The expected data and their implications were addressed in a ROTH Capital Partners report.
In an April 29 research report, analyst Jotin Marango reported that ROTH Capital Partners raised its price target on ArQule Inc. (ARQL:NASDAQ) to $10 per share in anticipation of a clinical update on its ARQ531 dose escalation study in chronic lymphocytic leukemia (CLL) patients, to be given at the European Hematology Association (EHA) Congress this June.
"This spring, we are increasingly bullish on ArQule," and "remain high conviction buyers of ARQL shares," Marango wrote. The stock is currently trading at around $6.10 per share.
The study results ArQule will present in six weeks will likely be from the sizeable group of CLL patients treated at higher doses of ARQ531, a BTK inhibitor, Marango noted. This would include cohort 6, whose dose was increased to 65 milligrams (65 mg) from 45 mg, and the expanded cohort 7, which received 65 mg. (Data from cohort 8, which is receiving 75 mg, likely will not be ready in time for the EHA meeting.)
Marango highlighted that a positive update could elicit a favorable market reaction, particularly if patients experienced tumor shrinkage. The new data could move ArQule closer to determining the recommended dose and positioning of a Phase 2 study. Also, a positive report could "rekindle mergers and acquisitions speculation around ARQ531," he noted.
Were the latter to happen, Marango purported, the interest would likely come from a handful of larger companies: AbbVie Inc. (ABBV:NYSE), Celgene Corp. (CELG:NASDAQ), Bayer AG (BAYRY:OTCMKTS; BAYN:XETRA), Daiichi Sankyo Co. (4568:TYO; DSKYF:OTCPK) and Jazz Pharmaceuticals Plc (JAZZ:NASDAQ). "Overall, we note that there certainly appear to be more potential apt buyers than there are reversible BTK inhibitors in development," he added.
ROTH has a Buy rating on ArQule.
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Disclosures from ROTH Capital Partners, ArQule Inc., Company Note, April 29, 2019
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Within the last twelve months, ROTH has received compensation for investment banking services from ArQule, Inc.
ROTH makes a market in shares of ArQule, Inc. and as such, buys and sells from customers on a principal basis.
Within the last twelve months, ROTH has managed or co-managed a public offering for ArQule, Inc.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.