Summit Therapeutics stock rallies as institutional buyer loads up on shares

Summit Therapeutics Inc (NASDAQ: SMMT) says it raised $200 million via an offer it accepted from an institutional investor on Monday. Shares of the biotech firm are up 12% at writing.

How many shares of $SMMT did the institution buy?

An unnamed institutional investor bought 22,222,222 shares of Summit Therapeutics this morning at a price of $9.0 each – about a 4.0% premium on their previous close.  

$SMMT will use the net proceeds for “working capital and general corporate purposes”. The news funds will also help “advance the clinical development of ivonescimab” the biotech company added in a press release on Monday.

The news arrives only days after Summit Therapeutics said its experimental cancer drug performed better than Keytruda (a blockbuster drug of Merck & Co Inc) in a late-state clinical study.

Last month, the Nasdaq-listed firm reported $43.5 million of net loss for its first financial quarter. That was down significantly from $542.3 million it lost in the same quarter a year ago.

Summit Therapeutics stock has now more than quadrupled in less than a week.

Why else is Summit Therapeutics stock rallying today?

Summit Therapeutics Inc revised its agreement with Akeso Inc this morning as well to expand its license territories for ivonescimab.

The expanded agreement adds Latin America and all countries of South and Central America to the biotech’s license territories for ivonescimab which previously included Japan, Canada, Europe, and the United States.

Total deal value, as per a press release today, is up to $70 million. According to Dr. Maky Zanganeh – the chief executive of $SMMT:

Last week, analysts at Citigroup reiterated their “buy” rating on Summit Therapeutics stock and raised their price objective to $13 which signals potential for another 30% upside from here. The bullish call was based primarily on the encouraging ivonescimab update on May 30^th.

The interim results of the company’s HARMONi-2 clinical trial, they told clients, could be groundbreaking for the treatment of NSCLC (non-small cell lung cancer).

Citi is constructive on $SMMT also because it now sees about a 75% probability of the ongoing HARMONi-3 trial of ivonescimab being successful. Note that biotech stock does not pay a dividend at writing.