Summit shares rocket up, fueled by an $842M pact with Duchenne leader Sarepta
With its market cap swelled by the FDA’s approval of the controversial Duchenne muscular dystrophy drug eteplirsen, Sarepta is now wheeling and dealing its way to new combination approaches.
The Cambridge, MA-based biotech $SRPT has scored an $842 million deal to partner with Oxford, UK-based Summit $SMMT Therapeutics, bagging European-plus rights to a lead therapy that follows a complementary pathway to treat DMD.
The news triggered a big rally for Summit’s shares, sending the stock rocketing up 111%. Ahead of the announcement the micro cap biotech had a market cap of $136 million.
In exchange for regional commercial rights, starting in Europe, Summit earned a $40 million upfront, another $42 million in development milestones – including a $22 million payment when the last patient is dosed in an ongoing Phase II. There’s also another $440 million for related development milestones —for the lead product and second-gen products — and a further $330 million for sales milestones, according to SEC documents.
It adds up to $842 million. And Sarepta also agreed to share R&D expenses in the deal.
The deal comes just days after Sarepta struck a separate collaboration deal with Catabasis to explore the development of combination drugs for Duchenne muscular dystrophy.
Sarepta is buying into the future of ezutromid, as well as the next-gen drugs Summit has been working on. While Sarepta’s eteplirsen has focused on using exon-skipping tech to spur production of dystrophin to strengthen the boys slowly crippled by DMD, Summit has been pursuing utrophin modulation with the same goal in mind.
Utrophin is another protein the bears similarities with dystrophin. Working on insights gained in the lab of Oxford’s Kay Davies, the theory is that adding utrophin can substitute for dystrophin. Summit is looking for some clear evidence that it can work in patients, though it’s also preparing to go through the long haul and prove it in Phase III. Summit is helmed by CEO Glyn Edwards, a high-profile figure in the UK’s biotech community.
Sarepta bull Brian Skorney at Baird gave the deal a quick thumbs up: “Though we think the deal has interesting potential, near term we think this has more read-through to Sarepta’s confidence in an eteplirsen approval in Europe.”
Sarepta won an extraordinary FDA approval for eteplirsen based on a tiny trial and some controversial biomarker data. The internal discussion over the drug’s future triggered a high-level showdown at the agency, which Janet Woodcock won by persevering over vehement objections to the drug from a group that included the agency’s chief scientist.
Summit CEO Glyn Edwards said:
“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.”