Summit Therapeutics' stock pops as lung-cancer treatment beats Merck blockbuster in late-stage trial

By Eleanor Laise

Merck's stock falls, but analysts see little near-term threat to Keytruda

Shares of Summit Therapeutics Inc. jumped more than 30% premarket on Monday after the biotech company released late-stage trial data showing that its experimental lung-cancer treatment topped Merck's blockbuster Keytruda.

Compared with Keytruda, the Summit drug ivonescimab cut the risk of disease progression or death by 49% in patients with a common type of lung cancer, Summit said in a release Sunday. Ivonescimab is the first drug to notch a clinically meaningful benefit over Keytruda for patients with the condition in a late-stage clinical trial, the company said.

Patients taking ivonescimab went a median of 11.1 months before their disease began to progress again, compared with a median 5.8 months for patients taking Keytruda.

Merck's stock (MRK) dropped 2.5% premarket on Monday.

The trial results were a "strong beat" of Keytruda, Leerink Partners analysts said in a note Sunday. But any selloff of Merck shares "is likely an overreaction," the analysts added, as there's little threat to Keytruda in the near term. Keytruda, Merck's top-selling drug, generated about $7.3 billion in sales in the second quarter, up 16% from a year earlier.

Summit (SMMT) announced in May that ivonescimab outperformed Keytruda in the trial, but the company did not release detailed data at that time. Data released Sunday were presented at the International Association for the Study of Lung Cancer's conference in San Diego.

The ivonescimab trial, conducted in China by Summit partner Akeso Inc. (HK:9926), involved patients whose tumors express PD-L1, a protein often linked with more aggressive tumors. Summit said it plans to launch a multiregional late-stage trial of ivonescimab early next year.

Summit's leadership has a track record of drug-development success: The company's chief executive and chair, Robert Duggan, is the former CEO and chair of Pharmacyclics Inc., known for developing the blood-cancer drug Imbruvica. AbbVie Inc. (ABBV) acquired Pharmacyclics in 2015 for about $21 billion.

Stifel analysts on Monday raised their target price for Summit's stock to $25, from $14 previously. The company is looking at a total addressable market of about $50 billion and growing, and its upside potential is "significant," the analysts said in a research note.

Summit's stock has jumped 370% in the year to date, while the S&P 500 SPX has climbed 13.4%.

-Eleanor Laise

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09-09-24 0914ET

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