Arrowhead's hep B plans in jeopardy

 Confirmation by Arrowhead that Johnson & Johnson is set to ditch the companies’ 2018 hepatitis B deal leaves investors in a quandary. On the one hand Arrowhead could soon have full rights to the asset in question, JNJ-3989, which J&J had put into three phase 2 trials. On the other the senior partner’s decision will not spur confidence in Arrowhead, whose stock is down 9% this week, and could embolden rivals. Arrowhead says it has not received a notice of termination, but confirmed that J&J was “deprioritising hep B broadly”. J&J apparently cannot sublicense JNJ-3989 without Arrowhead’s say-so, and the likeliest outcome is that the asset will soon revert to its originator, but Arrowhead says it will assess options once there is clarity in the coming weeks. Wells Fargo analysts, who cover Ionis, suggest that J&J’s decision might have been spurred by data on Ionis’s GSK-partnered bepirovirsen, which they say has demonstrated greater efficacy than all phase 2 siRNA compounds. “We do not know where JNJ-3989 will ultimately end up,” Arrowhead told this week’s quarterly analyst call. At least the $175m up-front fee plus J&J’s sunk R&D costs are effectively money in the bank.

RNA-directed clinical-stage hepatitis B projects
Project	Company	Mechanism	Status	HBsAg reduction (log10 IU/ml)
Bepirovirsen (GSK3228836)	GSK/ Ionis	Antisense oligo	Ph3 (B-Well 1 & 2)	2.65-2.95 @wk24*
VIR-2218 (ALN-HBV02)	Vir/ Alnylam	siRNA	Ph2 (March & others)	1.89-2.40 @wk24
ARO-HBV (JNJ-3989)	Arrowhead (J&J)	siRNA	Ph2 (Octopus, Penguin & others)	1.75-2.22 @wk24
AB-729	Arbutus Biopharma	siRNA	Ph2	1.82-1.99 @wk24
RG6346 (DCR-HBVS)	Roche/ Novo Nordisk (ex Dicerna)	siRNA	Ph2 (no ct.gov entry)	1.39-1.83 @wk16**
*In phase 2; **in phase 1. Source: clinicaltrials.gov & Wells Fargo. https://www.evaluate.com/vantage/articles/news/snippets/arrowheads-hep-b-plans-jeopardy