5 Reasons Arrowhead Pharma Is Hepatitis B Leader

Arrowhead Pharmaceuticals Inc ARWR reported positive data in a Phase II study of its lead product ARC-520 for the treatment of hepatitis B surface antigen [HBsAg] in HB envelope antigen-positive [HBeAg+] HBV patients. Chardan Capital’s Madhu Kumar initiated coverage of the company with a Buy rating and price target of $12.

Growth Catalysts

Arrowhead Pharma is focusing on the development and commercialization of RNAi therapies for the treatment of various conditions, including chronic hepatitis B virus infection, alpha-1 antitrypsin deficiency, thrombosis/angioedema, cardiovascular disease, and clear cell renal cell carcinoma.

Analyst Madhu Kumar outlined several catalysts driving the company’s growth prospects:

1. In a phase IIa study, ARC-520 achieved >97 percent suppression of HBsAg that was persistent for around 4 weeks after a single 4 mg/kg dose in combination with daily nucleoside analog (NUC) therapy.
2. Suppression of HBsAg is likely vital for durable HBV therapy. ARC-520 thus has the potential to generate a robust immune response against HBV.
3. Nucleoside analog therapies transiently suppress HBV, driving the need for combination therapies like ARC-520 to achieve durable responses.
4. ARC-520 is more advanced and likely more effective than competing HBV RNAi assets.
5. Arrowhead Pharma may enter into a partnership soon. Such announcements with RNAi companies are associated with high alpha generation.

Kumar believes Arrowhead Pharma’s ARC-520 may be of interest to larger players like Gilead Sciences, Inc. GILD and Johnson & Johnson JNJ.