Why Arrowhead Research Corporation Shares Jumped Higher

By Markets Fool.com

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What: Shares in Arrowhead Research Corporation climbed by 10% earlier today after the company announced that German regulators have approved its application to launch two phase 2b trials studying ARC-520 as a therapy for hepatitis B.

So What: The announcement helps clear the way for Arrowhead Research Corporation to kick-off additional global trials evaluating the efficacy and safety of ARC-520, an RNAi therapy that seeks to provide a functional cure for patients diagnosed with chronic hepatitis B.

Currently, ARC-520 has been well tolerated in earlier studies evaluating doses as high as 4 mg/kg; however, these trials, which will run in parallel, will evaluate the efficacy of just 1 mg/kg and 2 mg/kg doses.

Although the German trials will run for 33 months, Arrowhead Research Corporation plans to take a look at interim data after day 71 and, if necessary, make dosing adjustments.

Now What: There's a significant unmet need for hepatitis B treatment. Globally, 350 million to 400 million people are diagnosed with the disease, which can lead to liver disease and liver cancer.

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ARC-520 is an intriguing therapy, but it's still in the fairly early stages of development. Currently, the company has a single dose phase 2a study and a multiple dose phase 2b study under way.

Because 90% of drugs entering human clinical trials fail to reach the market, including 30% to 40% that fail in late stage trials, there's a lot of risk associated with this company, and that makes Arrowhead Research Corporation best suited for only the most risk-tolerant of investors.

The article Why Arrowhead Research Corporation Shares Jumped Higher originally appeared on Fool.com.

Todd Campbell owns shares of Arrowhead Research. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.