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Why Arrowhead Pharmaceuticals Stock Rose Over 10% Yesterday

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Dec. 13 2018, Published 11:42 a.m. ET

ARWR’s performance

On December 12, Arrowhead Pharmaceuticals (ARWR) stock closed at $12.19, an ~11.53% rise from its previous day’s close of $13.62. Arrowhead Pharmaceuticals stock rose from $3.68 at the close of market on December 29, 2017, to reach $15.19 at the close of market on December 12, reflecting a ~313% year-to-date rise.

On December 12, Arrowhead Pharmaceuticals stock closed at $15.19, a ~32% fall from its 52-week high of $22.39 on September 6. The stock hit its 52-week low of $3.01 on December 13, 2017.

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Reason for the hike in the stock price

Arrowhead Pharmaceuticals reported its fiscal 2018 financial results on December 11. Its fiscal 2018 ended on September 30. Its net revenue for the year amounted to $16.1 million compared to $31.4 million in fiscal 2017, reflecting a ~48.6% year-over-year fall.

In fiscal 2018, Arrowhead Pharmaceuticals entered into a license agreement with Johnson & Johnson’s (JNJ) wholly owned subsidiary Janssen Pharmaceuticals for Arrowhead’s investigational drug candidate ARO-HBV and up to another three investigational RNAi drug candidates. Arrowhead has already received an up-front payment of $175.0 million and $75.0 million in equity investments. Arrowhead’s deal with Janssen holds a potential value of $3.7 billion.

Arrowhead Pharmaceuticals already presented clinical data on its ARO-HBV at the American Association for the Study of Liver Diseases’ meeting in 2018. In that meeting, ARO-HBV demonstrated efficacy and tolerability.

In fiscal 2018, Arrowhead Pharmaceuticals reported net income and EPS of -$54.5 million and -$0.65, respectively, compared to -$34.4 million and -$0.47, respectively, in the same period of the previous year.

Analysts’ recommendations for ARWR and its peers

Of the five analysts tracking Arrowhead Pharmaceuticals in December, two have recommended “strong buys,” and three have recommended “buys” on its stock.

In December, of the four analysts tracking Endocyte (ECYT), ~50% have recommended “buys.” Among the seven analysts tracking RegenxBio (RGNX), ~57% have recommended “buys.”

On December 13, Arrowhead Pharmaceuticals, Endocyte, and Regenxbio had consensus 12-month target prices of $24.38, $24.33, and $82.07, respectively, representing potential returns of ~60.50%, ~1.95%, and 69.39%, respectively, over the next 12 months.

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