Prediction: 2 Stocks That Will Be Worth More Than Summit Therapeutics 1 Year From Now

Summit Therapeutics (NASDAQ: SMMT) has grown in prominence over the past three years, moving from a small-cap biotech to a large-cap valuation, driven by regulatory progress for its leading candidate, ivonescimab, a cancer medicine already approved in China. This drug could challenge the world's best-selling oncology therapy, Keytruda. However, Summit Therapeutics faces near-term uncertainty, and there is one key reason why its share price could drop significantly by year-end. Meanwhile, smaller biotechs like Axsome Therapeutics (NASDAQ: AXSM) and Madrigal Pharmaceuticals (NASDAQ: MDGL) have ongoing developments that could see them overtake their larger peer by the end of 2026.

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Summit Therapeutics' gamble

Summit Therapeutics recently filed an application with 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 (NSCLC). The application is based on a global study, with 38% of participants from Western countries (excluding China).

The results were pretty strong, but among patients who aren't from China, the medicine has yet to demonstrate a statistically significant improvement in a key metric: overall survival (OS). Summit Therapeutics noted that OS trends in this arm of the study have been positive in analyses so far.

But here's the problem. As the biotech itself said: "The FDA noted that a statistically significant overall survival benefit is necessary to support marketing authorization." Summit went ahead with an application anyway, and the regulatory agency will decide on it by Nov. 14. If the FDA declines to approve ivonescimab, Summit's shares could fall off a cliff. On the flip side, the company's stock could soar if the FDA grants ivonescimab its blessing, but considering the lack of a statistically significant improvement in OS, which the FDA is requesting, the odds of a rejection seem fairly high.

These two drugmakers are flying high

Axsome Therapeutics' market cap is $8.1 billion, while Madrigal's tops $10.2 billion. So, Summit's value is about 48% higher than the smaller of the two as of writing. The stock could drop significantly in the event of a significant clinical setback -- a 20% or more drop is not at all unheard of in somewhat similar circumstances in the biotech industry. However, it's also the case that Axsome Therapeutics and Madrigal Pharmaceuticals could make solid progress this year. Let's start with the former.

Axsome Therapeutics is reporting solid revenue growth, driven by Auvelity, a medicine approved for the treatment of depression, and Sunosi, a therapy for excessive daytime sleepiness due to narcolepsy. In 2025, Axsome Therapeutics' revenue rose 65.5% year over year to $638.5 million.

The biotech could experience important catalysts this year. It is awaiting approval for AXS-05 (that's the drug with the brand name Auvelity) for the treatment of Alzheimer's disease agitation, an indication that could significantly expand its addressable market. That's because more than five million AD patients in the U.S. suffer from agitation, yet there are few approved medicines for it. The FDA could grant AXS-05 the green light in treating AD agitation by the end of April.

Axsome Therapeutics could also have other important catalysts, including a phase 3 data readout and a regulatory application for another candidate. The stock could jump this year as a result.

Then, there is Madrigal Pharmaceuticals, which was the first to launch an FDA-approved medicine for metabolic dysfunction-associated steatohepatitis (MASH), Rezdiffra. Since this is a niche with unmet needs, Madrigal's sales have been increasing rapidly. In 2025, the company's revenue (all from Rezdiffra) totaled $958.4 million, up 432% from 2024. Yet, Madrigal still has a large addressable market in MASH and a vast pipeline with multiple MASH programs.

Madrigal could continue making headway in its target market this year and deliver excellent financial results and stock market performances along the way.

Read the fine print

Which of these healthcare stocks should you buy? All three are somewhat risky. It's hard to avoid significant volatility when buying biotech stocks. Summit may seem like the most obvious candidate for a clinical setback this year, but the other two could also hit similar roadblocks. All three also have attractive long-term upside potential, and Summit may have more than the other two. That's because ivonescimab could become a strong player in oncology. So, even though Summit's near-term prospects are a bit shaky, and the other two may have greater market value by year-end, all three are worth consideration for investors with a high tolerance for risk.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axsome Therapeutics and Summit Therapeutics. The Motley Fool has a disclosure policy.