Arrowhead Pharmaceuticals said it will eliminate approximately 30% of its workforce and refocus its drug development efforts on RNA interference (RNAi) therapeutics that use the company's new proprietary subcutaneous (subQ) and extrahepatic delivery systems.

In addition to the layoffs and restructuring, disclosed yesterday, Arrowhead said it will end development of three clinical-phase hepatitis B candidates based on its DPCiv™, or EX1, drug delivery vehicle.

The three candidates include ARC-520, a trial for which the FDA placed on clinical hold 3 weeks ago—an acknowledgement that triggered arrowhead’s recent spate of bad news. The clinical hold followed the deaths of nonhuman primates at the highest dose of the drug in the Phase IIb Heparc-2004 toxicology study, designed to support long-term dosing using EX1.

“During ongoing discussions with regulatory agencies and outside experts, 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,” the company stated.

That was one of two reasons cited by Arrowhead for the job cuts and restructuring. The other was what the company called “substantial advances” in its subQ-administered and extrahepatic RNAi-based development programs.

“In preclinical studies with the subQ platform, the company has obtained depth and duration of target gene knockdown approaching that of intravenously administered EX1-containing candidates, at lower doses and with good safety margins,” Arrowhead said.

As a result, the company said, it will focus instead on developing its subQ and extrahepatic pipeline, which consists of candidates for hebatitis B as well as alpha-1 antitrypsin deficiency (AATD), Factor XII deficiency, hypoxia-inducible factor (HIF)-2α, “and other unannounced programs.” Arrowhead plans to advance into clinical phases two previously unannounced HBV and AATD programs that use subQ.

Speaking with analysts yesterday, Christopher Anzalone, Ph.D., Arrowhead’s president and CEO, said the jobs to be eliminated include employees in its clinical team and part of its R&D team.

“We still have not received written notification from the FDA and do not yet have guidance about what might be required to remove its clinical hold,” Dr. Anzalone told analysts yesterday. “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.”

Shares of Arrowhead plunged about 60% from yesterday’s closing price of $4.46, to $1.79 in premarket trading as of 9 a.m. today.

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