What happened

After the company announced it has filed for approval with New Zealand regulators to begin phase 1 studies of its hepatitis B RNAi therapy, shares of Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) shot 10.5% higher at 3:30 p.m. EST Friday.

So what

Arrowhead Pharmaceuticals was forced to abandon all of its clinical-stage therapies in 2016 following regulators' concerns over liver toxicity. The news devastated shares and forced the company back to the drawing board to develop a new RNA delivery system.

Researchers in lab coats looking at a monitor displaying data and a double helix.

IMAGE SOURCE: GETTY IMAGES.

In September, Arrowhead Pharmaceuticals unveiled its new Targeted RNAi Molecule (TRiM) drug development platform and announced it's working on a few pre-clinical stage programs, including one for the treatment of hepatitis B. Management thinks its new platform is simpler, cheaper, safer, and speedier when it comes to drug development.

Today, the company announced it's pursuing an OK from regulators to begin human trials so that it can evaluate safety and dosing for ARO-HBV. If granted a green light, the company will have taken an important step toward rebuilding its pipeline and restoring investor confidence.

Now what 

The company's previous hepatitis B therapy, ARC-520, was among those that were abandoned in 2016. Like ARC-520, ARO-HBV will attempt to silence messenger RNA that contribute to hepatitis B activity. Management hopes that ARO-HBV, in combination with other therapies, can one day offer patients a functional cure.

The company is miles away from demonstrating that ARO-HBV will achieve that goal; however, it is intriguing to think that a hepatitis B cure could be on the horizon. An estimated 400 million people worldwide are infected with the disease and, unfortunately, current treatments only slow disease progression. As a result, patients diagnosed with chronic hepatitis B remain at risk of developing life-threatening liver cancer and liver failure.

Overall, this beaten-down biotech is trying to get back on its feet, but there's still a lot to prove. It's good to see Arrowhead moving in the right direction, but I'll want to see much more data on ARO-HBV before I'm convinced enough to buy shares. 

Todd Campbell has no position in any of the stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.