Arrowhead Research Corp Hammered On Drug News; Deutsche Bank Lowers Price Target

Arrowhead Research Corp ARWR had its price target lowered from $45 to $20 by Deutsche Bank on Wednesday. The firm maintained a Buy rating.

The report stated, "we see higher risk but do not think the program is dead."

The stock fell approximately 50 percent Wednesday due to disappointment over data on the company’s experimental hepatitis B drug and despite the confidence of Deutsche Bank analyst Robyn Karnauskas.

The report noted that the "viral reductions with ARC-520 were lower...than expected" and expressed disappointment in management’s handling of "expectations around the Ph 2a trial. Given the results we see risk from 1) longer timelines, 2) potential competitors & 3) risk of using higher doses. However, this abstract was selected as a late breaker which underlines the importance of data to Hep-B community."

The report concluded that "downside risks include: 1) lack of efficacy for lead asset ARC-520 or future product catalysts, 2) safety signal on ARC-520 or future product candidates, 3) smaller-than-projected market opportunity in HBV, 4) competition and smaller than expected future asset opportunities."

Arrow Research Corp recently traded at $6.57, down 47.16 percent.