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On Monday, Leerink Partners adjusted their stance on Arvinas Inc. (NASDAQ:ARVN), downgrading the biopharmaceutical company’s stock from Outperform to Market Perform and setting a price target of $9.00. According to InvestingPro data, the stock has seen a 78% decline over the past year, though it recently showed signs of life with a 10.6% gain in the past week. Analyst targets for the stock range from $8 to $110, reflecting the market’s divided outlook on the company’s prospects. The decision follows the presentation of full results from the Phase 3 VERITAC-2 trial at the American Society of Clinical Oncology (ASCO) meeting over the weekend.
The trial evaluated Arvinas’s drug vepdegestrant (vepdeg) in second-line and beyond (2L+) hormone receptor-positive, HER2-negative (HR+/HER2-) advanced/metastatic breast cancer patients. Leerink Partners entered the weekend with expectations to clarify vepdeg’s potential role in the competitive breast cancer treatment market. The company maintains a strong financial position with more cash than debt and a healthy current ratio of 4.58, providing runway for its development programs.
The full results indicated that vepdeg is active in patients with ESR1 mutations (ESR1m) and is likely to receive approval. However, Leerink Partners expressed concerns about vepdeg’s position as a leading treatment option. The rapidly changing breast cancer treatment landscape presents new uncertainties, particularly with the emergence of alternative therapies.
Most notably, Phase 3 SERENA-6 data released on Monday suggests that switching from aromatase inhibitors (AI) plus CDK4/6 inhibitors to camizestrant (cami) plus CDK4/6 inhibitors upon the detection of ESR1m in circulating tumor DNA (ctDNA) provides significant benefits. This finding could position camizestrant as a first-line (1L) treatment for HR+/HER2- advanced breast cancer.
Leerink Partners believes these developments could reshape the standard of care (SoC) and reduce the population of ESR1m patients in the second line who would be eligible for vepdeg treatment. This potential shift in treatment paradigms has led to the revision of Arvinas’s stock rating and price target. Based on InvestingPro’s comprehensive analysis, the stock appears slightly undervalued at current levels, with 8 analysts recently revising their earnings estimates upward for the upcoming period. For deeper insights into Arvinas’s financial health and growth prospects, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Arvinas Inc. has faced several significant developments impacting its financial outlook and market strategy. The company, in collaboration with Pfizer (NYSE:PFE), decided to halt Phase 3 trials for their combination therapy, vepdeg, targeting breast cancer. This decision was influenced by the results of the VERITAC-2 study and competitive pressures from other therapies. Analysts have responded with adjustments to their ratings and price targets for Arvinas. Citi maintained a Neutral rating but lowered the price target to $9.50, while Truist Securities downgraded the stock from Buy to Hold, reducing the price target to $11.
Similarly, BTIG maintained a Buy rating but significantly cut the price target from $69 to $16, reflecting a cautious outlook on the company’s potential in the ESR1 mutation-positive breast cancer market. TD Cowen also downgraded Arvinas from Buy to Hold following the cancellation of key trials, which were seen as crucial to the company’s growth prospects. Jefferies followed suit by downgrading the stock from Buy to Hold and slashing the price target to $10 from $52, citing the limited market potential for vepdeg monotherapy. These adjustments underscore the challenges Arvinas faces in navigating its development pipeline amidst evolving market conditions.
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