Summit Therapeutics to Sell $2 Billion in Preferred Stock to AstraZeneca Unit

What happened

Summit Therapeutics Inc., a Miami-based drug developer whose common stock trades on Nasdaq under the ticker SMMT, said in a filing with the Securities and Exchange Commission that it entered a securities purchase agreement on September 28, 2026 with AstraZeneca Holdings B.V., a subsidiary of AstraZeneca plc.

Under the agreement, Summit will issue 108,955.3686 shares of a newly designated class of stock — Class A Convertible Preferred Stock — at $18,356.14 per share, for gross proceeds of $2.0 billion, according to the filing. The purchase price is based on $18.3561 per share of common stock.

The filing says the closing is expected within five business days of the agreement, subject to customary closing conditions. The company filed a Certificate of Designation with the State of Delaware on September 28, 2026 creating the new preferred class, authorizing 108,956 shares.

Summit also disclosed that a subsidiary entered a separate clinical trial collaboration agreement with AstraZeneca to evaluate sonesitatug vedotin (sone-ve) in combination with ivonescimab. The filing does not state the financial terms of that collaboration.

Summit's most recent annual report showed no revenue for the period ending December 31, 2024. The company reports no revenue in the filing; it describes itself as a pharmaceutical preparations business. The filing does not explain what Summit develops beyond naming the two drugs in the collaboration.

The terms of the preferred stock

Each preferred share converts into 1,000 shares of Summit common stock. Conversion cannot occur until two conditions are met: the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the effectiveness of a charter amendment increasing the number of authorized common shares enough to permit full conversion.

The preferred stock carries no voting rights, except that Summit cannot adversely change the preferred stock's rights or amend the Certificate of Designation without consent of a majority of the preferred shares. Holders receive dividends on an as-converted basis alongside common shareholders, if any dividends are declared.

In a dissolution, liquidation or winding up, preferred and common shareholders share distributions pro rata as if the preferred had already converted, except preferred holders get a $0.01 per share cash payment first.

If the charter amendment to increase authorized shares is not effective within 18 months of issuance, Summit must redeem all outstanding preferred shares for cash at a price reflecting the then-prevailing market value of the underlying common stock, payable within five business days after that deadline. The filing notes the preferred stock also converts automatically upon a Change of Control and a Qualified Sale, as those terms are defined in the Certificate of Designation.

The filing says Summit will enter a Registration Rights Agreement requiring it to file with the SEC, within 60 days of closing, a registration statement covering resale of the common shares issuable on conversion, and to use reasonable best efforts to have it declared effective.

Market reaction

The stock closed at $16.39 on the event date, up 5.88% from the prior close of $15.48, according to price data. Volume was 27,261,400 shares, about 5.36 times the average volume of 5,087,965 shares.

The price at the close was below the $18.3561 per-share level used to set the preferred purchase price. The sources do not state why the shares moved as they did.

What this means

An 8-K is the form a US public company files with the SEC to report material events between quarterly reports. Summit's filing checks several items: entry into a material definitive agreement, an unregistered sale of equity, an amendment to its charter, and other events.

The sale is 'unregistered' because Summit is not selling shares through a public offering registered with the SEC. Instead it relies on an exemption — here, Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D — which allows sales to sophisticated or accredited investors without the full registration process. In exchange, the buyer agrees to certain restrictions on resale. The Registration Rights Agreement exists to let AstraZeneca later resell the common shares it receives on conversion through a registered resale statement, at which point those shares become freely tradable.

Preferred stock is a class of stock that sits ahead of common stock on dividends and in a liquidation. Convertible preferred can be exchanged for common stock at a set ratio. Here, each preferred share converts to 1,000 common shares, and the $18,356.14 purchase price is exactly 1,000 times $18.3561 — so the deal is priced as if AstraZeneca bought Summit common stock at $18.3561 per share, but through a security that gives Summittime to expand its authorized share count before any common shares exist.

That is why the charter amendment matters. A Delaware company cannot issue more shares than its certificate of incorporation authorizes, so conversion is blocked until shareholders approve an increase. If that approval does not arrive within 18 months, the deal turns into a cash redemption at market value — an unusual feature the filing spells out.

The HSR condition is also a timing feature. The Hart-Scott-Rodino Act requires parties to large transactions to notify federal antitrust agencies and wait a set period before closing, giving regulators a chance to review. AstraZeneca's stake, if converted, would be large: 108,955.3686 preferred shares times 1,000 equals roughly 109 million common shares. The filing does not state Summit's current share count, so it is not possible to calculate the percentage from this document alone.

The filing does not say what Summit will do with the $2 billion. It lists the risk that the company has broad discretion over the use of proceeds as a forward-looking statement. Because Summit's most recent annual report showed no revenue, a cash infusion of this size is material to a company with no product sales, though the filing does not state Summit's cash balance or burn rate.

Private placements like this dilute existing shareholders, but the terms here delay that dilution: the common shares are not issued until conversion, and conversion is blocked until the antitrust wait ends and the charter amendment takes effect. The filing does not state a closing timeline beyond the expected five business days, nor when the charter amendment would be put to shareholders.