The Friday Biotech Perspective #34

Summit Thera turns to China to reach the Summit … again

Shares of Summit Therapeutics Inc. (NASDAQ:SMMT) shot up ~200% in September 2024 when the company’s cancer bispecific antibody ivonescimab demonstrated improved efficacy over Merck & Co. Inc.'s (NYSE:MRK) Keytruda (pembrolizumab) in a phase III trial. Ivonescimab targets both the PD-1 and VEGF receptors, potentially expanding the $36 billion PD-1 inhibitor market dominated by Keytruda and Bristol-Myers Squibb Company’s (NYSE:BMY) Opdivo (nivolumab).

The apparent superiority of ivonescimab over Keytruda reflects a remarkable turnaround for Summit. Trading at less than $1 per share two years ago, Summit’s stock hit $33.60 per share after release of the ivonescimab data before gravity set in, closing at $17.17 per share on December 5. More significant, Summit became involved with ivonescimab and pushed all its chips toward the drug via an alliance with China-based Akeso Inc. (HKEX:9926.HK) on December 6, 2022. Akeso, which owned and developed ivonescimab in China, received a $500 million upfront payment from Summit. Akeso licensed rights to Summit to market the drug in the US, Canada, Europe, Japan, Latin America, Africa and the Middle East. The total value of the deal could reach $5 billion for Akeso.

Before ivonescimab, Summit was backing an antibiotic drug named ridinilazole. Serial entrepreneur and billionaire Bob Duggan took control of Summit in 2020 after investing approximately $75 million into the company. Duggan previously backed several young antibiotics companies, expecting the clear demand for more specific, rather than broad range, antibiotics presented a compelling medical need and business opportunity. Unfortunately, ridinilazole faltered in a late-stage trial in 2022 forcing Summit and Duggan to pivot to … cancer?

The shift may not be as radical as it appears, considering Duggan’s background. In the early 2000s, Duggan sold a computer technology company to @ISRG. He then invested heavily in the pharmaceutical company Pharmacyclics, while it lived in penny stock land.

Pharmacyclics’ key asset ended up being the blood cancer drug PCI-3276, which was acquired in 2006 for a mere $3 million in a fire sale by Celera Genomics. PCI-3276 became the leukemia drug Imbruvica, which then-CEO Duggan, licensed selected rights to Johnson & Johnson (NYSE:JNJ) for $900 million in 2011. Duggan then sold Pharmacyclics for $21 billion four years later to AbbVie, Inc. (NYSE:ABBV). In addition, entrepreneur Duggan proudly notes he introduced robotics to Chinese companies through partnerships decades ago.

Given Duggan’s career, the marriage of the entrepreneur’s wealth and a Chinese cancer drug is not an out-of-context pivot. However, the speed in which ivonescimab emerged as a serious contender to Keytruda surprised Wall Street and the Washington, DC-centric research community.

Akeso was advancing ivonescimab to treat EGFR-mutated NSCLC patients who had progressed after tyrosine kinase inhibitor therapy (approved in China in May 2024). Following the ridinilazole setback, Duggan and his team sought the ideal drug and indication to apply Summit’s and Duggan’s capital. They selected ivonescimab and lung cancer, based on Akeso’s science. Akeso and its co-founder, chairwoman, president and CEO Michelle Xia agreed to the deal, expecting the $500 million upfront and a potential $4.5 billion in milestones and royalties was suitable to grow the company quickly.

The growth of Summit and Akeso got a rocket boost with the September ivonescimab data. The findings were compelling but not entirely unexpected.

The 398-patient HARMONi-2 phase III trial evaluated monotherapy ivonescimab against monotherapy pembrolizumab in patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) whose tumors have positive PD-L1 expression (PD-L1 TPS >1%). All subjects in the trial were evaluated in China, and all data and analysis was generated by Akeso.

The median progression free survival (PFS) was 11.14 months for the ivonescimab arm compared to 5.82 months for the pembrolizumab arm (p<0.0001). Summit and Akeso claim no known phase III clinical trials in NSCLC have shown a statistically significant efficacy improvement compared to pembrolizumab in a head-to-head setting.

Both PD-1 and VEGF are proven treatment agents in cancer. Summit and Akeso claim ivonescimab combines the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects associated with blocking VEGF into a single molecule. In addition to acting on two protein targets with one drug, the companies assert ivonescimab displays unique cooperative binding to each of its intended targets with higher affinity. In essence, the drug activates potentially higher expression of both PD-1 (4x in vitro) and VEGF (18x in vitro) in tumor tissue and the tumor microenvironment (TME) compared to normal tissue in the body. As a result, ivonescimab’s far-reaching breakthrough is its demonstrated ability to exponentially boost potency by increasing the binding of the two proteins simultaneously compared to the individual actions of a PD-1 inhibitor or a VEGF inhibitor.

Summit was confident ivonescimab would work in combination with chemotherapy in NSCLC patients but was not as bullish in the results of a monotherapy trial. HARMONI-2 enabled the developer to become bullish.

Shortly after the September data, a chorus of US oncology researchers were quick to point out – correctly – the HARMONi-2 trial was conducted entirely on Chinese subjects and the data was prepared by a Chinese company. And that critique was relevant because?

In November, both Merck and BioNTech (NASDAQ:BNTX) signed deals to acquire the China-based companies LaNova Medicines and Biotheus, respectively. The Merck-LaNova terms were nearly identical to the Summit-Akeso alliance. Both La Nova and Biotheus are advancing individual drugs that promote dual action on PD-1 and VEGF proteins in cancer.

So much for the suggestion cancer drugs need to be tested in distinct ethnic populations.