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    Arcus Biosciences (RCUS): Reassessing Valuation After Domvanalimab Trial Discontinuation and Casdatifan Pipeline Shift

    Simply Wall St·12/23/2025 07:09:49
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    Arcus Biosciences (RCUS) just shook up its pipeline strategy by scrapping the high profile Phase 3 STAR-221 gastric cancer trial after an interim look showed no survival benefit for its domvanalimab combo.

    See our latest analysis for Arcus Biosciences.

    Despite the headline setback in gastric cancer, investors seem to be looking through the domvanalimab news to Arcus Biosciences longer term pipeline potential. The share price is $23.22, with a powerful 90 day share price return of 87.41 percent, even though the five year total shareholder return of negative 18.61 percent shows the recovery story is still playing out.

    If this kind of pipeline pivot has you reassessing your biotech exposure, it could be a good time to explore other healthcare stocks that might better match your risk and return expectations.

    With domvanalimab setbacks, accelerating casdatifan data, rapid share price gains and a sizeable gap to analyst targets, the key question now is simple: is Arcus still mispriced or are markets already baking in its next leg of growth?

    Most Popular Narrative Narrative: 30.1% Undervalued

    With Arcus Biosciences last closing at $23.22 against a narrative fair value of $33.22, the current share price implies a steep valuation gap that hinges on casdatifan execution.

    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.

    Want to see why this story leans so heavily on future trial wins, rising margins and a punchy profit multiple far above sector norms? The narrative stitches together ambitious revenue compounding, a sharp swing from deep losses to solid profitability, and a rich earnings multiple to bridge today’s price to its projected upside. Curious how those moving parts combine into that fair value tag and what has to go right along the way? Dive in to unpack the full playbook behind this valuation call.

    Result: Fair Value of $33.22 (UNDERVALUED)

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

    However, lingering regulatory uncertainty and intensifying HIF 2 alpha competition could quickly erode today’s upside narrative if future data or approvals disappoint.

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

    Build Your Own Arcus Biosciences Narrative

    If you see the setup differently or want to stress test the assumptions yourself, you can spin up a custom view in under three minutes: Do it your way.

    A great starting point for your Arcus Biosciences research is our analysis highlighting 1 key reward and 3 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.