Arcus, which is partly backed by GV, Alphabet’s (GOOGL) venture capital investment unit, had previously dropped 7% in Wednesday’s trading.
RCUS has a number of I/O [immuno-oncology] clinical assets, with AB154 (anti-TIGIT) receiving considerable attention following the advancement of a competitor candidate (Roche’s tiragolumab) into Phase III studies earlier this year.
According to Mizuho Securities analyst Mara Goldstein such a move would make sense for Gilead. According to the analyst, RCUS boasts a big pipeline for a small company, with interesting I/O assets that could fit well into many different companies’ pipelines.
“The focal point for RCUS today for investors is AB154, an anti-TIGIT, which could be on a path to be the “next checkpoint” approved for cancer; and RCUS does have a full pipeline of assets that are on the way toward clinical validation” she writes.
Plus with GILD’s takeout of Forty Seven for $4.9 billion in March (for the addition of Forty Seven’s investigational lead product candidate, magrolimab), she sees compelling valuation scenarios for RCUS shares.However Goldstein believes that the stock deserves support, regardless of Gilead, writing “Bottom line for us that is that partner activity or not, RCUS’ novel I/O pipeline has upside.”
Indeed, the stock has received four recent buy ratings from analysts, giving it a Strong Buy analyst consensus. (See Arcus’s stock analysis on TipRanks)
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