H.C. Wainwright has adjusted its price target for Summit Therapeutics plc (NASDAQ: NASDAQ:SMMT), increasing it to $30.00 from the previous $16.00, while reiterating a Buy rating on the stock.
The revision follows Summit's presentation of full Phase 3 trial data at the World Conference on Lung Cancer (WCLC) on Sunday.
Summit showcased results from its HARMONi-2 Phase 3 trial, which included 398 participants, testing ivonescimab against Merck's Keytruda in treating first-line PD-L1-positive non-small cell lung cancer.
As of January 29, 2024, with an 8.67-month follow-up, ivonescimab showed a median progression-free survival (mPFS) of 11.14 months, which is a 5.3-month improvement over Keytruda's 5.82 months. The hazard ratio (HR) for ivonescimab was reported at 0.51.
The data further indicated that ivonescimab outperformed Keytruda across all stratified subgroups. These included patients with low PD-L1 expression (0.54 HR), high PD-L1 expression (0.46 HR), squamous cell carcinoma (0.48 HR), and non-squamous cell carcinoma (0.54 HR).
Analysts at H.C. Wainwright have assessed the potential market impact of ivonescimab, considering Keytruda's annual sales are approximately $25 billion, with projections to reach $30 billion by 2026.
They believe that their forecast of $13 billion in peak sales for ivonescimab is conservative, especially in indications where Keytruda is not effective and is not used as standard therapy.
In addition to the promising trial results, H.C. Wainwright has reduced the discount rate applied to Summit from 10% to 9%, contributing to the increased price target for the company's shares. This financial metric adjustment reflects a more optimistic valuation of Summit's stock, aligning with the positive trial outcomes of ivonescimab.
Summit Therapeutics has been the subject of several significant developments. Citi has raised the biotech company's price target to $19.00, up from $13.00, due to promising clinical trial results for its drug candidate, ivonescimab.
H.C. Wainwright also maintained a Buy rating on Summit Therapeutics, citing ivonescimab's potential in areas where Merck & Co.'s KEYTRUDA has shown ineffectiveness. This follows Merck's termination of two clinical trials involving KEYTRUDA, opening opportunities for ivonescimab's utilization.
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