Stifel downgrades Argos to hold

Stifel downgraded Argos Therapeutics (NASDAQ:ARGS) to “hold” from “buy” and slashed its price target to $1.40 from $10 after an independent data monitoring committee (IDMC) recommended discontinuation of the ADAPT Phase 3 trial of AGS-003 in metastatic renal cell carcinoma (RCC) patients.

At midday on Feb. 22, the stock was quoted at $1.42, down $2.97, or 68%.

The IDMC concluded that the study was unlikely to demonstrate a statistically significant improvement in overall survival in the combination treatment arm, utilizing the intent-to-treat population, the primary endpoint of the study.

Analyst Thomas Shrader writes that the trial, which was designed to test immune-mediated therapy in RCC, still seems a reasonable choice and just last weekend the combination on Avastin plus an anti-PD1 antibody looked promising in RCC.

“As a result of today’s news, we think there will be very little appetite to test the Argos approach in other tumor types and we are basing our Argos target price on the expected cash at yearend 2016,” he added. “Based on lack of detail as to the company’s next moves, we are lowering our rating to hold.”