US biotech billionaire Bob Duggan is to invest $25m into antibiotics developer Summit Therapeutics, taking a near-49% stake in the UK company.
The investment, in the form of Summit’s American Depositary Shares, will be used to fund the phase 3 trial programme for Summit’s lead antibiotic candidate ridinilazole for Clostridium difficile infections and bring forward gonorrhoea treatment candidate SMT-571 into clinical trials.
Bob Duggan
Duggan was chief executive and president of Pharmacyclics when it was sold to AbbVie for $21bn in 2015, immediately catapulting him into the ranks of biotech billionaires, and Summit says his involvement comes because he holds the company’s “management team and…strategy for developing innovative antibiotics for patients with serious infectious diseases in high-regard.”
The heady valuation of the Pharmacyclics deal was largely on the back of Imbruvica (ibrutinib), a blood cancer therapy that made more than $2.5bn in sales for AbbVie in the first nine months of the year, plus another $1.9bn for commercial partner Johnson & Johnson.
The $25m investment in Summit is a relatively minor play for Duggan’s private equity fund, but a massive boost for the UK company which had around £17m (around $21m) in cash reserves at the end of September and a pricey phase 3 programme on the way in the first quarter of 2019.
At the time, Summit said that would be enough for the following 12 months of operations, but it is now funded through to the end of January 2020.
It’s also a boost to the UK company after the disappointment of its recent failed programme in Duchenne muscular dystrophy (DMD), which prompted its re-focusing as an anti-infectives specialist.
Glyn Edwards
“Mr Duggan is a seasoned healthcare entrepreneur and investor whose proposed investment into our company speaks volumes about the potential that our new mechanism antibiotics have in addressing serious infectious diseases,” said Summit’s CEO Glyn Edwards.
In a phase 2 trial, ridinilazole reduced recurrence rates by 59% versus standard of care vancomycin in patients with C difficile infection, which Summit says is because the drug is less damaging to the normal microbiome of the gastrointestinal tract. Preserving the microbiome makes it less likely that the pathogen can re-establish itself once treatment finishes, it suggests.
It’s worth noting that Duggan’s investment isn’t a done deal just yet. As it involves such a large stake in the company, under UK financial rules it should be put to existing shareholders in Summit via what is known as a Rule 9 offer. Shareholders are being asked to vote in favour of waiving that requirement at a meeting on 4 January.