H.C. Wainwright has updated its price target for Summit Therapeutics plc (NASDAQ: NASDAQ:SMMT), raising it to $45 from the previous $30, while maintaining a Buy rating on the stock.
The adjustment follows the presentation of Phase 2 clinical trial data at the European Society of Medical Oncology (ESMO) annual meeting held in Barcelona, Spain. Summit Therapeutics, in collaboration with its partner Akeso, showcased promising results for their drug ivonescimab in treating certain types of cancer.
The presented data included findings from a Phase 2 trial of ivonescimab, with or without ligufalimab, for the first-line treatment of PD-L1-positive head and neck squamous cell carcinoma (1L PD-L1+ HNSCC). Additionally, results from ivonescimab as part of a combination therapy with standard-of-care chemotherapy agents, with or without ligufalimab, for the first-line treatment of metastatic colorectal cancer (1L mCRC) were shared.
The analyst from H.C. Wainwright expressed confidence in the potential of ivonescimab to outperform the standard-of-care treatments in these indications. The inclusion of HNSCC data into their financial model has led to a projection of $15.7 billion in peak sales for ivonescimab across all indications. This forecast is considered conservative in light of the $25 billion annual sales of Merck & Co.'s KEYTRUDA, a leading drug in the oncology market.
In other recent news, Summit Therapeutics has seen several financial firms revise their stock price targets and maintain Buy ratings, following promising data from the HARMONi-2 study and full Phase 3 trial data.
For instance, Stifel raised the stock price target to $25, citing the potential of Summit's ivonescimab bispecific antibody compared to existing treatments. Similarly, H.C. Wainwright increased its price target to $30 and maintained a Buy rating, based on ivonescimab's performance in the Phase 3 trial. Citi also raised its price target to $19 and reiterated a Buy rating, highlighting the promising clinical efficacy of ivonescimab.
The HARMONi-2 study data revealed a 0.51 progression-free survival hazard ratio when ivonescimab was compared to Keytruda, suggesting that ivonescimab may offer a significant advantage over PD-[L]1 antibodies. Summit Therapeutics' management anticipates a comprehensive development plan that projects peak revenues by the early 2030s, with patents lasting until approximately 2040.
Analysts from H.C. Wainwright and Citi have highlighted the potential of ivonescimab 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.
InvestingPro Insights
Following the optimistic update from H.C. Wainwright on Summit Therapeutics (NASDAQ:SMMT), InvestingPro data and tips offer additional context for investors considering the stock. The substantial upward revisions in earnings by analysts for the upcoming period reflect the heightened expectations following the promising clinical trial results. With the stock experiencing significant returns over the past week, month, and year, it's evident that the market is reacting positively to Summit's potential in the oncology space.
According to InvestingPro data, Summit Therapeutics has a market capitalization of $23.47 billion. Despite the lack of profitability over the last twelve months, with an adjusted P/E ratio of -157.71, the company has demonstrated a remarkable one-year price total return of 1607.49%. This rapid appreciation has brought the stock price to within 95.03% of its 52-week high. However, the InvestingPro Fair Value estimate stands at $10.3, suggesting a discrepancy between current valuations and the platform's assessment.
InvestingPro Tips indicate that while the stock has returned significantly, analysts do not anticipate the company will be profitable this year, and it is trading at a high Price/Book multiple of 120.29. These insights, along with the fact that Summit Therapeutics does not pay a dividend, may influence investor strategy. For a more comprehensive analysis, investors can explore the full set of 17 InvestingPro Tips available for Summit Therapeutics at https://www.investing.com/pro/SMMT.
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