Needham raises Arcellx stock target to $81, maintains buy rating

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On Monday, Needham increased its price target for Arcellx Inc. (NASDAQ: ACLX) shares to $81 from the previous $72 while keeping a Buy rating on the stock. This adjustment follows recent favorable votes regarding the use of CAR-T therapies in earlier treatment lines for multiple myeloma (MM). The company’s candidate, anito-cel, is anticipated to benefit from these developments due to its similarities with Carvykti, which received unanimous support in a recent vote.

The FDA panel’s unanimous support for Carvykti (11-0) and the majority support for Abecma (8-3) on Friday highlighted the potential expansion of CAR-T therapy usage in earlier stages of MM treatment. This shift could pave the way for similar treatments, including Arcellx’s anito-cel. The panel’s discussion underscored the one-time treatment aspect of CAR-T therapies as a significant quality of life differentiator. However, they also noted that access to these therapies remains a significant hurdle.

The discussion from Friday’s meeting also brought to light the issue of suboptimal bridging, which was linked to early deaths in the use of both Carvykti and Abecma. This finding is expected to influence Arcellx’s strategy as it designs studies for earlier line therapies. The panel’s positive stance towards CAR-T therapies is seen as a de-risking factor for Arcellx, as it suggests a regulatory environment that is open to considering these treatments in earlier treatment settings.

The Needham analyst believes that the outcomes of Friday’s meeting indicate a regulatory openness to the use of CAR-T therapies in earlier lines of MM, which is a positive sign for Arcellx’s anito-cel.

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