Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR) announced financial results for its fiscal 2016 fourth quarter and year ended September 30, 2016. The company is hosting a conference call at 4:30 p.m. EST to discuss results.

Selected Fiscal 2016 and Recent Events

  • Discontinued development of ARC-520, ARC-521, and ARC-AAT in November 2016
    • The Company announced that it would be discontinuing these clinical programs, which utilized the intravenously administered DPCivTM, or EX1, delivery vehicle, and redeploying its resources and focus toward utilizing the Company’s new proprietary subcutaneous and extra-hepatic delivery systems
    • The decision to discontinue development of EX1-containing programs was based primarily on two factors:
      • During ongoing discussions with regulatory agencies and outside experts, it became apparent that there would be substantial delays in all clinical programs that utilize EX1, while the Company further explored the cause of deaths in a non-clinical toxicology study in non-human primates exploring doses of EX1 higher than those planned to be used in humans
      • The Company has made substantial advances in RNA chemistry and targeting resulting in large potency gains for subcutaneous administered and extra-hepatic RNAi-based development programs
    • Because of the discontinuation of its existing clinical programs, the Company also reduced its workforce by approximately 30%, while maintaining resources necessary to support current and potential partner-based programs and the Company’s pipeline
  • Entered into two collaboration and license agreements with Amgen
    • Total deal value of up to $673.5 million
    • Arrowhead received $56.5 million upfront:
      • $35 million in upfront cash payments, $21.5 million equity investment
    • Up to low double-digit royalties for ARO-LPA and single-digit royalties for the undisclosed target, ARO- AMG1
    • Amgen receives:
      • Exclusive license to ARO-LPA program
      • Option for an additional candidate against an undisclosed target, ARO- AMG1
    • Amgen will be wholly responsible for funding and conducting all clinical development and commercialization
  • Continued progress on preclinical candidates including ARO-HBV, ARO-AAT, ARO-F12, ARO-LPA, and ARO-HIF2
    • Regarding ARO-F12 and ARO-LPA:
      • Presented preclinical data at the American Heart Association’s Scientific Sessions 2016 for two development programs using Arrowhead’s proprietary subcutaneous delivery platform:
      • RNAi triggers against Factor 12 (F12) showed dose dependent reductions in serum F12
      • A statistically significant reduction (p=0.002) in thrombus weight was observed at greater than 95% F12 knockdown in a rat arterio-venous shunt model
      • There was no increased bleeding risk in ARO- F12-treated mice, even with greater than 99% knockdown of F12 levels
      • RNAi triggers against Lipoprotein (a) [Lp(a)] led to greater than 98% maximum knockdown after a single 3 mg/kg SQ dose in Transgenic mice
      • In an atherosclerosis model, data suggest that RNAi triggers can be effectively delivered to a fatty liver using the subcutaneous delivery platform
    • Regarding ARO-HIF2
      • Presented preclinical data showing that ARO-HIF2 inhibited renal cell carcinoma growth and promoted tumor cell death in its preclinical studies
  • Strengthened the Company’s balance sheet with August 2016 private offering and Amgen agreement upfront payments
    • In August 2016, the Company sold 7.6 million shares of Common Stock to certain institutional investors and received net proceeds of approximately $43.2 million
    • As part of the collaboration and license agreements as well as a Common Stock Purchase Agreement with Amgen, $14 million of the total $56.5 million upfront cash payments and equity investments were received in September 2016, and the remaining $42.5 million was received in November 2016
  • Continued progress on former drug candidates prior to the discontinuations
    • Presented preclinical and clinical data on former drug candidate ARC-AAT at the Liver Meeting
    • In a first-in-human clinical study, ARC-AAT was well tolerated and induced deep and durable reduction of the target AAT protein
    • The preclinical data suggest a possible improvement of liver health and arrest of further damage from treatment with ARC-AAT
    • Advanced former drug candidate ARC-521 into a Phase 1/2 study
    • Conducted multiple dose and combination studies of former drug candidate ARC-520 (Original Source)

Shares of Arrowhead closed flat today at $1.27. ARWR has a 1-year high of $8.22 and a 1-year low of $1.25. The stock’s 50-day moving average is $4.03 and its 200-day moving average is $5.80.

On the ratings front, Arrowhead has been the subject of a number of recent research reports. In a report issued on November 30, Jefferies analyst Eun Yang reiterated a Hold rating on ARWR, with a price target of $2.00, which represents a potential upside of 56% from where the stock is currently trading. Separately, on the same day, Chardan’s Madhu Kumar downgraded the stock to Hold .

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Eun Yang and Madhu Kumar have a yearly average return of 0.0% and a loss of -17.6% respectively. Yang has a success rate of 49% and is ranked #2673 out of 4285 analysts, while Kumar has a success rate of 31% and is ranked #4096.

Sentiment on the street is mostly neutral on ARWR stock. Out of 5 analysts who cover the stock, 4 suggest a Hold rating and one recommends to Buy the stock.

Arrowhead Pharmaceuticals, Inc. engages as a biopharmaceutical company developing targeted RNAi therapeutics. Its pipeline includes clinical programs in chronic hepatitis B virus and partner based programs in obesity and oncology.