Arrowhead Pharma shares rose more than 5% Monday afternoon to $24.41 after Bank of America analysts initiated overage of the company with a Buy rating and price target of $29.
The clinical-stage biotech company “has an attractive mix of early to late programs with significant upside potential,” analysts wrote, including a platform for developing ribonucleic acid targeting therapies (RNAi).
RNAi therapies work by essentially turning off certain genes, therefore reducing proteins that can cause diseases.
Arrowhead Pharma is currently trading at “an attractive entry point,” BofA analysts argued, pointing to the company’s first-mover potential in developing pulmonary RNAi therapies.
“RNAi delivery to the lung could be compelling given access to novel and historically undruggable targets,” the analysts wrote. “ARWR is evaluating three drugs (RAGE, MUC5AC, MMP7) with preclinical and healthy volunteer validation.”
The furthest along is ARO-RAGE, with initial clinical data in diseased patients expected in 2024.
Then, there are the company’s phase three therapies, plozasiran and fazirsiran, which treat hypertriglyceridemia (HTG) and alpha-1 liver disease, respectively. These drugs, “anchor our valuation at combined $23/share,” analysts wrote.
“Plozasiran is the biggest single-product value driver in our model with the potential for $2 billion in global peak revenue due to its competitive profile in high-risk severe HTG patients,” the analysts added. “For fazirsiran, we forecast peak sales of $770 million (after profit-split with partner Takeda).”
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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