An analyst's downbeat new take on Summit Therapeutics (SMMT 1.30%) pushed its stock downward on Hump Day. At the end of Wednesday, the shares had booked a loss of over 11% in price as investors absorbed the negative take. That was a far steeper fall than the 0.3% slide of the S&P 500 (^GSPC +0.13%) that trading session.
Bearish on Summit
Well before market open that day, Leerink Partners' Daina Graybosch initiated coverage on Summit stock. This wasn't a positive appraisal, as the analyst flagged it with an underperform (read: sell) recommendation and a price target of $12 per share. That level is nearly 40% below Summit's most recent closing price.
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According to reports, Graybosch focused on ivonescimab, the high-profile cancer drug that Summit has licensed from China-based peer Akeso for jurisdictions outside the large Asian country.
Despite good results in a recent head-to-head clinical study against Merck's Keytruda, the analyst doesn't believe ivonescimab -- if approved in countries covered by Summit's license -- will grab enough market share to justify Summit's rather high valuations as a stock. She also believes that, as it's not the first drug of its kind, ivonescimab will face higher hurdles for clinical success, approval, and sales.
NASDAQ: SMMT
Key Data Points
It will be all about ivonescimab
Like many biotech stocks, Summit's share price has been quite the seesaw, largely on ivonescimab developments. While I think Graybosch's assessment of its prospects are realistic, many types of cancer present large addressable markets, and I wouldn't necessarily count out Summit on the basis of those valuations. Much will depend, of course, on the drug's clinical trials in this part of the world.
