H.C. Wainwright Thinks Summit Therapeutics’ Stock is Going to Recover

H.C. Wainwright analyst Debjit Chattopadhyay maintained a Buy rating on Summit Therapeutics (SMMT) today and set a price target of $2. The company’s shares closed on Friday at $1.25, close to its 52-week low of $1.10.

Chattopadhyay noted:

“Our $2/share (previously at $3/share) is based on a risk-adjusted DCF analysis and is leveraged on the prospects of ridinilazole post $25M financing in January 2019. Our assumed 65% POS for ridinilazole is in line with historic Phase 3 success rates for anti-infective trials, with perpetuity growth rate of 0.5%, WACC of 7.8%, beta of 1.00 and tax rate of 17% beginning in YR2030. Risks to our target include: (1) clinical study failure; (2) regulatory risks; (3) commercial and competitive risks; and (4) significant financing risks.”

According to TipRanks.com, Chattopadhyay is a 1-star analyst with an average return of -2.4% and a 45.0% success rate. Chattopadhyay covers the Healthcare sector, focusing on stocks such as Global Blood Therapeutics, Mersana Therapeutics Inc, and Voyager Therapeutics Inc.

Currently, the analyst consensus on Summit Therapeutics is a Moderate Buy with an average price target of $2.

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Based on Summit Therapeutics’ latest earnings release for the quarter ending October 31, the company reported a quarterly GAAP net loss of $10.55 million. In comparison, last year the company had a GAAP net loss of $15.53 million.

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Summit Therapeutics Plc is a holding company, which engages in the discovery, development, and commercialization of novel medicines. It focuses on the genetic disease duchenne muscular dystrophy, and the infectious disease clostridium difficile infection.

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