Over the past three years, biotechnology company Summit Therapeutics (SMMT) has grown from a small firm into a large enterprise with a considerable market capitalization, driven by its lead candidate, ivonescimab. The drug has already been approved in China and has the potential to challenge the globally best-selling oncology drug, Keytruda. However, Summit currently faces short-term uncertainties, and its stock price could decline significantly this year. Meanwhile, Axsome Therapeutics (AXSM) and Madrigal Pharmaceuticals (MDGL) are advancing their respective research and development programs, and by the end of 2026, the market capitalizations of these two companies are expected to surpass that of Summit.
Summit recently submitted a marketing application to the U.S. Food and Drug Administration (FDA) for ivonescimab in combination with chemotherapy for the treatment of EGFR-mutated non-small cell lung cancer. The application is based on a global study in which 38% of participants were from Western countries (excluding China). Although the results were strong, the drug has not yet demonstrated a statistically significant improvement in overall survival—a key indicator—among the non-Chinese patient population.
The issue is that, as the company itself has acknowledged, the FDA has clearly stated that a statistically significant overall survival benefit is a necessary condition for marketing authorization. Summit nevertheless proceeded with the submission, and the FDA is set to make a decision by November 14. If approval is not granted, the company’s stock price could drop significantly; conversely, if approved, it could soar. Given that the overall survival data did not meet the FDA’s requirements, the likelihood of rejection is high.
In comparison, Axsome and Madrigal currently have market capitalizations of $8.1 billion and $10.2 billion, respectively. Summit’s market cap is approximately 48% higher than the former. In the biotech industry, major clinical setbacks are often accompanied by stock price declines of over 20%, and both companies are expected to achieve substantial progress this year.
Axsome is benefiting from the steady growth of its antidepressant Auvelity and its narcolepsy drug Sunosi, with revenue increasing 65.5% year-over-year in 2025 to $638.5 million. This year, its core drug AXS-05 (Auvelity) is awaiting FDA approval for the treatment of agitation in Alzheimer’s disease, a condition affecting more than 5 million patients in the U.S. with few approved treatments. The FDA is expected to make a decision by the end of April. Additionally, the company plans to release Phase III data for other candidates and submit regulatory applications—catalysts that could drive the stock price upward.
Madrigal, meanwhile, was the first company to launch an FDA-approved treatment for metabolic dysfunction-associated steatohepatitis (MASH) with Rezdiffra. Capitalizing on the unmet medical need in this area, Rezdiffra has seen rapid sales growth. In 2025, the company’s total revenue reached $958.4 million, all from this product, representing a 432% year-over-year increase. Madrigal still has substantial market opportunity in this indication and has multiple pipeline programs in place, positioning it for continued strong financial and market performance this year.
Overall, all three biotech stocks carry high risk, and investors can hardly avoid significant volatility. Summit faces a notable risk of clinical setbacks this year, but the other two companies may also encounter development hurdles. All three have considerable long-term upside potential, with Summit perhaps offering even greater growth prospects due to ivonescimab’s potential in oncology. Therefore, although Summit’s near-term outlook is uncertain and the other two companies are expected to overtake it in market capitalization by the end of the year, all three stocks are worth considering for investors with a higher risk tolerance.
