Arcellx Inc’s Strategic Advantage in Gilead Partnership Drives Buy Rating and $130 Price Target

John Newman, an analyst from Canaccord Genuity, maintained the Buy rating on Arcellx Inc. The associated price target remains the same with $130.00.

John Newman has given his Buy rating due to a combination of factors that highlight Arcellx Inc’s advantageous position in its partnership with Gilead. The structure of this partnership is more favorable in terms of profitability compared to the deal between Legend and Johnson & Johnson. Arcellx is expected to achieve profitability at lower revenue levels, as the collaboration with Gilead requires significantly less in sales to be profitable than the Legend/JnJ partnership.
Additionally, Arcellx benefits from Gilead/Kite assuming all manufacturing costs for anito-cel, which reduces both cost of goods sold and research and development expenses. This contrasts with Legend, which shares manufacturing costs with JnJ, impacting their profitability due to operational inefficiencies. Furthermore, Arcellx’s sales infrastructure is bolstered by Kite’s established network, leading to lower selling and distribution expenses. These factors, along with Arcellx’s strong cash position to support future developments, underpin Newman’s Buy rating and the $130 price target.

According to TipRanks, Newman is an analyst with an average return of -1.4% and a 37.37% success rate. Newman covers the Healthcare sector, focusing on stocks such as Regeneron, Arcellx Inc, and Delcath Systems.

In another report released on November 7, Needham also maintained a Buy rating on the stock with a $105.00 price target.