No way to bury Arrowhead and Bioinvent’s bad news


If the US presidential election made this week a good time to bury bad news then, for Arrowhead and Bioinvent at least, the strategy backfired. Both suffered double-digit share price falls when the US FDA slapped clinical holds on their respective lead assets.

For Bioinvent the hold on the multiple myeloma project BI-505 is the latest of several setbacks, while Arrowhead’s halt looks less catastrophic at this point. Though since ARC-520, a hepatitis B asset, has a consensus sales-derived NPV of $727m and the issue is related to a delivery vehicle used in other projects, the US biotech has more to lose.

Indeed, until today things were looking up for Arrowhead, and the stock was holding its own against the backdrop of a falling Nasdaq biotech index. After this morning’s 27% plunge the group is valued at under $300m, suggesting that the market had already assumed that the sellside’s expectations for ARC-520 were overblown.

That said, the risk of contagion spreading to the rest of Arrowhead’s pipeline is real; the company said the US agency’s action was related to its EX1 delivery vehicle, which it uses not only for ARC-520 but for both of its remaining clinical-stage RNAi projects, ARC-521 and ARC-AAT.

There might be some solace in the fact that the deaths on which the study halt have been blamed related to primates and not human subjects, and the dose to which ARC-520 had been escalated here was higher than that used in humans and in earlier toxicology trials.

The chimp gives and takes away

For Arrowhead this is ironic, since it was chimp data that first catapulted it to biotech stardom. Right now only the 12-patient Heparc-2004 trial is affected by the hold, and ARC-520 remains in five other clinical studies in a total of 432 hepatitis B patients.

No such luck for Bioinvent, whose phase II multiple myeloma study was its last remaining clinical effort with BI-505, an anti-Icam-1 MAb; the beleaguered Swedish company had earlier abandoned efforts to develop BI-505 for solid tumours. It has another clinical asset, TB-403, partnered with Thrombogenics, and this remains in a phase II trial for brain cancer, after colorectal and ovarian cancer trials were suspended when Roche pulled out of a deal.

Bioinvent says BI-505 is now on full clinical hold, meaning that all patient dosing has had to cease, owing to an adverse cardiopulmonary event. Boehringer Ingelheim earlier discontinued enlimomab, a stroke MAb with the same anti-Icam-1 mechanism, in phase III, while Ionis’s alicaforsen is an anti-Icam-1 antisense project still in pivotal studies for gastro-intestinal indications.

While consensus forecasts for BI-505 are not available, analysts had recognised it as Bioinvent’s lead asset since the double failure in 2012 of BI-204 and TB-402. That had caused Bioinvent’s stock to crash by 60%, and the shares were off 21% yesterday, despite the BI-505 news coinciding with blanket coverage of the US presidential election.

Investors are today none the wiser as to the goings-on at a third company, Alexion. The group’s insiders have been selling stock, it has still not filed its third-quarter report with the SEC, and it is apparently keeping the sellside in the dark over the reasons why.

Leerink analysts yesterday guessed at a range of scenarios from an M&A transaction, through an “internal and administrative issue”, to a product impairment due to adverse clinical outcomes. Ultimately, however, they admitted: “What have we learned? Not much.”

If it is bad news then now is probably a good time to slip it out, and the radio silence means that there still remains the possibility of a near-term positive surprise. No such scenario exists for holders of Arrowhead or Bioinvent.

US trials put on clinical hold this week
Project Company Design Trial ID
ARC-520 Arrowhead Dose escalation in 12 HBeAg-positive hepatitis B pts NCT02452528
BI-505 Bioinvent Combined with autologous stem cell transplant in 90 multiple myeloma pts NCT02756728

To contact the writer of this story email Jacob Plieth in London at or follow @JacobPlieth on Twitter

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