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On Tuesday, Stifel analysts maintained a positive outlook on Summit Therapeutics plc (NASDAQ:SMMT) shares, reiterating a Buy rating and a $40.00 price target. Currently trading at $18.03, the stock has shown remarkable strength with a 318% return over the past year. The firm’s analyst highlighted the potential of Summit’s drug candidate ivonescimab, compared to Merck (NSE:PROR)’s pembrolizumab, in treating first-line lung cancer. According to InvestingPro data, analyst targets range from $23.62 to $45.01, reflecting strong confidence in the company’s prospects.
The analyst anticipates significant data on overall survival (OS) from Summit’s ivonescimab to be released by early 2026. This data is crucial as it could influence both physicians’ clinical decisions and investors’ valuation of the company’s ongoing global lung trials. The firm suggests that an OS hazard ratio (HR) below 0.80 would be clinically significant, while a ratio under 0.75 could lead investors to confidently factor in the full potential of the drug. With a strong liquidity position (current ratio of 10.15) and moderate debt levels, Summit appears well-positioned to fund its clinical development programs.
The recent publication of the HARMONi-2 trial protocol details and the possibility of regulatory action in China by mid-2025 suggest that these important data disclosures might occur sooner than expected. According to precedent from first-line lung cancer trials, the progression-free survival (PFS) benefit seen in the HARMONi-2 trial is expected to translate into the necessary OS thresholds.
The analyst expressed confidence in ivonescimab’s prospects, noting that it has demonstrated a greater magnitude of benefit, more consistent results across different patient subgroups, and a better safety profile than previous PD-1/VEGF combination therapies. These factors are believed to contribute to keeping patients on treatment longer, which is essential for achieving an OS benefit from the observed PFS advantage.
Summit Therapeutics’ focus on developing ivonescimab as a treatment for lung cancer is underpinned by the potential to improve patient outcomes significantly. Stifel’s continued endorsement reflects optimism in the drug’s comparative performance and its ability to meet key clinical thresholds. While the company currently operates at a loss, with negative EBITDA of $210.9M, its market capitalization of $13.27B suggests strong investor confidence in its future potential. For deeper insights into Summit’s financial health and growth prospects, including exclusive ProTips and comprehensive analysis, visit InvestingPro, where you’ll find detailed research reports and expert commentary on over 1,400 US stocks.
In other recent news, Summit Therapeutics reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of -0.07 USD, slightly surpassing the forecasted -0.08 USD. Despite this minor earnings beat, the company did not report revenue for the quarter. The company ended 2024 with a strong cash position of $412 million and is now debt-free, which marks a significant improvement in its balance sheet. Analysts from H.C. Wainwright maintained a Buy rating on the stock, citing optimism about the ongoing Phase 3 trial of ivonescimab, a therapy being tested for various cancers. Stifel analysts kept a Hold rating with a $40 price target, attributing recent stock volatility to merger and acquisition speculation. Summit Therapeutics is progressing with its clinical trials, including collaborations with Pfizer (NYSE:PFE) to evaluate ivonescimab in combination with multiple antibody-drug conjugates. The company plans to release top-line data for its HARMONY trial by mid-2025, which is crucial for its market opportunities. These developments are part of Summit Therapeutics’ strategic focus on expanding its clinical pipeline in the oncology sector.
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