Good morning, and welcome to the Summit Therapeutics first quarter 2023 earnings and update call. All participants will be able to listen only until the question-and-answer portion of this call. We do not expect any technical difficulties today. However, in the event that we were to lose the webcast connection and are unable to provide any updates, please wait up to 10 minutes for resolution. Please refer to the company's website for updates. Please note that today's call is being recorded. If you would like to ask a question during today's call, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star and one. At this time, I would like to introduce the call to Dave Gancarz, Senior Vice President of Stakeholder Relations, Business Development, and Corporate Strategy. You may proceed.
Good morning, thank you for joining us. Our press release was issued earlier this morning and is available on the homepage of our website. Today's call is being simultaneously webcast, an archived replay will also be made available later today on our website, www.smmttx.com. On the call with me today is Bob Duggan, our Chairman of the Board and Co-chief Executive Officer, Dr. Maky Zangeneh, our Co-chief Executive Officer and President, Ankur Dhingra, our Chief Financial Officer, as well as Dr. Urte Gayko, our Head of Regulatory Safety and Quality at Summit. Before we get started, I would like to note that some statements made by our management team and some responses to questions that we make today may be considered forward-looking statements based on our current expectations.
Summit cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in forward-looking statements. Please refer to our SEC filings for information about these risks and uncertainties. Summit undertakes no obligation to update these forward-looking statements except as required by law. Following comments from Bob, Maky, and Ankur, we will take questions. With that, I will turn the call over to Bob.
Thank you, Dave. It's a pleasure to be on the call with each of you this morning. I'm incredibly proud of the accomplishments of Team Summit over the past few months since we closed our transaction with the world-class partners at Akeso. Our relationship discussions with Akeso began in July of 2022 through our business development channels. By October, we had achieved a vision and a concept of what a partnership with Akeso, including their bispecific drug ivonescimab, could potentially generate under Team Summit's stewardship. Throughout November, we gained additional data and evaluated it properly on not only the company, but the product itself. As we gained additional direct experience with Akeso's team leadership, and specifically with Dr. Michelle Xia, Akeso's CEO, Founder, and Chairwoman, we were able to then lead onto a December 5th truly historic day and transaction for all of us.
We signed a $5 billion and $500 million upfront transaction with Akeso. By entering into this transaction, we committed to our stakeholders, consistent with our mission statement, to take full responsibility for the development of ivonescimab. Along with that, we stated that we intended to make a significant positive difference for human health care by improving the quality of patient lives and potentially the duration of patient lives for most patients who may benefit from this medicine. I'm proud to say that we are making significant strides towards fulfilling that commitment, and Maky will provide us with additional details shortly regarding our progress on that. Finally, from a corporate governance perspective, we are proud to have added Dr. Michelle Xia to our board of directors this quarter in conjunction with closing the Akeso transaction.
As you may know, but it's worth repeating if you do, Dr. Xia, who founded Akeso in 2012, is their Chairwoman and CEO. She has exceptional experience in leadership across scientific discovery, R&D, building and scaling manufacturing, and overall leadership through her experience at companies in the US, including Celera Genomics, Bayer, and Crown Bioscience. At Crown, she played a decisive role in constructing the company's platform, she served in a leadership role in a joint venture with Pfizer. Dr. Xia has about 20 years of experience in the pharmaceutical industry and academic research in the US and UK, in addition to her deep experience in leading the Chinese company, Akeso. With that, I would like to hand it over to Maky to provide additional context as to our accomplishments and next steps. Maky?
Thank you, Bob. Good morning, everyone. I'm incredibly enthusiastic about our collaboration with Akeso. Akeso has a rich and diversified antibody drug pipeline with over 30 internally discovered drug candidates in various stages of development, including six bispecific antibodies. Akeso has taken part in over 80 clinical trials for 17 drug candidates, including 14 pivotal trials. Akeso has two drugs approved for oncology indication in China, a PD-1 inhibitor and a novel PD-1/CTLA-4 bispecific antibody called cadonilimab. cadonilimab is the first PD-1 based bispecific antibody approved in any major market demonstrating Akeso expertise and innovation in this space. Akeso has over 2,400 employees who perform end-to-end functions of a fully integrated biopharma company from drug discovery through to manufacturing and commercialization, is publicly listed in Hong Kong with a valuation approaching $5 billion.
Specific to our product candidate, ivonescimab is an innovative, potentially first-in-class bispecific antibody that is intended to change the standard of care across several oncological indications. Ivonescimab combines the effect of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects associated with VEGF into a single molecule. Anti-PD-1 therapy assists the immune system in killing tumor cells. Anti-VEGF therapy helps deplete the tumor of new blood vessels and allows the immune system to fight the tumor. Ivonescimab tetravalent structures enables higher avidity, which is the accumulated strength of multiple binding interactions with over 10 x the binding affinity to PD-1 in the presence of VEGF in vitro in tumor cells.
These tetravalent structures, the design of the molecule, and bringing these two targets into a single bispecific antibody have the potential to steer ivonescimab to the tumor tissue versus healthy tissue, which could lead to reduced adverse events associated with these targets when administered individually. It also has the potential to focus the anti-tumor activity of both targets as compared to separate anti-PD-1 and anti-VEGF compounds dosed together. As Bob said, I'm extremely proud of the work and accomplishment of Team Summit over the past several months since we have reached an agreement with Akeso. We began our work formulating our ideas on the development of ivonescimab during our due diligence process in the second half of last year.
Once we signed the deal in December and the agreement went effective in January, we have pushed very hard on bringing to life the vision that we set out at the start of this collaboration. We immediately engaged with health authorities in our licensed territories, including the US FDA. We held multiple meetings with the FDA to discuss multiple phase III clinical trials as part of our late-stage development plan in non-small cell lung cancer for ivonescimab. We appreciated and incorporated the feedback from the FDA when finalizing the design of our two clinical studies, which we announced last week. They are ivonescimab combined with chemotherapy in patients with EGFR-mutated, locally advanced or metastatic non-squamous, non-small cell lung cancer who have progressed after treatment with a third-generation EGFR TKI such as osimertinib, which we refer to as the HARMONi trial.
The second trial, ivonescimab, combined with chemotherapy in first-line metastatic squamous non-small cell lung cancer patients, which we call the HARMONi-three trial. This study will combine patients enrolled in China along with patients enrolled in United States, Canada, and Europe as a multi-regional, randomized, double-blind study enrolling over 400 patients across these regions. In supporting these clinical trials, we are executing up in a number of different areas, including the work to begin clinical trials with different trial sites and vendors, such as preparing clinical study sites to enroll patients and all of the foundational work needed to launch a clinical study, including contracts, institutional review boards approvals, and quality reviews.
Critical to all of this is the engagement with key opinion leaders and aligning feedback from these highly engaged physicians with the data generated from Akeso having treated over 750 patients with ivonescimab to date in China and Australia in order to successfully generate the momentum needed to enroll each study as effectively and efficiently as possible. In addition to preparing clinical drug supply for trials in our territory, we have been actively preparing to expand our supply chain channel long term with respect to having the opportunity to obtain clinical and commercial supply from multiple sources. Because of the hard work and effort across our entire team and the support from our partner at Akeso, we have initiated our first clinical study in our territory, HARMONi.
We were thrilled to announce earlier this week that we have enrolled our first patient in the HARMONi study, a feat accomplished in about 3.5 months after our deal closed with Akeso. We are following up on the achievement with our intent to initiate HARMONi-three and enroll patients in this study in the second half of this year. As we have stated since the announcement of the deal, in conjunction with our actions and following through of our commitments to start in a non-small cell lung cancer, these two clinical trials are only the first step with respect to our plans for ivonescimab. We have confidence in ivonescimab to continue to expand both within additional indication in non-small cell lung cancer and in other solid tumors during its development lifecycle.
Our deal was constructed with this mindset, as is evident from the number of indications for which regulatory milestones are scheduled to be paid, as well as the size of the potential milestones. We believe strongly in the potential of ivonescimab. As a reminder, our collaboration and license agreement provide us with the rights to ivonescimab in the United States, Canada, Europe and Japan. In exchange for these rights, we paid $500 million upfront to Akeso, and Akeso is eligible to receive regulatory milestone of up to $1.05 billion and commercialization milestone of up to $3.45 billion. Akeso will receive low double-digit royalty on our net sales of SMT112. We continue to build upon the established actions and data created by Akeso and the deal we have consummated.
Our team has made multiple visits to Akeso in the past few months and spent meaningful time in person with Akeso leadership over the past 8 months in order to continue to build the success of Akeso earlier stage clinical trials and propel our collaboration to the next level as we continue to work together to achieve the best results and realize the potential of ivonescimab. Our aligned missions, each of which focus on patient's needs and improve patient lives, allow for aligned intention within our partnership and the future of ivonescimab. My confidence cannot be higher in team Summit's ability to make a meaningful impact on the lives of patients who can benefit from this innovative therapy, both in non-small cell lung cancer and on other solid tumors. This is just the beginning. I will let Ankur give some more details on our financial position and outlook.
Thank you, Maki. These are very exciting times at Summit. With ivonescimab, we have a great opportunity in front of us to improve patients' lives, and I'm very pleased with the progress that team has made in this short duration of time. I will now give you an update on the financial developments during the quarter and our financial position as of the end of the quarter. During the quarter, we completed significant purchasing and financing transactions. First, we completed the in-licensing deal with Akeso and paid them $500 million as upfront consideration. This was paid via approximately $475 million in cash and 10 million shares of Summit's common stock. Second, we successfully completed our rights offering of $500 million. This offering was oversubscribed with broad-based participation.
we repaid $420 million of the loans this quarter and are left with $100 million of loan on our balance sheet, which becomes due in September 2024. we announced that we are ceasing investment in our anti-infectives business, focusing our resources on development of ivonescimab. most importantly, we did all the foundational work that Maky described towards initiation of two phase III clinical trials. It's been a busy quarter. about the P&L. Net loss for the quarter was $542.4 million.
Included therein is $520.9 million of IP R&D expenses, which reflects the upfront payment made to Akeso for in-licensing of ivonescimab, comprising of $474.9 million in cash payment and 10 million shares issued to Akeso with accounting valuation of $45 million, reflecting market price on the date the shares were issued. Excluding this one-time payment, pro forma net loss was about $22 million, of which our operating expenses were $16.8 million. Talking about our cash position, we exited the quarter with $242 million in cash and investments. We believe this is sufficient to fund our operating costs and working capital needs for currently planned clinical trials for SMT112 going into the second half of 2024.
This includes appropriately building an experienced oncology team capable of executing multiple large clinical trials and the related development work. We have a loan of $100 million on our balance sheet that becomes due on September 2024 and have ability to prepay in certain scenarios if we complete a capital raise transaction prior to September 2024. To note, all our cash equivalents and investments are held in highly liquid and highly rated money market funds or U.S. Treasuries, and the cash is held in large U.S. and European banks. To sum up, in last few months, we've taken significant actions since closing the deal for in-licensing of ivonescimab, a significant amount of groundwork leading to announcement of two late-stage multi-regional trials and treatment of first patient in our first trial.
We've also laid a solid financial foundation for for investment in our planned clinical studies and the development of ivonescimab. With that, I will hand it back over to Dave.
Thank you, Bob, Maki, and Ankur. We can now transition if there are any questions that we could answer. If we could please open the line for questions.
At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad, and we'll pause for just a moment to compile the Q&A roster.
Thank you, Kayla. We have received a couple of questions first, I'll start with those questions and then we can transition to those on the phone. The first question comes in relates to the phase three clinical trials that we plan to conduct and whether or not we will be able to submit any data that has been compiled and generated by Akeso, as opposed to just that data that has been generated by Summit. I'll take the first part of that question, then I'll hand it over to Ankur, who's our head of Regulatory Safety and Quality. Our HARMONi trial will enroll patients in the United States, Canada, Europe, and China. Those patients coming from China will be enrolled by our partners at Akeso.
Our intent is to include data, that is generated by, our partners at Akeso specifically for this trial.
Yes. Hi, this is Urte Gayko . Yes, we will definitely be able to utilize information coming from both the Akeso site as well as the data that we are generating. The most important part for the registration is that we have appropriately designed, aligned trials with the important health authority for the U.S., obviously the FDA, and that they're in the context of multi-regional studies. We have actually discussed exactly how to do this appropriately for our phase III studies and have gotten an agreement on that specifically with FDA and are executing in this context.
Thank you, Urte. One additional question that we've received. With respect to certain designations from the FDA, such as breakthrough therapy designation, fast-tracked designation, what can the company do in order to seek to achieve those designations if they're appropriate?
I think both of these designations are of interest and likely relevant for ivonescimab. Fast Track first. I think we are a strong candidate for Fast Track and are likely to pursue this designation. We have also started, as it relates to breakthrough designation consultation with FDA, specifically what kind of data set would be most appropriate to pursue that designation. We will continue this consultation with FDA. Both of them are very relevant for us, and we are likely candidates.
Thank you, Urte. Kayla, any additional questions?
At this time, there are no questions on the phone line. Again, as a reminder, if you would like to ask a verbal question, please press the star and one on your telephone keypad. There are no audio questions at this time. Dave, I'll turn the call back to you.
Perfect. Thank you very much. I would like to thank you for your participation in this. With that, there will be an archived version of this webcast that will be available on our website, www.smmttx.com. Thank you. We wish you a great day.
This concludes today's conference call. You may now disconnect.