Arrowhead Pharmaceuticals (ARWR) Surges 17.98% on Landmark Novartis Licensing Deal – Is This the Catalyst for a New Biotech Bull Run?

Summary
• Arrowhead Pharmaceuticals (ARWR) rockets 17.98% intraday, trading at $25.99 with a 3.5% turnover rate.
• Novartis inked a $200M upfront licensing deal for ARO-SNCA, a preclinical siRNA therapy targeting Parkinson’s disease.
• The stock’s 52-week high of $27.34 is within striking distance as volume surges to 4.5 million shares.
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Arrowhead’s historic 17.98% intraday gain is fueled by a transformative partnership with Novartis, unlocking $2B in potential milestones. The stock’s sharp rebound from its intraday low of $22.73 highlights investor confidence in the TRiM™ platform’s CNS delivery capabilities. With biotech sector volatility intensifying, ARWR’s move could signal a broader shift in RNAi therapeutic adoption.

Novartis Licensing Deal Ignites Biotech Sector Optimism
Arrowhead’s 17.98% surge is directly tied to its landmark $200M upfront licensing agreement with Novartis for ARO-SNCA, a preclinical siRNA therapy targeting Parkinson’s disease. The deal, which includes up to $2B in milestones and royalties, validates Arrowhead’s TRiM™ platform for subcutaneous CNS delivery. Novartis’ commitment to leveraging this technology for neurodegenerative diseases has triggered a re-rating of Arrowhead’s pipeline, with investors pricing in the potential for rapid clinical trial initiation and long-term collaboration. The transaction’s expected closure in H2 2025, pending regulatory approvals, has further stoked short-term momentum.

Biotech Sector Volatility Narrows as Alnylam (ALNY) Trails ARWR’s Surge
While Arrowhead’s 17.98% gain dwarfs sector benchmarks, Alnylam Pharmaceuticals (ALNY), the sector leader, posted a modest 0.71% intraday rise. This divergence underscores the market’s focus on Arrowhead’s novel RNAi platform and its potential to disrupt CNS drug delivery. The biotech sector, broadly, remains range-bound, with the 200-day moving average at $17.49 offering limited directional bias. However, Arrowhead’s partnership with Novartis has created a short-term outperformer narrative, contrasting with the sector’s cautious tone.

Options Playbook: Leveraging ARWR’s Volatility with Gamma-Driven Calls
• Technical Indicators:
- 200-day average: $17.49 (below current price)
- RSI: 73.17 (overbought)
- MACD: 1.38 (bullish divergence)
- Bollinger Bands: Price at $25.99 (above upper band of $23.63)
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Arrowhead’s short-term bullish trend and overbought RSI suggest a continuation of momentum, but caution is warranted as the stock approaches its 52-week high of $27.34. The 30-day moving average at $18.11 and 200-day average at $17.49 provide critical support levels. Given the stock’s elevated volatility (48.50–71.68% IV across options), leveraged call options with high gamma and moderate delta offer asymmetric upside potential.
• Top Options:
- ARWR20250919C25 (Call, $25 strike, 2025-09-19):
- IV: 66.51% (high)
- LVR: 13.53% (moderate)
- Delta: 0.6088 (moderate)
- Theta: -0.0728 (high decay)
- Gamma: 0.1011 (high sensitivity)
- Turnover: $98,093 (liquid)
- Payoff at 5% upside (27.29): $2.29/share
- This contract balances leverage and liquidity, ideal for capitalizing on a breakout above $26.
- ARWR20250919C24 (Call, $24 strike, 2025-09-19):
- IV: 65.33% (high)
- LVR: 10.36% (moderate)
- Delta: 0.7123 (moderate)
- Theta: -0.0725 (high decay)
- Gamma: 0.0915 (high sensitivity)
- Turnover: $109,983 (liquid)
- Payoff at 5% upside (27.29): $3.29/share
- Offers higher upside with a lower strike, suitable for aggressive bulls expecting a $27.34 52-week high test.
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Trading Setup: Aggressive bulls may consider ARWR20250919C24 into a breakout above $26.50, while conservative traders can use ARWR20250919C25 as a core position. Both contracts benefit from high gamma, amplifying gains if the stock continues its upward trajectory. A stop-loss below $24.50 would protect against a reversal.

Backtest Arrowhead Pharmaceuticals Stock Performance

Arrowhead’s Momentum Unleashed – Act Now Before Gamma Decay Accelerates
Arrowhead’s 17.98% surge is a testament to the market’s validation of its TRiM™ platform and the Novartis partnership’s transformative potential. While the stock’s overbought RSI and proximity to the 52-week high suggest a potential pullback, the options chain’s high gamma and moderate delta calls present compelling leverage opportunities. Investors should monitor the $26.50 level as a critical inflection point; a break above this could trigger a retest of $27.34. Meanwhile, Alnylam’s 0.71% gain highlights the sector’s cautious tone, but Arrowhead’s momentum-driven rally offers a clear outperformer narrative. Act decisively on ARWR20250919C24 or C25 before theta decay intensifies post-September 19 expiration.