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Summit Therapeutics shares shoot up 90% after it inks $522mln Sarepta deal

Last updated: 11:15 04 Oct 2016 EDT, First published: 07:10 04 Oct 2016 EDT

genomics
The company is developing what it hopes is a breakthrough for a hard to treat disease that affects boys.

Shares in Summit Therapeutics (LON:SUMM) shot up 90% after it confirmed it had signed a licensing deal with the US biotech Sarepta Therapeutics (NASDAQ:SRPT) worth up to US$522mln.

The pair will collaborate on Summit’s potentially breakthrough treatment for Duchenne muscular dystrophy (DMD), a muscle wasting disease that affects boys.

The UK drug developer gets an immediate US$40mln and US$22mln when the last patient in the company’s phase II trial is dosed.

Sarepta is a pioneer in the area of DMD with the only disease-modifying treatment out on the market approved by the US Food & Drug Administration.

Access to R&D

The deal, as well as having a massive financial impact, will provide Summit access to the research and development capabilities of the US firm.

DMD is caused by different mutations in the dystrophin gene that result in patients being unable to produce the protein, which is essential for maintaining healthy muscle function. 

The AIM-listed group’s discovery is designed to increase the levels of another, similar, protein call utrophin.

This, it is hoped, will compensate from the lack dystrophin. The system is called utrophin modulation.

Summit chief executive 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."

About DMD

Duchenne Muscular Dystrophy, or DMD, is one of the most common, fatal genetic disorders diagnosed in children around the world. 

It predominantly affects boys and it results in the progressive wasting of muscles throughout the body. 

The disease has an estimated incidence of 1 in 5,000 and a patient population in the developed world of around 50,000. 

Patients typically don’t live beyond their late 20s.

Sarepta’s chief executive, Edward Kaye, said: "Summit's utrophin modulation technology represents a potentially promising approach to treat DMD, which may complement our current approach of exon skipping therapy."

From the conference call 

The deal provides another two years of financing at least, according to Edwards, who was speaking to analysts, investors and journalists on a conference call.

He told them: "We believe our existing cash and the US$40mln upfront payment and the anticipated US$22mln milestone payment for the first dosing of the last patients in our Phaseout DMD study will fund the company through December 31, 2018."

On future partnering, Edwards said: "Our intention for other territories will be to develop  these ourselves but obviously we will keep other options open. In particular, our intention is to keep marketing rights for the USA."

He also noted: "For a new company, just getting going, it's actually easier to market in the US, which is a true single market as opposed to Europe."

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