What happened
Shares of Arrowhead Pharmaceuticals (ARWR 4.14%) rose 34% last month, according to data provided by S&P Global Market Intelligence. That far outpaced the less than 2% gains of the S&P 500 and the NASDAQ Biotechnology Index.
There wasn't any company-specific news to drive shares higher, but after the slide they took early in 2020 -- a rough period that began for Arrowhead before the coronavirus pandemic seized Wall Street's attention -- investors probably aren't complaining. Considering the company initiated multiple new clinical trials in the first half of the year, there's reason to expect the pharma stock can hang onto its recent gains.
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So what
Arrowhead Pharmaceuticals is developing a pipeline of genetic medicines based on RNA interference (RNAi). Shares of the company and its RNAi peers rose to all-time highs in late 2019 on the heels of multibillion-dollar deals in the space, positive clinical trial results for treatments being developed by multiple companies, and renewed enthusiasm for this class of gene-correcting tools.
Due to the relative early-stage nature of most RNAi pipelines, the meteoric rise in share prices late last year set the stage for a predictable cool down in early 2020. That's exactly what happened. The correction was accelerated when the COVID-19 pandemic tanked stock markets in February and March. At the nadir of that trough, Arrowhead Pharmaceuticals had declined more than 60% in 2020.
The drug developer's share price has been gradually recovering from its March low; it's now off by only 30% year to date. But even though the stock is significantly down from its recent peak, investors can argue Arrowhead Pharmaceuticals is in its best position in years. Since the start of the year, the business has reported clinical progress for four drug candidates in cardiometabolic disorders, nonalcoholic steatohepatitis (NASH), and cystic fibrosis.
Now what
A volatile stock price isn't ideal, but after the first six months of 2020, individual investors have no reason to change their previously-held opinions about this company. Arrowhead Pharmaceuticals is making progress with early-stage pipeline assets, and it ended March with $256 million in cash. The next big stock-moving events remain the same as before: data readouts from mid- and late-stage clinical trials.
