Analyst Asthika Goonewardene from Truist Financial maintained a Buy rating on Arcus Biosciences and decreased the price target to $30.00 from $39.00.
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Asthika Goonewardene has given his Buy rating due to a combination of factors that highlight Arcus Biosciences’ strategic focus and financial health. The company has decided to discontinue its Phase 3 STAR-221 study, which involved Dom+Zim in upper GI cancers, following an interim analysis that suggested futility. This decision reflects a shift in focus towards casdatifan, which is seen as a multi-billion-dollar opportunity, supported by a robust balance sheet with approximately $1 billion in cash.
Goonewardene’s rating also considers the anticipated clinical milestones for casdatifan, with multiple catalysts expected in 2026. The company plans to streamline its research and development expenses, aligning with its refined pipeline strategy. Additionally, Arcus Biosciences is expected to generate some collaboration revenue from Gilead, and its financial resources are projected to support operations into the second half of 2028, providing a solid runway to advance casdatifan through key clinical stages.
In another report released today, H.C. Wainwright also reiterated a Buy rating on the stock with a $32.00 price target.