Why Arcus Biosciences (RCUS) Is Down 15.4% After Ending Key Gastric Cancer Trial And Pivoting Pipeline

• Arcus Biosciences and partner Gilead Sciences have discontinued the Phase 3 STAR-221 trial after an interim analysis showed domvanalimab plus zimberelimab and chemotherapy did not improve overall survival versus nivolumab plus chemotherapy in first-line advanced gastric and esophageal cancers, though safety remained comparable.
• This setback is prompting Arcus to redirect development resources toward its HIF-2α inhibitor casdatifan and emerging small-molecule immunology and inflammation programs, reshaping the future focus of its pipeline.
• We’ll now examine how discontinuing STAR-221 and refocusing on casdatifan’s RCC potential could alter Arcus Biosciences’ existing investment narrative.

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Arcus Biosciences Investment Narrative Recap

To own Arcus Biosciences today, you need to believe that its value lies less in domvanalimab and more in the broader pipeline, particularly casdatifan in renal cell carcinoma and oral I&I assets. The STAR-221 failure removes a potential near term oncology catalyst, while putting more weight on upcoming casdatifan data and increasing the execution risk around Arcus’s path to future revenue and eventual profitability.

The most directly relevant recent announcement is the company’s detailed 2026 to 2027 development plan, which concentrates clinical spending on casdatifan with multiple RCC readouts and a possible Phase 3 initiation in late 2026. With quemliclustat results not expected until 2027 and Arcus still loss making, these timelines now frame both the key clinical catalysts and the funding risk investors need to watch most closely.

Yet alongside this refocused pipeline story, investors should also be aware of the risk that...

Read the full narrative on Arcus Biosciences (it's free!)

Arcus Biosciences' narrative projects $327.1 million revenue and $52.5 million earnings by 2028. This requires 7.7% yearly revenue growth and a $350.5 million earnings increase from $-298.0 million today.

Uncover how Arcus Biosciences' forecasts yield a $33.22 fair value, a 54% upside to its current price.

Exploring Other Perspectives

Four members of the Simply Wall St Community currently place Arcus’s fair value between US$25.34 and US$41.59, underlining how far opinions can diverge. You should weigh those views against the heightened execution risk now tied to casdatifan and reassess how such concentrated clinical bets could affect Arcus’s longer term business performance.

Explore 4 other fair value estimates on Arcus Biosciences - why the stock might be worth just $25.34!

Build Your Own Arcus Biosciences Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Arcus Biosciences research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Arcus Biosciences' overall financial health at a glance.

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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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