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On Thursday, Guggenheim Securities adjusted its outlook on Arcturus Therapeutics (NASDAQ:ARCT), reducing the price target to $45.00 from the previous $71.00, while still upholding a Buy rating on the stock. The revision was primarily due to anticipated limited partner sales of the company's COVID-19 vaccine, Kostaive, influenced by seasonal demand fluctuations and partner Meiji's (2269-TKS) observations on market demand. The stock, currently trading at $9.82, has experienced significant volatility, falling over 69% in the past year. According to InvestingPro analysis, the company maintains strong liquidity with a current ratio of 4.67, though it's currently experiencing rapid cash burn.
Whitney Ijem of Guggenheim noted that for the first quarter of 2025, Arcturus is estimated to generate $20 million in revenue, which falls short of the Street's expectation of $31 million. This projection is based on collaboration revenue rather than direct product sales. In the fourth quarter of 2024, Arcturus reported that its partner CSL-ASX accounted for $28 million in revenue share from Kostaive sales, which, according to Guggenheim's calculations, represents the bulk of the vaccine doses used during that period. InvestingPro data reveals that the company's revenue declined by 8.69% in the last twelve months, with analysts anticipating further sales decline in the current year. Get access to 15+ additional ProTips and comprehensive analysis with an InvestingPro subscription.
Despite a downward trend in overall vaccination rates, partner Meiji and key opinion leaders (KOLs) anticipate the potential for improved sales in the 2025-2026 season, bolstered by recent promotional efforts and the introduction of a more standardized two-dose vial. Meiji is scheduled to release its fiscal year-end 2025 annual results on May 9, 2025. Additionally, the market's attention is expected to turn to U.S. policy on mRNA technology and COVID-19 vaccines, especially after the missed regulatory decision for NVAX's Biologics License Application (BLA) for its own COVID-19 vaccine. With Arcturus's next earnings report due on May 12, 2025, InvestingPro subscribers can access detailed financial health scores and comprehensive research reports to better evaluate the company's prospects.
Guggenheim has updated its model to factor in the risks associated with potential U.S. sales and milestones for Kostaive, leading to the new price target of $45 per share. The firm also anticipates that upcoming clinical readouts for Arcturus in cystic fibrosis and Ornithine Transcarbamylase (OTC) deficiency in the second quarter of 2025 could significantly impact the stock value. Success in either clinical program could potentially lead to more than 100% upside, especially if Arcturus can establish a compelling profile in the treatment of cystic fibrosis. The stock currently trades at a relatively low revenue multiple, with analyst price targets ranging from $44 to $140, suggesting significant potential upside from current levels.
In other recent news, Arcturus Therapeutics has been the focus of several analyst updates and company announcements. The company reported a gross profit share of $28 million for Kostaive in Japan for the fourth quarter of 2024, with expectations to cover a portion of development costs owed to CSL (OTC:CSLLY). Analysts from BTIG, H.C. Wainwright, and Canaccord Genuity have updated their price targets for Arcturus, reflecting varying expectations for the company's future performance. BTIG maintained a $48 target, expressing optimism about the company's mRNA vaccine research. H.C. Wainwright adjusted its price target to $60, citing upcoming data from the Phase 2 study of ARCT-032 for cystic fibrosis. Canaccord Genuity revised its target to $68, noting updates on Arcturus's COVID vaccine market opportunity in Japan and its rare disease pipeline. Additionally, Leerink Partners reduced its price target to $65 while maintaining an Outperform rating, following Arcturus's full-year 2024 earnings announcement. These developments highlight the ongoing interest in Arcturus's research and its implications for the biotechnology sector.
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