Summit Therapeutics PLC (NASDAQ: SMMT) shares made a solid gain early on Thursday after the firm announced that it was awarded an additional $12 million under its contract with the Biomedical Advanced Research and Development Authority (BARDA), a division of the U.S. Department of Health and Human Services.
Keep in mind that this is a sizable chunk of change for Summit, as the stock closed Wednesday with a market cap of $35 million.
Ultimately, these funds will support the Phase 3 development program for ridinilazole, the company’s precision new mechanism antibiotic for the treatment of C. difficile infection (CDI).
For some quick background: CDI is caused by an infection of the colon by the bacterium C. difficile, which produces toxins that cause inflammation and severe diarrhea, and in the most serious cases can be fatal.
This award represents the first of three optional awards to be exercised under the BARDA contract. It brings the total committed BARDA funding to $44 million, which includes the base package of $32 million announced in September 2017. If BARDA exercises its remaining options in full, the total funding under the contract would increase to $62 million.
Glyn Edwards, CEO of Summit, commented:
BARDA’s continued support underlines the promise ridinilazole has as a potential front-line CDI treatment option which can treat the initial infection and address the key clinical issue of recurrent disease. We look forward to the planned initiation of the Phase 3 clinical trials which remains on track for the first quarter of 2019.
Shares of Summit traded up about 24% at $2.54 in Thursday’s premarket but were last seen at $2.27. The consensus analyst price target is $12.86, and the 52-week trading range is $1.94 to $16.86.