Arvinas, Inc. (ARVN): A Bull Case Theory

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5 days ago

This stock is one of several featured in our latest research. For more small-cap opportunities with asymmetric return potential, read our free article: 10 Promising SmallCap Stocks Under $1 Billion Market Cap.
We came across a bullish thesis on Arvinas, Inc. on Valueinvestorsclub.com by Ray Palmer. In this article, we will summarize the bulls' thesis on ARVN. Arvinas, Inc.'s share was trading at $7.59 as of July 16th.
Photo by Myriam Zilles on Unsplash
Arvinas (ARVN) presents a compelling deep value investment, trading at $6.50 despite holding $954M in cash ($13/share), significantly exceeding its market cap. Beyond cash, Arvinas owns a Novartis-partnered asset that brought in $150M upfront, with a risk-adjusted NPV estimated at $300M ($4/share).
Its breast cancer drug, vepdegestrant (vepdeg), though no longer a blockbuster candidate, retains meaningful value as a second-line treatment for mutant patients—a smaller but high-value market. The company estimates a sum-of-the-parts valuation north of $20/share, though corporate overhead currently drags on that value. The opportunity exists due to a combination of investor disillusionment and strategic missteps.
Vepdeg's Phase 3 data, announced in March, showed no efficacy in wild-type patients, capping its commercial scope. Pfizer, Arvinas's partner, subsequently cancelled combo trials, but notably retained involvement through a Phase 1 combo study it fully funds and prominently featured vepdeg in its ASCO plans—suggesting continued interest.
A near-term catalyst is ASCO's full data reveal, where Arvinas has teased best-in-class potential in mutant breast cancer. A second catalyst could be Pfizer assuming full commercialization duties under existing partnership terms, avoiding Arvinas's inefficient standalone approach. If Pfizer declines, selling the asset becomes the most viable path. Activism remains a third catalyst.
Insider ownership is minimal, executive compensation is excessive, and the cost structure hasn't adapted to the company's diminished scope. An activist could drive governance reforms, prevent value-destructive commercialization attempts, and push for a return of excess cash to shareholders. With a large margin of safety and multiple catalysts, Arvinas offers an attractive asymmetric risk/reward setup.
Previously we covered a on Relay Therapeutics, Inc. by Steve Wagner in May 2025, which highlighted the company's strategic pivot to focus solely on RLY-2608, supported by deep cost cuts and a strong cash runway through 2029. The company's stock price has appreciated approximately by 15% since our coverage. This is because early clinical data validated RLY-2608's potential. The thesis still stands as the lead program advances into pivotal trials. Ray Palmer shares a similar view on the breast cancer space but emphasizes Arvinas's undervaluation, cash-rich balance sheet, and activist-driven upside.
Arvinas, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held ARVN at the end of the first quarter which was 32 in the previous quarter. While we acknowledge the potential of ARVN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None.