Richard Pye - Senior Director, Corporate Affairs and Communications Glyn Edwards - Chief Executive Officer Ralf Rosskamp - Chief Medical Officer Erik Ostrowski - Chief Financial Officer.

Esther Pang - Needham Ted Tenthoff - Piper Jaffray Liisa Bayko - JMP Christopher Marai - Oppenheimer Samir Devarni - Rx Securities Arlinda Lee - Canaccord.

Good day and welcome to the Summit Therapeutics Plc Financial Results for the Fourth Quarter and Fiscal Year ended 31 January 2016 Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Richard Pye, Senior Director of Corporate Affairs and Communications. Please go ahead, sir..

Thank you and welcome to everyone joining us on the call to discuss our financial results for the fourth quarter and fiscal year ended January 31, 2016. Earlier today, we issued a press release summarizing these results. If you had not haven’t had a chance to review, it is available on our website at www.summitplc.com.

Joining me on the call today are our Chief Executive Officer, Glyn Edwards; our Chief Medical Officer, Dr. Ralf Rosskamp; and our Chief Financial Officer, Erik Ostrowski. Before we begin our discussion, I would like to remind listeners that we will be making forward-looking statements during this call.

I refer you to our filings with the Securities and Exchange Commission for description of the risks and uncertainties associated with an investment in Summit Therapeutics. I would now like to turn the call over to Glyn for an overview of our year and more recent corporate activities.

Glyn?.

Thanks, Richard and thank you all for joining us today as we discuss a really successful year in the development of our programs in Duchenne muscular dystrophy, or DMD and C. difficile infection or CDI, both of which have the potential to profoundly change the way we treat these diseases today.

Over the past year we progressed both programs to potentially pivotal points in their developments.

In DMD, we anticipate our first look at a proof of mechanism for our utrophin modulation program in about January of 2017 and in CDI following an outstanding Phase 2 set of data, we are exploring a potential partnership for its continued clinical developments.

With these milestones, this year it could be proved to be transformational for us, the patients and the families affected by DMD and CDI and our shareholders. I will now review the years’ activities that led us to this exciting time in our path to significantly advance the current standard of treatment for these serious diseases.

Starting with DMD, our unique approach has the potential to slow or stop disease progression in all patients with DMD regardless of the underlying mutation.

This approach was discovered by our Co-Founder, Professor Kay Davies at the University of Oxford and takes advantage of a protein called utrophin, which is naturally produced in developing all repairing muscles to perform a similar role to that of dystrophy and in mature muscles.

Our pipeline of oral, small molecule utrophin modulators aims to keep the production of utrophin switched on to compensate for the missing dystrophin in patients with DMD. Our lead modulator is ezutromid, which at least is easier to pronounce, which was previously known as SMT C1100.

Last summer, we successfully completed our Phase 1b modified diet trial of ezutromid, which demonstrated that a balanced diet along with the consumption of a small glass of full fat milk had a positive impact on the blood plasma levels of ezutromid.

All 12 boys in the trial achieved plasma levels, which we believe maybe able to sustain utrophin production and could lead to clinical benefit. Based on these positive results, we are poised to enter into a Phase 2 proof-of-concept trial called PhaseOut DMD.

I will let Ralf go into more detail on this trial in a few moments, but I am pleased to say that we just opened a site for enrollment in the UK. We had experienced expected enrollments to begin earlier in the year, but getting the site started up has taken longer than we had anticipated and we now expect enrollments in the UK to begin this quarter.

As a result, we are expecting data from the first set of 24-week biopsies in January 2017. These biopsies could provide early proof of mechanism data for ezutromid and utrophin modulation and we eagerly await these results. In late April this year, we received our investigational new drug, or IND clearance from the U.S.

Food and Drug Administration allowing us to expand the PhaseOut DMD study into the U.S. This marks the entry of the program into the U.S. and we are excited to bring the promise of utrophin modulation to an expanded network of the patients, families and key opinion leaders and we expect to begin enrolling patients in the U.S.

into PhaseOut DMD in the third quarter of this year. In addition to PhaseOut DMD, we have an ongoing Phase 1 trial evaluating two potentially optimized formulations of ezutromid that we referred to as the Phase 1 new formulation trial with the aim of increasing plasma drug levels in patients with DMD.

We cited one of these two formulations to be tested in DMD patients based on recently reported interim data from the trial, where we found that 16 healthy male volunteers were able to achieve and over tenfold increase in plasma exposure with the new formulation compared to the current formulation of ezutromid.

We also demonstrated with the initial dose that all 8 DMD patients achieved plasma drug levels within the range believed to be necessary for therapeutic benefit at just one-tenth of the dose required to achieve these levels with the current formulation.

Dose escalation is currently ongoing and we expect to announce the top line results in this trial in the third quarter of this year.

While these early results in the new formulation trial of ezutromid are encouraging, we remain confident that the current formulation of ezutromid with a modified diet will enable us to quickly evaluate the potential therapeutic benefit of Eutrophin modulation and we expect to make firm decisions regarding the future clinical developments of the new formulation once the new formulation trial is complete.

Behind our lead candidate, we have a fulsome pipeline of second and future generation utrophin modulators to strengthen our leadership position in this area.

And this past year, we published positive preclinical efficacy data on one of our second generation utrophin modulators further supporting the disease modifying potential of utrophin modulation in the treatment of DMD.

Preclinical work is ongoing with these molecules, which are similar in structure to ezutromid, but designed to have a more favorable pharmacokinetic profile. We have also progressed with our future generation utrophin modulators, which are part of our strategic alliance with the University of Oxford.

We announced the nomination of two series of molecules for advancements into lead optimization studies and one of these series appears to have a mechanism distinct from ezutromid.

This marked the achievement of the first research milestone for this collaboration and as our testaments the outstanding work coming from our collaboration that is being led at Oxford by the research teams of Professor Kay Davies, Professor Stephen Davies and Dr. Angelo Russo.

We are therefore delighted to announce the extension of the collaboration till at least November 2019. With ezutromid advancing into Phase 2 clinical trials and the burgeoning pipeline of utrophin modulator compounds in early development, we continue to maintain our leadership position in utrophin modulation and really look forward to the year ahead.

Now, turning to our CDI program, ridinilazole formerly known as SMT19969 is our first-in-class novel antibiotic for the treatment of CDI. CDI is quite different from many other infectious diseases.

In that resistance to current antibiotics is not yet an issue and I say not yet, but the unmet need here lies in reducing the high rates of recurrent disease. Recurrent disease is thought to be due to the use of broad spectrum antibiotics, which wipe out the healthy gut microbiome that can normally protect the gut from infection of C. diff.

Our approach is to eliminate C. diff with our highly selective antibiotic therefore allowing the healthy microbiome to thrive and protect the gut from recurrent disease. The FDA acknowledges the great unmet need in CDI and the promise of ridinilazole in the treatment of CDI through the granting of fast-track designation in July of 2015.

The data supporting the use of ridinilazole in the treatment of CDI lie our last. This last year, more recently, we have published the preclinical data demonstrating high potency against many clinical isolates of C.

difficile as well as data that showed that we outperformed the standard of care vancomycin and metronidazole in having a robust killing effect on C. difficile that significantly reduces the level of toxins produced by the bacteria that are known to drive the disease severity.

Most importantly, we have now demonstrated in the clinic that we have a profound effect on treating the initial infection in CDI and reducing recurrent disease. This past November, we successfully completed our Phase 2 trial of ridinilazole called CoDIFy. Ralf will go through in a bit more detail of the trial and the data.

But we believe that these results were spectacular. We achieved statistical superiority over the standard of care, vancomycin in the measure of sustained clinical response. Sustained clinical response is a composite endpoint of cure the end of treatments and no recurrence 30 days after treatment.

And we have further shown that this was due to a large numerical reduction in the rate of recurrent disease. These strong data have positioned ridinilazole as a very attractive asset. And while we are exploring all of our options for future developments, our preference is to select a partner to advance this promising compound into Phase 3.

There has been a great deal of interest in this compound and partnering discussions are well underway. We also have an exploratory Phase 2 trial ongoing which is comparing ridinilazole to fidaxomicin. This is an open label trial to evaluate the gut microbiomes of patients during and off the treatment.

The data from this trial are expected to help inform the design of future Phase 3 trials and the commercial positioning of the drug. We would not expect a delay in any partnering activities where we await the results of this trial which we now expect in the second half of the year. Operationally, we have strengthened our team across the UK and U.S.

particularly with the appointment of Dr. Ralf Rosskamp as our Chief Medical Officer and you will be hearing from him shortly. His expertise both as a pediatrician and as a rare disease drug developer has already brought great value to our team and we expect we will continue to build as advance Utrophin Modulator program. We also welcome Mr.

David Wurzer to our Board as a Non-Executive Director who brings to our team extensive experience in pharmaceutical and biotech financial and business matters.

On the financial front, we successfully completed our NASDAQ initial public offering in March of 2015, which complements our existing AIM listing to increase our access to specialist healthcare investors and is the strong foothold in a major market for our DMD and CDI programs.

We have accomplished a lot over the past year and the company is on a cusp of a potentially pivotal year ahead. With that overview, I will now pass the call over to Ralf to provide a bit more detail on what we expect from PhaseOut DMD and to review the results of the CoDIFy study, after which Erik will run through the financials.

Ralf?.

Thank you, Glyn. I will begin with our Phase 2 DMD clinical trial, which we have called PhaseOut DMD. PhaseOut DMD is an open label Phase 2 proof of concept trial of ezutromid in boys with DMD. The 48-week trial is expected to enroll up to 40 patients ranging an age from their fifth to their tenth birthdays at sites in the UK and in the U.S.

We see this trial as exploratory with the opportunity to gain insight into the mechanism and potential clinical benefits for ezutromid. We are therefore looking at several different measures within this trial.

Our primary endpoint is the change from baseline magnetic resonance imagining or MRI parameters related to fat infiltration and inflammation of the leg muscles. DMD affected muscles have a higher amount of fat whereas this non-DMD muscles which is measured through the so called fat fraction, a ratio of fats to water in MRI.

Over time, the fat fraction increases in the DMD affected muscles as muscle map is lost. In PhaseOut DMD, we would expect to see the stabilization of the fat fraction with ezutromid treatment. One of endpoints from this trial that we are most excited about is the measurement of utrophin and regeneration from muscle biopsies.

Each patient will have two biopsies one taken at baseline and a second taken at either 24 weeks or 48 weeks of dosing with ezutromid. This endpoint could enable us to demonstrate proof of mechanism of ezutromid. Patients with DMD produce larger amounts of utrophin naturally as the muscles are regenerating and repairing.

However, this utrophin appears in a biopsy as random hotspots of utrophin staining. With ezutromid treatment, we would expect that utrophin would be expressed uniformly in the biopsy samples indicating that utrophin is continuously produced and importantly taking the place of dystrophin.

We will look to correlate this with a reduction in muscle regeneration as measured by myosin. If we see this, we would expect ezutromid to slow the decline of functional measures. The functional measures are part of our exploratory endpoints and include the North Star Ambulatory Assessment, six minute walk distance and upper limb strength measures.

We will also record patient reported outcomes. We would expect ezutromid to slow the decline of these measures over time in PhaseOut DMD. We look forward to reporting the results of the first group of 24 week biopsies in January of 2017.

Now to CoDIFy, CoDIFy was a double blind randomized active controlled multi-center Phase 2 clinical trial that evaluated the safety and efficacy of ridinilazole over the standard of care vancomycin in a total of 100 patients.

Read part of the top line data in November of 2015 and have since reported some additional supporting data with the more to come during this year. Ridinilazole achieves the typical superiority of vancomycin and the measure of sustained clinical response with the raise of 66.7% with ridinilazole compared to 42.4% with vancomycin.

Remember as Glyn mentioned sustained clinical response is a combined measure of cure at the end of treatment and no recurrence 30 days after treatment. The statistical superiority was achieved in large part through a dramatic reduction in recurrent disease for patients receiving ridinilazole.

Recurrent disease rates were 14.3% for ridinilazole treated patients, where this 34.8% for vancomycin treated patients. Initial cure rates were 77.8% for ridinilazole treated patients where this 69.7% for vancomycin treated patients.

These analyses were conducted on a modified intensely treated population that comprised 69 subjects with CDI confirmed by the presence of free toxin in faeces. And these results were consistent across all treatment groups. Ridinilazole was generally well tolerated and the overall adverse event profile was similar to vancomycin.

These impressive results reflect of the high selectivity of ridinilazole and the hypothesis that this high selectivity would confirm protection on the gut microbiome and therefore reduce recurrent disease. In fact in February, we reported top line results analyzing the microbiome of these patients.

The results shows that ridinilazole preserves the gut microbiome in CDI patients, while vancomycin inflicts substantial damage on the gut microbiome during treatment and this damage persist that in many patients during the 30-day post treatment period.

We also know that initial evidence of recovery of bacterial groups was the key in protecting from CDI in ridinilazole treated patients. Collectively, the CoDIFy results to-date support the use of ridinilazole in the treatment of CDI. And we look forward to reporting additional details from this trial in the near future.

I will now pass the call to Erik for a review of our financials..

Thank you, Ralf. I will now provide an overview of our financial results for the fiscal year ended January 31, 2016. We will of course provide detailed results in our regulatory filings and I encourage you all to review those accordingly.

We present Summit’s results in accordance with international financial reporting standards in British pound sterling, but for convenience purposes I will give U.S. dollar equivalents for certain key numbers.

With respect to financial guidance we will define the important milestones that we intend to achieve with the financial resources currently available to us.

As we described in our earnings release today, we completed our financial year on January 31, 2016, with cash and cash equivalents of £16.3 million or $20.1 million compared £11.3 million at January 31, 2015.

Turning to the income statement, other operating income decreased to £1.4 million or $2.1 million during the year ended January 31, 2016 from £2.1 million for the previous year.

The £1.4 million in other operating income was comprised of £0.8 million with respect to income recognized from the Wellcome Trust in support of the CDI clinical program and £0.6 million recognized with respect to funding received from Innovate UK to support the development of ezutromid.

Research and development expenses increased to £16.8 million or $23.9 million for the year ended January 31, 2016 from £10.4 million for the previous year. This was primarily due to increased activities in both our DMD and CDI programs and an increase in headcount within these project teams.

General and administration expenses increased to £4.7 million or $6.8 million for the year ended January 31, 2016 from £4.4 million for the previous year. This increase was driven by increased legal and professional expenses associated with being a publicly trading company in both the U.S. and UK as well as staff related costs.

Net loss for the year was £17.1 million or $24.2 million compared to $11.4 million for the previous year. Turning to the cash flow statements, the group had a net cash inflow of £4.9 million or $7 million for the year ended January 31, 2016 as compared to a net cash inflow of £9.2 million for the previous year.

Net cash used by operating activities was £17.2 million or $24.4 million for the year ended January 31, 2016 compared to £11.3 million for the previous year driven by an increase in research and development expenses.

Net cash inflow from financing activities was £22.1 million or $31.4 million for the year ended January 31, 2016 compared to £20.5 million for the previous year. The financing activities include the U.S. initial public offering on the NASDAQ global market and exercising flow of the underwriters’ over-allotment option completed in March 2015.

Our cash on hand allows us to fund our key program initiatives through January 31, 2017 including the following.

Reporting 24-week biopsy data from the initial group of patients in the PhaseOut DMD clinical trial of ezutromid, reporting top line data from the Phase 1 new formulation trial of ezutromid and reporting top line data from the exploratory Phase 2 trial in CDI comparing ridinilazole with fidaxomicin.

I will now turn the call back over to Glyn for closing remarks.

Glyn?.

Yes, thanks Eric.

I am really proud of the accomplishments of the team over the past year which should provide momentum for us to embark on what could be a pivotal year with potential proof-of-mechanism data from ezutromid in the PhaseOut DMD trial and exploring a potential partnership for ridinilazole following on the heels of really strong clinical data.

Just before I take any questions, I would like to draw your attention to the fact that we will be hosting utrophin R&D Day in New York City on June 15 with several guest speakers who are experts on utrophin, experts on DMD and DMD clinical trials. And if you are interested in attending, please e-mail investors@summitplc.com or any of us.

Now, I will open the line for questions. Thank you.

Operator?.

Thank you very much. [Operator Instructions] We can now take our first question from Chad Messer from Needham. Please go ahead. Your line is open..

Hi, this is Esther in for Chad. Thanks for taking my question.

So, following Sarepta’s FDA panel and I guess since there was a mixed feeling on the dystrophin data, what are your thoughts on dystrophin and what lessons can you learn and how does that apply to utrophin, I guess the kind of data do you think the FDA or the panel will want to see?.

Well, that’s a really good question and one that we have been debating very strongly in-house, but in our discussions with the FDA and from what we learned, we don’t see that there is anything particularly new for us. What lessons there are, are that your methodology for measuring in our case utrophin needs to be robust and needs to be validated.

So, that’s the first thing. And we have been putting considerable efforts working to develop a reliable, automated and validated system for measuring utrophin.

We have a more complex issue than the guys developing dystrophin replacement treatments, because as Ralf said in his presentation, these DMD boys are already making quite large amounts of utrophin compared with what you would see from a biopsy sample from you or I who don’t have Duchenne, because utrophin is produced in response to repair.

And so well, we will look at total amounts of utrophin.

What’s most important is the distribution of that utrophin and so these methods that we are validating look to try and quantify the uniformity of utrophin production, but technology has moved on since Sarepta first started their studies several years ago and the whole community, research community and development community has a lot more expertise now.

And so we are in the lucky position of starting all this in 2016 and we are pretty comfortable that the newer technologies that are available will allow us to have a robust and reliable system so that we can just concentrate on what the drug effect is rather than worrying about the assay technology..

And will we be hearing about the systems that you are developing?.

Yes. We published a paper on the base technology so that before it moved to the industrialized, which came out just a few months ago.

So, the base technology has been the result of a published paper that was done in collaboration with scientist that’s great [indiscernible], but that’s – that technology has been moved out now into a commercial laboratory that works on clinical trials into an automated system and has been – the system has been made more robust from the researchers and so we will publish further data on the validation as that goes on, but the core technology has already been made public..

Okay, thanks.

And then moving on to the PhaseOut DMD, I mean, you said that in the MRIs, you would be looking for a fat to water ratio, is there I guess a published progression in DMD boys so that you can see a stabilization or is that something that you would have to look for as you run the study?.

I will hand over to Ralf to answer that question..

Yes, there are published data mostly coming from the imaging DMD group in Florida. They actually looked at the natural history showing that the natural history you see, because this is a relentless disease, you see a decrease in the fat fraction over time.

But also importantly they have treatment data for patients getting on steroids and they were able to demonstrate that there is actually some kind of stabilization induced by these steroid treatment. So, they have good natural history data and already some treatment data available as well..

And that’s measurable within 24 to 48 weeks?.

Yes. There is some actually depending on what you measure whether it’s the T1 or the T2 parameters can be seen at 3 to 6 months already, that we have chosen this as our primary endpoint, because it could theoretically give us an earlier read than waiting for the traditional endpoints, which will take something around at least a year..

Okay.

And is it uniform across all exon skipping kids or does that not matter?.

The data published on the natural history actually across all mutations and they are not specific to a certain genotype..

There is going to be a presentation about the technology at our R&D day, so here is a great opportunity for you to come to see us in New York and hear much more about that..

Okay. Thank you. Very helpful..

Thank you. We can now take our next question from Ted Tenthoff from Piper Jaffray. Please go ahead. Your line is open..

Great. Thank you very much and thanks for the thorough update.

And I am encouraged by the FDA briefing documents and sort of what they said about looking for activity and ultimately what would happen with PDUFA date coming up, but I am excited to see people still investing in this space, because I do think it’s an important disease competitor drugs can show efficacy, I am going to kind of ask my question with respect to C.

diff, and sort of making a sense Glyn if I may just in terms of partnering interest. We have seen obviously that difficile deal a little while back, that’s a different compound, but how are big pharma companies looking at C.

diff today, are they looking at this as a disease where you treat sort of the worst patients first and move forward or do they have a more optimistic view of really getting the better therapies utilized upfront in order to prevent recurrence?.

Ted that’s another great question and actually addresses one of the key differences between a new treatment for C. difficile infection like ridinilazole and perhaps another area where something that’s developing against a new treatment with a new antibody, if you can something where resistance is the main issue.

And it really comes down to the antibiotic stewardship argument.

What is the best for society when you have a new antibiotic and one of the big concerns from investors is you have a new antibiotic that looks fantastic and then it gets locked away and it covered only to be used on really intractable cases, because we don’t want to have it exposed to the community and resistance developing. Actually in C.

diff the antibiotics stewardship argument works in exactly the opposite way. So currently this gut disease is treated with really valuable broad spectrum of antibiotics. And those are being used in the gut infection where you are liable to create resistant mutants for which will then go into the environment.

And so with ridinilazole which is narrow spectrum which only really kills the clostridium and that was a subset of clostridium, in other words, a subset of clostridium and particularly the C. diff. Then the right thing for society is to use this very widely and keep back vancomycin and metronidazole for other more intractable diseases.

And we are seeing great traction with potential partners to develop this in such a way that it would become the drug of choice in first and second line treatments. And that’s a huge market because there is about 0.5 million cases every year in the United States and there is a similar number in Europe. So there is a very large market opportunity.

And the right thing to do it should – the drug proves to be effective in its Phase 3 studies would for this to become the frontline standard of care treatments and to keep these really valuable broad spectrum antibiotic spec for other diseases..

Thank you. We can now take our next question from Liisa Bayko from JMP. Please go ahead..

Hello..

Please go ahead Ma’am, your line is open..

Hi Liisa, how are you?.

Hi, good. How are you? Sorry.

Two questions, the first is maybe you could just step back to the FDA Advisory Committee Meeting and I think it was the first time we all got really a chance to hear FDA’s view on developing drugs in this sector, so what takeaways are there for other drug developments like yourself and we touched upon showing our activity on the relevant protein that you are trying to modify, but any other takeaways you have, it’s my first question?.

Yes. I think again the FDA has been pretty consistent with advising that points to consider they have put out. So what they would ideally like to see is a story that shows good signs that there is evidence of activity in our case the evidence of utrophin modulation and improvements in muscle structure.

But that when it comes to you are seeking approval that you have results from a randomized control study, which show a statistically robust difference between the treated and untreated boys that’s what they would ideally like to see.

But I think what the first the BioMarin and now the Sarepta Panel has said that they would really bend over backwards to try and accommodate a review and but that doesn’t mean to say that we should ourselves as drug developers be aiming low.

I think what we need to do is have programs that aim high and make the regulators job easy to approve revolutionary new drugs for this disease.

So I have been really encouraged by the panel and the interaction with the agency and it would proves us as drug developers to now do robust development programs to show that science works, the activity works and then the efficacy works..

Sorry the drug does get approved [Technical Difficulty] of this does it change your thinking on these programs, I mean you noticed that – does that lead you to believe that if you were to get a signal in this next study that there might be something you seem to get improved line, I am just curious about how this dynamic may influence how you see the next test for yourself and what the hurdle would be?.

Yes. So I hope for patients that Sarepta do get an approval, because I think there is some evidence that that drug works and we will and the FDA I am sure wish that a more robust trial had been done and they could show for sure.

From our point of view whatever the outcome there it doesn’t really change our approach, neither from a regulatory strategy point of view or from a market point of view. So from a regulatory strategy point of view, we are at the beginning of our development process.

Our intention is to do this activity study and then as soon as we see some kind of signal from this to then start to randomize control study which would be a registration study. And from a market point of view if this drug is approved and if all patients with a mutation amenable to exon-51 treatment go on that still only 13% of the population.

And we have the opportunity to develop drugs from the other 87%. So I think both from a regulatory strategy and from a market point of view, it doesn’t make any difference to what we do. But with the patient’s interest we hope to get it approved..

Okay. And then just to your CDI program if you can describe what an optimal partnership looks like for you? Thanks..

Yes. So we are pursuing actually a number of different types of partnerships. So we have got people who are interested in a global deal that has the ability to both developing market, the drug globally.

But we also have regional people who have very strong marketing and development presence in for instance Europe or the Far East including Japan or other parts of the U.S. And we may put together a mosaic of those depending on which we think gets us the best economic and developmental outcomes. So we have a broad interest in there.

And as you know, we have been in this process for some time and so we are pleased with the state of those discussions and negotiations..

Okay.

And of any absence if you are considering they would all be corporate related, no, kind of funding of the program through take mentally to use our other things with that?.

Well, actually, until the deal is done, the deal is not done. Our preference would be for a corporate partner actually mainly on the basis of speed.

There is a lot of support for novel antimicrobials in either not for profit or with government support and we have actually had huge interest from those sources in working with us on ridinilazole, but I don’t know what your experience is of working with government.

Usually, we find that very thorough and very reliable, but timeliness is not necessarily a key attribute whereas commercial discussions tend to work to a more reliable metronome..

Okay, thank you. That’s it for me. Thank you..

Thank you. We can now take our next question from Christopher Marai from Oppenheimer. Please go ahead..

Great. Good morning, guys. Thanks for taking the questions.

Just firstly on your data for DMD in the biopsies, I guess you are going to have data 24 and 48 weeks, is that correct? And then just remind us that will you be looking at MRI measures highlighting on potentially inflammation rather than specific sort of fat fraction changes? And then secondly given the drug’s mechanism of action, would you expect inflammation to be reduced here, do you have any data that you will be pulling from the current trial to that regard? Thank you..

Yes, I will hand over to Ralf, but yes, inflammation is an intermediate part of the disease progress. You get damage scores by the absence of dystrophin and then infiltration by inflammatory cells, but that’s a detailed answer to your questions I will hand over to Ralf..

Yes. So, everybody has a baseline biopsy and then half of the boys will have 6 months and half of the boys will have 12 months biopsy. And what we were trying to do is therefore we have the 6 months biopsy. So at the time of the 6 months biopsy, the boys had already two MRI measurements, so at 3 and at 6 months.

And hopefully this will enable us already to look at the relationship between changes in inflammation and changes in fat fraction and changes over baseline of what we see in the biopsy. So, I hope this answers your question..

Yes, great. Thanks.

And then with respect to your next formulation, I am just wondering how you think about bringing that into the clinic? I mean, will you need to start from sort of scratch here, how different is it from the original molecule and then would you expect sort of just bridging studies to start bringing that through and into patients? Thanks..

Yes. So, we are carrying out a study with the new formulation in DMD boys right now. It’s a more conventional safety and PK study, but we believe that will give us enough information to be able to then move that forward into our next randomized study.

Now, obviously, we will have to wait to see what all the data is to before we can confirm that decision, but the regulatory agencies around the world have reasonable guidance on types of development group for formulation changes during the development of the drug.

And we are conscious of those and have been taking those into accounts in this and it’s after reviewing the data we have so far reviewing our tox package for the active ingredients and what’s in the new formulation that leads us to believe finishing the study that our future randomized study is likely to be with the new formulation rather than our current formulation..

Great. And then lastly maybe when we think about DMD, we think a lot about combination therapies given the current apparent efficacy of compounds available.

So, I was just wondering you know how C1100 looks in that regard and if you have done additional work to sort of characterize potential interactions with either therapies currently used by patients like the steroids and others or potentially some of the ones in the later stages of development? Thanks..

Yes, that’s a really good set of questions.

So, first of all, in the build up to moving into human studies, we have done combination studies looking at ezutromid in combination with steroids and the concern there was were there any bad things about that combination and in fact the converse we found some evidence of synergy with steroids and in our Phase 2 program, all the boys will be stable on steroids.

So, we would be using combination with steroids, because for most parts of the world that the age group we are treating, then these boys are already on steroids. I think for the future, one of the really exciting things about this approach is that it’s likely to be able to be using combination with other treatments.

So, if you have one of the new disease modifying treatments whether it’s exon skipping, whether it’s the nonsense mutation or there I say crisper or the really exciting work that we are starting to see on gene therapy with AAV vectors.

If they produce a certain amount of dystrophin, then we want to be able to occupy some of the unoccupied sites with utrophin and see some benefit, because our approach is completely off-ordinal to those as there shouldn’t be side effects that combine and there should be at least an additive effect.

But as with all new drug developments, if there are two new treatments coming along the first thing, each has to do is show on their own that they give a benefit and then we can move to look at a combination treatment.

So, while we are hugely excited about the potential for combinations, our priority right now is to show single agent activity on a steroid background..

Got it. Thank you..

Thank you. We can now take our next question from Samir Devarni from Rx Securities. Please go ahead..

Thanks for taking my questions.

Glyn just on the – just going back to the biomarker assay development, can you just confirm whether you are using that in the PhaseOut DMD study?.

Yes, we are. Yes, yes. So, we are using – there are really two key assays that we will be using that Ralf referred to in the PhaseOut DMD. The first is looking at utrophin and utrophin distribution.

And the second, which you also mentioned and again is in this paper that was published earlier by [indiscernible] with charity funding from Joining Jack, looks at developmental myosin, so that we can look at the maturity of muscle fibers than what you hope with any treatment, whether it’s a utrophin modulator or any other treatment is that if it’s affected you will see a reduction in immature fibers and the appearance of mature fibers and we have an assay which is being validated at the moment and it will be part of our study to look at the maturity of muscle fibers.

And so in an ideal world what we would expect to see is a sequence that starts with utrophin production and uniformity of utrophin on the fibers that we see an increase in the maturity of those muscle fibers in the biopsy samples that the MRI shows a stabilization of the fat fraction and that in turn leads to the stabilization of clinical outputs like the six minute walk and the North Star Ambulatory.

Now those later two I think all the evidence points that you need a large randomized trial to see proved differences in those. But we hope that we would see differences in utrophin and differences in the maturity of the fiber also changes in the fat fraction in this PhaseOut study. So that’s why we are hugely excited.

And this next 12 months is going to be pivotal time for untrophin modulation. And we really look forward to recruiting the boys and getting the results..

Got it. And then just maybe on to the C.

diff interested upon your comments about the ongoing head to head with fidaxomicin, is it that you don’t because partners already have access to that data and is it open label under confidentiality?.

No, our confidence is just driven by the stunning data in the large or the larger blinded randomized study against vancomycin, I mean that data is just studying. And then as we peal back layers of the onion with microbiome data it just is a standout results in the field.

And we can feel from the discussions with the partners and others that this data just don’t alone based on that.

So the fidaxomicin study is more painting some color on to what the market positioning might be and what the Phase 3 design will be, it’s – it doesn’t in anyway impact the valuation of the current project or the enthusiasm for moving it forward..

That’s great.

And then just finally on – a question maybe for Erik just in terms of grant income, am I right that we are not expecting any further booking of grant income revenue for this year?.

Yes. So primarily the Wellcome Trust revenue has been recognized at this point, as you recall, that grant was related to the Phase 1 and the Phase 2 work for the CoDIFy study, which is now largely complete. We do have some remaining potential grant income from the Innovate UK grant £0.6 million is available under that grant..

Great. Thank you very much..

Thank you. We can now take our next question from Arlinda Lee from Canaccord. Please go ahead..

Hi guys. Thanks for taking our questions. I have a – I guess maybe one of DMD, you mentioned MRI fat fraction and I guess I am wondering how long do you think it will take to generate functional data to correlate with that, is that part of your current Phase 2 trial design and then maybe a follow-up after that? Thanks..

The MRI measurements are – have been taken every three months, so from the data we have so far from the natural history data changes have been observed already is starting especially the inflammatory parameters around three months – so three months to six months we would expect to have a first indication whether there are any changes from baseline.

So correlation question to functional measure that’s really not so much the purpose of our trial.

Our trial is really the correlation to the utrophin measures in the biopsy and the markers of regeneration that its literature out there actually showing some correlation between the quantitative MRI and functional measures, but that’s not the main purpose of our drug..

Would you need to show a correlation with functional measure at some point or is that for a larger Phase 3 trial?.

It is an exploratory part as I have mentioned. These are exploratory end points that’s six minute walking distance, it’s upper limb strengths, it’s the North Star Ambulatory Assessments all that there. They are of course functional measures, but it’s a 40 patient study and we don’t have a placebo group.

So it appears to us the directional answer but it will not be giving the full picture at this time..

Okay. Maybe then on the C. diff partnership, could you maybe talk about your preference for a larger upfront versus a greater royalty involvement in development of further development or sales? Thank you..

That’s always a difficult question to you, but got the term sheets right in front of you all of them. And I think having done an awful lot of these deals in the past, there is a natural shape to them. Right today we have a preference to some upfront because obviously we would like to use this as a bridge to fund the company in a less dilutive way.

But there also comes a point where the drug with this potential future revenue is very large that we wouldn’t want to necessarily give away a share of those future revenues for cash right now. So I think we need and we would want and expect to see some upfront.

But we also see that this drug has a lot of potential for the longer term and we will obviously announce the deal when the deal is announced and you will be able to see what the proportion is..

Okay, great. Thanks..

[Operator Instructions] We can now take our next question from [indiscernible] from N+1 Singer. Please go ahead..

Yes. Good morning, all. A couple of my questions have been answered already. Actually, thank you very much for that.

If I could just ask about the potential utility of ezutromid in other muscular dystrophy conditions and to what extent and when you are potentially looking to explore those? And secondly on CDI, just curious about the sustained clinical response, is that due to reduced spur formation in the spread aimed to reduce the infection rates there or is it sort of the mechanism as you mentioned improved resistance by sort of less of an impact on the microbiome? Thank you..

Yes. Those are two really good questions. So I will deal with the second one first. So the key in C. diff is the recurrence rate. So current treatments are pretty good although some of it they are getting less good at curing the initial infection.

But where the high unmet medical need is, is that typically and we saw from our study a large amount in our case it was about a third of patients had the disease came back.

But within 30 days of the initial treatment with vancomycin and this is not just to minor diarrhea, this is really debilitating disease which on top of patients with cancer or elderly patients can lead to high mobility and it’s got a really material mortality rate. So this recurrence is really to be avoided at all costs.

And so the reason we chose the same clinical response as the prime endpoint is it captures the two things you need have a high initial cure, but then you want to also have an impact on the recurrence rate. And so that’s whey we chose this composite endpoint for the year Phase 2 study.

And why it’s really material to both our partnership discussions, our regulatory discussions and to the key influence is in the market that we have shown as to be significant improvements in that end point. So I must deeply apologize because I have now forgotten entirely what the first question was..

Potential utility was….

Alright. Yes. Everyone else in the room remember it was started signaling franticly. So there is one other disease where lack of dystrophin leads to the fundamental disease and that’s disease called Becker muscular dystrophy. And so we would expect that if we had a benefit in Duchenne that would also lead to a benefit in Becker.

And we have actually had both from key opinion leaders and from a loss of Becker patients a lot of pressure for us to start a program in Becker muscular dystrophy. And while the incidents of Becker, is lower than Duchenne and because they live longer, the prevalence such as these have a certain number of patients with Becker is about the same.

So it’s another huge market opportunity. But our strong feeling is it if we show a benefit in Duchenne that you could extrapolate and predict a benefit in Becker and vice versa.

In the slightly wider area, there is perhaps a potential for improvement in muscle function in other diseases, but really prime benefit is going to be those diseases where there is a lack of dystrophin and the way utrophin can be placed in. And so for you market estimates, I would stick to looking Duchenne and for Becker.

Those are the two primary diseases where the mechanism of action plays directly and is disease modifying..

Okay. Thank you.

Is there – the follow-up on that is I mean is there anything you could tell us about the – you mentioned two series in the future generation program, is there anything that you can tell us about that the mechanism of all that second series is distinct from utrophin modulation?.

I can’t do anything apart from the published data so far which is that ezutromid and second generation of come-outs of a screen that were setup actually quite some time ago by Kay Davies and her group in Oxford.

And in looking at the future generations they have used that screen, but they have also developed a newer screen which incorporates what we have and what will they have learned about the control of the expression of utrophin in the 8 years to 10 years since this program first started.

And so when we look at the new series one of them lights up and shows in the new screen and the old screen as ezutromid. But one of them doesn’t show up at all than the old screen, but is the utrophin modulator does show up in the new screen. So, it’s obviously working through a mechanism that is not present in the old screen.

So, working through the different signaling pathway and that potentially is certainly from a scientific point of view really interesting. But it’s also very interesting from a drug development point of view, because to have two different approaches to the problem gives great potential to the combination products in the future.

But also as a risk reduction step if some reason we see an issue with ezutromid in the longer sales than we have something that will achieve the same by different mechanisms and that’s already useful thing to have..

Thank you..

Thank you. Due to time constraints that will conclude today’s Q&A session. I would now like to turn the call back over to you for any additionally comments..

Well, thanks everybody for listening. And thanks for some really interesting questions. Thanks for joining us today and thanks for the support over the past year. And as you can see we have had a really good year. I think that the progress on ezutromid and the new generations of products has been great.

And Richard Vickers and his team have really delivered absolutely stunning data on ridinilazole and that’s – and that puts us in a great position to augment our financing with a potential partnership deal as well as moving our product forward that can transform the lives of patients with serious infection.

So we look forward to reporting future progress in the years to come. Thanks very much..

Thank you. That will conclude today’s conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect..