On Monday, Stifel initiated coverage on Summit Therapeutics plc (NASDAQ:SMMT), issuing a Buy rating with a stock price target set at $8.00. The optimism surrounding the company's stock is based on the potential success of its drug, ivonescimab, in ongoing phase 3 lung cancer trials. These trials are expected to tap into a multi-billion dollar market, which could significantly elevate the company’s share price.
The analyst from Stifel noted that the probability of success for ivonescimab in the two major lung cancer phase 3 trials is high. This confidence is bolstered by phase 1/2 data that showed ivonescimab’s differentiation from Keytruda benchmarks.
Moreover, regulatory and phase 3 updates from Akeso in China in 2024 are anticipated to potentially raise investor expectations for Summit’s phase 3 success rates, potentially lifting the stock prior to the HARMONi trial readouts.
Stifel's positive outlook is also informed by the strategic selection of control arms in the trials, which seem favorable for ivonescimab. In the second-line EGFRm NSCLC trial, a placebo is used as the control, and in the first-line squamous NSCLC trial, the control is Keytruda, which has shown limited efficacy for this histology. Ivonescimab has avoided the severe bleeding risks associated with bevacizumab, a previously studied drug in this space, which may present an additional advantage.
Summit's ivonescimab is positioned to address significant unmet needs in lung cancer treatment. The drug's successful phase 1/2 results and the planned regulatory updates in China are key factors that could influence the company's share value.
The Stifel analyst's commentary underscores the potential for these developments to drive Summit’s stock higher as the market anticipates the phase 3 trial outcomes starting in 2025.
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