Assessing Arcus Biosciences’ Valuation After Halting Key GI Trials and Pivoting to Casdatifan-Focused Strategy

Arcus Biosciences, Inc., has drawn fresh attention after scrapping its late stage STAR-221 and EDGE-Gastric trials in upper gastrointestinal cancers, a setback that also clarifies where the next wave of potential value may come from.

See our latest analysis for Arcus Biosciences.

The abrupt end to STAR-221 and EDGE-Gastric triggered a sharp reset in sentiment, with a 1 day share price return of minus 14.36 percent. Arcus still posts an 85.92 percent 3 month share price return and a 33.89 percent 1 year total shareholder return, suggesting momentum has cooled but not vanished.

If this kind of binary trial risk keeps you cautious, it may be worth scanning healthcare stocks to spot other names where the balance of growth and clinical risk looks more appealing.

Yet even after the selloff, Arcus trades almost 50 percent below the latest analyst target and still boasts strong recent gains. This raises a key question for investors: is this reset creating upside or simply reflecting future growth?

Most Popular Narrative: 35.2% Undervalued

With Arcus Biosciences last closing at $21.53 against a narrative fair value of $33.22, the most followed view suggests meaningful upside still lies ahead.

The company plans to present further data throughout 2025 from ongoing studies, which are expected to demonstrate favorable outcomes such as improved overall response rate (ORR) and progression free survival (PFS). These outcomes could significantly impact future revenue growth as the positive data could drive market share gains.

Read the complete narrative.

Curious what kind of long term revenue climb, margin shift, and future profit multiple it takes to back that valuation gap, and how aggressive those forecasts really are? Read on to unpack the full blueprint behind this fair value call.

Result: Fair Value of $33.22 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, significant regulatory uncertainty and intense HIF-2 alpha competition could still derail casdatifan’s trajectory and force a rethink of today’s valuation assumptions.

Find out about the key risks to this Arcus Biosciences narrative.

Build Your Own Arcus Biosciences Narrative

If you see the story differently or want to test your own assumptions against the numbers, you can build a personalized narrative in minutes, starting with Do it your way.

A great starting point for your Arcus Biosciences research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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