Arvinas stock rating cut to Perform at Oppenheimer

On Tuesday, shares of Arvinas Inc. (NASDAQ:ARVN) experienced a sharp decline following the announcement of clinical trial results for VERITAC-2, which did not meet one of its co-primary endpoints. Oppenheimer analysts, led by Matthew Biegler, downgraded the company’s stock from Outperform to Perform in light of these developments. The adjustment comes after the trial’s failure to achieve the intended-to-treat (ITT (NYSE:ITT)) endpoint, despite success in the ESR1-mutant co-primary endpoint. InvestingPro data shows the stock’s high volatility, with a beta of 1.96, making it nearly twice as reactive to market movements as the average stock.

The company’s stock price fell to approximately $9.22 after the news broke, continuing its decline from a 52-week high of $47.24. According to InvestingPro analysis, the stock appears undervalued at current levels, with analyst price targets ranging from $19 to $110. Biegler noted that the majority of investors they surveyed had hoped to see the trial succeed on the ITT endpoint. The failure to do so could present challenges for Arvinas’ Vepdeg in standing out within a competitive market. Detailed results from the trial are being withheld until an upcoming medical meeting, but the initial information released has led to the decision to downgrade the stock rating.

Biegler expressed that for Arvinas to regain investor interest, a significant hazard ratio among the ESR1-mutant subset would be necessary. However, based on the qualitative details shared in the company’s press release, the analyst believes that such an outcome is increasingly unlikely. This skepticism has influenced the decision to adjust the stock rating to Perform.

The downgrade by Oppenheimer reflects a cautious stance on Arvinas’ potential to differentiate its product in the market. The lack of a price target in the analyst’s statement underscores the uncertainty surrounding the stock’s future performance. Investors are now left to await the full data from the VERITAC-2 trial, which could provide further insights into the drug’s efficacy and potential commercial viability.

In other recent news, Arvinas Inc., in collaboration with Pfizer Inc. (NYSE:PFE), announced the results of their Phase 3 VERITAC-2 clinical trial, which evaluated vepdegestrant for advanced breast cancer treatment. The trial showed a statistically significant improvement in progression-free survival for patients with specific estrogen receptor mutations, although it did not achieve statistical significance in the broader patient population. This outcome has been a focal point for investors, despite the trial’s success in a specific subgroup. UBS maintained its Buy rating on Arvinas with a $74 target, citing confidence in the anticipated outcomes of the VERITAC-2 study. Meanwhile, Stifel adjusted its price target to $51, maintaining a Buy rating, while H.C. Wainwright lowered its target to $81, also keeping a Buy rating. These adjustments reflect varying expectations on the trial’s impact and subsequent data release strategies. The safety profile of vepdegestrant was consistent with previous studies, indicating it was generally well-tolerated. Arvinas plans to present detailed trial results at a medical conference in 2025 and will continue to engage with regulatory authorities.

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