Arrowhead Pharma Downgraded Following EX-1 RNAi Program Discontinuations

Arrowhead Pharmaceuticals Inc ARWR announced it was discontinuing all its clinical RNAi programs. All these programs use the dynamic polyconjugate (DPC) platform in the EX-1 delivery vehicle.

Chardan Capital’s Madhu Kumar downgraded the rating on the company to Neutral, while lowering the price target from $8 to $2.

“Arrowhead will focus its research program on subcutaneous and extra-hepatic programs ARC-LPA, ARC-AMG1, ARC-F12, ARC-HIF2, and previously unannounced subcutaneous programs for chronic hepatitis B virus and alpha-1 antitrypsin deficiency,” Kumar mentioned.

RNAi Programs Discontinued

The decision to discontinue all programs containing EX-1 was based on continuing discussions with regulatory agencies and external experts, which indicated significant delays in the EX-1 programs as the company further investigated the cause of deaths in a non-clinical toxicology study announced on November 8, 2016.

Arrowhead Pharma also intends to reduce its workforce by about 30 percent, while expecting to extend its “cash runway” into 2019.

Kumar pointed out that the discontinuation of the EX-1 clinical assets had created low visibility into the company’s development program going forward.

However, the analyst also believes that since “the ARWR discontinuations are associated with the DPC platform and not the RNAi drugs, they should have minimal read-across to the RNAi space.”