Analyst Initiates Coverage On 'Undervalued' Summit Therapeutics

In the ever-evolving landscape of biopharmaceuticals, Summit Therapeutics Inc. (SMMT) has emerged as a company with significant potential, according to Cantor Fitzgerald. The firm recently initiated coverage on Summit Therapeutics, classifying its shares as 67% undervalued. This bold assessment is based on the strong potential of Summit Therapeutics' lead candidate, ivonescimab (SMT112), a potentially first-in-class bispecific antibody that combines the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects associated with blocking VEGF into a single molecule.



The Phase 3 trial data for ivonescimab showed significant progression-free survival benefits over Keytruda, a widely used cancer treatment. Specifically, ivonescimab monotherapy demonstrated a statistically significant improvement in progression-free survival compared to Keytruda, achieving a hazard ratio (HR) of 0.51. This data suggests that ivonescimab could potentially translate into improved overall survival, with data anticipated by the end of 2025 or early 2026.

Analyst Eric Schmidt from Cantor Fitzgerald highlighted that if ivonescimab continues to deliver superior efficacy relative to the PD-(L)1 class, which had $50 billion and growing in 2024 sales, it could become one of the most successful drugs ever. This potential for significant market impact and revenue generation is a key factor in the 67% undervaluation assessment.

In comparison to other biopharmaceutical companies in the same sector, Summit Therapeutics' valuation appears to be relatively low. The company's innovative approach and the promising data from its clinical trials suggest that its shares could be significantly undervalued. For instance, other companies with similar pipeline candidates and clinical trial successes might have higher valuations due to market expectations and investor confidence. Summit Therapeutics' unique investment in oncology, particularly with ivonescimab, positions it as a potential leader in the biopharmaceutical industry, which could justify a higher valuation in the future.

The unique cooperative binding mechanism of ivonescimab sets it apart from other VEGF x PD-(L)1 bispecific drugs by combining the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects associated with blocking VEGF into a single molecule. This dual action mechanism is highlighted by Cantor Fitzgerald, which notes that ivonescimab stands out from single-antibody combinations due to its cooperative binding mechanism. This mechanism allows ivonescimab to potentially offer superior efficacy and safety compared to other bispecific drugs.

In terms of efficacy, ivonescimab has shown significant progression-free survival benefits over Keytruda in Phase 3 trials. For instance, in the HARMONi-2 trial conducted in China, ivonescimab monotherapy demonstrated a statistically significant improvement in progression-free survival compared to Keytruda, achieving a hazard ratio (HR) of 0.51. This suggests that ivonescimab's unique mechanism may translate into improved overall survival, with data anticipated by the end of 2025 or early 2026.

Regarding safety, Cantor Fitzgerald writes that ivonescimab is effective and safe, which is a critical advantage in the competitive landscape of cancer treatments. The cooperative binding mechanism may contribute to this safety profile by allowing for more targeted and controlled inhibition of both PD-1 and VEGF pathways, potentially reducing off-target effects and adverse reactions.

Additionally, ivonescimab has a significant head start in development, with over 2,300 patients treated in clinical studies globally. This extensive clinical experience provides a robust foundation for understanding its safety and efficacy profile, further differentiating it from other bispecific drugs that may still be in earlier stages of development.



Despite the promising outlook, Summit Therapeutics faces significant competition and regulatory challenges that could impact its growth trajectory. Strategic collaborations and a focus on novel therapies for unmet medical needs present substantial opportunities for the company. Financial prudence and strategic partnerships are key as Summit Therapeutics navigates the capital-intensive landscape of drug development and commercialization.

In conclusion, Cantor Fitzgerald's initiation of coverage on Summit Therapeutics with an Overweight rating and a 67% undervaluation assessment highlights the company's potential in the biopharmaceutical industry. The unique cooperative binding mechanism of ivonescimab, coupled with its promising clinical trial data, positions Summit Therapeutics as a company to watch in the coming years. However, investors should remain cautious of the inherent risks and challenges associated with drug development and commercialization.