Summit Therapeutics PLC (ADR) (NASDAQ:SMMT) investors should be smiling from ear to ear today following the news that the drug development company has entered into an exclusive license and collaboration agreement with Sarepta Therapeutics Inc (NASDAQ:SRPT), granting Sarepta rights in Europe, as well as in Turkey and the Commonwealth of Independent States, to Summit’s utrophin modulator pipeline, including its lead clinical candidate, ezutromid, for the treatment of Duchenne muscular dystrophy (‘DMD’). As part of the agreement, Sarepta also obtains an option to license Latin American rights to Summit’s utrophin modulator pipeline. Summit retains commercialization rights in all other countries.
Summit Therapeutics shares reacted to the news, jumping over 80% in early trading Tuesday.
Utrophin modulation is a potential disease-modifying treatment for all patients with the fatal muscle wasting disease DMD, regardless of their underlying dystrophin gene mutation. Ezutromid is currently in a Phase 2 proof of concept trial called PhaseOut DMD.
“This partnership with Summit Therapeutics furthers our commitment to invest in innovative approaches to treating Duchenne and supports our common goal of improving the lives of patients with DMD,” said Edward Kaye, M.D., Sarepta’s Chief Executive Officer. “Summit’s utrophin modulation technology represents a potentially promising approach to treat DMD, which may complement our current approach of exon skipping therapy.”
“Sarepta Therapeutics has paved the way in the development of disease-modifying therapies for DMD with the first FDA-approved drug in this disease area, making them a strong strategic partner to support our utrophin modulator pipeline,” commented Glyn Edwards, Chief Executive Officer of Summit. “This agreement provides us with access to Sarepta’s development, regulatory and commercialisation expertise for the continued advancement of our promising utrophin modulator pipeline. We look forward to this partnership and working together to bring great advances to patients and families living with DMD.”
Under the terms of the agreement, Summit will receive an upfront fee of $40 million. In addition, Summit will be eligible for future ezutromid related development, regulatory and sales milestone payments totalling up to $522 million, including a $22 million milestone upon the first dosing of the last patient in Summit’s PhaseOut DMD trial, and escalating royalties ranging from a low to high teens percentage of net sales in the licensed territory. Summit will also be eligible to receive development and regulatory milestones related to its next-generation utrophin modulators. Sarepta and Summit will share specified utrophin modulator-related research and development costs at a 45%/55% split, respectively, beginning in 2018. If Sarepta elects to exercise its option for Latin American rights, Summit would be entitled to additional fees, milestones and royalties. (Original Source)
On the ratings front, Summit Therapeutics has been the subject of a number of recent research reports. In a report issued on September 15, H.C. Wainwright analyst Carol Werther initiated coverage with a Buy rating on SMMT and a price target of $26, which represents a potential upside of 201% from where the stock is currently trading. Separately, on September 8, Canaccord’s Arlinda Lee reiterated a Buy rating on the stock and has a price target of $14.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Carol Werther and Arlinda Lee have a total average return of 38.0% and -9.9% respectively. Werther has a success rate of 70% and is ranked #88 out of 4197 analysts, while Lee has a success rate of 40% and is ranked #4013.
Summit Therapeutics Plc engages in the discovery, development and commercialization of novel medicines. It operates through the Drug Development segment which covers Summit’s research and development activities carried out by the group, primarily comprising the Duchenne Muscular Dystrophy and the Clostridium Difficile Infection programs.