On Wednesday, Stifel, a financial services firm, increased the price target for Arcellx Inc. (NASDAQ:ACLX) shares to $83.00, up from $82.00, while reaffirming a Buy rating for the biopharmaceutical company.
The adjustment follows the company's announcement regarding the design of a phase 3 study for anito-cel, a treatment for Multiple Myeloma.
Arcellx has designed the iMMagine-3 study to focus on second-line (2L) patients and to compare anito-cel with the current second-line standard of care (SoC) regimens.
According to the company's projections, approximately 70% of Multiple Myeloma patients will have received an anti-CD38 regimen during the first line of treatment by the 2030s.
The iMMagine-3 study is set to enroll around 450 patients who have been exposed to anti-CD38 and IMiD treatments, targeting what Arcellx estimates to be a $12 billion market opportunity.
The company also disclosed that anito-cel will be manufactured by Kite, a Gilead Sciences (NASDAQ:GILD) company, instead of a contract development and manufacturing organization (CDMO). This strategic decision was made after the previous iMMagine-2 study was scrapped in favor of iMMagine-3.
Management at Arcellx highlighted their goal to achieve a 17-day turnaround time for anito-cel, which is consistent with the turnaround for CD19 CAR T products by Kite/Gilead.
Stifel's confidence in the potential success of the iMMagine-3 study, along with iMMagine-1, is reflected in the firm's belief that the probability of success (PoS) is high.
Drawing parallels with the efficacy observed in Carvykti-like phase 2 studies, Stifel ascribes a 75% probability of success to the upcoming trials, supporting the increase in the target price to $83 per share.
InvestingPro Insights
In light of Stifel's recent price target increase for Arcellx Inc. (NASDAQ:ACLX), it's worth considering the company's financial health and market performance. According to InvestingPro data, Arcellx has a market capitalization of $2.71 billion, with a high Price / Book multiple of 5.45 as of Q1 2024. This valuation metric is significant because it suggests that investors have high expectations for the company's assets relative to its book value. Despite not being profitable over the last twelve months, Arcellx has demonstrated a remarkable revenue growth of 635.05% during the same period, highlighting its rapid expansion in a competitive market.
Two InvestingPro Tips that could be of interest to investors are that Arcellx holds more cash than debt on its balance sheet and its liquid assets exceed its short-term obligations. This financial stability is crucial as the company navigates the costly process of clinical trials and seeks to bring new treatments to market. While analysts do not anticipate the company will be profitable this year, the strong return over the last five years indicates a robust long-term performance potential. For investors looking for deeper insights, there are additional InvestingPro Tips available at https://www.investing.com/pro/ACLX, and with the use of coupon code PRONEWS24, they can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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