Tuesday, June 19, 2018

Arrowhead Cuts Trial Short And The Market Loves It

Yesterday, Arrowhead Pharmaceuticals announced that it is cutting short its phase I study of ARO-AAT as it had observed what appeared to be maximal drug activities at lower than predicted doses.  ARO-AAT is the GalNAc-targeted investigational RNAi agent for the treatment of alpha-1-antitrypsin-related liver disease.  This just 3 months after it had initiated dosing in the (healthy volunteer) study.  

The stock market greeted the announcement, sending shares up another 24% turning it into a 10-bagger in the span of one year!

Interpretation of AAT program status

This is what was said to describe the general results seen so far:

We have escalated above a dose that we believe achieves maximal activity, and all doses to date appear to be generally well-tolerated.”

And this was the trial design:

AROAAT1001 (NCT03362242) is a Phase 1 single- and multiple-ascending dose study to evaluate the safety, tolerability, pharmacokinetics, and effect of ARO-AAT on serum alpha-1 antitrypsin levels in healthy adult volunteers. The study includes 7 cohorts in which 16 subjects receive placebo and 28 subjects receive single or multiple doses of ARO-AAT at doses of 35, 100, 200, or 300 mg. Additional cohorts were planned at a dose of 400 mg, but were deemed unnecessary based on observed activity at lower doses.

The company said that data from the study would be presented at AASLD late this fall.  However, based on the original study design involving single and multiple dose cohorts of 35, 100, 200, 300, and 400mg, we can roughly infer the following from the press statements: single and multiple dose cohorts of the first 3 doses up to 200mg had been completed (= 6 cohorts) and the 300mg single-dose cohort had started when they determined that 300mg is already above where maximal activity is reached.  Although the statement does not exclude the possibility that maximal activity appeared to have been seen already at 100mg, we can conservatively 200mg (~3mg/kg) as the dose with which the company plans to move into patients.

In monkeys, the company reported that AAT expression in the liver was almost completely abolished following 2 doses of 3mg/kg spaced 28 days apart based on last year's AASLD poster.

Moving pipeline and technology speedily along

This fast-tracking of the program is consistent with Arrowhead’s overall rapid-fire execution in bringing new programs into the clinic and then use modern, parallel-cohort trial designs and disease experts to move them rapidly along in the clinical development bowel. 

Its goal- and there is every indication they will make good on it- is to bring around half a dozen clinical candidates into the clinic in just over year.  If that weren’t challenging enough for a small biotech company like Arrowhead, these programs are not limited to being targeted to a single tissue (the liver), but could also involve the lung and cancer.

In a way, the liver pipeline is being moved along in a similar fashion to when Alnylam selected its current late-stage clinical crop of candidates 5 or so years ago in a cook-off between different target genes.  Once the technology is ready for a certain tissue, you focus on populating the pipeline with related candidates.  This allows you to grow your market cap and become an established biotech player.  With a market cap now well above $1B, Arrowhead certainly is close to reaching that dream.  It only needs to add to balance sheet cushion.


On the other hand, claimed breakthroughs not in just one (lung), but two (à cancer) additional tissue types, make me wonder whether Arrowhead has started to overpromise again in a fashion similar to the DPC experience when it and investors chose to whistle over safety signals ('DPC has no side effects').  It is understandable if RNAi companies dangle the carrot of additional tissue types in front of the investor community- investors need dreams to hang their hats on- but the speed in light of the size of the company make me wonder if they are taking a short-cut or two too many and investors choose to ignore red flags again.

How times have changed: a year ago, still overly punished by the markets for the DPC fiasco, an cutting-a-trial-short announcement like yesterday’s would have sent shares down further.  Now, Arrowhead is getting the benefit of the doubt.

Knowing that a statement like ‘all doses to date appear to be generally well-tolerated’ can mean pretty much anything bar a drug-related patient death, I choose to remain neutral with regard to the news and will await the AASLD data until further judgement on the quality of Arrowhead’s approach.

1 comment:

Sean Bedingfield said...

Late fall seems like a long time to withhold judgment. Seems like you are generally positive but surprised by the scale of the market's reaction (as am I).

By Dirk Haussecker. All rights reserved.

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