Arcturus Therapeutics: Dose Selection and Trial Design Uncertainty Justify Neutral Rating Despite Modestly Higher Target Price

Analyst Yigal Nochomovitz of Citi maintained a Hold rating on Arcturus Therapeutics, boosting the price target to $8.00.

Yigal Nochomovitz has given his Hold rating due to a combination of factors, primarily centered on clinical trial design and its implications for ARCT-032’s prospects. Although the 15 mg/day dose in the multiple-ascending-dose Phase 2 study showed an acceptable safety and tolerability profile, management unexpectedly chose to initiate the 12-week Phase 2 trial at 10 mg/day, a dose that has not shown compelling efficacy to date, which clouds confidence in generating a clear efficacy signal.

Nochomovitz also highlights that splitting a relatively small Phase 2b patient cohort between 10 mg and 15 mg could dilute statistical power and make it harder to interpret outcomes amid inherently variable spirometric measures. While acknowledging that management is implementing measures to reduce variability and that updated financial modeling, including shifting ARCT-154 revenue timing and rolling forward assumptions, results in a modestly higher $8 target price, he still views the path to successful late-stage development as difficult, warranting a neutral stance on the shares.