Top Picks 2021: Arrowhead Pharmaceutical (ARWR)

01/13/2021 5:00 am EST

Focus: HEALTHCARE

Genia Turanova

Lead Analyst and Editor, MoneyFlow Trader

My top biotech pick for 2021 is Arrowhead Pharmaceutical (ARWR), which operates in one of the most exciting areas of modern medicine — one with numerous potential applications longer-term, notes Genia Turanova, editor of Moneyflow Trader

Not to be confused with gene editing and gene therapy, gene silencing controls the flow of genetic information, and creates a “turn-off switch” for harmful genes before they’re able to create proteins that damage the host. 

With the growing possibility of simply deactivating our unwanted genes, the implications for our health are enormous. Gene silencing is already studied as a potential treatment for viral infections, cardiovascular diseases, cancer, endocrine disorders, and more.

No wonder the 2006 Nobel Prize went to two American biologists, Andrew Fire and Craig Mello, for their 1998 discovery of the RNA interference (RNAi) mechanism, or gene silencing, in living cells. (RNA, or ribonucleic acid, is the part of the gene responsible for protein synthesis.)

Arrowhead’s RNAi gene silencing technique can target and shut down specific genes that cause certain disease. Armed with this technology, ARWR targets all diseases that could be helped by its technology. Unlike many similar-sized biotechs, it’s not focused solely on rare diseases (or small markets). 

Biotechs are risky because there’s always a possibility something could go wrong — or that the original thesis or technology doesn’t live up to its early promise. Even if a company’s approach works, most biotechs are years — if not decades — away from making money off their inventions. 

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This risk isn’t as pronounced for Arrowhead because the company already has 13 drug candidates based on its gene silencing technology and its Targeted RNAi Molecule (TRiM) platform. Going forward, this ambitious biotech plans to introduce three new drug candidates into clinical studies every year. 

The main focus is currently on liver diseases — but ARWR also has one drug candidate for cancer and three potential drugs for the lungs (including one that targets COVID and future pulmonary-borne pathogens). ARWR is one of the brightest stars in the mid-cap biotech universe.

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