Citi cuts Arrowhead stock target to $17, maintains neutral

Published 13/05/2025, 10:40
Citi cuts Arrowhead stock target to $17, maintains neutral

On Tuesday, Citi analysts revised their outlook on Arrowhead Pharma (NASDAQ:ARWR), reducing the price target to $17.00 from the previous $21.00, while keeping a Neutral rating on the stock. Currently trading at $13.97, the stock appears overvalued according to InvestingPro analysis, with analyst targets ranging from $21 to $80. The adjustment followed Arrowhead’s announcement of its second quarter financial results for fiscal year 2025, along with updates on its robust pipeline, which includes over 15 assets currently in development. InvestingPro data reveals concerning metrics, including a weak financial health score and a current ratio of 0.71, indicating potential liquidity challenges. Get the full picture with InvestingPro’s comprehensive research report, available for over 1,400 US stocks.

The company has started to generate substantial revenue from its significant licensing agreement with Sarepta (NASDAQ:SRPT), marking a milestone in its financial trajectory. With a projected revenue growth of 38.43% for FY2025, the company shows promising top-line expansion. In a notable advancement, the U.S. Food and Drug Administration (FDA) accepted the New Drug Application (NDA) for plozasiran, a treatment for familial chylomicronemia syndrome (FCS), and set a Prescription Drug User Fee Act (PDUFA) target action date of November 18, 2025.

If approved, plozasiran would become Arrowhead’s first sanctioned drug, positioning the company as a second player in the highly specialized FCS market, following the lead of Ionis Pharmaceuticals’ Tryngolza. Arrowhead is also conducting Phase 3 trials aimed at expanding plozasiran’s label to include severe hypertriglyceridemia (SHTG), which could significantly broaden the drug’s market reach, albeit as a subsequent entrant behind Tryngolza.

The decision by Arrowhead to pay down a portion of its credit facility is anticipated to be received positively by certain investors. However, Citi analysts suggest that, despite these developments, the short-term potential for Arrowhead stock appreciation remains limited due to the modest expectations for the FCS drug launch. Discover more exclusive insights and financial metrics with InvestingPro, including detailed analysis of the company’s growth prospects and financial health.

In other recent news, Arrowhead Pharmaceuticals reported impressive financial results for Q2 FY2025, significantly exceeding expectations. The company posted a net income of $370.4 million, or $2.75 per share, which was a notable turnaround from the anticipated loss of $0.45 per share. Revenue also soared to $542.7 million, surpassing the forecasted $127.9 million, largely due to a lucrative license agreement with Sarepta. The firm anticipates multiple product launches in the coming years, including Flodasiran for Familial Chylomicronemia Syndrome, with a PDUFA date set for November 2025.

Furthermore, Arrowhead’s strategic advancements were highlighted by a substantial agreement with Sarepta, which brought in $500 million upfront and additional payments, strengthening its financial position. The company is also advancing its obesity programs and developing a CNS platform targeting diseases like Alzheimer’s and Parkinson’s. In terms of analyst activity, Arrowhead’s stock performance post-earnings reflects investor confidence, although no specific upgrades or downgrades were mentioned. The company continues to focus on expanding its therapeutic offerings in the RNAi sector, with a strong cash position of $1.1 billion as of March 31, 2025.

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