Chardan Capital Markets Downgrades Arrowhead Research (ARWR) to Neutral on EX-1 RNAi Program Discontinuations

November 30, 2016 6:19 AM EST
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Price: $2.06 -5.07%

Rating Summary:
    1 Buy, 7 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Chardan Capital Markets downgraded Arrowhead Research (NASDAQ: ARWR) from Buy to Neutral with a price target of $2.00 (from $8.00) on EX-1 RNAi program discontinuations.

Analyst Madhu Kumar commented, "As previously highlighted, the Bear Case for ARWR has occurred, with broad loss of the EX-1 based clinical pipeline. In our 10 November 2016 company note, we highlighted both bullish and bearish scenarios for Arrowhead after the FDA's announced clinical hold for the Heparc-2004 clinical study of ARC-520. In particular, we stated that, due to the use of EX-1 DPC technology across Arrowhead's clinical pipeline, "the clinical hold could reflect a widespread risk to the Arrowhead platform." The announced discontinuation of EX-1 clinical assets confirms this risk, leaving us with little visibility on Arrowhead's development program moving forward."

The analyst sees little read-across to the RNAi space. "Because the ARWR discontinuations are associated with the DPC platform and not the RNAi drugs, they should have minimal read-across to the RNAi space. To our understanding, the Arrowhead clinical hold for Heparc-2004 was due to deaths in "a nonclinical toxicology study in non-human primates using EX[-]1, the company's liver-targeted, intravenously administered delivery vehicle." As the clinical hold was based on deaths from a study using EX-1 without a RNAi drug, competing assets in the RNAi space like ARB-1467 and ARB-1740 from Arbutus (Buy) and ALN-HBV and ALN-AAT02 from Alnylam (Buy), which do not use a DPC like EX-1, to us should not face similar safety risks."

For an analyst ratings summary and ratings history on Arrowhead Research click here. For more ratings news on Arrowhead Research click here.

Shares of Arrowhead Research closed at $4.39 yesterday.

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