Arcturus Slumps Amid Analyst Pessimism on Vaccine

Three analysts cut their ratings on Arcturus after a disappointing progress report on its coronavirus vaccine. The stock slumps.
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Arcturus Therapeutics  (ARCT) - Get Report shares lost half their market value as three analysts cut their ratings on the biopharma after a disappointing progress report on its coronavirus vaccine candidate.

Arcturus recently traded at $44.94, down 51%. In 2020 through the close of Monday trading, the stock had leaped by a factor of more than eight amid optimism about the vaccine candidate.

“We expect high risk” for clearance of the company’s ARCT-021 vaccine after the lackluster Phase 1/2 interim clinical data, Barclays analyst Gena Wang wrote in a commentary cited by Bloomberg.

She slashed her rating to equal weight from overweight and lowered her price target to $46 from $68.

From the trial data, it looks as if about 1x neutralizing antibody geometric mean titer could be the bar to achieve more than a 50% efficacy threshold, Wang said, according to Bloomberg. Higher dosages in animal studies showed some effectiveness, but safety concerns limited higher doses.

Meanwhile, Baird analyst Madhu Kumar lowered his rating on Arcturus to neutral from outperform and reduced his price target to $69 from $79.

Raymond James analyst Steven Seedhouse trimmed his rating to market perform from outperform. He has no price target.

Piper Sandler analyst Yasmeen Rahimi wrote that ARCT-021 demonstrated “clean safety but underwhelming immunogenicity with disappointing neutralizing titers,” Bloomberg reports.

On the other hand, he said he was “compelled” by the promising preclinical results supporting T-cell-driven efficacy, and he remains optimistic about Arcturus’ mRNA technology.

Pfizer  (PFE) - Get Report is the biggest U.S. company with a vaccine in use. “The vaccine’s incredible speed to market reinforces [the] innovative power behind Pfizer’s wide moat,” Morningstar analyst Damien Conover wrote in a commentary this month.