Gilead Sciences and Arcus Biosciences notched another win for their cancer program on Monday, briefly pushing GILD stock to a four-year high as RCUS stock gapped higher.
The companies revealed the fourth interim analysis from a study of their drug, domvanalimab, in patients with a common form of lung cancer. They are testing two combinations of the drug vs. a standard treatment. Both regimens showed clinically meaningful improvements compared with the standard drug.
The previous updates were "somewhat vague," RBC Capital Markets analyst Brian Abrahams said in a report to clients. But this was clear, he added.
"We believe the current (release), which included 133 of 150 enrolled patients with two or more scans, is likely now mature enough to show clear signs of activity," he said. The companies moved up a presentation of their data to Dec. 20 from expectations for early 2023.
In response, GILD stock initially rose as much as 2.2%, touching its highest point since January 2018. But shares closed down 1.2% at 85.21 on today's stock market. RCUS stock, on the other hand, jumped 7.2% to 28.63.
GILD Stock: Combinations Outperform
The companies are testing domvanalimab in patients with non-small cell lung cancer and looked at 133 patients who had received treatment at least 13 weeks ago. All patients had undergone at least two scans examining their tumor sizes.
Both combinations using domvanalimab outperformed the standard drug, dubbed zimberelimab. Zimberelimab is also an Arcus drug. It's an immunotherapy that blocks a protein used by cancer cells to camouflage themselves from the immune system.
Domvanalimab uses a new mechanism, binding to a receptor called TIGIT that cancer cells use to avoid detection from the immune system. When domvanalimab locks onto the receptor, it sets the immune system free to kill targeted cells.
Abrahams, the RBC analyst, kept his outperform rating and 87 price target on GILD stock.
He noted there's a potential domvanalimab could compete against Roche's TIGIT-targeting drug, tiragolumab. Notably, Roche said in May that a combination using tiragolumab failed to lengthen the amount of time before patients worsened. The study is still ongoing.
To be successful, Gilead expects the drug to have to ultimately show a 50% overall response rate, which is 15% better than the standard of care. So far, the drug looks safe, Abrahams said.
"Overall, we believe TIGIT remains the next high-profile catalyst for Gilead, as it could validate both their multibillion-dollar partnership with Arcus as well as their oncology pivot," he said.
RCUS Stock Surges
Gilead's move into oncology has helped shares rally recently.
GILD stock broke out of a saucer base with a buy point at 74.22 on Oct. 28, MarketSmith.com shows. Almost immediately, they soared out of the 5% buy zone.
Shares also have a nearly perfect Relative Strength Rating of 97 out of a best-possible 99. This puts them in the leading 3% of all stocks in terms of 12-month performance, according to IBD Digital.
RCUS stock has a middling RS Rating of 61, but shares surged as much as 13.5% early Monday.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
