Summit Therapeutics: Buy the Next Dip Amid Clinical Breakthrough Potential

Summit Therapeutics Inc. (SMMT) is a U.S.-based biopharmaceutical company. It focuses on developing innovative medicines for cancer treatment. The company’s leading drug candidate is ivonescimab, which is in late-stage clinical trials. The company holds commercial rights in major global markets and has attracted attention for its potential to deliver a first-in-class therapy.

Despite strong clinical progress and strategic collaborations, the stock remains highly volatile, reflecting investor optimism and underlying risks. This article explores Summit’s financial position, technical chart signals, clinical milestones, and valuation to assess whether the next pullback offers a compelling buying opportunity.

Fundamental Strength: Ivonescimab Leads Summit’s Pipeline

Summit Therapeutics is making strong progress with its lead asset, ivonescimab (SMT112). The drug is a bispecific antibody that combines PD-1 blockade with VEGF inhibition in a single molecule. This dual mechanism positions it as a potentially first-in-class therapy for non-small cell lung cancer (NSCLC).

Since acquiring rights from Akeso in January 2023, over 2,800 patients have received treatment in global clinical studies. Summit holds commercialisation rights across major regions, including the U.S., Europe, Japan, Canada, and Latin America.

The company is advancing multiple Phase III trials for NSCLC. The HARMONi study delivered positive topline results in May 2025. Ivonescimab plus chemotherapy significantly improved progression-free survival, with a hazard ratio of 0.52.

The benefit was consistent across Asia and Western populations. While overall survival data did not yet reach statistical significance, a positive trend was observed. This is important because no FDA-approved regimens currently show a survival advantage in this patient group. Summit now plans to file a Biologics License Application (BLA) in consultation with the FDA.

Beyond HARMONi, Akeso has also reported strong results from HARMONi-6 and HARMONi-2 studies in China. These trials confirmed progression-free survival benefits over standard-of-care PD-L1 therapies, marking significant milestones for the program. Notably, ivonescimab was approved by China’s NMPA for a second indication in April 2025.

Summit is also expanding its collaborations with leading research centres such as MD Anderson and Memorial Sloan Kettering. A new partnership with Revolution Medicines will explore ivonescimab combinations with RAS inhibitors in solid tumours.

Financial Performance: Heavy Losses and Rising R&D Costs

Summit Therapeutics reported cash and short-term investments of $297.9 million at the end of June 2025, down from $412.3 million in December 2024. On the other hand, the operating expenses increased to $568.4 million in Q2 2025, compared with $59.6 million in Q2 2024.

Moreover, the research and development (R&D) expenses also surged due to expanded clinical trial activity. The chart below shows that the R&D expenses increased to $208.0 million in Q2 2025.

The company reported a net loss of $565.71 million in Q2 2025, as shown in the chart below. The widening losses highlight the heavy investment phase as Summit pushes ivonescimab through late-stage development. While financial pressure is significant, the strong clinical data and broad trial pipeline provide a foundation for long-term growth.

Technical Analysis: Volatility, Support Levels, and Chart Patterns

The long-term outlook for Summit Therapeutics shows that the stock has broken above the key level of $14, indicating strong upward momentum. The chart highlights significant growth from May 2024 through April 2025. This growth was supported by investors who see potential in late-stage clinical trials of ivonescimab, a potentially first-in-class bispecific antibody. Moreover, the momentum was further accelerated as Summit announced strategic collaborations with leading cancer research centres and biotech firms.

After hitting the peak in 2025, the stock corrected lower toward its long-term support zone near $14. Notably, the stock has two strong long-term support levels: the first at $14, and the second in the $6.50 to $8.50 range. The price action also reflects a period of consolidation between October 2023 and September 2024.

Despite this past consolidation, the long-term outlook remains bullish. The charts show the formation of a double-bottom pattern, which reinforces the potential for renewed upward momentum.

The intense price volatility in Summit Therapeutics is evident on the monthly log chart, which highlights a transparent price structure. The chart shows the formation of a double-bottom pattern, followed by a decisive breakout above the $14 region. The stock is now correcting back toward this breakout area. This correction should be viewed as a potential buying opportunity for long-term investors.

The weekly chart for Summit Therapeutics also shows bullish price action. It is found that the price broke above the $5 level in 2024, as indicated by the red trend line. After this breakout, the price surged to a record high in September 2024. Since then, the stock has been consolidating between $15 and $32, signalling that the next buying opportunity may be approaching.

Summit Therapeutics Valuation

Summit Therapeutics has a market capitalisation of about US$13.46 billion. The company holds US$297.9 million in cash and carries very little debt, resulting in a net cash position of roughly US$292 million. However, its earnings remain deeply negative.

Summit trades at a very high price-to-book (P/B) ratio of about 52.87, well above its biotech peers and industry average. This premium reflects strong expectations for ivonescimab’s success and future regulatory approvals. However, negative cash flow and uncertain drug approval timelines pose significant risks. Rising competition could also make the valuation difficult to justify if key milestones are missed.

When comparing Summit Therapeutics’ stock performance to its biotech peers, the valuation picture becomes clearer. From 2016 to 2025, Summit gained about 57.9%, while Ascendis Pharma (ASND) surged nearly 899% and Genmab (GMAB) advanced 189%.

On the other hand, Neurocrine Biosciences (NBIX) also outperformed with a 161% gain, while Incyte Corp. (INCY) declined 35%. This relative underperformance shows that Summit trades at a premium to book value mainly on future expectations rather than past returns. Investors are pricing in the potential of ivonescimab. Meanwhile, other companies with stronger track records have delivered better long-term returns.

Market Risks

Summit Therapeutics faces significant financial risks. The net loss of $565.7 million in Q2 2025, due to heavy R&D spending, indicates uncertainty. Moreover, the decline in cash reserves shows pressure on liquidity. The continued losses without revenue may require additional financing or dilution.

On the other hand, regulatory risks remain high despite strong clinical progress. While ivonescimab has shown encouraging trial results, overall survival data have not yet reached statistical significance. Any delays in the Biologics License Application (BLA) submission or FDA approval could hurt investor confidence. Moreover, the competition from established immunotherapies like Merck‘s Keytruda also raises uncertainty about market adoption.

The chart below shows the EPS estimates for Summit Therapeutics for the current and next fiscal years. These estimates have deteriorated over time, with sharp downward revisions pushing the EPS projections to nearly –$0.97 for both years. This trend reflects growing investor concern over Summit’s widening losses, particularly the surge in R&D spending due to late-stage trials for ivonescimab. The latest plunge signals that analysts now expect even deeper losses than before, which could pressure the stock in the near term.

From a technical perspective, the stock price is dropping from record levels back toward $14. A failure to hold this support will likely trigger a deeper correction toward $8.50. Such a decline would damage the bullish outlook for the stock.

Why Summit Therapeutics Is a Buy on the Next Dip

Summit Therapeutics sits at a critical juncture. The company has shown that ivonescimab can compete with and even outperform established cancer drugs in key trials. This positions Summit as a potential disruptor in the global oncology market, but the story is still unfolding.

The valuation premium reflects high investor expectations for the success of ivonescimab. However, the heavy cash burn and rising losses mean the company must deliver major successes to justify its current valuation. Investors must weigh the risks of regulatory delays and fierce competition from established players like Merck.

From a technical perspective, the stock has formed a long-term double bottom pattern and looks to surge higher. Long-term investors can accumulate near the support levels of $14 and $8.50, as the price remains highly volatile. Moreover, the short-term traders should watch $14 as a decision point. Overall, the stock carries a high-risk, high-reward profile that requires patience, discipline, and close monitoring of trial milestones.