Dive Brief:

• The Food and Drug Administration has placed a clinical hold on Aardvark Therapeutics’ drug for Prader-Willi Syndrome, escalating a trial stoppage that began when signs of potential heart problems were detected in a study of healthy volunteers. 
• Aardvark said Thursday it will “unblind,” or reveal which enrollees in a late-stage trial received ARD-101, in order to help investigators and regulators determine whether the drug is safe and effective enough to continue testing in humans.
• The company has dosed 68 people in the placebo-controlled Phase 3 trial and another 19 in an open-label extension study, both which were intended to measure whether ARD-101 can address the “hyperphagia,” or insatiable hunger, distinctive to Prader-Willi. The cardiovascular concerns emerged from a safety trial in healthy people who’d received much higher doses than what was administered in the other studies. 

Dive Insight:

Aardvark shares fell as much as 36% in morning trading and, at just over $5 apiece, were worth less than half of their trading price before ARD-101’s troubles began. The situation has put the company in a tough spot, as it may need to raise money by mid-2027, when its roughly $90 million in cash reserves will run out. 

To convince investors to buy in, Aardvark will likely need to agree with the FDA on a path forward for ARD-101, its most advanced drug prospect. ARD-101 stimulates secretion of GLP-1 and a second gut hormone called cholecystokinin that help increase sensations of satiety. In Prader-Willi, a genetic disorder, a deficiency in hormones released by the hypothalamus drive nonstop hunger.

Prader-Willi has long been a difficult target for drugmakers but the payoff for a successful medicine could be significant. The FDA has approved one drug, Vyktat, for the hyperphagia associated with the disorder. Its developer Soleno Therapeutics was acquired by Neurocrine Biosciences about a year after that clearance.

While news of the clinical hold triggered a share sell-off for Aardvark, some Wall Street analysts noted that there could be a silver lining in unblinding the study. William Blair’s Andy Hsieh wrote that if “early signals of efficacy” were detected, the company might be in a “better position” to design and run a new trial that could support approval.  

Yet because of the cardiovascular complications observed with high doses, it’s unclear what doses the FDA will be comfortable with moving forward, added Stifel analyst James Condulis. Aardvark likely won’t be able to go ahead with the current 800 milligram, twice-daily dose, making a new study the most plausible scenario, he wrote.

“It remains hard for us to get comfortable here with what was always a high-risk trial to begin with,” Condulis wrote.