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

Chad Messer - Needham & Company Joseph Hedden - Rx Securities Carol Werther - H.C. Wainwright Arlinda Lee - Canaccord Genuity.

Good day, ladies and gentleman. And welcome to the Summit Therapeutics Plc Financial Results for Fourth Quarter and Fiscal Year Ended January 31, 2017 Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Richard Pye. Please go ahead, sir..

Thank you. And welcome to everyone, joining us on our call to discuss our financial results for the fourth quarter and fiscal year ended January 31, 2017, and our operational progress. Earlier today, we issued a press release summarizing this information. If you had not had a chance to review, it is available on our Web site at www.summitplc.com.

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

I therefore 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. While we may elect to update these forward looking statements at some points in the future, we specifically disclaim any obligations to do so, even if our views change.

These forward looking statements should not be relied upon in representing our views as of any date subsequent to today. I would now like to turn the call over to Glyn for an overview of our year and more recent corporate activities..

Thanks, Richard. And thank you all for joining us as we discuss a productive year in our C. difficile infection, or CDI, and Duchenne muscular dystrophy, or DMD, program and we’ll set the stage for the year to come.

The excitement in the DMD and investment community surrounding our utrophin modulation program and DMD has gained momentum over the past year for a good reason.

We’re now in a Phase 2 trial, called the PhaseOut DMD, where we have the opportunity, for the first time, to see if utrophin modulation can demonstrate the disease modifying results in patients that we have already seen in animal models of DMD.

If utrophin modulation provides clinical benefits in this Phase 2 trial, it has the potential to do so for the entire DMD population regardless of their genetic fault that causes the disease.

Utrophin is the protein that acts as a molecular shock absorber in muscles similar to dystrophin, but these two proteins acted different time points in muscle developments. Utrophin is present when a muscle is first laid down or when it's repairing after damage.

As the muscle matures, utrophin is down regulated and dystrophin takes its place in the mature muscle. In DMD affected muscles, utrophin is present at the quite high levels because there’s a loss of muscle related repair taking place.

But utrophin is naturally down regulated as the fiber matures, and with no dystrophin to take its place the muscle degenerates. Our goal is to modulate or change the production of utrophin so that it's continuously produce and can substitute the dystrophin in the more mature muscle fibers.

In animal models, we're able to protect against the loss of muscle function expected in DMD with the administration of our lead utrophin modulator ezutromid. This past year, we initiated the PhaseOut DMD study, which aims to provide proof of concept for ezutromid in-patients with DMD.

We also completed a Phase 1 clinical trial of a new formulation of ezutromid, called F6 and has since begun dosing patients in the PhaseOut DMD study with this formulation.

F6 formulation was part of our efforts to improve upon the bioavailability of ezutromid and so to provide us with an opportunity to study a wide range of drug exposures together with the F3 formulation of ezutromid.

In the Phase I trial of the F6 formulation, we were able to achieve average maximum plasma levels that were over six-fold higher than to the F3 formulation in patients with DMD.

These results have encouraged us to include the F6 in the PhaseOut DMD study, such that we can evaluate the effect of a much wider range of ezutromid drug exposures on safety and efficacy with long-term dosing. In essence, this approach has allowed us to conduct a more typical dose ranging Phase II trial by using different formulations.

And we believe that the inclusion of these two formulations in PhaseOut DMD is important for a better understanding of any potential clinical benefit of ezutromid. PhaseOut DMD is well underway with a total of 16 sites active in the U.S. and the UK.

Enrollment has accelerated as the sites have come onboard, and we expect to complete the trial enrollments of approximately 40 patients in the second quarter of this year. We're incredibly excited about PhaseOut DMD as it has the potential to provide the first proof of concept data for ezutromid and utrophin modulation.

We’ll be looking to gather a variety of measures that can help assess the efficacy and safety of ezutromid, including MRI, as a measure of muscle health and inclination and functional test. But what we’re really focused on is the assessment of muscle architecture through the biopsy measures.

This could enable us to look at the changing utrophin expression overtime with ezutromid treatment and how this change affects muscle maturity, where we believe an increase in muscle fiber maturity could indicate utrophin is able to replace dystrophin in patients with DMD.

Our goal with these biopsies is to have the clearest picture of what happens after six-months of ezutromid treatments in patients with DMD. We expect to have a broad exposure range with both the F3 and F6 being tested, and believe the most robust analysis can be performed on the complete 24 week biopsy data set.

So, we look forward to reporting the analysis of 24-week biopsy data, but all those patients who will provide the 24-week biopsy sample, and we expect this in the first quarter of 2018. And so, we will not be analyzing and reporting on an interim 24-week biopsy analysis from a smaller group as these patients.

The full interim analysis will consist of approximately 20 patients, some dosed with F3 and some dosed with the F6 formulation of ezutromid. We plan to analyze all the 24-week treatment biopsies at once, once all the samples have been collected.

And in addition to reporting the biopsy data, we also expect to announce the 24-week analysis of MRI and the functional data from all the patients in the trial. So that’s important to note, there has not been a delay in the trial, but rather we’re amending our approach to the analysis, and we know this change maybe a bit disappointing to some.

But ultimately, we believe it's in the best interest of the program and the Duchenne community to report when we all the 24-week data. This change will also affect the start of the potential registration trial and updated timing and plans of that trial will be provided following the 24-week data read-out.

There has recently been a meeting of an independent data monitoring committee for the PhaseOut DMD study. Based on its review of safety and tolerability data to-date, the committee has supported the extensions of PhaseOut DMD and so we have submitted the necessary regulatory updates in the UK and the U.S.

with the intention to patients to transition into this phase of the trial without hesitation of dosing. If we obtain the necessary regulatory approval, we'll have the opportunity to extend access to ezutromid for patients in the trial, and still ezutromid is either approved in the relevant country or it’s discontinued.

And we believe that through this extension phase, we'll be able to gather longer term safety and efficacy data, which will be important for a rigorous marketing application.

Our progress of ezutromid in the clinic is also matched by our progress in the commercial side with our exclusive license and collaboration agreement granting Sarepta Therapeutics rights to our utrophin modulated pipeline in Europe, Turkey and the Commonwealth of Independent States, and with an option for rights to certain Latin American countries.

As part of the agreement, we've received $40 million in cash up front, and could receive an additional $522 million for ezutromid related milestone payments, including $22 million milestone payment up on the first dosing of the last patient in the PhaseOut DMD.

In addition, there are royalties related to ezutromid with further development of regulatory and sales milestones related to the future generation of utrophin modulators.

We also began a cost share in January 2018 to the global development of ezutromid and our future generation compounds where we will pay 55% to the R&D costs and Sarepta will pay 45%.

This agreement not only provides financial benefits to Summit but also gives us access to the knowledge and expertise of the Company with the only FDA approved disease modifying drug in Duchenne. And for more details on the agreement, I'll refer you to our filings with the SEC.

Now, turning to our CDI program, but the strength here lies in the selectivity of our novel antibiotic ridinilazole. CDI remains a major threat in healthcare. And ironically, the current standard of care for the treatment of CDI, which is a broad spectrum antibiotic, is the main reason why it's such a serious issue.

Broad spectrum antibiotics are great at killing infections, but they also cause significant damage to the healthy gut microbiome leading the gut susceptible to colonization by C. difficile. This results in a high risk of recurrent disease, which is the main clinical issue in treating CDI.

With each episode of CDI, the risk of further recurrence increases along with the severity of the disease.

And although there's a lot of focus now on reconstituting the microbiome as a defense for the recurrent CDI, we believe that with our highly selective antibiotic Ridinilazole, we can both treat the initial infection and allow the microbiomes to recover during treatment, thereby warding off recurrent disease.

Our Phase 2 clinical trial results were highly supportive of this. In the trial, called CoDIFy, ridinilazole outperformed vancomycin, which stands to be statistically superior in sustained clinical response; a measure that combines both initial cure and recurrent disease.

The statistical superiority was driven by a large numerical reduction in recurrent disease, which we believe is usually the minimal impact that ridinilazole had on the microbiomes of patients in the trial.

Not only did ridinilazole preserve the microbiome of patients compared to vancomycin, but in many cases, patients treated with ridinilazole experienced recovery of their microbiomes during a treatment.

This is important as many patients who first come down with CDI have had a prior course of antibiotics for an unrelated infection, and that has damaged their microbiome; so already at a disadvantage when they're treated with another broad spectrum antibiotic for CDI. These results led us to present the data and plans for the Phase 3 trial to the U.S.

Food and Drug Administration and to the European Medicines Agency this past year. Input from these regulatory authorities has enabled us to design a robust Phase 3 program that we believe could support the use of ridinilazole as a front-line treatment for CDI.

The program is expected to comprise two Phase 3 trials with approximately 700 patients in each with the primary endpoint being superiority and sustained clinical response over vancomycin, which is consistent with the Phase 2 CoDIFy trial, just a lot bigger.

We also plan to build into the trials health economic outcome measures, which will be important for discussions with payers. Preparation for the three Phase 3 trials is ongoing, while we continue to evaluate the various options to fund the program.

The partnership with Sarepta has provided us with a bit more time and freedom to fully assess the merits and several options, including third-party collaborations, non-violated funding from governments or charitable organizations, or a combination thereof.

We're confident that the preclinical and clinical data today makes ridinilazole a highly attractive asset, and look forward to the Phase 3 program which we anticipate starting in the first half of 2018.

Finally, on the operational side, we have been strategically adding team members with capabilities and expertise necessary as a mid to late stage clinical company. One of our key appointments is that of Dr. David Roblin.

David has worked with us closely at Summit over the past several years in an advisory capacity, and now joins us as our Chief Operating Officer and President of Research and Development; initially on an interim basis and full time, starting in June this year.

He has over 25 years of experience in the biopharmaceutical industry to-date, at companies such as Pfizer, Bayer and the Francis Crick Institute and has led the successful of research developments and commercialization of several drugs in a variety of disease areas.

At Summit we have attracted an individual of David's caliber and reputation is a reflection of the promise and innovation in our drug programs. We believe his guidance will be instrumental in executing on our CDI and DMD programs, and ensuring that our drug candidates have the best chance of reaching the patients in need.

So now, I'll turn the call over to Erik for a review of the financials.

Erik?.

Thank you, Glyn. I’ll now provide an overview of key components of our financial results for the fiscal year ended January 31, 2017. We will of course provide detailed results in our regulatory filings and I encourage all to you to review those accordingly.

We present Summit’s results in accordance with International Financial Reporting Standards and pound sterling, but for convenience purposes, I’ll give U.S. dollar equivalents for certain key numbers.

As we described in our earnings release today, we completed our financial year on January 31, 2017 with cash and cash equivalents of £28.1 million or $35.3 million compared £16.3 million at January 31, 2016.

Turning to the income statement, revenues were £2.3 million or $2.9 million during year ended January 31, 2017 following our entry into an exclusive collaboration and license agreement with Sarepta Therapeutics. Under the terms of the agreement, we received an upfront payment of $40 million, which we have recognized invariably over time.

Research and development expenses increased to £19 million or $23.9 million for the year ended January 31, 2017 from £16.9 million for the previous year.

This was primarily due to increased spending related to our DMD program and an increase in R&D related staffing costs offset by a decrease in spending related to our CDI program, which was due to the completion of our Phase 2 clinical trial of ridinilazole versus vancomycin.

General and administration expenses increased to £8.3 million or $10.4 million for the year-ended January 31, 2017 from £4.8 million for the previous year. This increase was driven by increased legal and professional expenses, and negative movement in exchange rate variance, as well as staff related costs.

Our income tax credit for the year increased to £4.3 million or $5.5 million for the year-ended January 31, 2017 from £3 million for the previous year. This was driven by our overall increased R&D expenditure, which resulted in a related increase in our R&D tax credit.

And finally, net loss for the year increased to £21.4 million or $26.9 million compared to £20.1 million for the previous year. Turning to the cash flow statement, the Group had a net cash inflow of £12.5 million or $15.7 million for the year-ended January 31, 2017 as compared to a net cash inflow of £4.9 million for the previous year.

This year's net cash inflow was primarily the result of the receipts of $40 million or £32.8 million upfront payment from our agreement with Sarepta, as well as the receipt of £3 million research and development tax credit offset by our R&D and G&A related expenses. I'd now like to provide our cash guidance.

We expect that our current cash resources plus the anticipated $22 million milestone payment under our agreement with Sarepta related to the first dosing of the last patient in our PhaseOut DMD study, will fund the Company through December 31, 2018. I’ll now turn the call back over to Glyn for closing remarks. Glyn..

Thanks, Erik. In summary, it's been a year of great progress across all areas of the business and way for the exciting time ahead.

I'd like to close by thanking the shareholders for their support and our employees for their hard work and dedication to help progress on the two programs that have the potential to significantly advance the current standard of care in their respective disease areas.

Our patients and their families are counting on us, and we’re committed to ensuring the best chance of success in DMD and C. diff. And with that, I'll take any questions..

Thank you [Operator Instructions]. We’ll now proceed and take our first question from Hartaj Singh from Oppenheimer. Please go ahead..

This is Emma on for Hartaj. Thanks for taking the question. Could you talk in a bit more detail just about the specific assays you've developed to analyze these biopsies.

And kind of how you’ve been able to overcome the challenges specific to measuring dystrophin or utrophin in these patients versus dystrophin?.

Yes, as you know and we’ve had detailed discussions with several of herewith, we spend a lot of time and efforts on a number of these assays. Just in order to keep this fairly brief, our focus on the utrophin assays and on the developmental vancomycin assays, which looks at muscle fiber maturity.

And both of these assays are measured from the histopathology and the biopsy sample. And so things have come a long way in this field generally in measuring these muscle proteins.

And in particular, we've been able to bring in expertise from other therapeutic areas and from companies that have been developing other assays, which have been in use of endpoints in clinical trials in both Europe and the U.S.

So we've moved away from the fluorescence type assays, if that you remember from the Prosensor and Sarepta advisory panels with their technical shortcomings to a more convention and histochemistry point of view. And that gives you much more reliability, bigger dynamic range and much tighter distributions of an intra assay variability.

So we've been able to actually get the quantification of these assays into a much more reliable position. Then specifically looking at utrophin, as you know one of the big challenges for us compared with the technologies that are developing products that simulate the production of dystrophin is that in the DMD patient there's no dystrophin.

If you see some dystrophin, then you can count that as a win although you then get into obviously how much dystrophin is needed.

In the case of utrophin, as I said in my preamble, the patients are producing a lot more utrophin than a healthy individual would be because there's a great deal of regeneration going on in their muscles because of the damage that's done, caused by the failure of fibers when they have no dystrophin.

But that's -- distribution of utrophin is rather unique and you'll get a very patchy distribution, somewhere where the muscle fiber has had a recent catastrophic failure and there's a lot of repair going on, and there'll be a lot of utrophin.

And in other parts of the muscle fiber where repair was some time ago, there'll be less utrophin and there'll be other parts where it hasn't been repaired for a great deal of time where there is very little or no utrophin. And what we expect to see with an effectively treated muscle fiber is that the distribution is more uniform.

Maybe not the high intensity that you see with immediate repair, but neither would we see the areas where there's no exposure at all. So we spend a great deal of time quantifying the distribution of utrophin, as well as the total amount. And one of the ways we do that is the use of automated techniques, which allow you to explore a much bigger field.

So instead of looking down a microscope and choosing, say six fibers; typically, a machine looks at a slice through the muscle and is able to quantify utrophin in 2000 fibers. And that obviously gives you a much more robust result. So that's on the utrophin side.

On the muscle fiber maturity, we're using a marker which is developmental mycin, which has an epitope on it unique to that developmental stage. And so we're able to stain segments that look at how much developmental mycin. They've got a lot there intensity stained. If they’ve got none, they're not stained at all.

And mature muscle fibers have no developmental mycin. So we would expect to see if the drug is having a reasonable effect that we will see an increase in the proportion of more mature muscle fibers with treatment with the drug.

And obviously the big win is a combination of the two, because in nature, you see no muscle fibers that are both fully mature and have significant utrophin on them; because, by definition, as a fiber matures, it stops producing utrophin; whereas with treatment with effective utrophin modulator, you would expect to see mature muscle fibers with utrophin on them.

And that can only be as a result of drug effect. So, I hope that answers your question. Obviously, happy to go offline and give you a lot more detail, should you need it..

Just a quick follow up so with the full 24-week analysis now, especially in the first quarter of 2018.

Is it possible that we might see an improvement in the functional message of that plan, particularly in F6 cohort? Or is it focused really on that uniformity of utrophin distribution and improvement in the muscle fiber maturity?.

So, it's important to measure these functions, just to take these functional measurements. We're looking at a variety of them. But as we’ve guided people, this particular trial design is not optimized to give us a clear result from the functional measures. For two reasons, one is, there is no control arm.

And so to look at these things, we have to look at historical controls. And secondly, this is a pretty wide age range to be -- for a trail where functional endpoints are of significant importance.

So if you look at the PTC trials or Sarepta's current trails, if you're looking at, for instance six minute walk test, you would actually recruit patients in a much tight range; so to reduce the heterogeneity to stand any chance of seeing it. We will see what we’ll see and we’ll share that information with you.

But our focus is really on data that comes out from these biopsy samples and from the MRI where each person's control is at pre-treatment stage compared with their post treatment state. Ralf do you agree with that, would you like to add anything to that..

No thank you, you captured it well. We know that as we said we will report the six months functional data, and as you know, in those other studies. You start observing changes after one year, but we’ll also on the MRI data.

And that’s our primary endpoint, and it's potentially foreseeable that the six months time frame, you would be able to observe some changes over this short period of time..

The next question comes from Chad Messer of Needham & Company. Please go ahead..

I was just wondering if cancelling the earlier interim in PhaseOut has any power calculation impact?.

That’s a good question, and it does help. So what's rather than a pure statistical level, just more qualitatively, doing all the biopsy samples at one times makes the result more reliable; you’ve got bigger number and you’ve got better reproducibility if you're doing these assays much closer together.

So, we just feel that having the complete data set and doing just one analysis on it give you a personal and more robust answer and a clear answer is the answer.

Whereas if we did sort of six or eight patients first and then another 14 or 12 later on, you kind of got two looks of incomplete data and then you have to pull -- better to do it all at once, get a least very clear unequivocal answer.

And if we’re thinking about what happens next, we need the data from both the F3 and the F6 in order to select the dose of the registration study. So actually, we can't really make any final decisions on the registration study design, so we've got that F6 data as well, which we will have all at the same time.

So it seem to us the more robust scientifically and not an overall delay in progress of the trial if we looked at all this data all at once and gave a single clear answer to that before we test that..

Just so I am clear, you would not have had F6 in the earlier interim or would have been all F3?.

It would have been six or eight F3 patients, if we done that analysis. And we’re on track -- we’ve had those numbers, but we've chosen not to do the biopsies not to look at that data but to rather wait till we've got the complete sets of 24-week biopsies from both F3 and F6 and do the analysis altogether and announce the results altogether..

Then just on your cash guidance, I wanted to double check if that wouldn’t include anything for the C. diff Phase 3.

And then since you’re in the planning stages for that now, is it possible to show what that sort of a rough idea of what that program might cost?.

In terms of the current cash guidance, that really just includes Phase 3 preparation related activities. So we’ll clearly need to raise some capital to fund the Phase 3s. As you know, those are rather large trials to 700 patient trials included there.

So, just based on initial estimates to give you a directional view on what those might look like, we're estimating roughly about $100 million to conduct those Phase 3s and C. diff program..

Thanks, that's very helpful..

And just with regard to that when Erik says raise, he doesn’t mean that he’s going to do equity raise to raise $100 million. We've been looking at a lot non-dilutive sources of funding. And as you know, we've been in partnership negotiations for quite some significant period of time. So, we need to bring that amount of money into the program.

But we expect to see -- that will largely, if not entirely, come from these sources of partnership and/or government and non-government sources of money..

Thanks, you've been pretty consistent in saying that. Thank you..

The next question comes from Joseph Hedden of Rx Securities. Please go ahead..

Just a couple on ezutromid, I was wondering if you could provide us with an update about when you think a registrational study might now stop, and then just on PhaseOut DMD.

Looking at the picture of dosing across the trial now, can you just remind us actually what that looks like? So, you've got 30 patients on the old formulation is at 2.5 grams twice daily. But then what dose level to the F6 got carried into the trial? Thanks..

Ralf, could you answer the F6 dosing question..

Yes. As you said, correctly, the F3 is dosed at 2.5 grams twice daily and the F6 is dosed at 1 gram PID..

So, is that just one level that got carried through?.

Yes, it’s a fixed dose in for both the F3 and the F6 formulation. And we are measuring the plasma concentrations frequently throughout the study, which will then allow us to look at the actual plasma concentration and its relationships to any outcomes to define our concentration response range..

Okay, thank you..

And the first part of your question, Joseph, was about the registration study, when's it going to start. We're not, in this call, providing any new guidance on that. And we're just advising that we should get the data on which we'll be able to make all these decisions in quarter one of next year..

[Operator Instructions] The next question comes from Carol Werther of H.C. Wainwright. Please go ahead..

I was just wondering, do you have any idea, at this point, what the combination trial will look like with Sarepta's drug, and how much that might cost next year? Thanks..

Thanks Carol. That's another good question, because obviously, one of the -- two exciting opportunities for us in the Sarepta collaboration, the first is that we got access to the expertise. And obviously they, whatever marketing infrastructure they put into Europe, we can leverage that.

But the second is that one of the hugely exciting things about utrophin modulation is because it’s orthogonal to what the other guys are doing in trying to modify dystrophin that you have the potential to see certainly additive and potentially synergistic effects of the drugs in use.

But our primary driver and our critical path is to show single agent activity, and to get single agent approval. So the work that's going on at the moment in terms of combinations is all non-clinical work look at animal experiments. And as yet, we have not announced what the combined clinical program will look like nor when it’s going to start.

And as I say, our prime driver is to make sure we get the optimal design for study to get approval for single agent activity. And Sarepta are right behind us on this approach. They think it's exactly the right thing to do as well..

Will we see any of the non-clinical data?.

Yes, there'll be published in the usual places and conferences, and so on..

The next question comes from Arlinda Lee of Canaccord. Please go ahead..

I had a question on the timing of the discussions with FDA and EMA. And so I guess originally, we thought you were going to start Phase 2 registrational trial this year, but if your data is not coming.

Until next year, is there any information that you can glean from any incremental looks to kind of keep the discussions going forward? Or are you going to just wait until 1Q and then take couple of packages and look for more….

That’s a very pressing question, actually, Arlinda, to note. So we're ramping up our regulatory interactions, both through the EMA and the FDA. And we’ll be having meetings with them before we get the data.

We're having meetings within at least once and possibly twice during this calendar year; so that we're all geared up with -- to have the most rapid start with the most confidence that we're doing the measurements and have the endpoints that those authorities would accept..

Okay great….

There’s a whole lot of other things, and not related to that like manufacturing and all these going things. And you need to do those as well that are significant part of the program. And obviously, you need regulatory interaction with those to talk package and so on.

But even on the endpoints and the trial design and all those aspects, we can learn a lot before we’ve got this data to make sure that we have the most rapid rollover into a registration study..

Ladies and gentleman, there are no further questions over the telephone. So that will conclude today’s conference call. Thank you for your participation. And you may now disconnect..