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Investing.com - Barclays initiated coverage on Summit Therapeutics plc (NASDAQ:SMMT) with an Underweight rating and a $13.00 price target, representing approximately 31% downside from current levels. Trading at $18.12, the stock sits well below its 52-week high of $36.91, with InvestingPro data indicating the company is currently overvalued based on its Fair Value analysis.
The rating is based on several factors, including a lengthy regulatory path for Summit’s ivonescimab, a PD-1 x VEGF bispecific antibody, and competitive dynamics in the lung cancer market where Barclays notes "the standard of care is no push-over." With an InvestingPro Financial Health Score rated as ’WEAK’ and negative EBITDA of -$759 million in the last twelve months, the company faces significant operational challenges.
Barclays’ analysis predicts only modest improvement over current standard-of-care treatments in the two patient subgroups targeted in Summit’s HARMONi trials: patients with epidermal growth factor receptor-mutated (EGFR-mutated) lung cancer and those with non-small cell lung cancer (NSCLC).
For EGFR-mutated lung cancer, Barclays indicates that data generated to date does not appear superior to clinical comparisons, while for NSCLC, the implied overall survival benefit for ivonescimab over pembrolizumab is described as modest.
Barclays also highlighted that pembrolizumab is expected to lose patent protection in 2028, which will "materially reduce the cost of care for patients eligible for PD-1/PD-L1 therapies," further challenging Summit’s market position with its current $14 billion market capitalization. InvestingPro subscribers can access 11 additional key insights about Summit Therapeutics, including detailed analyst forecasts and comprehensive financial health metrics in the Pro Research Report, helping investors make more informed decisions about this volatile biotech stock.
In other recent news, Summit Therapeutics has been in the spotlight following several significant developments. The company presented longer-term follow-up data from its global Phase 3 HARMONi trial at the World Conference on Lung Cancer. This trial evaluated ivonescimab plus chemotherapy in EGFR-mutated non-small cell lung cancer, but the data revealed disappointing results, raising concerns about the drug’s regulatory pathway in North America and Europe. Despite this, H.C. Wainwright reiterated its Buy rating with a $50.00 price target, citing clinical milestones achieved by ivonescimab in the HARMONi-2 trial in China. JMP Securities also maintained its Market Outperform rating with a $40.00 price target, following the presentation of updated trial data. These ratings reflect a continued positive outlook from analysts, even as the company’s recent data update has raised questions. Summit’s ivonescimab showed superior results in the China-based HARMONi-2 trial, extending median progression-free survival compared to Merck’s Keytruda. This has contributed to maintaining confidence among some analysts, who highlight the drug’s potential despite recent challenges.
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