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Time to Go Bargain Hunting on Arcturus Stock? Analyst Weighs In

·2 min read

Arcturus Therapeutics (ARCT) investors felt the impact of a thunderous thud on Tuesday, following the share price’s collapse. The stock shed over 50% of its value after the company released disappointing data from an early-stage clinical trial of its COVID-19 vaccine candidate ARCT-021.

While following the administration of one dose, the vaccine produced neutralizing antibodies, the levels weren’t as high as those produced by Pfizer's and Moderna's two-dose mRNA COVID-19 vaccines. The vaccine might only be 62% effective at fending off Covid-19, while Pfizer's exhibited a 95% success rate, slightly above Moderna's 94.1% rate.

Following the study’s results, Arcturus received a slew of downgrades from Wall Street analysts. However, B. Riley analyst Mayank Mamtani offers the contrarian’s view. While the analyst notes the share price decline “reflects the underwhelming neutralizing antibody (NAb) response,” he points out other elements to consider.

“We believe the jury is still out on specific mechanism of C-19 disease protection, in particular characterizing the incremental contribution of 'killer' CD8 T cell response that also holds additional potential in driving durability of immune protection,” the 5-star analyst said.

“To this end, we also came away encouraged by ARCT releasing new preclinical data supportive of protection from SARS-CoV-2 including in (1) primate challenge model with both single and prime-boost regimens (comparable), and (2) humoral (B cell) immunodeficient mice model with single, low dose administration, primarily driven by highly potent cellular immunity to the virus,” Mamtani continued.

The company reiterated its intention to move into late-stage development and announced that the Singapore Health Sciences Authority approved the vaccine for the Phase 2 clinical trial, which is expected to kick off shortly. Arcturus anticipates interim results from the study will be available early next year and plans to initiate a global phase 3 study in 2Q21. 

Overall, Mamtani keeps his Buy rating on ARCT intact, and his $138 price target suggests a hefty 218% upside from current levels. (To watch Mamtani’s track record, click here)

Even after several Wall Street analysts’ U-turns, ARCT’s $94.38 average price target represents potential upside of ~118%. The stock currently has a Moderate Buy consensus rating based on 5 Buys, 4 Holds and 1 Sell. (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.