Silence Therapeutics, a publicly traded biotech firm based in the U.K., said it has made a $9.6 million equity investment in Arrowhead Pharmaceuticals.
Silence said it acquired about 8.4 percent of the outstanding shares of common stock in Arrowhead (NASDAQ: [[ticker:ARWR]]), which is based in Pasadena, CA, but houses its research and development team in Madison, WI.
Both companies are focused on developing therapies designed to attack viruses using ribonucleic acid interference (RNAi), which destroys messenger RNA from viruses before the infected cell turns those RNA into proteins that propagate the infection. This interference is also known as “gene silencing.”
Silence had been evaluating several different RNAi-focused companies and technologies since raising the equivalent of about $48 million from investors in 2015, according to a news release.
The all-cash transaction could be a forerunner to discussions over a licensing deal or R&D collaboration, Silence said. “We look forward to opening a constructive dialogue with Arrowhead,” Ali Mortazavi, Silence’s CEO, said in a prepared statement.
Arrowhead, for its part, emphasized that Silence’s investment is the only official business the two firms have done together up to this point. “There have been no discussions about any potential transaction between the two companies,” Arrowhead said in a separate news release.
Mortazavi told the financial news website Proactive Investors that Silence intends to continue developing drugs on its own, rather than just buy other companies and have them perform the R&D work.
In November, shares in Arrowhead plunged following the company’s announcement that it had canceled the development of three experimental drug candidates for liver diseases. It also said that it planned to reduce staff by about a third, and later revealed that it had terminated the employment of chief scientific officer David Lewis. The announcements triggered a mass sell-off of Arrowhead stock.
Arrowhead’s stock price has since risen, though not by much. Shares in the company were trading at $1.89 a share on Monday afternoon, down about 3.6 percent from Friday’s closing price of $1.96 a share.
Arrowhead said on Monday that it plans to continue development of several drug candidates, none of which are currently in clinical trials. The company is developing some candidates independently, but on others it is collaborating with partners, including Amgen (NASDAQ: [[ticker:AMGN]]), a large pharmaceuticals company based in Thousand Oaks, CA. In its release announcing the investment from Silence, Arrowhead said it will “continue to seek partnerships and collaborations that maximize the value of its assets.”
Silence committed a sizable chunk of its cash reserves with the deal. The company said it had about $58 million in cash as of last June.
Arrowhead recently reported having about $85 million in cash and cash equivalents, as of Sept. 30.
