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Tuesday, Jun 6, 2023

Arrowhead Takes Flight

Arrowhead Pharmaceuticals Inc. might be on the brink of a biotech drug breakaway.

It looks as though its shares have a head start in any case – up by about 300 percent so far this year, pushing its market capitalization to $1.4 billion.

The Pasadena-based biopharmaceutical company just won European and U.S. approvals for its orphan drug to treat liver disease tied to alpha-1 antitrypsin deficiency, a rare genetic disorder.

Early results of a clinical trial of the RNA-interference (RNAi) drug, meanwhile, suggest it can stymie a harmful protein linked to the disease. The process is known as “gene silencing,” which aims to turn off certain genes in order to inhibit the body’s production of disease-causing proteins.

“Near complete suppression,” Chris Anzalone, chief executive of the 14-year-old Arrowhead. “It’s exciting. We still have a long way to go until commercialization – but we have made a huge step forward.”

Arrowhead has a research laboratory in Wisconsin – picked up in a deal with Roche Holding AG – that works at the molecular level to develop the gene-silencing medicines to treat various intractable illnesses.

The company has a pipeline of eight drugs under development to treat liver and cardiovascular disease and hepatitis B. The research and development lineup on RNAi drugs give it a place in an emerging field of gene therapy that aims to wipe out proteins that cause disease.

Arrowhead’s standing – along with its shares – have also gotten recent boosts from licensing deals with Roche, Novartis AG and Amgen Inc., as well some progress by a competitor in the segment.

The recent activity has some viewing Arrowhead as a rising star in the growing Los Angeles biotech industry as well as in the field of RNAi drugs.

“Arrowhead has done a good job of moving their pipeline forward,” said Ahmed Enany, chief executive of the Southern California Biomedical Council, a Los Angeles-based trade group. “They’ve done a good job of hanging around, hanging tough, riding the market and raising money from the public to move their products.”

Reverse merger

Arrowhead was founded as a holding company for a variety of nanotechnology companies, Anzalone said. It went public in 2006, the same year that that Andrew Fire of Stanford University and Craig Mello of the University of Massachusetts Medical School were credited with the discovery of RNAi and awarded a Nobel Prize for medicine.

Arrowhead soon acquired two spinoff firms from California Institute of Technology in Pasadena. One of the acquisitions was Calando Pharmaceuticals Inc., the first company to develop an RNAi therapy.

Investors bid up the prospects for the then-new segment – Merck paid $1 billion for Sirna Therapeutics, one of the first companies in the field, in October of 2006.

The market, however, cooled quickly – Roche cut its program the same year, ending a commitment that covered three years and $500 million, according to reports at the time.

Arrowhead took a different tact, turning entirely toward the new gene therapy.

“The history of Arrowhead is following the science – and looking for the best ways to bring RNA interference to a superior therapeutic platform,” said Anzalone, a Southern California native with a PhD in biology from UCLA.

A big break for Arrowhead came in 2011, he said, when it acquired the same RNAi assets that had been shut down by Roche, which got a stake in the Pasadena company as part of the transaction.

The deal also gave Arrowhead a state-of-the-art research lab with dozens of research scientists in Madison, Wisc., and various technologies.

The company went back to the Big Pharma to acquire Novartis’ RNAi portfolio in 2015, getting various patents and three drugs in the preclinical stage for $35 million.

Arrowhead licensed two RNAi compounds for cardiovascular disease to Amgen a year later in a deal valued up to $674 million including milestones. The Thousand Oaks-based biotech giant paid $56.5 million upfront in cash and stock in exchange for rights to clinical development and commercialization of the compounds.

Ups and downs

Arrowhead hit a snag in 2016, when it was forced to abandon several of its late-stage drugs over federal regulatory concerns about liver toxicity in patients.

Some other drug companies and venture capitalists moved on from RNAi therapy, and Arrowhead abandoned several drugs that were in late stages of development.

The company stuck with RNAi through, retooling its approach.

“There was a huge investment in dollars,” said Anzalone. “But as always happens in all science, it was a lot harder than we thought – how to bring these small molecules into a rigid cell, at the right time to initiate the process of RNAi. It took a decade to figure it out. But I think we’re entering the golden age of RNAi.”

Now the scientific pendulum has swung back to RNAi, industry watchers said, with Arrowhead competing primarily with Alnylam Pharmaceuticals Inc. of Cambridge, Mass., which is now nearing federal approval for a treatment for hereditary ATTR amyloidosis.

Arrowhead has gone from zero clinical programs to five in the past 12 months. The company’s eight targeted RNAi molecules now include two that are in early stage clinical trial – its alpha 1 drug, and another that holds the potential cure for a chronic hepatitis B, which affects 400 million worldwide.

Clinical trials to treat hypertriglyceridemia, cystic fibrosis and renal cell carcinoma are planned for either this year or next.

“We’re not a me-too company, we’re not a follower – anything we do, we’ll be the first in it, or primary RNAi player,” Anzalone said. “This company is fiercely competitive – fiercely competitive, fiercely innovative … we’re constantly looking for ways to move forward.”

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