Wells Fargo Upgrades Arcellx to Overweight Due to Potential of Multiple Myeloma CAR-T Asset
Wells Fargo Coverage: Wells Fargo has initiated coverage of Arcellx (ACLX) with an overweight rating, highlighting its CAR-T therapy, anito-cel, as a significant future treatment for multiple myeloma, setting a price target of $100.
Market Potential: Analyst Yanan Zhu anticipates that anito-cel could dominate the BCMA CAR-T market in fourth-line multiple myeloma due to its efficacy and safety, with peak sales projections of $1.6 billion in the fourth line and $3.8 billion if approved for second-line treatment.
Approval Timeline: Zhu expects anito-cel to gain approval in the second line by 2028, potentially earlier, which would enhance its market presence and sales.
Competitive Landscape: Despite strong data for Johnson & Johnson's combination therapy for multiple myeloma, Zhu notes that a significant portion of patients are ineligible for this treatment, indicating a continued need for alternative therapies like anito-cel.
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FDA Draft Guidance Boosts Arcellx (ACLX) and Legend Biotech (LEGN) Stock Prices
- FDA Guidance Impact: The U.S. FDA's draft guidance allows minimal residual disease and complete response as endpoints for accelerated approval in multiple myeloma treatments, leading to a stock price increase for Arcellx (ACLX) and Legend Biotech (LEGN), reflecting market optimism for new therapies.
- Collaborative Prospects: Legend Biotech's partnership with Johnson & Johnson (JNJ) on the Carvykti cell therapy has already incorporated MRD negativity as an endpoint in the CARTITUDE-6 trial, which analysts view as a positive development for its market performance.
- Market Competition Analysis: Analysts highlight that Arcellx's anito-cel therapy is also expected to enter the market based on MRD negativity, enhancing its competitiveness in the second to fourth-line treatment settings and increasing investment appeal in this sector.
- Investment Rating Changes: Jefferies maintains an Outperform rating on Legend Biotech with a target price of $66, noting that while the stock trades at a significant discount, the FDA guidance provides a clear positive signal for its future growth.
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