Summit Therapeutics up 55% as lung cancer drug outperforms Merck's
Analysts have now given the company a much higher share target price too
Rowan Dunne
Shares of Miami’s Summit Therapeutics Inc NASDAQSMMT soared on Monday following news of the company’s experimental lung cancer treatment outperforming Merck & Co Inc’s NYSEMRK Keytruda drug. This achievement is particularly significant considering that Merck’s drug has been one of the top cancer immunotherapies for years.
New Phase III clinical trial data showed that Summit’s Ivonescimab remedy was 49 per cent more effective at reducing the risk of disease progression and death than Merck’s. Summit presented its new findings at the 50th annual World Conference on Lung Cancer in San Diego yesterday.
In addition to Monday’s stock surge, the development prompted analysts to significantly raise their share target price for the company. Notably, one from Missouri’s financial firm Stifel Financial Corp NYSESF increased their target from US$14 to US$25. Also, a Citigroup Inc NYSEC analyst expects a US$6 increase in the coming days.
“This is a historic moment for ivonescimab, Team Summit, and our partners at Akeso Inc HKG9926,” Summit Chairman and CEO, Robert W. Duggan, said in a news release. “And most importantly, we believe this is the beginning of a landscape shift for treatment options for patients living with cancer.”
This is the first time that a drug has outperformed Keytruda in a late-stage study, multiple sources reported. In Q2 this year alone, Merck raked in US$7.3 billion from its injectable medication — a strong indicator of the implications.
The crowd here at #WCLC24 in San Diego broke out in applause when they saw this data just minutes ago. For more details, see our breaking news story about @SMMT_TX (via me and @adamfeuerstein for @statnews) >> statnews.com/2024/09/08/sum…
Read more: Breath Diagnostics takes aim at lung cancer with One Breath
Read more: Breath Diagnostics pioneers novel lung cancer breath test
Subsequent studies to commence early 2025
Following this breakthrough “HARMONi-2″ trial, Summit plans to conduct even more comprehensive research on the drug next year. This recent study was completed in partnership with Akeso, solely in China.
The upcoming HARMONI-7 study will be a multi-national trial aiming to further solidify and expand on the results presented in California on Sunday.
FDA approval is still a distant goal for Summit. “We’ll kind of sneak up on them [Merck] over a four or five-year period of time,” Duggan said in an interview.
Also, some analysts like Leerink Partners have said that Summit’s success doesn’t mean that Merck shareholders will be selling anytime soon. Others share a similar sentiment.
“Merck has a very large amount of data for pembrolizumab [Keytruda] in multiple tumours that are unlikely to be penetrated anytime soon, even if ivonescimab begins to run trials challenging in these indications,” BMO Capital Markets analyst, Evan Seigerman, said.
Lung cancer screening sector has noteworthy development
In addition to this breakthrough study and its potential impact on lung cancer treatment, another American company has developed a novel and efficient new means of testing for the disease.
Kentucky’s Breath Diagnostics Inc. has designed an advanced device capable of stabilizing volatile organic compounds in a person’s breath, which can then be sent off to a lab for accurate diagnosis in only a few days.
Following the completion of several extensive studies with consistently favourable results, Breath Diagnostics is working to commercialize the device and eventually obtain FDA approval for it.
rowan@mugglehead.com
