Thrill-seeking investors can get their fill with the rollercoaster rides provided by clinical-stage biotech stocks. Just look at Summit Therapeutics (SMMT 0.50%).

By May 7, 2024, Summit Therapeutics stock had more than doubled year to date. Only three weeks later, the biopharmaceutical company's share price was down 8% year to date -- a huge swing in the wrong direction.

However, investors who threw in the towel then are no doubt kicking themselves now. Summit Therapeutics stock has delivered a gain of nearly 10x in 2024 after skyrocketing over the last few months. Is it too late to buy this high-flying biotech stock?

Beating the best

The inflection point for Summit Therapeutics came on May 30. That's the day when the company announced results from a phase 3 clinical study evaluating ivonescimab in treating patients with locally advanced or metastatic non-small cell lung cancer whose tumors express the PD-L1 protein.

This study was conducted by Chinese drugmaker Akeso, Summit's collaboration partner. Akeso found that ivonescimab achieved a statistically significant improvement progression-free survival (PFS), compared to Merck's Keytruda.

It's hard to overstate the importance of these results. Keytruda is the most powerful cancer immunotherapy on the market right now. The drug raked in a whopping $25 billion in sales last year, ranking as the top-selling drug in the world. Before ivonescimab, no drug had ever beaten Keytruda in a head-to-head randomized late-stage clinical study.

Great expectations

Summit's move to license the rights to ivonescimab from Akeso for the U.S., Canada, Europe, and Japan in January 2023 looks brilliant in hindsight. So does the company's amended agreement signed in June 2024 to expand the licensed territories to include Latin America, the Middle East, and Africa.

Akeso has already secured regulatory approval in China for the drug. Summit is moving forward with two phase 3 clinical studies that it hopes will lay the groundwork for winning approvals in the U.S. and other key markets.

Non-small cell lung cancer could be only the start. Summit is working with The University of Texas MD Anderson Cancer Center to conduct clinical trials evaluating ivonescimab in treating several solid tumors.

Expectations for Summit's cancer drug are understandably sky-high. If ivonescimab proves superior to Keytruda in other clinical studies, it could realistically achieve peak annual sales of well above $25 billion.

Too late to buy?

Investors might be counting their chickens before they hatch, though. Summit Therapeutics' market cap already tops $18 billion, yet the company has no approved product on the market. Does this mean it's too late to buy the biotech stock? I don't think so.

If ivonescimab comes anywhere close to fulfilling its potential, Summit should be worth a lot more than $18 billion within a few years. I suspect we could see multiple approved cancer indications for the drug along the lines of what Merck was able to secure for Keytruda.

Granted, ivonescimab must first sail through late-stage clinical studies. There's always a possibility of a stumble.

Investors could also face a real risk of dilution in the not-too-distant future from Summit issuing new shares. The company thinks its current cash position will fund operations into the fourth quarter of 2025. However, positive clinical results for ivonescimab could offset the negative impact of this dilution.

All in all, though, I think Summit Therapeutics remains a great pick for biotech investors. This stock should still have plenty of room to run.