Re Agreements, Equity Investment and Restructuring Update
Re Agreements, Equity Investment and Restructuring Update
Summit Corporation plc
("Summit" or "the Company")
RESTRUCTURING OF LICENCE AGREEMENTS, AND
UPDATE ON COST SAVING INITIATIVES AND FINANCIAL POSITION
Oxford, UK, 29 May 2009 - Summit Corporation plc (AIM: SUMM), the UK
drug discovery company, today announces it has made important
progress with the restructuring of its business which will provide
greater focus on the development of its proprietary iminosugar drug
discovery platform, an area that Summit believes offers great
potential for the discovery of new medicines.
* $500,000 equity investment made by Orient Pharma Ltd ("Orient") as
part of the restructuring of the sialorrhoea programme agreement
which was completed today;
* Three new cross-license agreements signed today with Orient
granting Asia Pacific rights for the Company's programmes in
seborrhoea (acne) (SMT D002), glaucoma (SMT D003) and age-related
macular degeneration (AMD) (SMT D004);
* Agreement with BioMarin to restructure the Duchenne muscular
dystrophy (DMD) licensing agreement to remove all future
preclinical and nonclinical development costs that were to be borne
* Operational cost savings following the termination of the Cambridge
facility lease from the end of March 2009, and restructuring of
Summit's operations in Wales from May 2009.
These cost saving initiatives will save approximately Â£760,000
annually in operational and lease costs, and provide additional lease
savings from April 2010 until the end of the leases of Â£550,000.
This, together with the equity investment by Orient and the cash
proceeds from the recent divestment of the zebrafish services
business, provide Summit with the cash resources to last towards the
end of the Q3 2009. This will allow Summit more time to continue to
seek additional sources of finance or strategic transactions to
secure the future of the Company.
Steven Lee, PhD, Chief Executive of Summit said, "These transactions
provide immediate financial support to the Company and allow us to
progress work on our iminosugar drug discovery platform. Summit is
using what we believe to be our unparalleled expertise in iminosugars
to develop new medicines with a specific focus in the major
therapeutic areas of anti-infectives and metabolic diseases.
"While these activities raise new working capital and reduce our
financial commitments, we continue to investigate options to secure
the future of the Company to fully exploit the considerable potential
of our proprietary iminosugar platform."
Restructuring of sialorrhoea co-development agreement with Orient
Summit and Orient completed today the restructuring of their
programme agreement for SMT D001, the clinical candidate being
developed to treat sialorrhoea, a non-motor symptom of Parkinson's
disease. This agreement supersedes the co-development agreement
between the two parties that was announced in September 2008.
Under the terms of the restructured agreement, Orient has acquired
full ownership of the clinical candidate SMT D001, and will be
responsible for all costs associated with its development,
manufacture and distribution.
In return, Orient will make a $500,000 equity investment in Summit
via a subscription for 2,332,000 new ordinary shares at a price of
13.5 pence per share. In addition, Summit will be eligible to
receive undisclosed royalties on worldwide sales of the product.
In relation to the above equity subscription, application will be
made to the London Stock Exchange for the admission of 2,332,000 new
ordinary shares to trading on AIM. It is expected that admission of
these new ordinary shares will become effective and dealings will
commence on AIM at 08:00 on 4 June 2009. The new ordinary shares
will, when issued, rank pari passu with the existing ordinary shares
of the Company.
Following the equity investment, Orient will hold approximately 4.0%
of the enlarged issued share capital of Summit, and is subject to a
12-month lock-in and orderly market agreement thereafter.
Signing of Three new Cross-licensing Agreements with Orient
Summit has today entered into three new cross-license agreements with
Orient for the Company's clinical and preclinical programmes in Acne
(SMT D002), glaucoma (SMT D003) and wet age-related macular
degeneration (AMD) (SMT D004).
Under the terms of the agreements, Orient gains exclusive development
and commercialisation rights in Asia Pacific and Australasia and will
be responsible for all development, manufacturing and distribution
costs associated with the products within its territories.
Summit retains the rights to the products in North America, Europe
and the rest of the world and has rights to access data generated by
Orient. This includes new formulations of the products and clinical
trial results, which the Company can use to secure future commercial
agreements within its territories.
Restructuring of Duchenne muscular dystrophy agreement with BioMarin
Summit and BioMarin have recently restructured their agreement for
the Duchenne muscular dystrophy (DMD) programme, which was originally
signed by the two parties in July 2008, and under which Summit
received an equity investment of $7 million at the time.
Under the terms of the restructured deal, BioMarin has acquired full
ownership of the DMD programme, including the preclinical candidate
SMT C1100 (redesignated BMN-195). In particular, BioMarin has
assumed all future preclinical and nonclinical development costs for
SMT C1100 that were to be borne by Summit under the original
licensing agreement. This is in exchange for a clinical development
milestone of $1.0 million that was expected to be payable in 2010.
While providing Summit with a short term cash flow advantage the
overall effect on the Company's financial position is broadly
Summit now remains eligible to receive success-based development and
regulatory milestones of up to $50 million plus sales milestones of
up to $85 million and tiered royalty payments rising to a low-teen
Reduction in Operational Costs Associated with the Facilities in
Wales and Cambridge
As part of its on-going efforts to reduce operating costs, Summit is
restructuring its operations in Wales. The work is expected to be
completed by the end of May 2009 and will include the loss of 11 jobs
and no further lease obligations for Summit associated with this
facility after the above date.
In addition, Summit has negotiated the early termination of the lease
and all related costs, pertaining to its facility in Cambridge which
was effective from the end of March 2009.
Following these activities, Summit now employs a total of 54 staff,
of which 25 are employed by the services subsidiary business Dextra.
This total compares to 116 staff at the start of 2009.
- ENDS -
For more information, please contact:
Steven Lee, PhD
Richard Pye, PhD
Tel: +44 (0)1235 443951
Andrew Burnett / Rakesh Sharma (Corporate Finance)
Ashton Clanfield (Corporate Broking)
Tel: +44 (0)207 459 3600
About Summit plc
Summit plc is a UK based drug discovery company with a major focus on
developing new therapeutics from its iminosugar drug discovery
Summit believes iminosugars are the key to gaining access to several
disease mechanisms where classical drugs have had little success, and
thus offer a major opportunity for the discovery and development of
Carbohydrates (sugars) play critical roles in maintaining correct
functioning of many normal processes in healthy individuals and
errors in carbohydrate recognition or modification can lead to
malfunction in cells resulting in disease. Iminosugars have the
potential to mimic carbohydrates or to interact with processes which
manipulate carbohydrates to modify activity or to correct aberrant
function. Additionally, the structural features of iminosugars allow
them to have, have important effects when interacting with many other
unexploited therapeutic targets.
Commercially, Summit has a track record of signing programme
agreements and currently has an out-licensed product portfolio
comprising of four drug programmes with BioMarin, Orient Europharma,
Evolva and the Lilly TB Drug Discovery Initiative. In the future
these programmes may generate success based milestone payments and
royalties for Summit.
In addition, Summit owns Dextra Laboratories, a business unit that
operates independently to Summit, which offers specialist
carbohydrate chemistry services to third parties on a fee-for-service
or collaborative basis.
The company listed on the alternative investment market (AIM) of the
London Stock Exchange in October 2004 - symbol: SUMM. Further
information about the company is available at www.summitplc.com.
This document contains "forward-looking statements" within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by words such as
"anticipates", "intends", "plans", "seeks", "believes", "estimates",
"expects" and similar references to future periods, or by the
inclusion of forecasts or projections.
Forward-looking statements are based on the Company's current
expectations and assumptions regarding our business, the economy and
other future conditions. Because forward-looking statements relate to
the future, by their nature, they are subject to inherent
uncertainties, risks and changes in circumstances that are difficult
to predict. The Company's actual results may differ materially from
those contemplated by the forward-looking statements. The Company
cautions you therefore that you should not rely on any of these
forward-looking statements as statements of historical fact or as
guarantees or assurances of future performance. Important factors
that could cause actual results to differ materially from those in
the forward-looking statements and regional, national, global
political, economic, business, competitive, market and regulatory
---END OF MESSAGE---
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.