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Arrowhead Pharmaceuticals plans to raise $45 million
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Arrowhead Pharmaceuticals plans to raise $45 million

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Arrowhead Pharmaceuticals — a California drug development company with most of its operations in Madison — plans to raise $45 million in a private stock offering.

Arrowhead said it is making 7.63 million shares of common stock available, at $5.90 a share, with Cantor Fitzgerald & Co. as the sole placement agent. The offering is expected to close by Aug. 12.

The stock sale would bring in $45 million before expenses are subtracted.

Arrowhead is developing drugs based on RNA interference, or RNAi, a natural process that can turn off harmful genes. Funds from the stock sale will help pay for clinical trials underway on two drugs, said Dave Lewis, who is Arrowhead’s chief scientific officer and heads the company’s Madison operations.

The lead drug, ARC-520, is aimed at treating chronic hepatitis B, an infection in the liver that can lead to cirrhosis or cancer.

The drug is in phase 2B trials in the U.S., Europe, Asia and Australia, Lewis said, to test its safety, find an appropriate dose, and see how effective it is as a treatment.

Another drug, ARC-AAT, is meant to treat patients with a more rare, hereditary disease, Alpha-1 antitrypsin deficiency, that can affect the liver and lungs. It’s in phase 1 of human tests.

Arrowhead, 465 Science Dr., has nearly 100 employees in Madison and about 20 at its corporate headquarters in Pasadena, California, Lewis said. He said the stock offering is not expected to result in a lot of new hiring.

The Madison operation began as Mirus Corp., founded in 1995. The RNAi portion of Mirus was purchased by Swiss pharmaceutical giant Roche in 2008 for $125 million and then sold in 2011 to Arrowhead — then called Arrowhead Research Corp. Another part of Mirus, making and selling research tools, split off in 2008 to form Mirus Bio.

Arrowhead shares, sold on the Nasdaq market under the symbol ARWR, closed Tuesday at $6.39 a share, up 49 cents from the day before.

After the market closed, the company released its fiscal third-quarter report showing a net loss of $19.4 million, or 32 cents a share, on revenue of $40,000 compared with a net loss of $15.9 million, or 27 cents a share, on $124,000 in revenue for the same period last year.

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