Arcus Biosciences (RCUS) PT Raised to $45 at H.C. Wainwright

H.C. Wainwright analyst Emily Bodnar raised the price target on Arcus Biosciences (NYSE: RCUS) to $45.00 (from $32.00) while maintaining a Buy rating.

The analyst commented: "Arcus has discussed its goal of developing an IO + IO based combination regimen for cas in 1L ccRCC, adding to the ipilimumab/nivolumab (ipi/nivo) backbone which is one of the widely used regimens that does not include an IO + TKI combo. This approach differs from Merck's (MRK; not rated) LITESPARK-012 trial which did not meet its primary endpoint and evaluated belzutifan + anti-PD-1 + TKI. IO + IO has demonstrated longer lasting durability and avoids TKI-related toxicity, making it preferred for patients with intermediate/poor-risk disease. In addition, cas has demonstrated efficacy which we believe appears superior to belzutifan in comparable settings, demonstrating mPFS of >12 months in ARC-20 (n=127) vs only 5.6 months for belzutifan in LITESPARK-005 in late-line ccRCC. Cas had also indicated lower progressive disease (PD) rates (~16-19% in ARC-20 vs belz 34% in LITESPARK-005), driven by its increased potency and improved pharmacodynamic profile with greater EPO suppression, which could lead to improved outcomes. The company also noted that in the cas + zim cohort, a primary PD rate of only 7% (2/30) was observed, supporting the notion that cas has a faster onset of action driven by greater EPO suppression and potency. With belzutifan out of the running, cas could potentially now be the only HIF-2α inhibitor to be marketed in 1L ccRCC, if data in Phase 3 are positive. Arcus has guided to initiating a Phase 3 (PEAK-20) 1L ccRCC trial in 2H26 and plans to announce initial results from 1L ccRCC ARC-20 cohorts including cas + zim and cas + zim + ipi in 2H26. With our model update; we increase our PT to $45 on inclusion of 1L ccRCC opportunity."

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