What happened
Shares of Summit Therapeutics (SMMT +0.93%) were soaring 14% higher at 11:14 a.m. ET on Friday and had vaulted as much as 30% higher earlier in the day. The big gain came after the company submitted a regulatory filing to the U.S. Securities and Exchange Commission (SEC) following market close on Thursday. This filing showed that Summit Therapeutics CEO Robert Duggan recently bought 94,849,203 shares for a little over $92 million.
So what
Investors almost always love to see key insiders scooping up shares of their companies. That's especially the case with clinical-stage biotech stocks such as Summit. Major insider buying hints that executives are highly confident that the programs in development will be successful.
NASDAQ: SMMT
Key Data Points
Duggan certainly appears to be enthusiastic about Summit's prospects. He now owns a total of more than 166.5 million shares -- over 81% of the company's total outstanding shares. Duggan was CEO of Pharmacyclics from 2008 to 2015 and took the helm at Summit in 2020.
Summit's lead pipeline candidate (and only clinical-stage program) is ridinilazole. The drug is currently in late-stage testing for treating Clostridioides difficile infection.
Now what
It could take a while for Summit to be in a position to win regulatory approval for ridinilazole. The company met with the U.S. Food and Drug Administration (FDA) in July to discuss data from its phase 3 study of the experimental drug. The FDA indicated that at least one other clinical trial will be needed. Summit stated in its second-quarter update that it intends to "explore this possibility."
