Summit Therapeutics agrees to US$2B AstraZeneca equity investment
A signed trial pact covers ivonescimab and sonesitatug vedotin in gastrointestinal cancers; Summit expects the share sale to close by Oct. 2.
Adrian Kessler
A US$2 billion equity commitment would fund more cancer drug development at Summit Therapeutics Inc. NASDAQSMMT, as the Miami company said on Monday, Sept. 28, that AstraZeneca PLC LONAZN NYSEAZN agreed to buy convertible preferred shares. The US$18.36 common-share equivalent price is 18.6 per cent above Monday's close, shown at 4 p.m. EDT on Sept. 28 by NASDAQSMMT.
Summit shares closed at US$15.48 at 4 p.m. EDT on Sept. 28, according to NASDAQSMMT. Summit said AstraZeneca will buy approximately 108,955 preferred shares, each convertible into 1,000 common shares. AstraZeneca's release puts its resulting interest at about 12 per cent of outstanding common shares, or 10.6 per cent on a fully diluted basis, after the investment closes. Conversion to common stock later requires customary regulatory clearances.
Summit is a Miami-based oncology developer advancing ivonescimab in major markets outside China. The investigational antibody combines blockade of the PD-1 immune checkpoint with inhibition of VEGF, a protein involved in blood vessel growth.
The Sept. 28 release is stamped 5:30 p.m. EDT, after the NASDAQSMMT page's 4 p.m. EDT close. Summit expects the preferred-share sale to close by Friday, Oct. 2, subject to customary conditions, so Monday's closing price predates the announcement.
AstraZeneca Agrees to Buy Preferred Shares
The effective purchase price equals the previous week's five-day volume-weighted average plus 10 per cent, according to Summit's terms. Summit also agreed to file a registration statement with the SEC covering resale of common shares following closing. The potential conversion would dilute existing holders, while giving AstraZeneca an economic stake in Summit's oncology program.
AstraZeneca said the investment is intended to accelerate development of ivonescimab in combination with antibody drug conjugates across cancer types. Its oncology research chief described the strategy in the company's Sept. 28 release:
"A core pillar of our oncology strategy is to broaden the reach of our ADC portfolio as the backbone of treatment across tumour types with combinations alongside next-generation immunotherapies," AstraZeneca executive vice-president Susan Galbraith said.
A separate signed clinical collaboration covers trials of ivonescimab with AstraZeneca's sonesitatug vedotin in gastrointestinal cancers. AstraZeneca intends to sponsor the studies, while each company supplies its own drug and shares trial costs. Each retains development and commercial rights to its respective medicine.
The partners also signed a nonbinding memorandum covering possible trials with other AstraZeneca cancer medicines. Summit said the proposal carries no additional financial considerations associated with milestones, royalties, revenue sharing or profit sharing. The companies say a broader clinical agreement may never be completed.
Read more: Merck closes SciBrunch KRAS licence worth up to US$2.13B
Separate Cancer Trial Results Are Due at ESMO
AstraZeneca reported that sonesitatug vedotin improved overall survival against investigators' choice of therapy in its CLARITY-Gastric01 study of previously treated, Claudin 18.2-positive advanced gastric cancer. The Sept. 28 release gave a high-level result; AstraZeneca said detailed findings would be presented at the European Society for Medical Oncology congress.
The other listed developer tied to ivonescimab is Akeso, Inc. HKG9926, which engineered the antibody and retains rights in China and other regions. Akeso's Sept. 22 notice schedules a Phase 3 overall survival presentation for Oct. 25 on ivonescimab plus chemotherapy against durvalumab plus chemotherapy in advanced biliary tract cancer.
The iShares Biotechnology ETF NASDAQIBB closed at US$209.77 at 4 p.m. EDT on Sept. 25, according to its Google Finance quote. That dated sector benchmark precedes Summit's after-hours announcement.
Read more: Merck and Daiichi Sankyo withdraw ifinatamab deruxtecan BLA
Summit expects the US$2 billion preferred-share sale to close by Friday, Oct. 2. Closing would complete AstraZeneca's preferred-share purchase; the proposed broader clinical collaboration still requires a definitive agreement.
