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Arrowhead Stock Falls After FDA Places Hold on Clinical Trial

Xconomy Wisconsin — 

Shares in Arrowhead Pharmaceuticals took a nosedive Wednesday after the FDA placed a hold on a phase 2 clinical trial of the company’s lead drug candidate, which is aimed at treating chronic hepatitis B virus (HBV).

The company said in a press release Tuesday that the FDA has not sent any written communications to Arrowhead regarding the clinical hold. However, the company said it was told verbally by the agency that the hold was prompted by deaths of non-human primates in a separate study that involves EX1, a drug delivery vehicle developed by Arrowhead that is administrated intravenously and targets the liver.

“The FDA did not indicate the clinical hold was based on any human findings,” Arrowhead said in the release.

Still, investors saw the news as a major setback. Shares in Arrowhead (NASDAQ: ARWR) plunged following the company’s announcement of the clinical hold. At the close of trading Wednesday, its stock price was $4.20 a share, more than 31 percent lower than Tuesday’s closing price of $6.11 a share.

The study in which the animals died involves higher doses of EX1 than those given in human trials, Arrowhead said. The cause of the animal deaths is being investigated, according to the release, and Arrowhead officials believe the findings of the study are related to dose level.

EX1 has been given to more than 300 people to date, Arrowhead said, and has been administered to them more than 800 times in total.

Three serious adverse events have been observed in instances where patients were given EX1, according to the release. Two of them were fevers, Arrowhead said. The third event involved a patient with chronic HBV and cirrhosis of the liver who was later diagnosed with hepatic carcinoma, the most common type of liver cancer. Arrowhead said in the release that the physician who treated this patient judged the patient’s contraction of hepatic carcinoma to be unrelated to any Arrowhead-developed drug given to the patient.

Arrowhead’s lead product candidate, ARC-520, is not the company’s only one that uses EX1. It is also used in programs involving another experimental chronic HBV drug (ARC-521) and a candidate designed to treat rare liver diseases resulting from alpha-1 antitrypsin deficiency (ARC-AAT).

When the FDA places a clinical hold, it orders those running the study to stop dosing in patients currently enrolled. Additionally, no new patients may be recruited to the study, according to the agency’s website.

The 12-patient trial that was placed on hold is known as Heparc-2004. It started in August 2015 and had been expected to conclude about a year from now, according to the federal website that tracks clinical trials. Not counting Heparc-2004, ARC-520 is currently undergoing five clinical studies.

The stock market website Seeking Alpha and others have speculated that Arrowhead issued the press release when it did—Tuesday evening, when millions of Americans were watching results of the presidential election come in—in an effort to limit the impact of announcing the FDA’s decision.

Arrowhead is headquartered in Pasadena, CA, but its research and development operations are based in Madison, WI.