On Wednesday, H.C. Wainwright showed confidence in Arrowhead Pharma (NASDAQ:ARWR), raising the stock's price target from $60.00 to $80.00 while maintaining a Buy rating. This aligns with the broader analyst sentiment, as InvestingPro data shows analyst targets ranging from $23 to $80, with three analysts recently revising earnings estimates upward.
The firm's optimism is driven by Arrowhead's recent global license and collaboration agreement with Sarepta Therapeutics (NASDAQ:SRPT), which was announced on November 26, and is expected to significantly support Arrowhead's financial and developmental goals.
The collaboration between Arrowhead and Sarepta involves licensing several assets focused on rare genetic diseases affecting muscle, the central nervous system, and the lungs. Arrowhead is poised to receive a substantial upfront payment of $500 million and an additional $325 million through a common stock purchase once the deal closes, anticipated in 2025.
According to InvestingPro analysis, this injection of capital is crucial, as the company has been quickly burning through cash, though it maintains a healthy current ratio of 6.74, indicating strong short-term liquidity. This strategic partnership is viewed as a critical factor in supporting the commercial launch of Arrowhead's first RNA interference (RNAi) therapeutic, anticipated in 2026 if it receives approval.
Arrowhead has also made significant strides in its drug development pipeline. On November 18, the company filed a New Drug Application with the FDA for plozasiran, a therapy targeting apolipoprotein C-III for the treatment of familial chylomicronemia syndrome. With the FDA granting Breakthrough Therapy Designation to plozasiran back on September 10, the review process could be expedited, potentially leading to approval and launch in 2025 and 2026 respectively.
Furthermore, Arrowhead has filed Clinical Trial Applications for ARO-INHBE and ARO-ALK7, its obesity programs, with plans to initiate Phase 1/2 studies in the first quarter of 2025. Updates on its central nervous system-targeted RNAi programs, including ARO-MAPT for Alzheimer's disease, are also expected in 2025.
The financial results for FY2024 and the corporate update provided by Arrowhead indicate a robust strategic position. The Sarepta deal is seen as a particularly clear positive, offering significant capital that will enable Arrowhead to fund its internal pipeline, which H.C. Wainwright considers underappreciated.
The firm's reiterated Buy rating on ARWR reflects its positive outlook on Arrowhead's future prospects. InvestingPro subscribers can access 12 additional key insights about Arrowhead's financial health, valuation metrics, and growth prospects through the comprehensive Pro Research Report, helping investors make more informed decisions about this biotechnology company's potential.
In other recent news, Arrowhead Pharmaceuticals (NASDAQ:ARWR) has been making significant strides with its financial status and drug development. The company has reported a transformative fiscal year, despite a net loss of $599.5 million for 2024, maintaining a robust cash and investment balance of $681 million. A significant partnership with Sarepta Therapeutics, involving a $500 million upfront payment and a $325 million equity investment, is expected to sustain Arrowhead's operations well into 2028.
The company's lead program, plozasiran, has seen progress with a New Drug Application (NDA) submitted for Familial Chylomicronemia Syndrome (FCS) and ongoing Phase 3 studies for Severe Hypertriglyceridemia (SHTG). Arrowhead has also introduced two new obesity programs, ARO-INHIBI and ARO-ALK7, as part of its ongoing commitment to innovation in RNAi therapeutics.
As for analyst perspectives, Bernstein SocGen Group lowered its price target for Arrowhead from $27.00 to $24.00, while Piper Sandler reduced its 12-month price target to $45 from the previous $62, and Citi slightly reduced the price target from $27.00 to $26.00. However, all three firms maintained their respective ratings on the stock.
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