One good drug can change fate! Summit's stock price soars by 119%, with its market value increasing more than a hundredfold

On September 12, 2024, Summit Therapeutics announced that the company has accepted stock purchase offers from several leading biotech institutions and individual investors, selling a total of approximately 10.35 million shares of common stock at a price of $22.70 per share (the closing price on September 11, 2024). After the sale of the stock, the company will obtain a total revenue of $235 million.

After the market opened, Summit's stock price once soared by about 20%. This is another significant increase for Summit following the announcement of the head-to-head Keytruda first-line treatment of advanced non-small cell lung cancer (aNSCLC) in the HARMONi-2 study on September 9. It is reported that within the last five days, Summit's stock price has accumulated an increase of about 119%.

According to the announcement on the 12th, of the $235 million financing, $156 million came from biotech institutional investors, and the remaining $79 million came from individual investors. It is known that these individual investors include 16 Summit executives/board members, including Robert W. Duggan (Summit CEO and Chairman), Dr. Maky Zanganeh (Summit CEO and President), Manmeet S. Soni (Summit Chief Operating Officer and Chief Financial Officer), Bhaskar Anand (Summit Finance Director), and Jeff Huber (Summit Board Member).

In the announcement, Summit stated that it intends to use the net proceeds to advance the clinical trial development of ivonescimab, including NSCLC and environments outside of lung cancer, including but not limited to colorectal cancer and triple-negative breast cancer.

Currently, Summit's market value has risen to $19.8 billion, which is more than a hundredfold compared to when it just started cooperating with Akeso Bio over a year ago.

After more than ten years of struggle, one drug changes destiny

Summit was established in 2003 and went public on NASDAQ in 2015. Before cooperating with Akeso, Summit was committed to the development of anti-infective drugs and rare genetic disease drugs, but the research progress was not smooth, and no products were approved by the FDA for market launch.

In 2020, Mr. Glyn Edwards, CEO of Summit, resigned, and the company appointed Robert Duggan as the new CEO. Duggan had invested $75 million in Summit, holding 65% of Summit's shares, and was its largest shareholder.

Duggan is a successful businessman known for planning one of the greatest deals in Wall Street history. Duggan had invested in a biotechnology company called Pharmacyclics and served as its CEO. During his tenure, Duggan successfully launched a leukemia treatment drug. In 2015, as the largest shareholder, Duggan sold Pharmacyclics to AbbVie at a price of $261.25 per share, with a total transaction value of $21 billion. It is called one of the greatest deals because when Duggan initially chose this company for investment, the stock price fluctuated between $1 and $3, which is a world of difference compared to the acquisition price of AbbVie.

Duggan invested in and joined Summit because of his strong interest and optimism in anti-infective drugs. At that time, Summit's core product, ridinilazole (an antibiotic developed for Clostridium difficile infection), had just achieved excellent results in phase II clinical trials. The field of antibiotics is not favored by investors and large pharmaceutical companies due to high research and development costs but low returns. Duggan had been persistent in the field of antibiotics. Before Summit, Duggan had also invested in another company developing anti-infective drugs, but it went bankrupt.

The imagined success did not happen, and Duggan's second attempt in the field of antibiotics also ended in failure. In December 2021, Summit announced the top-line results of the phase III Ri-CoDIFy study of its core product ridinilazole (an antibiotic). The results showed that the clinical sustained response rate of the ridinilazole group was 73%, which is higher than the vancomycin group (standard therapy for Clostridium difficile infection), but the advantage is not significant and did not reach the primary endpoint.

Due to the failure of the core product, Summit's stock price continued to fall and once hit rock bottom. In early December 2022, Summit's stock price hit a historical low of about $0.7 per share.

The cooperation with Akeso saved Summit.

On December 6, 2022, Akeso announced a cooperation agreement with Summit. Summit will obtain the rights to Akeso Bio's PD-1/VEGF dual antibody AK112 in the United States, Canada, Europe, Australia, and Japan. Summit will pay a transaction amount of up to $5 billion ($500 million advance payment + milestone payment).

After the official announcement of the cooperation, Summit began to enter a surge mode. As of September 13, 2024, the stock price has increased about 39 times compared to the pre-transaction low, and the market value has increased about 120 times compared to the pre-transaction.

Can it continue to be this high?

The future development of Summit is entirely dependent on the future performance of ivonescimab.

At present, the pipeline disclosed on Summit's official website has only two phase III clinical trials of ivonescimab, namely:

1. HARMONi

HARMONi (NCT05184712) is a multicenter, randomized, double-blind phase III study aimed at comparing the efficacy and safety of ivonescimab + chemotherapy versus placebo + chemotherapy in patients with EGFR-mutated, locally advanced or metastatic non-squamous NSCLC who have progressed after treatment with third-generation EGFR-TKIs (especially osimertinib). (2L TKI-resistant EGFR-mutated advanced/metastatic NSCLC)

EGFR-TKI is the first-line standard treatment plan for EGFR-mutated NSCLC. With EGFR-TKI treatment, there is a certain therapeutic effect at the beginning, but many patients will develop resistance to EGFR-TKI during treatment, and the disease progresses after resistance, making it particularly difficult to find effective second-line or third-line treatment plans, and there is a huge unmet clinical demand. The results of several phase II clinical studies of ivonescimab disclosed at ASCO 2022 show that ivonescimab has great potential for clinical value and is expected to become a new and highly efficient plan for treating patients with this disease.

In mid-2023, the HARMONi study completed the first patient dosing in the United States (run by Summit). The part of the study in China is also called the "AK112-301 study," which has also completed patient enrollment (run by Akeso). The main endpoint of the study is OS and PFS assessed by irRC.

2. HARMONi-3

HARMONi-3 is a multicenter, randomized, double-blind phase III study aimed at comparing the efficacy and safety of ivonescimab + chemotherapy versus pembrolizumab + chemotherapy as first-line treatment for metastatic squamous non-small cell lung cancer (sq-NSCLC).

This study is also a competition with K-drug, different from the HARMONi-2 study announced this time, and there are two points worth noting in HARMONi-3:

It is an international multicenter study, not limited to China.

The overseas clinical research part including the United States and Europe is advanced by Summit, and the Chinese part of the study is carried out by Akeso Bio. The first patient dosing has been completed.

It is a combination with chemotherapy, not a single drug. The Keytruda + chemotherapy combination challenged by the HARMONi-3 study is the standard first-line treatment plan (TPS≥50% and TPS 1-49%) for sq-NSCLC, which is closer to the standard therapy compared to the HARMONi-2 study.

The HARMONi-2 study targets the treatment of PD-L1-positive advanced NSCLC without driver gene mutations, including patients with TPS≥50% and TPS 1-49%. According to the NSCLC NCCN guidelines, for NSCLC patients with TPS≥50% (whether adenocarcinoma, large cell carcinoma, or squamous cell carcinoma), the first-line treatment options recommended in addition to pembrolizumab monotherapy also include the combination of pembrolizumab + chemotherapy; and for patients with TPS 1-49% (whether adenocarcinoma, large cell carcinoma, or squamous cell carcinoma), only the combination of pembrolizumab + chemotherapy is the first-line recommended option, and pembrolizumab monotherapy is only available in individual cases.

That is to say, although the HARMONi-2 study has shown strong efficacy over Keytruda in patients with high or low PD-L1 expression levels, through the HARMONi-2 study, ivonescimab has obtained the qualification to be a candidate.

【Editor’s note】The above content (~7450 words) is a quick translation of a Chinese article (posted on 2024-09-13) by DrugTimes team. To read the original article, please click here. All comments are warmly welcome. Many thanks!