A few weeks back, and in fact the day before the U.S. election, RNAi biotech Arrowhead quietly posted some miserable news that its hep B candidate, ARC-520, was placed under a clinical hold by the FDA. Today, this candidate, along with a host of others and 30% of its staff, are to be axed as the biotech desperately seeks to refocus.
Much of its work had revolved around the EX1 delivery vehicle, but those created under this system—hep B meds ARC-520, ARC-521, and ARC-AAT for alpha-1 antitrypsin deﬁciency—will now all be canned. ARC-520 had once been touted as a potential cure for hep B, with the entire company and its platform formerly said to be a trillion-dollar opportunity. Yesterday, its market cap had fallen to under $90 million.
To shore up the losses, it will also be cutting 30% of its workforce (including clinical and R&D teams), which is “intended to extend its cash runway into 2019.” The company added a more “streamlined” company would make progress for its remaining pipeline happen more “rapidly.”
The company announced on Nov. 8 that the FDA had halted a trial for ARC-520, which uses small interfering RNAs to reduce the levels of HBV proteins and the RNA template used to produce viral DNA, given questions over a nonclinical toxicology study in nonhuman primates using EX1, where these primates died.
It said the decision to stop work on all three meds came during “ongoing discussions with regulatory agencies and outside experts,” where the management said “it became apparent that there would be substantial delays in all clinical programs that utilize EX1, while the company further explored the cause of deaths in a nonclinical toxicology study in non-human primates.”
In a call to investors last night, Dr. Christopher Anzalone, president and CEO, said: “While a path forward has been taking shape [on ARC-520], it is becoming increasingly clear that the nonclinical studies required to test our hypotheses would be complicated, time-consuming, and expensive.
“Why is that? We still do not know why some of the primates died at the highest dose, which, as we have said previously, is higher than human doses. Our hypothesis is that they were caused by dose related drug-induced toxicity exacerbated by extensive study-related handling procedures and infusion reactions for which the animals are not pretreated, unlike patients and volunteers in our clinical studies who receive an oral antihistamine prior to treatment.
“Given time, we could test these hypotheses and possibly provide comfort to regulators, but risk to the company would still be high.”
Now, it will focus on another process, namely the subcutaneous (subQ) and extrahepatic delivery system, and said in a statement that it “intends to advance to the clinic two previously unannounced HBV and AATD programs using our subQ platform.”
It will also continue work on its $674 million cardiovascular RNAi pact with Amgen, which was signed back in September, as well as on preclinical med ARC-F12 in clear and renal cell carcinoma, and several other early-stage candidates.
The biotech’s shares plummeted 60% last night, after hours, on the news as it appears to be heading toward penny stock territory.
Back in August, the California biotech said it had raised $45 million in cash through a series of investors to help bolster its R&D war chest.
The company has been working on developing a number of gene-silencing techniques, with much of its RNAi assets bought from Novartis in a $35 million deal that saw it grab the rights to three preclinical candidates.
In 2011, it bought out Roche’s RNAi platform as this tech moved out of Big Pharma and into smaller biotech.
Arrowhead has for some time been locked in a rivalry with fellow RNAi specialist Alnylam ($ALNY) to get their RNAi meds onto the market first, although this field is now coming under increasing scrutiny.
This comes as Alnylam too has had its own troubles, losing around a half-billion dollars in market cap in trading in late September on the news that it halted development of RNAi liver disease candidate ALN-AAT after a Phase I/II study resulted in three patients with liver enzyme elevation at the highest dose.