Summit Thera leaps on news of potential $5 billion deal with Akeso

Shares of US drugmaker Summit Therapeutics (Nasdaq: SMMT) went stratospheric yesterday, rocketing 194% to $2.31 by close, after it announced a licensing deal with a Chinese drug developer that could cost it as much as $5 billion.

Loss-making Summit, with a market capitalization of just around $456 million even following yesterday’s leap, will in-license Akeso’s (9926.HK) breakthrough bispecific antibody, ivonescimab. Akeso, a pioneer and source originator in developing innovative antibodies, will receive an upfront payment of $500 million. The total potential deal value is $5.0 billion, as Akeso will be eligible to receive regulatory and commercial milestones of up to $4.5 billion. In addition, Akeso - whose shares gained 18.8% to HK$37.00 - will also be eligible to receive low double-digit royalties on net sales.

The US firm says the agreement supports Summit’s mission of developing and commercializing ground-breaking oncology pipeline products aimed at improving the quality of life of patients with serious unmet medical needs. Akeso will retain development and commercialization rights for the rest of the regions including China.