No segment of the stock market is as fraught with risk as the biotech section. Shares can swoon by heart shuddering amounts should clinical studies not go according to plan or when development of a prospective treatment stalls.
Luckily for risk-on investors, the opposite also holds true, and shares can soar dramatically when a company announces positive developments. Which on Tuesday was good news for those backing Arcturus Therapeutics’ (ARCT) success.
In fact, the company has had several pieces of encouraging news lately. On Tuesday, shares took off to the tune of 68% after the company announced it had received the go ahead from the Singapore Health Sciences Authority to move forward two messenger RNA COVID-19 vaccine candidates – ARCT-154 and ARCT-165 – into phase 1/2 clinical studies.
These trials will test the candidates both as primary vaccines and as boosters after participants have been vaccinated with Pfizer and BioNTech’s Covid-19 vaccine Comirnaty. The study is partially supported by a grant awarded by Singapore’s Economic Development Board (EDB).
The news followed another confidence boosting announcement. On Monday, the company disclosed that the Vietnam Ministry of Health had given the green light for ARCT-154 to advance into a phase 1/2/3 clinical trial. This is in partnership with Vietnamese company Vinbiocare, who will be providing the funding for the Vietnamese clinical studies.
Within the next few weeks, Arcturus should begin the Singapore clinical trials. There should also be some updates on the pipeline’s progress when Arcturus delivers the second quarter’s financials on August 9.
“We are encouraged by ARCT’s rapidly evolving strategy in COVID-19,” said Wells Fargo’s Nick Abbott. “While we expect greater clarity on 8/9, the contemporaneous development of ARCT-021 targeting the ancestral strain alongside vaccine candidates targeting variants of concern offers a unique opportunity to test both vaccines in the same population.”
Abbott is clearly bullish on Arcturus’ potential; even after Tuesday’s gains, the analyst’s $118 price target suggests shares could more than double from current levels. (To watch Abbott’s track record, click here)
The rest of the Street is less confident, however; based on 4 Buys and Holds, each, plus 2 additional Sells, the stock has a Hold consensus rating. Moreover, the recent gains have taken the stock beyond what most consider its fair value; at $46.29, the figure represents possible downside of 6% over the next 12 months. (See ARCT stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
