Summit Therapeutics (SMMT) stock jumped 8.5% on Thursday in reaction to a Bloomberg report about talks between the biopharmaceutical oncology company and pharma giant AstraZeneca (AZN) for a $15 billion deal to license its lung-cancer drug ivonescimab. The report mentioned that Summit also held discussions with other major pharma companies. AZN stock was down 2.4% yesterday.
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If the talks between the two companies are successful, then it would mark another major licensing deal following Bristol-Myers Squibb Co.’s (BMY) agreement to pay BioNTech SE (BNTX) $11.1 billion to license a next-generation cancer drug.
Potential Licensing Deal Between Summit and AstraZeneca
The $15 billion potential deal between Summit and AstraZeneca reportedly includes a multibillion-dollar upfront payment, as well as milestone payments. The report said that terms of the agreement are still being finalized and cautioned that talks could still end without reaching a deal.
It is worth noting that Summit’s lung cancer drug ivonescimab showed promising results in a Chinese study, outperforming Merck’s (MRK) Keytruda, the best-selling cancer drug. However, the buzz around SMMT stock moderated as results from a later trial, which included patients in Western countries, revealed less impressive outcomes. Specifically, the company stated that ivonescimab, which it licenses from its Chinese peer Akeso, when added to chemotherapy for a subtype of lung cancer, didn’t deliver a statistically significant benefit.
Summit plans to seek approval for ivonescimab, but needs to “consider the timing of the filing,” as the U.S. Food and Drug Administration (FDA) had asked for a statistically significant overall survival benefit to support the drug’s authorization.
Is Summit Stock a Good Buy?
Currently, Wall Street is highly bullish on Summit Therapeutics, with a Strong Buy consensus rating based on 11 Buys versus one Sell recommendation. The average SMMT stock price target of $35.38 indicates 44.1% upside potential. SMMT stock has rallied about 38% year-to-date.
