Shares of Arcus Biosciences and Iteos Therapeutics surged Friday after Roche provided "meaningful" evidence for a new cancer treatment class. RCUS stock easily retook its 50-day line.
Arcus is part of a group of companies testing different means of blocking TIGIT, a receptor that can shroud cancer cells from the immune system. By blocking TIGIT, the companies hope to release immune cells to attack cancer cells hiding nearby.
In a study of patients with liver cancer, Roche said adding its anti-TIGIT drug, tiragolumab, to the standard treatment helped more patients respond to treatment. Patients also had a longer response time before their cancer worsened.
SVB Securities analyst Daina Graybosch called the Roche results "the most validating signal" for the group of TIGIT-blocking drugs.
"Tiragolumab's contribution to clinical benefit was meaningful and mostly clear," she said in a report to clients.
On today's stock market, RCUS stock rocketed 25.9% and closed at 22.03. Shares of Iteos, which is also testing a TIGIT blocker, catapulted 30% to 18.05. Roche stock rose a fraction to 40.26.
RCUS Stock: What's Next For Its TIGIT Drug?
Arcus is soon expected to unveil updated results for its own TIGIT blocker, dubbed domvanalimab. It's developing the drug with Gilead Sciences.
Companies are testing their TIGIT-blocking drugs on top of medicines that block PD-1, a protein tumor cells also use as camouflage. Arcus is testing its own PD-1 blocker, zimberelimab, with domvanalimab. It also has a triplet regimen in the works, which adds a third drug to domvanalimab and zimberelimab.
In December, Arcus unveiled mixed results and RCUS stock crumbled. Zimberelimab underperformed rivals in patients with lung cancer. The two-drug approach looked better, but still lagged Roche's combo. Adding a third drug to the mix led to lower responses and a shorter window before patients worsened.
But Mizuho Securities analyst Mara Goldstein still expects Arcus to succeed. The company is on deck to release a new set of data from the same study during the American Society of Clinical Oncology, or ASCO, meeting early next month.
"We see potential improvement in the zimberelimab monotherapy arm with continued differentiation in the domvanalimab-containing doublet and triplet arms as a potential upside scenario," she said in a note to clients.
Goldstein has a buy rating and 51 price target on RCUS stock.
Roche Drug Leads To Longer Responses
Roche ran its study in patients with liver cancer, though the company is also working in lung cancer.
Ahead of the ASCO meeting, Roche said 42.5% of patients responded to a regimen that added the TIGIT blocker to standard drugs. In comparison, just 11.1% of patients responded to the standard drugs alone. At the medium, patients on the TIGIT-containing regimen lived for 11.1 months before worsening vs. just 4.2 months for those on the standard treatment.
Merck, which is testing its TIGIT-blocking drug on top of its blockbuster anti-PD-1 treatment, Keytruda, sank 1.1% to close at 111.07.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
