The week kicked off in style for Summit Therapeutics (NASDAQ:SMMT) with the shares soaring by 56% in Monday’s trading session.
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To be fair, while those are certainly nice gains, it’s not as if investors have been bereft of returns so far this year. Monday’s action added to a handsome haul, with the stock up by 633% throughout 2024.
The bullish story evolving around Summit concerns its lung cancer drug ivonescimab, and results from a late-stage trial of the investigational bispecific antibody showed exactly what investors were hoping for.
Specifically, in the China-based Phase 3 HARMONi-2 study looking at ivonescimab vs. Merck’s Keytruda (pembrolizumab) as a monotherapy first-line treatment of patients with PD-L1 positive advanced NSCLC (non-small cell lung cancer), the drug showed it lowered the risk of disease progression or death by 49% compared to Keytruda. This achievement represented the first time a drug demonstrated a clinically significant advantage over Keytruda in a randomized, late-stage clinical study in NSCLC.
Stifel analyst Bradley Canino thinks the data addresses two “widely debated” questions about ivonescimab: whether the ivonescimab bispecific differs from co-administered PD-[L]1+VEGF antibodies, and whether ivonescimab will show positive overall survival compared to PD-[L]1 antibodies. “We think the 0.51 PFS HR versus Keytruda will begin to convince more investors the answer to those questions is yes, and when the 2023 PD-[L]1 TAM is ~$50bn and still growing the upside potential for SMMT is significant,” Canino confidently opined.
Management believes that lung cancer is only the starting point. They anticipate launching an extensive development plan aimed at reaching peak revenue by the early 2030s, holding patents through approximately 2040, and owning rights to any “next-generation ivonescimab.”
Furthermore, the robust safety data for ivonescimab, now supported by 1,800 patients and displaying reduced VEGF-related toxicity, such as bleeding, offers a profile that can “capture a broad opportunity.”
Bottom line, the results merit a new price target for SMMT, which Canino increases from $14 to $25. The new figure offers further upside of 25% from current levels. Naturally, Canino’s rating stays a Buy. (To watch Canino’s track record, click here)
2 other analysts have recently waded in with SMMT reviews and they are positive too, making the consensus view here a Strong Buy. Combined, the average price target stands at $24.6, closely mirroring Canino’s objective. (See SMMT stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
