On Tuesday, Citi initiated coverage on Summit Therapeutics plc (NASDAQ:SMMT) with a Buy rating and a price target of $7.00 for the shares. The firm's analysis suggests that Summit's leading drug candidate, ivonescimab, has a strong potential to change the treatment dynamics for non-small cell lung cancer (NSCLC).
According to Citi, the drug is well-positioned based on its mechanism-of-action, its advanced stage in development, and its potential to outperform existing treatments for NSCLC.
Citi's coverage notes that Phase 1/2 clinical trial data for ivonescimab in first-line squamous NSCLC and second-line EGFR-mutated NSCLC has shown efficacy that exceeds current standard-of-care benchmarks.
Summit Therapeutics is currently conducting two global Phase 3 trials, named HARMONi and HARMONi3, targeting second-line EGFR-mutated and first-line squamous NSCLC, respectively. Success in these trials could significantly broaden ivonescimab's use across various solid tumor indications.
The firm's proprietary Clinical Trial Simulator indicates that the HARMONi trial has approximately an 80% chance of success in terms of progression-free survival (PFS), while the HARMONi3 trial has about a 60% chance of success in overall survival (OS). These high probabilities of trial success underscore the confidence in ivonescimab's clinical development.
Citi also believes that ivonescimab could present a more favorable clinical benefit/risk profile in the second-line EGFR-mutated NSCLC setting compared to the combination of amivantamab and chemotherapy.
Furthermore, the first-line squamous NSCLC market, which is substantially larger but less competitive, is currently dominated by the combination of Keytruda and chemotherapy. Ivonescimab stands out as one of the few late-stage assets targeting this market exclusively.
The initiation of coverage by Citi also comes with a 90-day Catalyst Watch, signaling that the investment firm is closely monitoring the upcoming developments and potential market-moving events related to Summit Therapeutics and ivonescimab.
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