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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 Arcturus Therapeutics Holdings, Inc. 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.

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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 Pfizer Inc. 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.