONi study in the EGFR refractory, that's our easiest study, right? So that's ivonescimab chemo versus chemotherapy, right? The other studies we have are against PD-1. So let's be clear on that. So I think what the agency is looking for is not only a positive study, but consistency between the Chinese data and the Western data. So Akeso had already started conducting their version of the study, right, at the time of the deal. So the fact that Summit was able to sort of acquire or sort of agree with the agency to add on to that study created significant value after the closure of the deal, right? But we're going to add a bunch of Western patients. The analysis will be -- the aggregate analysis between both populations, the Chinese and the Western population. But I'm sure the agency is going to want to look for directional consistency between the Chinese and Western data.

Okay. And -- but specifically, you have buy-in from the agency in terms of the number of percentages...

Yes. That's all been agreed to.

Okay. Great. Maybe to jump in, the HARMONi-3 study is potentially pretty transformational if you do pembro. It's a very big swing. Can you talk about taking that risk, taking that swing and maybe that's what drew you to the opportunity here, whoever wants to take a stab at that.

I'll take that one. So it's our first-line indication. It's a big indication, squamous nonsmall cell lung cancer makes up about 40% of the market depending on the stage. It could be a little bit less than that, but 40% of nonsmall cell lung cancer. And I don't think it's a big risk, right. So let's be clear here. If you look at previous data from Roche, the EMPOWER study showed that there's a benefit of VEGF in nonsmall cell lung cancer, but it was never fully developed in squamous because there are certain safety concerns that we're not seeing, right? We know that it will add value to the VEGF here. And so I think for a lot of reasons, we're pretty comfortable and confident around that study. Aside from the data that Akeso has already generated in this space, we're pretty comfortable with the other data out there that this is going to be a successful study.

Okay. Maybe just last question between Bob, Maky, Manmeet, there is the element of sort of getting the band back together here. Maybe what specifically drove you to this opportunity with ivonescimab so much?

Well, we have a real love for helping this health care industry. The first 4 letters of health are H-E-A-L. All heathy the individuals have to be healed from time to time and through our work from robotics to patient finally oncology therapy, we just became very attracted to it. So now we sell -- we got a bolus of money. We looked around it and other things. We're much more experienced. We have more access to money. We have more convening power, more regulatory power, and we saw this opportunity with Akeso. These are -- it's a Chinese company, but they are -- 3 of them are American citizens or speaking fluent English. They love what we're doing, how we're doing it. We do things that they haven't. And so this partnership really, really put together. And now we could go after a major opportunity and make a significant difference for the better, and we think it's the right risk for us to take.

All right. Perfect. Well, we're out of time. We'll have to leave it there, but thank you very much for joining us today.

Okay. Happy to be here. Thank you.