Refocused Summit targets new funding

AIM-listed biotech group Summit Corporation has narrowed the focus of its research programmes to two key assets, which both made encouraging progress in clinical trials, the company said.

Chief Executive Glyn Edwards, who was appointed in April last year, curtailed other research activities to preserve cash as he led a refocusing of the company onto the development of two potentially high-value clinical-stage assets, one targeting Duchenne Muscular Dystrophy (DMD) and the other on the C. Difficile hospital superbug.

At the January 31st year end the company had £3.4m of cash in the bank, which it hopes to boost during the coming year with new investment from grant bodies, corporate entities and not-for-profit organisations, or from traditional equity funding.

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Summit's novel lead candidate to treat DMD successfully completed its phase-one clinical trial in healthy volunteers, which had been financially supported by a $1.5m award from a group of US DMD foundations, and will now advance into clinical trials in patients. Summit is now actively engaged with the regulatory authorities and it is expected that the first patient trial will start in the second half of 2013, with a proof of concept study to follow.

The second clinical programme, developing an antibiotic treatment for infections caused by the Clostridium difficile superbug, entered into clinical trials in October 2012 and was boosted by a £4.0m research award from the Wellcome Trust.

With the C. difficile programme substantially supported by the Wellcome Trust, Summit's management intends to increase its investment in R&D and advance the DMD programme into a phase-two clinical trial during this financial year, but only "if it is able to raise additional funds and recognises that this would need to be in place by the middle of 2014".

The board admitted that the amount and timing of such new sources of funding was of course uncertain, and if Summit was unable to attract further funding "then further progress on the DMD clinical study may be delayed or cancelled".

The Oxford-based company closed its in-house research facility, with the loss of 13 employees, and net costs after redundancy payments and other provisions balanced by some profits from the sale of laboratory equipment of around £0.3m.

By the January 31st year-end the company had £3.4m of cash, having spent net cash in operating activities of £3.1m, up from £2.4m the year before, as an increase in expenditure on research and development from £3.0m to £3.6m arose from progression of the lead programmes into clinical development.

Revenues, mostly from grant receipts and milestone payments, totalled £1.8m, leading to a losses before interest, tax, depreciation and amortisation and excluding exceptional items of £3.7m.

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