Shares of Top Therapeutics (NASDAQ: SMMT) rose 123.4% this week through Thursday trading, according to data from S&P Global Market Intelligence.
A biotech stock soaring this fast usually means a new blockbuster drug candidate has posted good trial data or has been approved for use. That’s exactly what happened this week with Summit’s lung cancer antibody Ivonescimab.
Keytruda beats in a phase 3 clinical trial
This past weekend, Summit announced results from its Harmoni-2 Phase 3 trial, conducted in China in collaboration with its partner Akeso. In the trial, Summit’s novel drug Ivonescimab achieved superior progression-free survival compared to Keytruda, the current standard of care for lung cancer patients expressing PD-L1.
Following the data, Wall Street analysts raised their price targets on Summit’s stock, predicting that Summit’s Ivonescimab could dethrone Keytruda in a $50 billion end market for PD-L1 lung cancer drugs.
Shares of Summit soared on the news and continued to climb throughout the week. Management capitalized on Wall Street enthusiasm to raise $235 million in a stock offering announced Thursday. Summit said it had accepted a bid from “leading biotech institutional and individual investors” to sell 10.35 million shares at $22.70.
Normally when a company sells stock to raise money, the stock goes down due to dilution. However, Summit took another step higher, rising another 21% after the announcement.
This could be because investors appreciate the confidence shown by these sector-focused investors, or because Summit now has funds available to bring Ivonescimab to market.
Summit is a new biotech to watch
Summit is up more than 1,000% this year on the back of Ivonescimab results.
It is very difficult to know now whether Summit is a bargain or not, as it is difficult to predict the future impact of Ivonescimab on sales and profits. But if Ivonescimab ultimately proves to be a more effective option to combat this critical disease, Summit could actually be undervalued even after this big run.
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Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Summit Therapeutics. The Motley Fool has a disclosure policy.
Why Summit Therapeutics Surged 123% This Week was originally published by The Motley Fool
