What Caused Arrowhead Pharmaceuticals to Skyrocket 12.5% Today

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What:After industry analysts at Cantor Fitzgerald began coverage with a buy rating, shares ofArrowhead Pharmaceuticals, Inc.(NASDAQ: ARWR) shot 12.5% higher at 1:30 p.m. EDT today.

So what:Arrowhead Pharmaceuticals is researching drugs that target RNA (ribonucleic acid), a nucleic acid present in all living cells that acts as a DNA messenger.The company's most advanced therapy is ARC-520, which is being studied as a new treatment for hepatitis B.

Recently, Arrowhead Pharmaceuticals reported that combiningARC-520 and Bristol-Myers Squibb's (NYSE: BMY) Baraclude resulted in up to 5.5 log, or 99.99% reductions in serum HBV DNA. Patients with HBeAg-negative mutation -- a tough-to-treat variation -- achieved reductions that put them below the limit of quantification, too.

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Those results boost confidence that ARC-520 combination therapy could provide a functional cure for the 350-million-plus people worldwide who are infected with hepatitis B.

Now what: Cantor Fitzgerald analysts have slapped a $15 price target on Arrowhead Pharmaceuticals shares and if they're right, that would undeniably be a big win for investors.

However, before investors get too excited, they should remember thatARC-520 is in mid-stage trials, and that future trial results could fail to back up earlier findings.

Image source: Arrowhead Pharmaceuticals.

In short, while Arrowhead Pharmaceuticals has some intriguing research underway, following the advice of Wall Street analysts blindly is never a good idea. Instead, investors should do their own due diligence before clicking the buy button. In this case, that due diligence may lead risk-intolerant investors to decide that watchful waiting is the best way to approach this stock right now.

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Todd CampbellTodd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned.Like this article? Follow him onTwitter where he goes by the handle@ebcapitalto see more articles like this.

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