Shares of Summit Therapeutics (SMMT 1.34%) rocketed 123.4% higher this week through Thursday trading, according to data from S&P Global Market Intelligence.
A biotech stock surging that much usually means a new blockbuster drug candidate either posted good trial data or was approved for use. That's exactly what happened with Summit's lung cancer antibody Ivonescimab this week.
NASDAQ: SMMT
Key Data Points
Besting Keytruda in a phase 3 clinical trial
Last weekend, Summit announced the results of its Harmoni-2 phase 3 trial, which was conducted in China in conjunction with its partner Akeso. In the trial, Summit's new drug Ivonescimab achieved a superior progression-free survival period relative to Keytruda, which is the current standard of care for lung cancer patients with a PD-L1 gene expression.
In the wake of the data release, Wall Street analysts hiked their price targets on Summit's stock, positing that Summit's Ivonescimab could unseat Keytruda in a $50 billion end market for PD-L1 lung cancer drugs.
Summit's stock subsequently skyrocketed on the news, and kept climbing through the week. Management took advantage of Wall Street's enthusiasm to raise $235 million in an equity raise announced Thursday. Summit said it accepted an offer from "leading biotech institutional and individual investors" to sell 10.35 million shares at $22.70.
Usually when a company sells stock to raise money, the stock goes down, due to the dilution. However, Summit then took another leg up, rising another 21% in the wake of the announcement.
This could be due to investors appreciating the confidence showed by these industry-focused investors, or that Summit now has funds to capitalize on taking Ivonescimab to market.
Summit is a new biotech to watch
Summit has increased by over 1,000% this year on the back of results for Ivonescimab.
It's very difficult now to know whether Summit is a buy or not at this point, as it's hard to know the revenue and profit impact of Ivonescimab going forward. But if Ivonescimab is ultimately a more effective option to combat this critical disease, Summit could even be undervalued, even after this big run.
