Stifel on Tuesday initiated coverage of Summit Therapeutics Inc. (NASDAQ:SMMT), citing the potential of its lead drug candidate, ivonescimab.
Ivonescimab is a PD-1xVEGF bispecific antibody under development for cancer, primarily for lung cancer.
Extensive Phase 3 Pipeline Strengthens Positioning
There are currently 14 Phase 3 studies that are either ongoing or have been completed studying ivonescimab, ten of which are being conducted in China by Akeso and four of which are Summit-sponsored global studies.
In January, the U.S. Food & Drug Administration (FDA) accepted for filing Summit’s Biologics License Application (BLA) seeking approval for ivonescimab in combination with chemotherapy in patients with epidermal growth factor receptor (EGFR)-mutated locally advanced or metastatic non-squamous non-small cell lung cancer (NSCLC) post-tyrosine kinase inhibitor (TKI) therapy.
The FDA provided a Prescription Drug User Fee Act (PDUFA) goal action date of November 14.
Stifel initiated with a Buy rating and a price forecast of $45.
Large Market Opportunity
Analyst Dara Azar on Tuesday wrote that PD-1xVEGFs are expected to reach indications that PD-1s could not reach.
Stifel estimates the emerging class led by Summit Therapeutics has a peak sales potential of around $200 billion, nearly three times the consensus-projected fiscal 2027 estimates of over $64 billion sales of the threatened PD-1 class.
The estimate exceeds current fiscal 2035 peak GLP-1 sales estimates of around $175 billion.
“We believe Ivonescimab (first-in-class PD-1xVEGF bispecific antibody) is positioned well to build on its lead in what could be a ~$200bn drug class, with growing strategic capital committed to fast-followers suggesting scarcity value in SMMT’s competitive positioning and data validation,” the analyst said.
“We believe the goal of the cooperative binding mechanism should be delivering superior immunotherapy and find the clinical evidence coalescing around this premise, with data maturity driving the competitive moat.”
Four Summit Therapeutics-sponsored Phase 3 trials target around $70 billion peak opportunity with a unique around 3-year commercial lead that analyst Azar expects to quickly broaden into 1L sq-NSCLC, the first Keytruda-competitive PD-1xVEGF label, to offer a ~2-year window of exclusive Keytruda-displacement and a strategic path to category dominance.
Stifel also wrote that the leveraging of parallel trials by the Chinese partner Akeso more than offsets some of the unwanted news flow sensitivity introduced.
Summit Therapeutics can pair first-mover timing with second-mover learning and deliver more investable Phase 3 trials.
Competitive Positioning
While the PD-1xVEGF field is becoming increasingly crowded, nearly 50% of the identified 15 competing bispecifics lack this cooperative design, and none offer comparable clinical maturity, driving the competitive moat.
Stifel further added that superior early disease control, exemplified by decisive progression-free survival (PFS) HRs, and early death prevention compared to Merck & Co. Inc.’s (NYSE:MRK) Keytruda implied by an interim overall survival (OR) HR read-out, provides a good overall survival-derisking base for Summit Therapeutics-sponsored 1L NSCLC P3s.
SMMT Price Action: Summit Therapeutics shares were down 1.56% at $18.92 at the time of publication on Wednesday, according to Benzinga Pro data.
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