What happened

Shares of Summit Therapeutics (SMMT 2.56%) 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.

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."