Silence Therapeutics buys stake in US-based Arrowhead Parma

Silence Therapeutics, a developer of ribonucleic acid (RNA) treatments, has bought an 8.4% stake in Nasdaq-listed Arrowowhead Pharmaceuticals for $7.8m ($9.6m).

The AIM-listed company bought the minority stake, which represents about 6m shares in the US pharmaceutical’s share capital, in order to facilitate future discussions for product licensing, to collaborate on research and development and share technology or for a potential corporate transaction.

Silence Therapeutics maintained that it and Arrowhead, however, are not currently engaged in any discussions.

Arrowhead develops medicines to treat intractable diseases by silencing the genes that cause them by using a portfolio of RNA chemistries.

The company believes that Arrowhead's intellectual property, technology and pipeline is “among the leading platform technologies in a sector that promises huge potential advances by generating novel medicines”.

Ali Mortazavi, chief executive of Silence Therapeutics, said: "We believe that the recent technological advancements in RNA therapeutics have been underestimated and undervalued. We are confident that the recent market approval of medicines in our field are the beginning of the emergence of an important new class of therapeutics. We look forward to opening a constructive dialogue with Arrowhead."

Silence Therapeutics bought the stake using its existing cash resources and the stake will not be consolidated and will be held as an investment asset on the balance sheet, as such there are no profits to attribute to the assets being held.

The company maintained that there will be no contribution from the investment to its net loss and at it had $47.6m in cash as the end of June 2016.

Shares in Silence Therapeutics were up 5.41% to 104.75p at 0859 GMT.