FDA clears the way for Arrowhead's hep B treatment, with a caveat

Arrowhead ($ARWR) is finally moving forward with a Phase IIb study on its hepatitis B treatment thanks to the FDA, but the company will need to further convince regulators before it can mount a larger effort.

The FDA has cleared Arrowhead to begin a multiple-dose Phase IIb trial of ARC-520, an RNA treatment designed to help the immune system fight hep B infection. The company now plans to get rolling on Heparc-2004, a placebo-controlled trial that will enroll up to 12 patients and test how well the once-monthly ARC-520 can reduce bodily levels of hep B virus. Patients will get three doses of either 1 milligram per kilogram of ARC-520 or placebo, once every four weeks, and Arrowhead will track results over 147 days.

But the FDA is not backing off from a clinical hold instituted in January that limits just how much of ARC-520 Arrowhead can administer. The biotech had initially planned to run a Phase IIb study in which two patient groups would get 2 and 4 milligrams per kilogram in parallel, but the agency wants to see more preclinical results and data from Heparc-2004 before allowing that to proceed, Arrowhead said.

In the meantime, the company is working to get its Heparc-2004 up and running as soon as possible, expecting to begin enrollment in about a month. And Arrowhead's investors cheered the incremental victory, sending the biotech's shares up about 16% on Monday morning.

ARC-520 is the top prospect in Arrowhead's stable of RNA interference treatments, which includes the rare disease treatment ARC-AAT and a slew of preclinical assets for liver ailments. The biotech made headlines last month when struck a $35 million deal to pick up Novartis' ($NVS) discarded RNAi assets, replicating a similar agreement with Roche ($RHHBY) from 2011.

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