logo-loader
viewSummit Therapeutics PLC

Bryan Garnier sets 155p fair value target on Summit Therapeutics, offering around 550% upside

The analysts said "we have established a fair value for Summit which we believe more accurately reflects its fundamental value than the current share price of 24p”

Antibiotic
They noted that Summit currently has two new mechanism antibiotic candidates in the pipeline, ridinilazole and SMT-571

Bryan Garnier & Co. has initiated coverage on Summit Therapeutics PLC (LON:SUMM) (NASDAQ:SMMT) with a fair value target of 155p, offering around 550% upside to the innovative biotech firm’s current share price of 22.50p.

The French broker was appointed Summit’s joint corporate broker, joining N+1 Singer back in November 2018, pointed out that the Oxford-based company is focused on developing novel, best-in-class antibiotics with new mechanisms of action specific for bacteria such as C.difficile, N.gonorrhoea, and others.

WATCH: Summit Therapeutics to begin Phase 3 studies of ridinilazole this quarter

In a note to clients, Bryan Garnier’s analysts said: “In this era of growing threats to health and medical practice coming from ever more resistant super strains of antibioticresistant bacterial, it is timely that Summit Therapeutics is driving new mechanism antibiotics into clinical development.”

They added Summit’s novel antibiotics targeting specific pathogens are being developed in clinical trials designed to deliver ‘superiority’ data to support their use as first-line treatments.

The analysts pointed out that Summit’s proprietary antibiotic discovery platform, Discuva, identifies new targets critical for bacterial survival and appropriate drugs against them.

Two antibiotic candidates in the pipeline

They noted that Summit currently has two new mechanism antibiotic candidates in the pipeline, ridinilazole and SMT-571.

Ridinilazole, now in Phase 3 development with the first patient dosed - announced 13 February - is a targeted treatment for C.difficile aiming to replicate Phase 2 results showing superiority over standard of care, vancomycin, in the cure and reduced recurrence of C.difficile infection.

SMT-571, a novel candidate to treat N.gonorrhoea infections, is expected to enter Phase 1 in H2 2019.

Alongside this, Summit plans to undertake new preclinical testing on new compounds for the treatment of the highly resistant ESKAPE pathogens over the next year. Summit is currently focusing its discovery and development efforts on WHO priority pathogen-targeted antibiotics with novel mechanisms of action. 

The analysts said: “With an estimated £26mln of cash plus non-dilutive funding (BARDA and CARB-X) and having just commenced a phase 3 programme of ridinilazole, we have established a fair value for Summit which we believe more accurately reflects its fundamental value than the current share price of 24p.”

They concluded: “On the basis of our risk-adjusted SOTP model, we value Summit at 155p per share (£249mln) making now an excellent entry point.”

Quick facts: Summit Therapeutics PLC

Price: 23.75 GBX

AIM:SUMM
Market: AIM
Market Cap: £38.12 m
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Summit Therapeutics PLC named herein, including the promotion by the Company of Summit Therapeutics PLC in any Content on the Site, the Company...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Summit Therapeutics CEO says anti microbial resistance will be as big a...

Summit Therapeutics PLC (LON:SUMM) CEO Glyn Edwards sat down with Proactive at the 2019 BIO Investor Forum where is explained anti microbial resistance will be as big a problem as climate change. Edwards says recently, Summit reported that Phase II trials showed that antibiotic Ridinilazole...

2 weeks, 4 days ago

2 min read