Summit Corporation PLC : Preliminary Results

Summit Corporation plc

("Summit" or "the Company")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 JANUARY 2013

Oxford, UK, 11 April 2013, Summit (AIM: SUMM), a drug discovery and development company advancing therapies for Duchenne Muscular Dystrophy and C. difficile infections, today reports its preliminary results for the year ended 31 January 2013.

Successful completion of Phase 1 healthy volunteer clinical trial of SMT C1100 for the treatment of DMD

Phase 1 clinical trial showed new formulation of SMT C1100 to be safe, well tolerated and able to deliver drug levels predicted to significantly increase utrophin production

Initiation of Phase 1 healthy volunteer clinical trial of selective antibiotic SMT19969 for the treatment of C. difficile infections; top-line results expected to be reported in Q2 2013

Translational Award of up to £4.0 million from the Wellcome Trust to support the clinical development of SMT 19969

Technology license agreement entered with Bristol-Myers Squibb to access the Seglin(TM) technology platform

Strategic re-focusing of the Group on the development of the clinical-stage Duchenne Muscular Dystrophy and C. difficile infections programmes

Appointment of Mr Glyn Edwards as Chief Executive Officer

Changes to the Board of Directors that included the appointment of Dr Frank Armstrong and Mr Jim Mellon as Non-Executive Directors

Cash position at 31 January 2013: £3.4 million (31 January 2012: £2.1 million)

£5.0 million fund raise with new and existing investors completed in April 2012

Operational expenditure in-line with expectations

Exceptional non-cash impairment of intangible assets of £0.9 million, non-cash release of provision of £0.2 million (credit), and costs related to cessation of internal discovery research of £0.3 million

Net loss for 12 months ended 31 January 2013 of £4.2 million (31 January 2012: £2.7 million)

Glyn Edwards, Chief Executive Officer of Summit commented: "It has been an important period for the Company with the strategic re-focussing on our two programmes to treat Duchenne Muscular Dystrophy and C. difficile infection.  Both of these exciting programmes made great strides as they advanced into human clinical trials and I look forward to reporting on their further progress over the coming months."

Summit is an Oxford, UK based drug discovery and development Company targeting high-value areas of unmet medical need including Duchenne Muscular Dystrophy and C. difficile infection.  Summit is listed on the AIM market of the London Stock Exchange and trades under the ticker symbol SUMM. Further information is available at www.summitplc.com and follow Summit on Twitter (@summitplc).

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Forward Looking Statements

This announcement contains "forward-looking statements", including, but not limited to, statements about the discovery, development and commercialisation of programme assets. These forward-looking statements are statements based on the Company's current intentions, beliefs and expectations, which include, among other things, the Company's results of operations, financial condition, prospects, growth, strategies and the industry in which the Company operates. No forward-looking statement is a guarantee of future performance and actual results could differ materially from those expressed or implied in the forward-looking statements.  Accordingly, readers should not place undue reliance on forward-looking statements or information.  Forward-looking statements and information by their nature involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These include but are not limited to: adverse results in clinical or preclinical development studies; delays in obtaining regulatory approval; failure to obtain patent protection for inventions; commercial limitations imposed by patents owned or controlled by third parties; being unable to secure partnership agreements to develop and commercialise programme assets; being unable to secure the necessary funding to conduct any proposed research and development studies; and the ability to retain and recruit key personnel.  The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained in this announcement to reflect any changes in expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based, except as required by applicable law.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S JOINT STATEMENT

It has been a year of strategic change and strong scientific progress for Summit. We have refocused the Company on the development of two potentially high-value clinical-stage assets targeting Duchenne Muscular Dystrophy ('DMD') and C. difficile infection ('CDI') with all other research activities being curtailed.  This change will allow Summit to capitalise more effectively on the scientific and commercial potential of the respective programmes as we seek to create two independent, high-value franchises.

The DMD and CDI programmes made substantial scientific progress in the period with the achievement of significant milestones coupled with the enhancement of the respective programme development teams to support the future progress.  In this joint statement, we are pleased to report on the highlights of the period.

Utrophin Modulation for the Treatment of Duchenne Muscular Dystrophy

Our lead candidate to treat DMD, SMT C1100, cleared a significant hurdle by successfully completing a Phase 1 clinical trial in healthy volunteers and it will now advance into clinical trials in patients.  Work is also on-going to advance our next generation molecules as we endeavour to maintain a strong pipeline in this therapy area.

DMD is a devastating disease that predominately affects boys for which there is currently no disease modifying treatment.  It is caused by a number of different genetic faults on the X chromosome that result in boys being unable to make dystrophin, a structural protein essential in maintaining the healthy function of skeletal  muscle as well as other muscles such as the heart and diaphragm.  Progressive muscle wasting occurs which means patients will require the use of wheelchairs during their teenage years and have an average life expectancy into their mid- to late twenties.  There are approximately 50,000 boys with the disease in the developed world and it is associated with a high economic and social burden; Muscular Dystrophy Australia has estimated that the annual cost of DMD is AUD $415,000 (£275,000) per patient.

Summit's approach is to develop small molecule drugs to modulate utrophin, a protein that occurs naturally both during foetal development and muscle regeneration in adults and children.  Utrophin has the potential to act as a substitute for the missing dystrophin to restore and maintain the healthy function of muscle. This approach builds on the fundamental research of Professor Kay Davies FRS at the University of Oxford who has pioneered utrophin as a treatment for DMD.

A major advantage of utrophin modulation is that, unlike some approaches in development, it is applicable to all genetic forms of the disease, which means it has the potential to benefit all DMD patients.  In addition, we expect our small molecule drugs to achieve good distribution throughout the body so that the drug can target all muscles, including the heart and diaphragm.

2012 has been an important year of the programme with SMT C1100 successfully completing a Phase 1 clinical trial in healthy volunteers. The double-blind, placebo controlled trial evaluated the safety, tolerability and bioavailability of an oral nanoparticle aqueous formulation of SMT C1100 that has been specifically developed for use by all age groups.  The key result showed that all volunteers who received repeat doses of SMT C1100 achieved blood plasma concentrations of the drug that are expected to confer therapeutic benefit based on data generated in pre-clinical efficacy studies.  The new formulation of SMT C1100 was also shown to be safe and well tolerated.  The trial was financially supported by a $1.5 million award from a group of US DMD foundations.

Following the positive outcome from this Phase 1 clinical trial we are now preparing to take the major step of advancing SMT C1100 into the first-ever proof of concept trials in patients of a utrophin modulator drug.  Summit is now actively engaged with the regulatory authorities and it is expected that the first patient trial will start in H2 2013, with a proof of concept study to follow.

To support these proposed clinical trials, a comprehensive biomarker programme has commenced to develop new techniques to explore the benefit of SMT C1100 in future patient trials. The biomarkers will measure utrophin protein levels and other signals of muscle health.  Good progress has already been made as highlighted by the announcement in February 2013 of a collaboration between Summit and Children's National Medical Center in Washington DC.  This collaboration is being financially supported by the US group, the Foundation to Eradicate Duchenne.  Other preparatory work continues and includes drug product manufacture for use in the future clinical trials and long-term regulatory toxicology studies.

Summit was also delighted to announce in February 2013 the formation of a world-leading programme Advisory Board that comprises six pre-eminent scientists and clinicians in the field of neuromuscular diseases.  Collectively they will bring a deep insight into DMD to support all aspects of the programmes future development.

In parallel to the development of SMT C1100 as the first utrophin modulator drug, activities continue towards the identification of next generation utrophin modulators as we target the development of best-in-class drugs in this field.  This will strengthen the immediate and long-term future of the programme by adding greater scientific depth and enhancing the overall commercial attractiveness of the asset to prospective partners.

Novel Antibiotic Programme for the Treatment of C. difficile Infection

Our second clinical programme is developing SMT 19969 for the treatment of infections caused by the superbug, Clostridium difficile.  This novel antibiotic has made great progress during the year, culminating in its entry into clinical trials in October 2012.  The programme received a major boost with the Wellcome Trust's decision to grant Summit a translational research award worth up to £4.0 million to support the development of SMT 19969 through proof of concept clinical studies.

Clostridium difficile infection ('CDI') is a major healthcare threat affecting hospitals, long-term care homes and increasingly the wider community.  It is a serious illness caused by the infection of the colon by the bacteria C. difficile, which results in the production of toxins that cause inflammation, severe diarrhoea, and in the most serious cases, death.  CDI typically develops following disruption to the natural gut flora, which allows the proliferation of C. difficile bacteria.  The broad spectrum antibiotics used to treat the infection can cause further disruption to the natural balance of the gut flora. Consequently, these traditional antibiotics are associated with recurrent episodes of the disease which are typically more severe and have higher mortality rates.

SMT 19969 is a novel, small molecule antibiotic that combines high potency with exquisite selectivity for C. difficile bacteria as well as displaying an excellent resistance profile.  Working through a novel mechanism of action, this narrow but potent spectrum of activity provides SMT 19969 with the potential to treat both the initial infection and recurrent disease.  This ability clearly differentiates it from other marketed drugs or products understood to be in development.

SMT 19969 completed formal pre-clinical development studies during the period and it entered into a Phase 1 clinical trial in healthy volunteers in October 2012.  The randomised, dose-escalating, placebo-controlled trial is evaluating the safety, tolerability and pharmacokinetics of SMT 19969.  Top-line results from the trial are expected to be reported during Q2 2013 and a positive outcome from this safety trial will mark another important milestone in the development of this new antibiotic.

The development of the programme received a significant endorsement following the decision by the Wellcome Trust to extend its partnership with Summit through a Translational Award worth up to £4.0 million.  This represents the second funding award made by the Wellcome Trust and will substantially support the development of SMT 19969 through to the completion of clinical proof of concept studies.

There is ever increasing concern about the rise of resistance towards existing antibiotic drugs.  Warnings about this threat have been expressed by the UK's Chief Medical Officer Dame Sally Davies, while in 2012 the US introduced the GAIN Act to provide companies with greater commercial incentives to develop new antibiotics, such as SMT 19969, which can counter the threat from a number of specific pathogens including C. difficile.

The strategic refocusing of the Company led to a curtailment of in-house development of the Seglin(TM) technology platform and other programme activities.  The decision resulted in a reduction of our workforce by approximately half.  On behalf of the Board, we thank those former colleagues for their hard work and commitment during their time with the Company.

We remain enthusiastic about the potential of the Seglin(TM) technology, and where possible, alternative ways of realising value from the Seglin platform will be sought.  This approach was highlighted by the technology license agreement with Bristol-Myers Squibb.  The license provides the US biopharmaceutical company with access to our proprietary technology to identify and develop drug candidates for up to ten targets across multiple therapeutic areas.  Bristol-Myers Squibb is responsible for all research, with Summit eligible for research, development and regulatory milestones of up to $30 million per product, plus royalties on worldwide sales.

Cash at 31 January 2013 was £3.4 million (31 January 2012: £2.1 million) with net cash used in operating activities for the year ended 31 January 2013 of £3.1 million (2011/2012: £2.4 million).  Revenues for the year were £1.8 million (2011/12: £1.8 million), arising principally from recognition of grant receipts from the DMD agreements and receipt of milestone payments from the Wellcome Trust for the C. difficile programme.  As set out above, the progression of the programmes into clinical development has led to an increase in expenditure on research and development to £3.6 million (2011/12: £3.0 million).  We have continued to control expenditure on general and administrative costs, with only a small rise to £1.6 million (2011/12: £1.5 million).

With our focus on the development of two clinical-stage programmes, and the decision to end the option agreement with Evolva, we have provided fully against the value of intangible assets resulting from the acquisition of intangible assets from MNL Pharma in 2006. The amount provided against intangible assets was £0.9 million and there is an associated release of the provision for contingent consideration payable to MNL Pharma of £0.2 million.

The decision to close the in-house research facility, with the loss of 13 employees, led to redundancy costs of £0.2 million, with a further dilapidation provision being made of £0.2 million.  The Company realised £0.1 million through the sale of laboratory equipment and other tangible assets.

In April 2012 a placing of 166,666,670 new Ordinary shares with new and existing institutional investors raised an additional £5.0 million (£4.6 million net of costs) which has helped support the Company in achieving the progress it has made in its two key programmes as well as funding work to advance next generation molecules in the utrophin modulation programme.

Losses before interest, tax, depreciation and amortisation and excluding exceptional items were £3.7 million (2011/12: £2.8 million).  Net loss for the year was £4.2 million (2011/12: £2.7 million), equivalent to 1.34 pence per share (2011/12: 1.51 pence per share).

Our approach is to advance programmes through important technical milestones and secure partnership deals at the appropriate stage that realise best value from each of the assets for shareholders.  The two independent clinical programmes target diseases that have a high economic and social burden on society and the development of effective treatments represents an attractive commercial opportunity.  Summit is maintaining a regular dialogue with interested parties but it is equally vital that we maintain the pace of development to ensure that value is continually being added so as to enhance the overall data package.  To achieve this, it is important to identify and undertake the activities on the programme's critical pathway.  With the CDI programme substantially supported by the Wellcome Trust, Summit intends to increase its investment in R&D and advance the DMD programme into a Phase 2 clinical trial during this financial year. The Group will only make this increased investment if it is able to raise additional funds and recognises that this would need to be in place by the middle of 2014. The Group anticipate this investment coming from, and is in discussions with, grant bodies, corporate entities, and DMD not-for-profit organisations that routinely sponsor such work by biotechnology companies or from traditional equity funding.  The amount and timing of such new sources of funding is uncertain, however, and if the Company is unable to attract further funding then further progress on the DMD clinical study may be delayed or cancelled.

The Board remains confident that the Company can attract the necessary additional investment to progress its clinical programmes and provide sufficient working capital for the foreseeable future through a combination of grants, commercial partners and other funding.

The Board of Directors has evolved during the period to meet the challenges the Company faces as we focus on the development of our clinical-stage programmes.

Mr Glyn Edwards was appointed as Chief Executive Officer in April 2012, while Dr Barry Price assumed his previous role as Non-Executive Chairman.  Mr Jim Mellon and Dr Frank Armstrong were subsequently appointed to the Board in November 2012 and they will bring considerable business, clinical and product development expertise to support the future growth of Summit and our drug programmes.

With these appointments, Dr Richard Storer, Dr Andy Richards, Mr George Elliott and Professor Stephen Davies stepped down from the Board; Dr Storer has since retired from the Company.  On behalf of the Board, we sincerely thank each of them for their contribution towards the development of Summit and their role in establishing strong foundations that will support the future growth of the business.

The business has made strong progress during the past year and developments in the current period and beyond offer exciting opportunities for Summit.  Under an experienced leadership team, the Company looks forward to advancing our two clinical-stage programmes through value-enhancing development milestones to increase further the value of these promising and commercially attractive assets.

The Board would like to thank all our staff for their efforts and dedication over the last year, which has been instrumental in advancing the business.  Finally, we thank all our shareholders for their continuing commitment and support.

Barry Price, PhD                  Glyn Edwards

Non-Executive Chairman     Chief Executive Officer

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)

For the year ended 31 January 2013

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited)

As at 31 January 2013

CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)

For the year ended 31 January 2013

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)

For the year ended 31 January 2013 (unaudited)