H.C. Wainwright initiated coverage of Summit Therapeutics (NASDAQ:SMMT) with a “buy” rating and $26 price target. The stock closed at $5.50 on Thursday.
Summit has two de-risked assets, with billion-dollar potential, and is conducting clinical programs focused on two genetic diseases: Duchenne muscular dystrophy (DMD) and Clostridium difficile infections (CDI).
Ezutromid is an oral agent that has the potential to treat all 50,000 DMD patients in the developed world, writes analyst Carol Ann Werther. Ezutromid is able to up regulate the protein production of utrophin, which has the potential to develop and repair muscles fibers. Ezutromid has already been shown to be well tolerated in about 100 healthy volunteers and 24 DMD patients.
“We expect Summit to commercialize Ezutromid on its own worldwide and to potentially generate about £1.2-billion in worldwide sales in 2026,” she added.
Ridinilazole (RDZ) is a highly selective, novel antibiotic for the treatment of CDI that achieved statistical superiority over vancomycin, with sustained clinical responses of 66.7%, compared with 42.4%, in a Phase 2 trial.
“In our view, RDZ may have be able to selectively target C. difficile without causing collateral damage to the natural gut flora and thereby reduce CDI recurrence rates,” Ms. Werther said, adding that Summit plans to partner RDZ and not conduct the Phase 3 program on its own.
She has modeled U.S. and EU launches in calendar 2021, with peak sales of approximately £930-million and Summit receiving a flat 20% royalty.
