RBC Capital Downgrades Arrowhead Research (ARWR) to Sector Perform

RBC Capital downgraded Arrowhead Research (NASDAQ: ARWR) from Outperform to Sector Perform with a price target of $9.00 (from $35.00). The change follows the release of its AASLD abstract earlier.

Analyst Michael J. Yee said, "Although the stock is down significantly to ~$350M mkt cap now because of low-end efficacy in AASLD abstract, we find it reasonable to now be at Sector Perform from Outperform because we won't get any real new data on the key debate of whether this drug can lead to Hep B cures until end of '15 or 2016 from either: 1) Phase IIb controlled 1-year study starting up soon, or 2) combinations with IFN injections that could start in '15 but won't have data until H2:15. Since the "knockdown" data today or higher doses at AASLD is unlikely to seriously re-invigorate us or investors to believe the drug will lead to cures at this point and we need more data - the stock is likely range-bound for a while (we think the floor is $3/cash and $2 by YE:15) as investors will likely wait to see more meaningful data."

"We simply believe the range of knockdown won't lead to high cures right now, and have written that promising orals from other companies are starting to gain visibility (ASMB, Novira data at AASLD, etc) and investors may start to worry about competitive bars (or even other RNAi/antisense co's TKMR, ISIS, ALNY)," he added.

For an analyst ratings summary and ratings history on Arrowhead Research click here. For more ratings news on Arrowhead Research click here.

Shares of Arrowhead Research closed at $12.51 yesterday.

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