Summit Therapeutics (SMMT) - 2024 Q4 - Annual Report

Financial Performance - For the year ended December 31, 2024, total operating expenses were $226.3 million, a decrease of$384.3 million from $610.6 million in 2023[441]. - The operating loss for 2024 was$226.0 million, improving by $383.6 million compared to a loss of$609.6 million in 2023[441]. - Net loss for the year ended December 31, 2024, was $221.3 million, a reduction of$393.6 million from a net loss of $614.9 million in 2023[441]. - The company incurred a net loss of$221.3 million for the year ended December 31, 2024, compared to a net loss of $614.9 million in 2023[458][469]. Research and Development Expenses - Research and development expenses increased by$91.4 million to $150.8 million in 2024, primarily due to investments in oncology clinical trials for ivonescimab[441][445]. - Oncology clinical trial related costs for ivonescimab amounted to$100.9 million in 2024, up from $35.2 million in 2023, reflecting a$65.7 million increase[443]. - The company anticipates continued increases in research and development expenses as it progresses with the development of ivonescimab[445]. - Research and development tax credits decreased by $0.7 million in 2024, totaling$0.3 million[450]. - The company has $1.3 million of research and development tax credits outstanding as of December 31, 2024, which are highly likely to be collected[501]. General and Administrative Expenses - General and administrative expenses rose to$60.5 million in 2024, an increase of $30.2 million from$30.3 million in 2023[441]. - General and administrative expenses increased by $30.2 million in 2024, primarily due to a$25.3 million rise in stock-based compensation[449]. Cash Flow and Financing Activities - Cash flows used in operating activities were $142.1 million in 2024, up from$76.8 million in 2023[468][469]. - Net cash used in investing activities was $205.3 million in 2024, significantly lower than$587.8 million in 2023[470]. - Net cash provided by financing activities was $381.2 million in 2024, compared to$86.5 million in 2023[471]. - Net cash provided by financing activities for the year ended December 31, 2023, was $86.5 million, primarily due to net proceeds of$104.1 million from the 2023 Rights Offering[472]. - The company extinguished $395.3 million of principal and accrued interest under the$400 million Duggan Promissory Note as part of the Rights Offering[472]. Debt and Interest - Interest expense on promissory notes payable decreased to $8.7 million in 2024 from$16.5 million in 2023[454]. - Interest on the Duggan Promissory Notes accrues at an initial rate of 7.5%[476]. - The Duggan February Note was amended to extend the maturity date from September 6, 2024, to April 1, 2025[479]. - As of October 1, 2024, the company repaid the Duggan September Note in full, totaling $100 million in principal payments and$7.3 million in accrued cash interest[480]. Future Expectations - The company expects to continue incurring significant operating losses for the foreseeable future[456]. - The company expects to finance operations through public or private equity or debt financings until significant revenue from product sales is generated[498]. Tax and Regulatory Matters - The company has unrecognized tax positions of $2.1 million and$1.1 million as of December 31, 2024, and 2023, respectively[495]. - Additional potential milestone payments to Akeso could total $4.56 billion, including regulatory and commercial milestones[461]. Currency and Interest Rate Risks - The company is exposed to foreign currency exchange rate risk, particularly with the pound sterling and euro, but currently does not consider the impact material[499]. - The company maintains a portfolio of cash, cash equivalents, and short-term investments to minimize interest rate risk, with no material exposure to changes in fair value due to interest rate fluctuations[500]. - A hypothetical 10% increase or decrease in overall interest rates would not have a material impact on the company's operating results or portfolio fair value[500]. - The company monitors its exposure to foreign currency exchange rate risk and manages it through natural hedging[499]. Dividend Policy - The company has not paid and does not intend to pay dividends, based on its history and expectations[496]. - The company’s expected volatility is calculated based on historical volatility of its share price[496].