Arvinas stock rating cut to hold at TD Cowen after trial cancellations

On Friday, Arvinas Inc. (NASDAQ:ARVN) stock rating was downgraded by TD Cowen from Buy to Hold following the announcement that partner Pfizer (NYSE:PFE) has canceled the 1L and 2L vepdeg/CDK4(6) combination trials. The trials were considered a significant component of Arvinas’ market opportunity. The news has contributed to the stock’s recent decline, with InvestingPro data showing a 20% drop in the past week and a 73% decline over six months. The company, currently valued at $528 million, has seen its stock price fall to $7.23.

TD Cowen’s analyst pointed to the unexpected trial cancellations as the primary reason for the downgrade. The firm had previously been optimistic about the potential of vepdeg to stand out in the market, based on positive management statements. The decision to downgrade was made ahead of anticipated data presentations at the upcoming American Society of Clinical Oncology (ASCO) meeting. According to InvestingPro analysis, despite current challenges, analysts maintain a consensus Buy recommendation, with price targets ranging from $10 to $110.

According to the analyst, the removal of these trials from Arvinas’ pipeline significantly reduces the largest market opportunity for the company. The expectation of differentiation for vepdeg now seems increasingly unlikely, which has led to a reassessment of the stock’s outlook.

The cancellation by Pfizer has thus prompted a change in TD Cowen’s stance on Arvinas stock, moving from a positive Buy rating to a more conservative Hold position. The firm had intended to review the data from the trials at ASCO before making a rating decision, but the recent developments have accelerated this reassessment.

Arvinas Inc. and its investors are now facing a new landscape without the anticipated trials, which were previously seen as a key driver for the company’s future growth. The TD Cowen downgrade reflects the immediate impact of Pfizer’s decision on Arvinas’ market potential and investor expectations.

In other recent news, Arvinas Inc. reported impressive financial results for Q1 2025, with revenues reaching $188.8 million, significantly surpassing analyst forecasts of $42.16 million. The company also achieved earnings per share of $1.14, showcasing strong financial performance. Despite these positive results, Arvinas and its partner Pfizer have decided to discontinue the development of their combination therapy for breast cancer, focusing instead on vepdeg monotherapy for ESR1 mutant ER+/HER2- breast cancer. This decision has led Jefferies to downgrade Arvinas’ stock from Buy to Hold and reduce the price target to $10, while Goldman Sachs also lowered its price target to $8, maintaining a Neutral rating.

The discontinuation of the combination therapy aligns with Arvinas’s strategy to reduce costs and extend its cash runway into the second half of 2028. Arvinas plans to focus on its early-stage pipeline, with ongoing efforts to advance its drug candidates. The company’s strategic realignment reflects a shift in priorities to maximize efficiency and support promising pipeline developments. Analysts at Jefferies and Goldman Sachs have highlighted the potential market limitations for vepdeg, which is now confined to patients with second-line or later ESR1 mutation-positive breast cancer. Despite these challenges, Arvinas remains committed to advancing its early development portfolio and exploring potential growth opportunities.

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