Shares of Summit Therapeutics SMMT rose nearly 6% on Friday after analysts at Jefferies recently initiated coverage on the company with a ‘Buy’ rating and set a price target of $31 per share.

The analysts remain optimistic about the company’s 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.

The analysts highlighted the recently reported results from the phase III HARMONi-2 study (conducted in China by Akeso), in which treatment with ivonescimab outdid Merck’s MRK blockbuster oncology drug Keytruda in certain patients with non-small cell lung cancer (NSCLC). The analysts believe that these results could “translate globally” and generate nearly $10 billion in peak sales in the NSCLC indication alone.

Summit is currently conducting two late-stage studies on the drug in separate NSCLC settings, with data from one study expected in mid-2025. Jefferies expects the drug to secure its first potential FDA approval in 2026. SMMT is also likely to start a third-late study evaluating the drug in a separate NSCLC setting early next year.

SMMT Stock Performance

Year to date, Summit’s shareshave skyrocketed more than 600% against the industry’s 4.1% decline.

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SMMT Boasts Ivonescimab Efficacy Over Keytruda

The HARMONi-2 study evaluated ivonescimab against the Merck drug in patients with locally advanced or metastatic NSCLC whose tumors have positive PD-L1 expression. In May, Summit reported positive results from this study, which showed that treatment with ivonescimab led to statistically significant and clinically meaningful improvement in the primary endpoint of progression-free survival (PFS).

Management reported additional results from this study in September, which showed that ivonescimab also 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.