Summit soars after $2 billion investment from AstraZeneca for cancer therapies

Sept 29 (Reuters) - Summit Therapeutics' SMMT.O shares rose 23% in premarket trading on Tuesday after the drugmaker said AstraZeneca AZN.L would invest $2 billion in the company to test cancer treatments together.

UK-listed shares of AstraZeneca were up 1.6% to a two-month high after the Anglo-Swedish company announced the deal late on Monday.

The investment is a validating buy-in for Summit from a global leader in cancer treatments, and offers it a much-needed cash infusion while retaining strategic options, Evercore ISI analyst Cory Kasimov said.

The companies will start testing AstraZeneca's experimental cancer treatment, sonesitatug vedotin, in combination with Summit's ivonescimab for certain gastrointestinal cancers.

Each company will retain development and commercial rights to their respective molecules, as part of the agreement.

Summit's ivonescimab works by simultaneously blocking two protiens: PD-1, which helps cancer evade the immune system, and VEGF, which tumors use to grow blood vessels.

The deal gives AstraZeneca access to this promising new mechanism, called VEGF bispecific, bringing it on par with US peers Bristol BMY.N and Merck MRK.N, Barclays analyst James Gordon said.

"We had seen a VEGF bispecific deal (as) all the more likely, following discontinuation of Astra's volrustomig bispecific last month, which left Astra's solid tumour pipeline looking a little thinner, and which this now helps address," Gordon added.

The companies also intend to enter into an agreement to conduct clinical trials combining ivonescimab with AstraZeneca’s multiple cancer medicines.

"The infusion of capital and clinical capabilities that AstraZeneca is providing will enable Summit to go bigger, faster and capture an even bigger slice of the pie," said Cantor Fitzgerald analyst Eric Schmidt, adding that the deal makes strategic sense from Astra's perspective as well.