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Summit Corporation – Positive Data for Drug Candidate SMT C1100, No Change to Forecasts – Buy at 4.375p with 5.7p target price

Summit Corporation, the UK based drug discovery company using its innovative Seglin™ drug discovery platform, has this morning announced positive non-clinical efficacy data for its Duchenne Muscular Dystrophy (‘DMD’) oral candidate SMT C1100.

DMD is a fatal disorder for which there is no cure and is caused by the loss of a protein called dystrophin, which results in the degeneration of all skeletal muscles and causes damage to the heart. In previous scientific studies it has been shown that by upregulating (increasing) production of utrophin (a naturally occurring protein) in the body this can compensate for the missing dystrophin and thereby restore and maintain muscle function.

The data arising from the latest studies on dystrophin deficient muscle cells taken from DMD patients were conducted at Oxford University by Professor Dame Kay Davies FRS, a world-leading expert who pioneered utrophin upregulation as a therapeutic approach for DMD. These latest studies showed that dosing of myoblast cell with only low concentrations of SMT C1100 resulted in increased utrophin levels, which if translated into DMD patients in human trials, are anticipated to have a significant therapeutic benefit. The full results are being presented at the Muscular Dystrophy Association’s National Scientific conference in Las Vegas from 13^th to 16^th March.

Professor Davies said of the results, “The use of utrophin protein to substitute for the missing dystrophin … has the potential to benefit all DMD patients, regardless of their genetic mutation. … complementary to the other therapeutic approaches in development. These significant results provide further encouragement about the potential of SMT C1100 as an utrophin upregulator drug.” While Francesco Muntoni, a leading DMD clinician and Professor of Paediatric Neurology and Head of the Dubowitz Neuromuscular Centre at the UCL Institute of Child Health in London said, “These results in DMD muscle cells demonstrate that SMT C1100 can increase utrophin to levels, which if replicated in DMD patients, would undoubtedly make it a disease modifying therapy.”

The latest data supplements Summit’s already strong data package generated from a range of earlier studies, including those conducted in the ‘gold standard’ in vivo model that showed SMT C1100 increased the amount of utrophin and reduced muscle degeneration, fibrosis and chronic inflammation. Additionally, SMT C1100 significantly improved resistance to muscle fatigue in a forced exercise model; a surrogate for the six minute distance walk test that is the accepted primary efficacy end-point in human clinical trials. Moreover, in a healthy volunteer clinical trial, SMT C1100 was shown to be safe and well tolerated with no adverse events reported. In addition, blood plasma levels of SMT C1100 did exceed levels that are anticipated to produce a therapeutic effect in some individuals, although there was variability in the results with lower exposure levels reported for others. In future clinical studies, Summit will evaluate alternative formulations of SMT C1100 in order to produce consistently higher results.

Summit is a rare biopharma group because it not only has a broad drug candidate portfolio and drug discovery technology platform but also has management and industry relations in considerable depth to exploit its discoveries. Moreover, the group operates a low risk, high reward strategy by licensing its pre-clinical drug candidates to credible partners, who undertake at their cost all the future development and clinical trial costs. Summit secures an upfront payment for each licensed drug candidate agreement together with incremental clinical trial milestone payments and a 5% – 10% sales royalty, should the drug candidate actually make it to market.

We are not changing our existing expectations or our very cautious 5.7p target price following the latest announcement but the results increase the potential for securing a new licencing partner for SMT C1100. Nevertheless, we do anticipate further upward movement in our target price as the company secures licensing agreements and despite the steady rise in the share price we maintain a stance of buy.

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