Arrowhead's Big Sell-Off Presents Buying Opportunity, According to HC Wainwright

The sell-off on shares of Arrowhead Pharmaceuticals Inc ARWR tied to the ARO-EnAC phase 1/2 study halt is overdone, leading H.C. Wainwright & Co. to reiterate its Buy rating.

The Arrowhead Analyst: H.C. Wainwright & Co. analyst Patrick Trucchio reiterated the firm’s Buy rating and a price target of $95 on shares of Arrowhead Pharmaceuticals.

The Arrowhead Takeaways: Arrowhead notified regulators on July 2 it was voluntarily pausing its ARO-EnAC (an RNAi therapeutic) phase 1/2 study following signs of local lung inflammation in rats, Trucchio said. Following this, the pharmaceutical company’s shares plummeted nearly 30%.

Like many other pharmaceutical companies, Arrowhead has multiple therapeutics undergoing clinical trials, as suggested by the report. The company’s cardiovascular disease programs contribute $67 to the share price target, while the paused ARO-EnAC siRNA therapeutic represents a mere $2, Trucchio said regarding his valuation.

Trucchio stated he believes the sell-off is “overdone and is presenting a compelling buying opportunity ahead of multiple potential positive events on the much more valuable Arrowhead programs expected in 2H21 and 2022.”

It is not yet known whether the inflammation is specific to rats or a potential side effect in humans; however, speculation remains that rats could be more sensitive to this type of inhaled treatment, Trucchio noted.

ARWR Price Action: Shares of Arrowhead Pharmaceuticals are down 0.095% at $63.07 on Tuesday, following Friday’s sell-off.