Double Jump! Should you buy SMMT?
$Summit Therapeutics PLC(SMMT)$ has been on a tear lately. After a major jump in late May, the stock surged again.
Fueled by news of a stock offering, this clinical-stage biotech saw its shares jump 22.5% last Thursday, ultimately closing up more than 20% at $27.41.
The catalyst for this rally?
Summit announced a private placement deal with several biotech firms and accredited investors, issuing over 10.3 million shares to raise approximately $235 million.
Notably, key insiders were major players in this funding round, which boosts investor confidence. CEO Robert W. Duggan and Mahkam Zanganeh, COO and CFO Manmeet Soni, Chief Accounting Officer Bhaskar Anand, and board member Jeff Huber bought a total of over 3.48 million shares.
New Drug Boosts Stock Prices
The stock has been climbing for a while now, up nearly 940% year-to-date and doubling (+118.9%) in the past five days. The spark was positive Phase 3 trial results for their lung cancer drug, Ivonescimab, announced on September 8.
This study showed Ivonescimab reduced the risk of disease progression or death by 49% compared to Merck’s blockbuster Keytruda, making it the first drug to beat Keytruda in a late-stage trial.
Summit’s stock also jumped in late May due to positive results from the Harmoni-A trial. The promising Harmoni-2 trial data further validated Ivonescimab’s potential as an alternative to Keytruda for lung cancer. With a lung cancer treatment market worth over $50 billion, a successful drug here is a huge deal for Summit.
Should you buy Summit stock?
Despite the impressive Phase 3 results for Ivonescimab, biotech stocks in clinical stages always come with risks. The company doesn’t yet have a market product but boasts a nearly $19 billion market cap, indicating high market expectations.
While there’s risk, the commercial potential of Ivonescimab is huge, making it a good fit for aggressive investors.
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