What happened

Shares of Arrowhead Pharmaceuticals (NASDAQ:ARWR) rose nearly 32% last month, according to data provided by S&P Global Market Intelligence. The biopharma company announced a business update for the fiscal second quarter of 2019. It appears to have been a busy three months.

The clinical-stage company began dosing patients in two phase 1 studies, received the green light from regulators to begin an important phase 2/3 trial, and reported promising interim data from an ongoing trial being conducted by a subsidiary of partner Johnson & Johnson. It's the second-straight quarterly update to send shares soaring.

A hand pulling the last column in a chart above the rest.

Image source: Getty Images.

So what

The pipeline is buzzing with activity at Arrowhead Pharmaceuticals. Rare-disease drug candidates ARO-ANG3 and ARO-APOC3 were each administered to the first patients in early-stage studies. ARO-AAT got the nod to begin a phase 2/3 trial to evaluate its potential to treat alpha-1 antitrypsin (AAT) deficiency. It has the potential to serve as a pivotal study, meaning the data generated from the first half of the trial could be submitted for marketing approval while the second half of the study continues.

Of course, investors are most interested in the hepatitis B program being developed with Johnson & Johnson. It's off to a promising start. Data presented at the EASL International Liver Congress 2019 meeting showed that all 40 patients treated with JNJ-3989 (formerly ARO-HBV) were able to meet total reduction targets, while 88% reduced a measurable biomarker below the specified level.

Now what

All eyes will remain on the hepatitis B program. Arrowhead Pharmaceuticals stands to receive up to $3.7 billion in milestone payments, plus royalties on commercial sales, for the successful development of the asset. It has already received at least $200 million in cash from its partner in addition to a $75 million equity investment. If the early-stage results hold up in larger trials, then investors will be rewarded for their patience.

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