Why Is Aardvark Therapeutics Stock Sinking Monday?

Aardvark Therapeutics Inc. (NASDAQ:AARD) shares are down during Monday’s premarket session following the company’s announcement to voluntarily pause its Phase 3 HERO trial for Prader-Willi Syndrome.

The decision comes as the company is conducting a comprehensive review of safety data.

Observed Side Effects

The company on Friday revealed that it will not announce topline data from the HERO trial as previously anticipated in the third quarter of 2026. This pause was prompted by reversible cardiac observations at higher than target therapeutic doses found during routine safety monitoring in a healthy volunteer study.

Aardvark’s CEO, Tien Lee, emphasized the commitment to patient safety and the importance of evaluating the signals seen at elevated doses of ARD-101. The company plans to continue collaborating closely with the FDA and the Prader-Willi Syndrome community while determining the next steps for its clinical program.

Analyst View

“At this point, it is admittedly difficult to properly assess prospects of ARD-101 in Prader-Willi syndrome given the limited available information,” William Blair wrote in an investor note on Monday.

Analyst Andy T. Hsieh added that due to the severe disruption of the study pause, the ongoing Phase 3 HERO trial may not be fully completed. However, this outcome opens the possibility of the company electing to unblind the study early.

He highlighted that the management announced that greater than half of the target (90 patients) had been completed around mid-January, suggesting that unblinding the HERO study results could yield a sufficient sample size for investors to fully assess the risk/benefit profile of ARD-101.

“Assuming resolution of the cardiac safety event, Aardvark may be able to accelerate and streamline the second pivotal study with increased confidence in its statistical and powering assumptions,” analyst Hsieh commented on Monday.

Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $29.78. Recent analyst moves include:

• RBC Capital: Downgraded to Sector Perform (Lowers Target to $6.00) (Mar. 2)
• Stifel: Downgraded to Hold (Lowers Target to $6.00) (Mar. 2)
• Morgan Stanley: Downgraded to Equal-Weight (Lowers Target to $7) (Mar. 2).
• HC Wainwright: Downgrades to Neutral (Mar. 2).

AARD Price Action: Aardvark Therapeutics shares were down 55.88% at $5.51 during premarket trading on Monday. The stock is near its 52-week low of $4.88.

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