Arrowhead Pharmaceuticals (ARWR): Evaluating Valuation After First-Ever Dual-Target RNAi Therapy Enters Clinical Trial

Arrowhead Pharmaceuticals (ARWR) has taken a key step forward by filing for regulatory clearance to launch a Phase 1/2a trial for ARO-DIMER-PA, its novel dual-target RNAi therapeutic.

See our latest analysis for Arrowhead Pharmaceuticals.

Arrowhead’s bold move with ARO-DIMER-PA has come on the heels of a strong run for the stock. Excitement over its innovation and recent conference spotlights have driven impressive momentum. The 30-day share price return sits at 26.4%, while the 90-day return has risen 119.6%. Over the past year, total shareholder return is up 73.8%, reflecting renewed optimism and growth potential, even as longer-term gains remain modest by comparison.

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With shares up sharply and a major pipeline milestone achieved, the key question now is whether Arrowhead is still undervalued or if the market has already priced in its future growth potential, which could leave limited room for upside.

Most Popular Narrative: 18.2% Undervalued

Arrowhead Pharmaceuticals’ most widely followed narrative suggests its shares are trading at an attractive discount to the calculated fair value, with the last close price of $36.81 well below the implied target. This sets up a compelling case for further upside if certain growth milestones are met.

Arrowhead's advancing late-stage clinical pipeline, especially the expected launch of plozasiran for FCS and SHTG, plus pivotal studies for three other RNAi therapies targeting major unmet needs, positions the company to capitalize on rising demand for innovative treatments driven by an aging population and increasing prevalence of chronic and genetic diseases. This could significantly accelerate revenue growth as approvals and launches materialize.

Read the complete narrative.

Want to know why this narrative puts Arrowhead’s future in uncharted territory? There’s a bold mix of ambitious revenue growth, margin recovery, and a profit multiple rarely seen outside breakthrough tech stocks. The model behind this fair value is built on aggressive financial and market expansion assumptions. Find out what’s powering the high conviction.

Result: Fair Value of $45 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution stumbles in key partnerships or setbacks in late-stage trial results could quickly undermine Arrowhead’s current growth outlook and valuations.

Find out about the key risks to this Arrowhead Pharmaceuticals narrative.

Another View: Looking Beyond the Surface

While Arrowhead appears undervalued against its estimated fair value, looking through a different lens reveals potential caution. Its price-to-sales ratio stands at 8.9x, slightly higher than the peer average of 7x, though below the broader US biotech industry’s 11.3x. This signals Arrowhead’s valuation risk sits between optimism and market reality. Could investor enthusiasm be running a bit high, or is the market missing the bigger picture?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Arrowhead Pharmaceuticals Narrative

If the numbers or narratives above do not match your perspective, you can dive into the data and build your own view in just a few minutes. Do it your way

A great starting point for your Arrowhead Pharmaceuticals research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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