The Drug Developers: We project negative overall survival for AZN/DS's AVANZAR, TL-07 & TL-08 - blocking SMMT plus Datroway NSCLC combo

Bernstein maintains a Market-Perform rating on Summit Therapeutics (SMMT) with an unchanged $11.90 price target, implying 23% downside. The report argues that the FDA requires a trial sponsor to demonstrate the contribution of components for a combination regimen, so the Phase 3 trials of Datroway (AVANZAR, TL-07 or TL-08) and Ivonescimab (HARMONi-3) must each show statistically significant overall survival to support an FDA label-enabling study in first-line non-squamous NSCLC. In Bernstein's base case, AVANZAR reads out around November 2026 and TL-07 around March 2027, with negative overall survival in both ITT and QCS+ populations; TL-07's probability of technical success is only about 12% in ITT and 22% in QCS+ because alpha is diluted across as many as eight tests and the sample size is limited. TL-08 is also projected to show negative overall survival in ITT. The AZN/DS collaboration does not change the thesis, and investors should not be long SMMT.