Why Arrowhead Pharmaceuticals Stock Is Skyrocketing 23.3% Today

What happened

After the company updated investors on progress it’s making in its phase 1 study of ARO-AAT for alpha-1 antitrypsin deficiency (AATD), shares of Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR) are shooting 23.3% higher at 1:30 p.m. EDT today.

So what

In 2016, concerns over liver toxicity led to Arrowhead Pharmaceuticals abandoning all of its clinical-stage therapies and to the development of a new RNA delivery system.

Image source: Getty Images.

Today, The company reported that it’s fully enrolled its phase 1 study of ARO-AAT, a therapy for AATD that was developed using the new approach. A rare disease, AATD is characterized by an inability to properly create the A1AT protein. A buildup of this incorrectly folded protein in the liver can cause liver disease requiring liver transplant.

ARO-AAT interferes with genetic messengers to curb production of the mutant protein, preventing it from accumulating in the liver. If successful, ARO-AAT would be the only treatment for liver disease caused by AATD aside from liver transplant.

Now what

The company was enrolling multiple cohorts of patients in order to study various doses of ARO-AAT. Interestingly, the company abandoned the highest dose cohorts (400 mg) because “maximal activity appeared to occur at lower doses than expected.”

This decision may signal that Arrowhead is seeing early signs of efficacy at lower doses that could be safer for patients.

Although it’s encouraging to hear progress is being made in treating this life-threatening disease, investors should recognize that there’s still a lot of work to do before ARO-AAT is proven safe and effective. A lot can (and often does) go wrong in clinical trials, so a little caution is wise.

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Todd Campbell has no position in any of the stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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