One exceptional stock in the healthcare sector this trading week was Summit Therapeutics (NASDAQ: SMMT). Buoyed by encouraging news from the lab, the company got an additional boost on Monday with an initiation of coverage by a bullish analyst. Over the course of that week, according to data compiled by S&P Global Market Intelligence, the company’s share price had increased by almost 23%.
Summit has nearly 100% upside potential, says pundit
That prognosticator was Stifel‘s Brad Canino, who launched his coverage of Summit stock with an unhesitating buy recommendation and a price target of $8 per share. That’s nearly double the biotech company’s most recent closing share price.
Canino is encouraged by solid clinical trial results posted recently for the investigational lung cancer drug ivonescimab, for which Summit holds marketing rights in North America, Europe, and Japan. He wrote that “Our thesis is that ivonescimab has high probability-of-success in two material lung cancer phase 3s that could unlock a multi-billion dollar sales opportunity that would support a significantly higher share price.”
Summit recently completed phase 2 trials for ivonescimab as both a monotherapy and in combination with a form of chemotherapy to treat advanced non-small cell lung cancer (NSCLC). The company reported that patients taking the drug experienced “promising” anti-tumor activity from the testing.
The right therapies at the right time?
Given its prevalence throughout the world, cancer is a disease for which many biotechs and pharmaceutical companies are attempting to develop drugs. Just now, ivonescimab looks like a very promising treatment for lung cancer, but of course the road to phase 3 success and regulatory approval is long and difficult. This is a stock for patient investors.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Summit Therapeutics. The Motley Fool has a disclosure policy.
Why Summit Therapeutics Stock Crushed the Market This Week was originally published by The Motley Fool