Arrowhead's Landmark Deal With Amgen Sends Shares Shooting Higher

Amgen will pay Arrowhead $35 million upfront, invest $21.5 million in equity to gain exclusive license to ARC-LPA and a second option on an undisclosed second CV target of Arrowhead.

Amgen will also pay Arrowhead up to $617 million in development, option, regulatory, and commercial payments in to low double digit royalties for ARC-LPA and single digit royalties for its undisclosed target.

Cantor Fitzgerald reiterated its Buy rating and $15 price target on Arrowhead saying "we have not seen a deal with such favorable economics in recent history for a compound that is one to two years from the clinic."

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Meanwhile, Arrowhead took an edge over Alnylam Pharmaceuticals, Inc. ALNY in ALN-AAT program, an investigational RNAi therapeutic targeting alpha-1 antitrypsin (AAT) for the treatment of AAT deficiency-associated liver disease.

Arrowhead's ALN-AAT program moved to Phase 1/2 trial with a clean safety profile at even higher doses, while Alnylam reported dose dependent liver enzyme elevations with doses from 3mg/ kg to 6mg/kg.

Analyst Elemer Piros does not see any liver safety concerns with Arrowhead's ARC-AAT, with shares of Alnylam falling as much as 8 percent to $70.58.

"Alnylam claims a sequence specific issue, but we cannot rule out a possibility that the issue is broader, chemistry-based for them. Regardless, Arrowhead is now clearly in the lead by at least 2–3 years with their AAT program," Piros wrote in a note.

At Time Of Writing ...

• Alnylam shares were down over 8 percent at $70.53.
• Amgen shares were at $167.46, down 1.33 percent.
• Arrowhead was up over 9 percent at $7.68.

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