WB ups Arrowhead Pharma price target to $12

William Blair raised its price target for Arrowhead Pharmaceuticals (NASDAQ:ARWR) to $12 from $9 after the company licensed exclusive worldwide rights to two preclinical cardiovascular programs to Amgen (NASDAQ:AMGN).

Under the accord, Arrowhead would receive an up-front fee of $35-million and $21.5-million in equity, and up to $617-million in options and milestones, plus royalties.

“We believe this is a positive deal for Arrowhead that not only strengthens the balance sheet, but also serves as a strong validation of the company’s RNAi technology platform,” writes analyst Katherine Xu.

“The deal also provides non-dilutive financing to fund development of Arrowhead’s proprietary programs, including the hepatitis B (HBV) program and the AAT program,” she added.

Ms. Xu said Arrowhead is a leader in HBV research, using its proprietary RNAi platform, but also carries a broad pipeline based on its technology in other indications, which serves as upside on its valuation and a potential source of non-dilutive revenue.