03/06/2008
Drug developer and pharmaceutical services provider Summit Corporation trebled both losses and revenues last year, but the AIM-traded business has high hopes for a major deal from its drug pipeline in 2008.
Formerly known as VASTox, Oxford-based Summit operates laboratory services for global pharmaceutical companies in order to support its drug discovery pipeline – revenues from these operations grew to £3 million (2007: £1 million) in the year to January. However, rising research and development costs to advance the company’s treatment for the effects of Parkinson’s disease into Phase II clinical trials, meant losses widened from £3 million to £9.9 million.
Annual progress from the pipeline included the signing of a $10 million (£5.1 million) co-development deal for an infectious disease drug candidate with Swiss company Evolva Biotech. As well as receiving an upfront payment, Summit will be entitled to further development funding for the drug and retains 50 per cent ownership of the programme.
Summit also has a product to treat the effects of acne that has advanced successfully through a Phase I trial, and has selected a potential candidate for fatal genetic disease Duchenne muscular dystrophy. This candidate, says chief executive Steven Lee, is ‘making excellent progress through preclinical development’.
Net cash outflow during the year was £1.8 million and, as of the year-end, the balance sheet boasted £10.1 million in cash and short-term deposits. Lee says his primary objective for 2008 is ‘a major programme deal from our drug pipeline’, which would presumably involve a licence payment.
Shares in Summit, which have fallen from a three-year high of 193.5p in 2005 to 48.5p today, value the entire concern at £24.66 million.
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