Going concern

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going concern

Going concern

The accompanying consolidated financial statements are prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of the business. As of September 30, 2020, the Company had an accumulated deficit of $199.2 million. During the three months and nine months ended September 30, 2020, the Company incurred a net loss of $17.7 million and $39.3 million, respectively, and used $40.1 million of cash in operating activities. The Company expects to continue to generate operating losses for the foreseeable future. As of September 30, 2020, the Company had cash and cash equivalents of $21.3 million.

On November 5, 2020, the Company raised $50 million through a subscription and placing of new common shares through a private placement with certain existing shareholders. The net proceeds of the subscription and placing, together with the Company's existing cash resources and funding agreements, are expected to extend its cash runway into the fourth quarter of 2021. The Company expects to

use these funds to support the continued Phase 3 clinical program of ridinilazole for the treatment and reduction of recurrence of C. difficile infection ('CDI'); preparatory activities to support commercial launch of ridinilazole, if approved; development of early-stage research projects; and general corporate purposes.

The Company is evaluating various options to finance its cash needs through a combination of some, or all, of the following: equity offerings, collaborations, strategic alliances, grants and clinical trial support from government entities, philanthropic, non-government and not-for-profit organizations and patient advocacy groups, debt financings, and marketing, distribution or licensing arrangements. While the Company believes that funds would be available in this manner before the end of the fourth quarter of 2021, there can be no assurance that the Company will be able to generate funds, on terms acceptable to the Company, on a timely basis or at all, which would impact the Company’s ability to continue as a going concern. The failure of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations and financial condition.

Should the Company be unable to raise additional funding, management has the ability to take mitigating action to fund its operating expenses and capital expenditure requirements in relation to its clinical development activities for only a short period beyond 12 months from the date of issuance of these financial statements. These circumstances represent a material uncertainty which may cast and raise significant doubt on the Summit Group’s ability to continue as a going concern. The interim financial statements do not contain any adjustments that might result if the Summit Group was unable to continue as a going concern.