Arrowhead Pharmaceuticals said on Tuesday that it has canceled the development of three experimental drug candidates for liver diseases and plans to lay off part of its workforce, sending the company’s stock down nearly 60 percent in after-hours trading.
Arrowhead’s (NASDAQ: ARWR) stock price was $1.77 a share as of 7:39 p.m. in New York, down from $4.39 a share when the closing bell rang hours earlier.
Arrowhead said it will lay off about 30 percent of its workers, a move intended to give the company enough cash to operate through 2019, according to a news release.
All three of the programs Arrowhead axed involve candidates that use EX1, a drug delivery vehicle developed by the company that is administered intravenously and targets the liver. Troubles with the treatments began earlier this month, when the FDA placed a trial of one of the now-discontinued drugs on hold because of deaths of non-human primates in a separate study that involved EX1.
Arrowhead said on Nov. 8 it received a verbal notification from the FDA about the hold on ARC-520, which is aimed at treating chronic hepatitis B virus (HBV). The cause of the deaths, Arrowhead said at the time, was still unknown and happened at the highest dosing level of 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,” according to Arrowhead’s news release announcing the cancellation of the three programs.
One of the other candidates that Arrowhead said it would stop developing, ARC-521, is also an experimental drug for chronic HBV patients. The third scrapped candidate, ARC-AAT, is designed to treat rare liver diseases resulting from alpha-1 antitrypsin deficiency.
Arrowhead said that it plans to continue several of its development programs, none of which involve drug candidates containing EX1. Two of the programs that Arrowhead will move forward with are being conducted in partnership with Amgen (NASDAQ: AMGN), a large biotech based in Thousand Oaks, CA. Arrowhead announced its collaboration with Amgen in September.
Arrowhead will now focus on programs involving drug candidates that use the company’s subcutaneous and extra-hepatic delivery systems. Both of the programs Arrowhead is conducting alongside Amgen fit into that category, as do other programs with which Amgen is not involved.
Arrowhead is headquartered in Pasadena, CA, but its research and development operations are based in Madison, WI. The Wisconsin State Journal reported in September that about 100 of the company’s employees work in the Madison area.