Why Summit Therapeutics Stock Is Rising Again Today

Actions of Summit Therapeutics (SMMT 22.29%) were up 22.5% as of 11:18 a.m. ET Thursday. The gain came after the clinical-stage biopharmaceutical company disclosed that it has entered into agreements with several accredited institutional and individual biotech investors to sell more than 10.3 million shares for about $235 million in a private placement.

Investors were no doubt especially happy to see key members agree to buy more Summit Therapeutics shares. Together, Co-CEOs Robert W. Duggan and Mahkam Zanganeh, Chief Operating Officer (COO)/CFO Manmeet Soni, Chief Accounting Officer Bhaskar Anand and Board Member Jeff Huber are purchasing more than 3.48 million shares.

What’s behind Summit’s meteoric rise?

Summit’s most recent gain came on top of the stock’s 85% rise earlier this week. This meteoric rise is due to the company’s overwhelmingly positive results reported on September 8, 2024, from a Phase 3 study evaluating ivonescimab as a first-line treatment for advanced non-small cell lung cancer.

In this clinical trial, which was conducted in China, ivonescimab reduced the risk of disease progression or death by 49% compared to MerckKeytruda’s blockbuster drug. Summit’s experimental cancer therapy is the first to directly beat Keytruda in a late-stage randomized clinical trial.

Is Summit Therapeutics Stock a Buy?

Even with the excellent Phase 3 results for ivonescimab, buying a clinical-stage biotech stock is always associated with risk. There are also tremendous expectations for Summit, as reflected in the company’s market cap of nearly $19 billion, despite having no product on the market. That said, the commercial potential for ivonescimab appears to be huge. I think this stock is one to consider for aggressive investors.