Arcus Executives Divest Stock Following 60% Surge
Chief Operating Officer and Chief Financial Officer sell shares under pre-planned trading schedules as the biotech company's stock nears its 52-week high.
Top executives at Arcus Biosciences (NYSE: RCUS) have sold shares in the company throughout October, capitalizing on a significant rally that has seen the stock climb more than 60% in the past month. The sales, executed under pre-arranged trading plans, come as the cancer drug developer enjoys a wave of positive clinical trial data and strong analyst support.
According to regulatory filings, Chief Operating Officer Jennifer Jarrett and Chief Financial Officer Robert C. Goeltz II collectively sold approximately $850,000 worth of company stock. Jarrett’s sales occurred in early October, totaling around $750,000, while Goeltz sold shares valued at $100,000 on October 28.
The transactions were conducted under Rule 10b5-1 trading plans, which allow corporate insiders to set up a predetermined schedule for buying and selling shares at a future date. While such plans are a standard tool for executives to manage their personal finances and avoid accusations of trading on non-public information, the timing of the sales has drawn investor attention as Arcus stock trades near its 52-week high of $22.11.
The surge in Arcus's valuation has been underpinned by promising developments in its oncology pipeline. The company's stock gained significant momentum following the release of encouraging data from its Phase 2 EDGE-Gastric study. The trial, which evaluates a combination of its anti-TIGIT antibody domvanalimab with other therapies, showed a notable improvement in median overall survival for patients with a specific type of gastric cancer, according to company announcements.
Further bolstering investor confidence is the company's collaboration with biotech giant Gilead Sciences, which has been a key partner in developing Arcus's pipeline. The partnership provides both financial stability and external validation of the company's scientific platform.
In afternoon trading, shares of Arcus Biosciences were trading around $20.29, a stark contrast to its 52-week low of $6.50. The stock's Relative Strength Index (RSI), a measure of momentum, recently topped 70, a level considered "overbought" by technical analysts, often suggesting a potential for a short-term pullback.
Despite the insider sales, Wall Street remains broadly optimistic about the company's prospects. The average analyst price target for RCUS sits at $31.45, implying significant upside from its current level. Following the recent clinical data updates, several firms, including HC Wainwright & Co. and Wells Fargo, reiterated positive ratings, pointing to the long-term potential of the company's drug candidates.
Arcus also reported a strong financial position in its third-quarter results, beating revenue estimates and ending the period with $841 million in cash and marketable securities. This provides the company with a substantial runway to fund its ongoing and planned clinical trials, including a new Phase 3 study for its HIF-2a inhibitor, casdatifan, in renal cell carcinoma.
While insider selling can sometimes raise concerns about executives' confidence in their company's future, the use of 10b5-1 plans and the fact that the sales represent a fraction of the executives' total holdings suggest they were likely part of a planned diversification strategy. For investors, the focus remains on the upcoming clinical milestones that will ultimately determine if Arcus Biosciences can build on its recent momentum.