What: Shares in Arrowhead Research Corporation (NASDAQ:ARWR) climbed by 10% earlier today after the company announced that German regulators have approved its application to launch two phase 2b trials studying ARC-520 as a therapy for hepatitis B.

So What: The announcement helps clear the way for Arrowhead Research Corporation to kick-off additional global trials evaluating the efficacy and safety of ARC-520, an RNAi therapy that seeks to provide a functional cure for patients diagnosed with chronic hepatitis B.

Currently, ARC-520 has been well tolerated in earlier studies evaluating doses as high as 4 mg/kg; however, these trials, which will run in parallel, will evaluate the efficacy of just 1 mg/kg and 2 mg/kg doses.

Although the German trials will run for 33 months, Arrowhead Research Corporation plans to take a look at interim data after day 71 and, if necessary, make dosing adjustments.

Now What: There's a significant unmet need for hepatitis B treatment. Globally, 350 million to 400 million people are diagnosed with the disease, which can lead to liver disease and liver cancer.

ARC-520 is an intriguing therapy, but it's still in the fairly early stages of development. Currently, the company has a single dose phase 2a study and a multiple dose phase 2b study under way.

Because 90% of drugs entering human clinical trials fail to reach the market, including 30% to 40% that fail in late stage trials, there's a lot of risk associated with this company, and that makes Arrowhead Research Corporation best suited for only the most risk-tolerant of investors.