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Investing.com - Goldman Sachs downgraded Arvinas Inc. (NASDAQ:ARVN) from Neutral to Sell on Wednesday, while reducing its price target to $6.00 from $8.00. The stock, which has declined over 50% year-to-date, is currently trading at $9.41. According to InvestingPro analysis, the company appears undervalued based on its Fair Value assessment.
The downgrade comes as Goldman Sachs cited a "rapidly evolving competitive landscape" for HR+/HER2- metastatic breast cancer that puts Arvinas’s vepdegestrant drug candidate at "increasing risk of obsolescence."
Goldman Sachs noted that competitors’ progress has diminished interest in vepdegestrant and made an out-licensing deal "incrementally more challenging," despite Arvinas and its partner Pfizer seeking to out-license commercial rights to the program.
The firm also mentioned it continues to monitor the development of Arvinas’s LRRK2 and BCL-6 programs but does not expect data disclosures over the next 12-18 months to be viewed as de-risking or adding value.
Goldman Sachs expects Arvinas shares will primarily trade based on cash burn considerations and the level of investment in the early-stage pipeline, which it believes will result in underperformance compared to the broader biotech sector.
In other recent news, Arvinas Inc. has reported positive results from two Phase 1 clinical trials for its drug ARV-102, targeting leucine-rich repeat kinase 2 (LRRK2) for Parkinson’s disease. The trials demonstrated that ARV-102 was well-tolerated in both healthy volunteers and patients, achieving significant levels of LRRK2 degradation. Following this development, Piper Sandler raised its price target for Arvinas to $16, maintaining an Overweight rating, citing promising data from the trials. Meanwhile, Arvinas and Pfizer have announced plans to out-license their metastatic breast cancer drug candidate, vepdegestrant, to a third-party partner. This strategic move led BofA Securities to downgrade Arvinas from Buy to Neutral, lowering the price target to $10. Conversely, H.C. Wainwright reiterated its Buy rating with an $18 target, viewing the out-licensing as a financially de-risking strategy. Barclays also adjusted its price target for Arvinas to $15, maintaining an Overweight rating, in light of the licensing plans for vepdegestrant. These recent developments highlight significant shifts in Arvinas’s strategic approach to drug development and commercialization.
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