Shares of Aardvark Therapeutics lost more than half their value after safety worries led the biotechnology company to halt testing of its most advanced drug prospect. 

Aardvark said Friday that, “out of an abundance of caution,” the company has voluntarily paused dosing and enrollment in a Phase 3 trial of ARD-101, an experimental drug it’s been developing for the rare genetic disease Prader-Willi syndrome. According to Aardvark, trial monitors detected “reversible cardiac observations” during a routine safety check in a study of healthy volunteers. 

Aardvark didn’t provide more details about the findings, which were seen in recruits taking far higher doses than the company is targeting with its drug. But they were concerning enough for Aardvark to stop its big trial, “HERO,” as well as an open-label extension study. Aardvark had been expecting to report study results later this year. But it’s unclear when that data might come now. The company will review the safety findings and provide an update next quarter.

“The safety of every patient in our clinical studies is our highest priority, so we will thoroughly evaluate the signals seen at higher than therapeutic doses of ARD-101 in a healthy volunteer study,” said company founder and CEO Tien Lee, in a statement. 

Lee added that the company is “committed” to advancing ARD-101 and evaluating “optimal therapeutic dosing levels” to support its progress. Still, the study stoppage casts doubt on the future of one of the most advanced prospects for Prader-Willi, a rare condition that causes relentless hunger. 

Prader-Willi has long been a tough target for drugmakers. Many attempts to develop a medicine for patients’ insatiable appetite, or “hyperphagia,” either failed in testing, proved unsafe or were rejected by regulators. For decades, the only treatment options managed symptoms or prevented complications. That changed last year, though, when the Food and Drug Administration approved a hyperphagia drug called Vykat from Soleno Therapeutics. 

Vykat got off to a fast sales start, too, quickly turning Soleno profitable and suggesting there’s pent up demand for an effective Prader-Willi therapy. Analysts at the investment bank William Blair have estimated that the total addressable market for Prader-Willi drugs is worth $10 billion  

But questions about Vykat’s growth trajectory and safety have since emerged, sinking Soleno’s share price and spotlighting the potential room for alternative therapies. Aardvark, which raised $94 million in an initial public offering in February 2025, has been hoping ARD-101 might become one of them. 

ARD-101 acts on certain types of “bitter taste receptors,” which convey acrid flavor from the mouth to the brain but also help regulate metabolism and inflammation. Previous attempts to activate these receptors with a drug have been hampered by safety concerns — scientific literature suggests they’re expressed in multiple tissue types, including the heart and lungs — but Aardvark has contended ARD-101 should sidestep those issues as it’s designed to specifically home in on targets in the gut. 

The emergence of potential heart problems related to treatment, then, “adds a layer of uncertainty to what was considered the lower-risk element of the program's profile, its acute safety,” wrote RBC Capital Markets’ analyst Brian Abrahams. 

After speaking with management, Abrahams wrote that the findings were observed on a common “EKG” heart test and reversed when treatment was withdrawn, suggesting a “potential drug relationship.” Aardvark could still have a path forward given it hasn’t seen such findings at the dose levels in its Phase 3 study. But the “therapeutic window,” or range of safe and effective doses, is likely “narrower,” he added. 

Prader-Willi is also a multifaceted disease that leaves patients with “high underlying [cardiovascular] morbidity,” raising questions about how the issue will be received by regulators and physicians, wrote Stifel analyst James Condulis. 

With regulators, “it seems like all plausible scenarios are on the table,” from proceeding as planned to stopping the study altogether,” Condulis wrote. 

“This ultimately could prove to be fine; that said, we think it's hard to have confidence right now,” he added.

Aardvark shares plummeted from a $12.05 close on Friday to less than $6 apiece in early trading Monday. Soleno shares, meanwhile, ticked up a few percentage points.