Here's Why Summit Therapeutics Stock Soared 15% on Friday
Shares of Summit Therapeutics SMMT rose more than 15% on Friday after the analysts at Cantor Fitzgerald and Truist Securities maintained their positive outlook on the company.
Both investment firms remain optimistic about Summit Therapeutics' lead pipeline drug, ivonescimab. This drug was developed in collaboration with China-based Akeso, which is also its original developer. Summit in-licensed the right to develop and market the drug in 2022 across several territories, including the United States and Europe.
Cantor reportedly reiterated its Overweight rating on SMMT after an SEC filing revealed that the company's co-chief executive officer (co-CEO), Bob Duggan, exercised warrants to acquire nearly 4 million shares of the company. This transaction was executed about four years before the warrants expired at a strike price of $1.58 each. The analyst pointed out that this indicated a bullish signal for the stock.
Another regulatory filing also revealed that the company's other co-CEO, Zanganeh Mahkam, procured a similar number of SMMT shares after exercising her warrants roughly four years in advance.
The analysts at Truist also maintained their 'Buy' rating on Summit and a price target of $35 per share.
Year to date, shares of Summit have surged 30% against the industry's 10% decline.
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The growing optimism around SMMT stock stems from the recently reported results from the HARMONi-2 study, whichevaluated ivonescimab against Merck's MRK blockbuster oncology drug Keytruda in patients with locally advanced or metastatic NSCLC whose tumors have positive PD-L1 expression.
Last year in May, Summit reported that the drug met its primary endpoint of progression-free survival (PFS), delivering statistically significant and clinically meaningful benefits. Updated results released in September further revealed that ivonescimab cut the risk of disease progression or death by nearly half compared to Keytruda. A clinically meaningful benefit of the drug was also seen across multiple clinical subgroups, including those with PD-L1 low and high expression, squamous and non-squamous histologies, and other high-risk patients.
Based on the HARMONi-2 study results, we believe that ivonescimab could replace Keytruda as the next standard of care across multiple NSCLC settings. Unlike the Merck drug, which targets the PD-1 protein, the Summit drug is a first-in-class bispecific antibody that targets two proteins, namely PD-1 and VEGF. We believe this dual mechanism differentiates ivonescimab from currently available therapies for solid tumors as there is a potentially higher expression of both these proteins in tumor tissue compared to the normal tissues in the body.
Analysts at Truist are optimistic about the overall survival (OS) data from the HARMONI-2 study, expected later this year. OS is considered to be the 'gold standard' for measuring the clinical benefits of a cancer drug.
Currently, ivonescimab is only approved in China to treat patients with EGFR-mutated, locally advanced or metastatic non-squamous NSCLC who have progressed after treatment with an EGFR-TKI. This approval, received last year in May, is based on data from the late-stage HARMONi-A study, which showed that treatment with the drug achieved the primary endpoint of PFS when compared to placebo.
Summit is currently conducting two late-stage studies on the drug in separate NSCLC settings, with data from one study expected in mid-2025. SMMT is also likely to start a third-late study evaluating the drug in a separate NSCLC setting later this year.
Developing bispecific antibodies that target two proteins, namely PD-1 and VEGF, has been one of the lucrative areas in the treatment of cancer of late. Companies like BioNTech BNTX and Instil Bio TIL are also developing their respective PD-1/VEGF-targeting antibody candidates, namely BNT327 and AXN-2510.
Despite the competition, we believe Summit enjoys the advantage of being ahead in clinical development over the BioNTech and Instil Bio therapies. The BNTX and TIL candidates are still at least a couple of years away from reaching the same clinical development position as SMMT.
In November, Merck signed a deal with China-based LaNova Medicines for the latter's LM-299, which is also based on the same mechanism as ivonescimab. Merck intends to advance the drug's clinical development 'with speed and rigor for patients in need.'
Summit Therapeutics PLC price | Summit Therapeutics PLC Quote
Summit currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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