Is Arvinas Stock A Buy? While amazing strides have been made in recent years to combat cancers and other serious debilitating diseases, there’s still a long way to go — particularly when it comes to breast cancer, prostate cancer, and other difficult-to-treat diseases that continually pose a serious threat to the patients who get diagnosed with them.
Thankfully, there are all sorts of innovative biopharmaceutical companies that work day in and day out to fight back against cancer and other aggressive forms of diseases. One such company is Arvinas, whose revolutionary therapies very well could change the fight against cancer forever.
With this in mind, is Arvinas stock worth investing in?
Arvinas Taking On “Mission Impossible”
Simply put, Arvinas describes its mission as “making the impossible, possible.”
Of course, it’s a lot more complicated than this simple statement — in reality, it’s working tirelessly on a novel cancer treatment that much of the world has never seen before.
Known for creating PROTAC protein degraders (which is a portmanteau for proteolysis-targeting chimeras), Arvinas is attempting to train the body to take its own natural protein disposal system and use it to rid the body of cancerous and other disease-causing proteins.
What’s more, Arvinas is proving that the PROTAC protein degraders are far greater than just an “attempt” at harnessing the body’s protein disposal system — In December of 2020, the company completed phase 1 of trials with very promising results and moved on to dose expansion and combination studies.
Should this next phase of trials go as successfully as phase 1, Arvinas will surely have a very exciting year — both in their fight against disease and on the stock market, as well.
Arvinas Revenues & Earnings Forecasts
While Arvinas’s trials are going quite well and looking very promising from an outsider’s perspective, its revenues and earnings tell a different story.
With about 20 million dollars in revenue and nearly 165 million dollars in total expenses, Arvinas is currently looking at a net income of negative $140 million+, give or take.
Needless to say, this might look a little scary to potential retail investors and traders. However, it’s important to consider that this is not totally out of the ordinary for a company — especially one that was only founded in 2014.
Many companies rely on this kind of extreme loss for many, many years before they see a turnaround. The J-curve of investment sucks up a lot of capital before it’s finally possible to reap the rewards. Look no further than Amazon (AMZN) or Uber (UBER) for recent examples of this.
If Arvinas continues to perform as successfully as it has lately and keeps it up for several years in a row, it would be fair to assume that its net income would begin to tick upward instead of down.
Trial Results Are The Possible ‘Fly In The Ointment’
As with any publicly traded company, especially a biopharmaceutical one, there are inherent risks to investing. Even the slightest hiccup in the trial phase could sent Arvinas stock into turmoil, even though this is a totally natural part of the scientific method.
This could include anything from a minor development of adverse side effects in patients taking part in the trial to an extreme case of injury (or even death) as a result of the treatment.
Then, there’s Arvinas’s debt mentioned in the previous section. While debt doesn’t immediately mean there’s a problem, a problem could very easily arise if Arvinas suddenly began rapidly increasing their debt or started drastically scaling back their debt repayment. (Thankfully, its increased revenue over the years doesn’t make this risk very likely — still, it’s always worth considering all risks, even the most unlikely ones.)
With both of these risks in mind, Arvinas seems to be doing quite well when it comes to funding. They continue to bring in investors quarter after quarter and year after year, leaving it with a few hundred million dollars to work with as it enters into this next phase of trials. If it needed to, it could hypothetically settle its debt at any time.
Arvinas Vs Foghorn Therapeutics et al.
While Arvinas’s innovative treatment plan is one-of-a-kind, that doesn’t mean that they don’t have any competitors. The world of biopharmaceuticals is a big one, and there are several others working on brand-new cancer treatments at the same time as Arvinas.
Some of the most notable include Foghorn Therapeutics (FHTX), OnQuality Therapeutics, and Luzitin — all much smaller than Arvinas, by comparison, but all with the potential to match (or even surpass) Arvinas on the stock market should one of their unique treatments prove to be as successful as Arvinas’s early phase 1 results.
Anything’s possible in this industry, and the next great innovation could arrive at any time — whether it comes to Arvinas first or one of their competitors remains to be seen.
Is Arvinas Stock A Buy? The Bottom Line
So, what’s the answer? Is Arvinas stock worth buying?
Consider what’s been said so far: Arvinas is working on a potentially revolutionary cancer treatment that uses the human body to combat the disease.
It has been at it for about seven years now, and it only continues to accrue wealth (even if it does have a significant amount of debt to its name).
There are risks, yes, and there are also competitors worth reckoning with, but at the end of the day, Arvinas seems like a serious force for positive change in the world of biopharmaceuticals.
While it’s a little bit below its highest price point of $90 — which it hit back in January of 2021 — it seems to be trending upwards once more. If phase 2 trials go as well as phase 1, that $90 price per share will surely be surpassed. For this reason, it likely makes sense to buy now before it gets any higher.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.