Arcus Biosciences: Hold Rating Amid Uncertain Future for Casdatifan and Competitive Challenges

Analyst Jason Zemansky from Bank of America Securities maintained a Hold rating on Arcus Biosciences (RCUS – Research Report) and keeping the price target at $22.00.

Jason Zemansky’s rating is based on several factors, primarily surrounding the performance and future potential of Arcus Biosciences’ drug, casdatifan. While recent data from the ARC-20 phase 1/1b trial showed promising results, particularly in comparison to Merck’s Welireg, there are still questions regarding casdatifan’s ability to become the ‘best-in-class’ treatment. The uncertainty arises from its developmental position, where it trails behind competitors and faces challenges without the extensive infrastructure that companies like Merck and Exelixis possess.
Moreover, the broader pipeline of Arcus has yet to show clear advantages, and recent market reactions have been negative, partly fueled by Arcus’s decision not to proceed with zanzalintinib combinations. The collaboration between Merck and Exelixis further complicates Arcus’s competitive stance, as it indicates a preference for Welireg. These factors, combined with the ongoing maturation of the ARC-20 dataset, contribute to the Hold rating, as the full potential and market positioning of casdatifan remain uncertain.