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Biopharma Co.'s Shares Triple in Value on US$5B License Deal
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Summit Therapeutics Inc. shares traded 194% higher yesterday after the company reported it entered into an in-license agreement with Akeso Inc. for its breakthrough bispecific antibody ivonescimab, which combines a blockade of PD-1 with an anti-VEGF into a single molecule designed to target cancer. Summit has agreed to pay Akeso an upfront payment of US$500 million, which it plans to finance via an equity rights issuance.

Biopharmaceutical company Summit Therapeutics Inc. (SMMT:NASDAQ; SUMM:LON), which is engaged in the discovery, development of, and commercialization of medicines for infectious diseases, cancer, and other unmet medical needs, yesterday announced that it entered into a definitive partnership agreement with Akeso Inc. (9926.HK) to in-license its breakthrough bispecific antibody, ivonescimab.

Summit Therapeutics explained that ivonescimab, known as AK112 in China and Australia and SMT112 in the U.S, Canada, Europe, and Japan, is "a novel, potential first-in-class bispecific antibody combining the power of immunotherapy via a blockade of PD-1 with the anti-angiogenesis benefits of an anti-VEGF into a single molecule."

The report indicated that ivonescimab is believed to be the most advanced PD-1 / VEGF bispecific antibody advanced in clinical studies, though to date, neither the U.S Food and Drug Administration (FDA) nor the European Medicines Agency (EMA) have granted approval for any PD-1- based bispecific antibodies. Summit mentioned that ivonescimab has received Breakthrough Therapy Designation status in China from The National Medical Products Administration (NMPA) for three separate indications relating to non-small cell lung cancer (NSCLC).

The agreement will provide Summit with the rights to advance, market, and commercialize SMT112 (ivonescimab) in the U.S, Canada, Japan, and Europe, with Akeso retaining the rights to develop and sell ivonescimab in China, Australia, and all other areas except for those assigned to Summit. The report stated that Akeso is considered to be a pioneer and source originator in creating and developing novel antibodies and that the in-license arrangement with Summit will allow it to advance its goals of becoming a global biopharma firm.

For its part, Summit will make an upfront payment in the amount of US$500 million to Akeso. Akeso will be eligible to receive up to an additional US$4.5 billion if certain regulatory and commercial milestones are achieved, along with low double-digit royalties on net sales.

The offering is expected to provide the company with gross proceeds of up to US$500 million, which it plans to utilize to pay its upfront payment to Akeso, support clinical development and regulatory approval for SMT112, and expand its drug pipeline.

Summit Therapeutics' Chairman and CEO Robert W. Duggan commented, "The partnership between Summit Therapeutics and Akeso is a strategically compelling opportunity . . . We are extremely encouraged by ivonescimab and the potential for improving the quality and duration of patients' lives based on clinical data to support this point."

Akeso's Co-founder, Chairwoman, CEO, and President, Dr. Michelle Xia, stated, "Ivonescimab has demonstrated the potential to deliver superior clinical benefit for patients and tremendous value for investors . . . The Akeso team has been dedicated to the development of ivonescimab for the past eight years and proudly advanced the molecule to the clinical Phase 3 stage. The global value of ivonescimab awaits great work from a great team to realize."

"We look forward to the swift execution of the clinical development and commercial plan in a global setting for ivonescimab," Xia added.

Summit Therapeutics advised that in a Phase 2 NSCLC trial that included patients with failed EGFR-TKI's, those treated with ivonescimab demonstrated "an overall response rate (ORR) of 68.4% and a median Progression-Free Survival (mPFS) time period of 8.2 months when combined with combination chemotherapy (pemetrexed and carboplatin) as compared to historical mPFS of 4.3 months in patients treated with combination chemotherapy (pemetrexed and platinum-based chemotherapy) alone."

Ivonescimab is now being developed in China and Australia for use in treating multiple solid tumors and is currently being evaluated in a Phase 3 clinical trial in patients with NSCLC that is positive for an epidermal growth factor receptor (EGFR) mutation and whose disease has progressed after treatment with an EGFR tyrosine-kinase inhibitor (TKI).

Co-CEO, President, and Summit Board Member Maky Zanganeh remarked, "We have found the ideal partnership with the potential to change the paradigm for treating patients facing difficult odds with devastating diagnoses . . . 10 years ago, metastatic lung cancer patients rarely survived for more than ten to twelve months from diagnosis. Today, survival can be measured in years."

Summit advised that it intends to finance its obligations under the agreement by the issuance of a rights offering that will allow its common shareholders of record to purchase non-transferable subscription rights to buy common shares at the lesser of US$1.05 per share or the five-day volume weighted-average price of its shares prior to the date of the transaction. The offering is expected to provide the company with gross proceeds of up to US$500 million, which it plans to utilize to pay its upfront payment to Akeso, support clinical development and regulatory approval for SMT112, and expand its drug pipeline.

Summit Therapeutics is a biopharmaceutical firm headquartered in Menlo Park, Calif. The company is engaged in discovering, developing, and commercializing medicines to treat cancer, infectious and other diseases with high unmet needs. The firm is highly focused on developing SMT112 (ivonescimab), which was engineered to combine two well-established oncology-targeted mechanisms of action. Initially, the company's SMT112 development efforts at being directed at treating NSCLC. Summit plans to begin treating patients in clinical studies by Q2/23.

Akeso is a biopharma company engaged in the discovery, development, manufacturing, and marketing of medicines designed to address high unmet medical needs worldwide. The company's pipeline includes more than 30 assets that are being developed to treat cancer, autoimmune disease, inflammation, metabolic disease, and other therapeutic areas. To date, 17 of these product candidates have been advanced into clinical trials. Akeso's Kaitanni (cadonilimab) received approval from China's NMPA in June 2022 for use in the treatment of relapsed or metastatic cervical cancer in patients who progressed on or after platinum-based chemotherapy making it the first commercialized PD-1-based bispecific drug globally.

Summit Therapeutics started off the day yesterday with a market cap of around US$158.0 million with approximately 201.3 million shares outstanding. SMMT shares opened 68% higher yesterday at US$1.32 (+US$0.535, +68.15%) over the previous day's US$0.785 closing price. The stock traded yesterday between US$1.19 and US$1.59 per share and closed for trading at US$1.54 (+US$0.755, +96.18%).

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