Stockwatch: Bluebird, Arrowhead And Short Memories

When I arrived at 3i Group plc in 2000 there was a legendary piece of internal research that classified CEOs that had been successful at 3i investee companies into either first-timers or repeat CEOs. There was no difference in success rates between the two groups. Perhaps the better piece of research in order to increase the chances of success would have been to stratify and exclude those CEOs who had been previously unsuccessful, because two CEOs last week demonstrated that failure often has a habit of making repeat visits.

Continuing the dire year-end news flow in life science companies, Arrowhead Pharmaceuticals Inc. followed up on the FDA's clinical hold on its lead interfering RNA (RNAi) program ARC-520 for chronic hepatitis B virus (HBV) infection by cancelling all its clinical programs. (Also see "Arrowhead Tumbles As FDA Puts A Clinical Hold On Novel HBV Therapy Trial" - Scrip, 9 November, 2016.) ([A#sc097774]) Investors were clearly shocked by the news and Arrowhead's shares plunged more than 68% on the week against the backdrop of the NASDAQ Biotech Index's more sedate 4.3% fall. Arrowhead's investors only had themselves to blame as the nucleic acid drug space had already suffered a number of setbacks this year. (Also see "Stockwatch: Alnylam Helps Nucleic Acid Drugs Degrade" - Scrip, 10 October, 2016.) They should have taken heed of the fact that Arrowhead's platform comprises the cast-offs from Roche and Novartis AG that were acquired in 2011 and 2015 respectively, for a total of only $10m in cash and various stock and promissory note considerations