On Friday, H.C. Wainwright adjusted its financial outlook for Arvinas Inc. (NASDAQ:ARVN) shares, lowering the price target to $87 from $90, while sustaining a Buy rating. The revision follows Arvinas' recent announcement of a licensing agreement with Novartis (SIX:NOVN) for ARV-766, an androgen receptor (AR) degrader.
Arvinas revealed on Thursday that it had entered into a license agreement with Novartis for ARV-766, which targets metastatic castration-resistant prostate cancer (mCRPC) and has been somewhat overshadowed by the company's breast cancer program in partnership with Pfizer (NYSE:PFE). Despite the reprioritization of ARV-766 last fall not attracting significant investor interest, the licensing deal now underscores the strategic move.
The timing of the deal coincides with Novartis' advancement of Pluvicto, which is anticipated to become its first blockbuster drug. Novartis has been aiming to broaden the patient base for Pluvicto, which is approved for a specific subset of mCRPC patients. The addition of ARV-766 is expected to complement Novartis' portfolio, potentially enabling the company to venture into monotherapy and combination therapies with Pluvicto.
For Arvinas, the agreement with Novartis is seen as an opportunity to focus on completing the Phase 3 study for ARV-766. It also reaffirms the value of Arvinas' protac platform in targeted oncology. With strategic partnerships now in place for its lead programs, Arvinas is poised to concentrate on its other pipeline projects, including those in neurodegeneration.
In light of the collaboration and the transfer of ARV-766 to Novartis, H.C. Wainwright has adjusted its valuation of Arvinas. The new price target reflects a combination of anticipated milestone payments and low double-digit tiered royalties from the deal.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.