Summit: A Few Catalysts In Q2 Of 2024 To Carry The Tide

seekingalpha05-09

NPMA decision on whether to approve Summit Therapeutics Inc.'s ivonescimab for the treatment of patients with EGFR-mutant metastatic non-squamous NSCLC following TKI progression is expected in Q2 of ...

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Acc"},"translate_title":"峰会：2024年Q2引领潮流的几个催化剂","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SMMT":1,"AKESF":1,"SMMF":1,"MRK":0.9},"content_text":"NPMA decision on whether to approve Summit Therapeutics Inc.'s ivonescimab for the treatment of patients with EGFR-mutant metastatic non-squamous NSCLC following TKI progression is expected in Q2 of 2024.Interim analysis from phase 2 AK112-303 study, using ivonescimab for the treatment of NSCLC patients with TPS >1%, expected in Q2 of 2024.The global non-small cell lung cancer market is expected to reach $20 billion by 2033.Two ongoing phase 3 studies, known as HARMONi and HARMONi-3 are evaluating use of ivonescimab for the treatment of patients with NSCLC; The purpose of this is to eventually receive U.S. marketing approval of this drug for these patients.   SDI Productions/E+ via Getty Images Summit Therapeutics Inc. (NASDAQ:SMMT) is gearing up for several catalysts for investors to look forward to in Q2 of 2024. One of them is the fact that its partner Akeso, Inc. (OTCPK:AKESF) is expecting a decision from regulators in China on potential approval of ivonescimab for the treatment of patients with EGFR-mutant metastatic non-squamous non-small cell lung cancer [NSCLC] who have progressed following treatment with a tyrosine kinase inhibitor [TKI]. This is not only important because it would bring about regulatory approval for the company, but also since this patient population is the same as what is being advanced in the phase 3 HARMONi trial. This is being done to eventually obtain U.S. marketing approval of ivonescimab for these EGFR-mutant metastatic NSCLC patients. Speaking of this phase 3 U.S. study, it is expected that enrollment for it will be completed in the second half of 2024. Besides these two catalysts, there is another one to keep an eye on, which might bring about shareholder value. It is expected that Akeso will release data from another ongoing phase 3 study known as AK112-303. This study will be an important one because it is evaluating the use of ivonescimab as a monotherapy versus Keytruda [pembrolizumab] for the treatment of patients whose tumors have a PD-L1 TPS >1%. A planned interim analysis from this late-stage study is expected to be done in Q2 of 2024. With continued advancement of ivonescimab as a PD-1 and VEGF inhibitor for the treatment of patients with tumors, plus several catalysts on the way, I believe that Summit Therapeutics Inc. investors could benefit with any potential gains made. Ivonescimab For The Treatment Of Patients With Non-Small Cell Lung Cancer As I noted above, the goal of Summit Therapeutics is to eventually receive FDA approval of ivonescimab for the treatment of patients with non-small cell lung cancer [NSCLC]. To accomplish this task, it has already been able to initiate two phase 3 studies known as HARMONi and HARMONi-3. Before going over these studies, it is important to note what non-small cell lung cancer is and what the possible market opportunity could be upon regulatory approvals being achieved. Non-small cell lung cancer [NSCLC] is a type of disease characterized as cancerous cells that form in the lung of a patient. It is important to note that there are two types of lung cancer, which are as follows:  Non-small cell lung cancer  Small-cell lung cancer [SCLC].  The larger market would be the patients who get NSCLC. Why is that? Consider that it is said about 85% of lung cancers fall into the category of NSCLC. The other 15% of lung cancer cases are those that are diagnosed with SCLC instead. The global non-small cell lung cancer market is expected to reach $20 billion by 2033. One other item to mention is that the company does have a study specifically targeting EGFR mutant locally advanced or metastatic non-small cell lung cancer. One evaluation done between 2013 and 2019 showed that out of a large pool of NSCLC patients, about 17.9% had the EGFR mutation. One item to mention is that Summit Therapeutics had in-licensed ivonescimab from Akeso. Having said that, it is testing ivonescimab in the United States in two phase 3 trials, which are HARMONi and HARMONi-3. The first phase 3 study, known as HARMONI-3 is using the combination of ivonescimab + chemotherapy for the treatment of 1st-line metastatic squamous NSCLC. The first patient had been treated for this study in Q4 of 2023. The other phase 3 study is known as HARMONi, and it is advancing the combination of ivonescimab + chemotherapy for the treatment of EGFR mutant metastatic non-squamous NSCLC that have progressed after being treated with a 3rd generation TKI. Regarding this second phase 3 HARMONi trial I mentioned, there is a catalyst opportunity with this, in that completion for enrollment of it is expected in the 2nd half of 2024. Data from each of these phase 3 studies won't be out for quite some time. It is possible that with a sustained recruitment schedule that data for each could be released by 2026 or 2027. If this is the case, why should investors care about this name now? It is because there are two other near-term catalysts to highlight. The first of which is that Akeso has already submitted a New Drug Application [NDA] of ivonescimab for the treatment of EGFR mutant metastatic non-squamous NSCLC who have progressed after being treated with a 3rd generation TKI. Such a regulatory application was submitted to the NPMA CDE of China back in August 2023 and a decision is expected to happen in Q2 of 2024. What makes this molecule unique is that there are no PD-1 based bispecific antibodies approved in the United States or Europe. Thus, if Summit Therapeutics can eventually obtain regulatory approval for its licensed territories, then it would be the first of its kind to offer a unique molecule for treating these specific NSCLC patients. This expectation of ivonescimab is just because of possible regulatory approval, which, if achieved, would mean a boost to the stock price in my opinion. However, there is another milestone to keep an eye on, which is expected to take place during the same period of time [Q2 of 2024]. That would be regarding the phase 3 AK112-303 study, which is comparing the use of monotherapy ivonescimab versus Keytruda for the treatment of 1st-line NSCLC patients with a TPS >1%. This is a keen study because it will prove if PD-1 and VEGF inhibitor bi-specific antibody is capable of achieving superior antitumor activity for the treatment of these specific NSCLC patients compared to that of Keytruda alone. It remains to be seen if either of the two ongoing phase 3 studies end up being successful. But there is something to note, which is that the reason for initiating them was because of what was observed in a prior phase 2 study, known as AK112-201. This specific mid-stage study tested two different cohorts, which were cohort 1 and cohort 2 respectively. The following cohorts and data were noted, the reason for being able to move on with larger phase 3 studies, as follows:  Cohort 1 - 63 1st-line squamous NSCLC patients: 12-month and 24-month overall survival [OS] of 85.6% and 64.8% respectively  Cohort 2 - 19 2nd-line and 3rd-line EGFR mutant TKI resistant NSCLC patients: 12-month and 24-month OS rate of 73.7% and 40.9% respectively.  The thing is that the mechanism of action of ivonescimab is highly idea. How so? Well, the PD-1 mechanism takes care of the immune suppression done by a solid tumor, for starters. Secondly, the VEGF component is responsible for angiogenesis that occurs in the tumor microenvironment [TME]. What is this angiogenesis that occurs? The VEGF component allows for the formation of blood vessels to keep the tumor alive. As you can see, by inhibiting both of these proteins, it is believed that further antitumor efficacy can be achieved. Far beyond that which might be achieved by a PD-1 inhibitor like Keytruda alone. The bottom-line is that this bi-specific tetravalent molecule has the potential to offer patients a new form of treatment option. Especially, since its mechanism of action [MOA] has not only been proven, but also the fact that it offers two same effects. The first effect would be the targeting of only PD-1 and VEGF proteins on the tumor itself and not on healthy cells. Secondly, the half-life of 6–7 days, which allow for an improved safety profile. Financials According to the 10-Q SEC Filing, Summit Therapeutics had cash and cash equivalents, restricted cash, and short-term investments of $157 million as of December 31st of 2023. The thing is that this biotech is low on cash, and it is highly likely that it will raise cash very soon. There are two reasons why this will be the case. The first reason is that in its 10-Q SEC filing, it states that it believes that it has enough cash runway to fund its operations for at least the next 12 months. The second reason is that in order to in-license ivonescimab, it had to make a deal with Akeso. Under the terms of such a deal, Summit is responsible for paying it additional milestone payments of up to $4.5 billion, regulatory milestones of up to $1.05 billion and commercial milestones of up to $3.45 billion. Thus, it is not only going to need to raise cash to keep its operations going, but to also honor its commitment to paying off milestone payments to Akeso as they come due. Risks to Business There are several risks that investors should be aware of before investing in Summit Therapeutics. The first risk relates to its licensing partner Akeso in terms of attempting to receive regulatory approval of ivonescimab for the treatment of locally advanced or metastatic EGFR-mutant NSCLC patients who had failed on a prior TKI. A decision by the NPMA in China is expected to take place in Q2 of 2024. There is no assurance that such a regulatory approval will be achieved, nor that the drug will sell well upon being marketed in that specific territory. A second risk to consider would be regarding the release of data from an ongoing phase 3 study. As I noted above, the goal of it is to conduct an interim analysis of the ongoing phase 3 AK112-003 study, which is using ivonescimab for the treatment of patients with 1st-line NSCLC patients with a TPS >1%. The goal is to see if monotherapy ivonescimab is superior in treating these patients compared to that of monotherapy Keytruda. There is no guarantee that positive results will be released from the interim analysis from this late-stage study, nor that the drug will turn out to achieve superior antitumor efficacy compared to that of Keytruda. A third risk to consider would be regarding the financial position that the company is in. It believes that it only has enough cash to fund its operations for the next 12 months. As such, it is highly likely going to need to raise cash very soon. One place where it might choose to raise funds is if it releases a positive news item in the coming days/months. As I discussed previously, there are several catalysts on the way in 2024. Thus, if one of these causes the stock price to trade higher, then it is highly like that it will dilute on the back of one of these events. The truth is that Summit Therapeutics Inc. will need to continually dilute to raise cash, especially because its lead drug ivonescimab has been in-licensed. It is going to have to pay Akeso billions of dollars in certain milestone payments. On the flip side, not all payments will be necessary collectively, and they should be spaced out over time depending upon what milestones are achieved. The fourth and final risk to consider would be regarding the two ongoing phase 3 United States studies I noted above. This would be regarding the advancements of HARMONi and HARMONi-3 studies. Both of these studies are specifically targeting certain NSCLC patient populations, and there is no assurance that upon completion of either of these that positive results will be obtained. Nor that ivonescimab will ultimately be approved by the FDA to treat either of these NSCLC patients. Conclusion With the expectation of several catalysts in 2024, I believe this biotech is worth a look. I think that the possible regulatory approval of ivonescimab is one catalyst in the near-term that could boost shareholder value. Another one would be the release of interim results from another phase 3 study by partner Akeso. This would be with the release of data from the phase 3 AK112-303 study, which is using ivonescimab for the treatment of patients with 1st-line NSCLC with a TPS >1%. Positive data here would not only be good for shareholders, but it would also prove that its PD-1 and VEGF bi-specific tetravalent antibody is capable of being used effectively alone as a monotherapy. That's because several of the studies I highlighted above combined this drug with chemotherapy to achieve the desired efficacy. This dual targeting mechanism approach of targeting tumors may ultimately pay off for Summit Therapeutics Inc., but only time will tell.  Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. 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