Ivonescimab isn’t approved by the U.S. Food and Drug Administration (FDA) yet. If it getrs the green light, selling it to oncologists already familiar with Keytruda could be relatively easy. Keytruda boosts the immune system’s ability to attack solid tumors by inhibiting the programmed death ligand-1 (PD-1) pathway. Ivonescimab is a double-sided protein that inhibits PD-1 plus vascular endothelial growth factor (VEGF) at the same time.

Oncologists will likely feel more comfortable prescribing ivonescimab than they generally are when considering new cancer therapies. That’s because combining VEGF inhibitors, such as Avastin with PD-1 drugs like Keytruda, is already a common practice.

The successful head-to-head trial between Keytruda and ivonescimab was conducted in China. The FDA won’t approve a new cancer therapy for sale in the U.S. unless it’s been tested on lots of North American patients.

To support applications outside of China, Summit Therapeutics is running a pair of phase 3 trials in the U.S. The Harmoni trial will test if adding ivonescimab to standard chemotherapy outperforms standard chemo plus a placebo among second-line patients. The study has completed enrollment, and top-line data is expected in mid-2025.

The Harmoni-3 trial will test ivonescimab plus chemo against Keytruda plus chemo among newly diagnosed lung cancer patients. The first-line study is still enrolling, and top-line results aren’t expected until 2027. This study is far more important to Summit investors because newly diagnosed patients tend to stay on therapy much longer than folks who’ve already relapsed.

A successful result for the second-line Harmoni trial could send Summit Therapeutics stock soaring in anticipation of positive results for Harmoni-3. That said, a great deal of success has already been baked into this stock’s price. Its market cap was a whopping $13.6 billion at the end of November. That’s an enormous valuation for a company that doesn’t have any products to sell yet.

I think ivonescimab will eventually become a popular first-line lung cancer therapy, but my risk-tolerance level isn’t high enough to buy this stock. Summit won’t have a recurring source of revenue until early 2026 at the earliest. If data for ivonescimab fails to excite investors when Harmoni reads out next year, anyone who bought the stock at its inflated valuation could suffer heavy losses.

For billionaire investors with an ultra-high tolerance for risk, a bet on Summit Therapeutics makes sense. For most of us, though, it’s just too risky.

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies and Summit Therapeutics. The Motley Fool has a disclosure policy.

Billionaire Ken Griffin Is Selling Palantir and Buying a Stock Wall Street Expects to Rocket 139% Higher was originally published by The Motley Fool