Arrowhead Pharmaceuticals Inc (NASDAQ: ARWR) stock plunged 17.40% on October 4^th, 2018 but slightly recovered by over 1.4% on October 5^th, 2018 (as of 10:57 AM GMT-4; Source: Google finance). The company entered a $3.7 billion license and cooperation agreement with Janssen Pharmaceuticals Inc. to develop and commercialize its ARO-HBV treatment for chronic hepatitis B. As part of the deal, Arrowhead will receive $175 million upon close and Janssen parent Johnson & Johnson Innovation JJDC Inc., a unit of Johnson & Johnson JNJ, +0.23% will buy a $75 million stake priced at $23 a share of Arrowhead common stock. Arrowhead will be eligible to receive up to $1.6 billion in milestone payments and another roughly $1.9 billion in option and milestone payments for reaching three additional targets. The company will also be eligible for tiered royalties on product sales. Janssen will have an exclusive license on the ARO-HBV program, a subcutaneously administered RNAi therapeutic candidate aimed at treating hepatitis B. The deal is expected to close in the fourth quarter. Arrowhead said proceeds would be used to fund other treatments under development. The company is currently testing drugs for metabolic disorders, lung disease and cancer. Arrowhead Pharmaceuticals employs a broad portfolio of RNA-interference (RNAi) drugs designed to inhibit harmful proteins by silencing the genes that cause them. Its Targeted RNAi Molecule (TRIM) targets specific genes in order to affect production of specific proteins. Last month, the company had presented initial clinical data that pointed to a functional cure for the hepatitis B virus infection. More data from the phase 1/2 trial is expected in November.

Meanwhile, ARWR will present initial clinical data for ARO-HBV, the company’s third generation subcutaneously administered RNA interference (RNAi) therapeutic being developed as a potentially curative therapy for patients with chronic hepatitis B virus (HBV) infection, at the 18th World Gastroenterologists Summit in Auckland, New Zealand. Data will be presented from the eight patients in the lowest two dose cohorts: 100mg and 200mg. The data shows that three monthly doses of ARO-HBV led to a maximum reduction in circulating HBV surface antigen (HBsAg) of 4.0 log10, with mean reductions of approximately 2.0 log10 on day 85 in the 100 mg cohort and 1.4 log10 on day 71 in the 200mg cohort (currently the last complete data point available). All eight patients achieved greater than 1.0 log10 reductions in circulating HBsAg. Further, the company intends to submit a late-breaking abstract with additional clinical data to the Liver Meeting, the Annual Meeting of the American Association for the Study of Liver Disease (AASLD), being held in November 2018.