** Pfizer PFE.N said late on Monday that a key experimental cancer drug from its $43 billion Seagen acquisition failed to significantly improve survival versus chemotherapy in a late-stage lung cancer trial of previously treated patients.

A SETBACK, NOT A CLOSED DOOR

** J.P. Morgan ("neutral") says the trial failure is a negative for the drug, sigvotatug vedotin, and that investors will likely want to see first-line data before assigning value to it

** RBC Capital Markets ("sector perform," PT: $25) says the trial is "a clear setback," though the stronger survival trend in patients who had received only one prior therapy could support testing sigvotatug vedotin in earlier-line combinations

** Citi ("neutral," PT: $27) says the overall miss is "disappointing" but "not program-ending," as the stronger trend in second-line patients supports continued evaluation in earlier-line lung cancer

** BMO Capital Markets ("outperform," PT: $34) says the miss was "likely largely priced in," adding that signs of efficacy in second-line patients "leave the door open" for the first-line trial

** Guggenheim says they are "disappointed but not surprised by the result given how difficult it has been for other agents to show an overall survival benefit over docetaxel"