UPDATE: Citigroup Downgrades ArQule on Increased Uncertainty Around Lead Cancer Drug Candidate

In a report published Wednesday, Citigroup analyst Jonathan Eckard downgraded the rating on ArQule (NASDAQ: ARQL) from Buy to Neutral, and lowered the price target from $5.00 to $2.25.

In the report, Citigroup noted, “We are changing our rating on ARQL to Neutral from Buy reflecting the increased uncertainty around the company's lead cancer drug candidate, tivantinib, following a safety signal arising in an ongoing P3 trial for liver cancer. ARQL pipeline is fairly deep and includes other late-stage tivantinib trials, and several wholly-owned early-stage agents. However, this new uncertainty around tivantinib clouds the timelines of what was already a ‘longer-term story'. We are moving to the sidelines until additional clarity is available regarding the potential for their P3 liver cancer trial to continue.”

ArQule closed on Tuesday at $2.19.