On Monday, Summit Therapeutics plc (NASDAQ:SMMT) received a Market Outperform rating from JMP Securities, accompanied by a $32.00 price target. The new coverage reflects a positive outlook on the company's recent shift in focus from infectious diseases to oncology.
The biopharmaceutical company made a strategic pivot in 2022, in-licensing ivonescimab, a PD-1 x VEGF bispecific antibody, from Akeso. The deal involved an upfront payment of $500 million and up to $5 billion in potential milestones. Following this pivot, Summit Therapeutics released Phase 3 data from the HARMONi-2 study.
The study compared ivonescimab monotherapy to pembrolizumab in a Chinese patient cohort, showing promising results.
The randomized Phase 3 trial involved 398 patients and demonstrated nearly double the median progression-free survival (mPFS) for ivonescimab (11.1 months) compared to pembrolizumab (5.8 months). Additionally, ivonescimab showed a higher objective response rate (ORR) of 50% versus 38.5% for pembrolizumab. The safety profile of the treatment was also considered manageable.
While JMP Securities acknowledged the risks of relying solely on data from Chinese patients, the firm also noted the increasing quality of clinical research emerging from China. This view is supported by the growing number of deals and the expansion of the healthcare market in the region, exemplified by Johnson & Johnson's licensing agreement with Legend Biotech for their CAR-T therapy.
Summit Therapeutics is conducting multiple global Phase 3 studies and, given the strong head-to-head monotherapy data, the firm believes Summit has the potential to reach commercialization for specific patient populations.
The target market includes those with EGFR mutation-positive (EGFRm) and first-line non-small cell lung cancer (1L NSCLC). Upon successful commercialization into the 1L NSCLC market by 2034, Summit could achieve global peak revenues of $17.9 billion.
In other recent news, Summit Therapeutics has seen significant developments in its clinical trials and financial position. H.C. Wainwright has adjusted the 12-month price target for Summit Therapeutics to $44 from $45, while maintaining a Buy rating on the stock.
This followed Summit's announcement of the expansion of its Phase 3 (HARMONi-3) study to include additional non-small cell lung cancer (NSCLC) subtypes, aiming to cover all major NSCLC disease subtypes in the US.
Furthermore, Summit Therapeutics reported robust Q3 2024 results, with a cash position of $487 million and an additional $235 million raised to support clinical development.
The company completed enrollment for the global HARMONi trial and anticipates releasing top-line data by mid-2025. The lead investigational drug, ivonescimab, showed a promising 49% reduction in disease progression risk in NSCLC patients with high PD-L1 expression.
The FDA granted a fast track designation for ivonescimab for EGFR-mutated NSCLC, and the company expanded its HARMONi-3 trial to include patients with non-squamous metastatic NSCLC. A new Phase 3 trial, HARMONi-7, will study ivonescimab as a first-line treatment for NSCLC with high PD-L1 expression.
These recent developments highlight Summit Therapeutics' focus on advancing its Phase 3 trials and exploring additional indications for ivonescimab.
InvestingPro Insights
Summit Therapeutics' recent strategic pivot and promising clinical trial results are reflected in its impressive market performance. According to InvestingPro data, SMMT has seen a remarkable 844.78% price total return over the past year, with a 332.57% increase in the last six months alone. This aligns with the positive outlook from JMP Securities and the potential market opportunity highlighted in the article.
Despite these gains, InvestingPro Tips caution that SMMT is not currently profitable and analysts do not anticipate profitability this year. This is consistent with the company's focus on developing its oncology pipeline, particularly ivonescimab. The company's operating income stands at -$181.59 million for the last twelve months, underscoring the significant investment in research and development typical of biopharmaceutical companies in the clinical stage.
Interestingly, SMMT's stock price often moves in the opposite direction of the market, which could be attractive for investors seeking portfolio diversification. The company also operates with a moderate level of debt and has liquid assets exceeding short-term obligations, potentially providing financial flexibility as it advances its clinical programs.
For investors considering SMMT, it's worth noting that InvestingPro offers 13 additional tips for a more comprehensive analysis of the company's financial health and market position.
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