Aardvark Therapeutics Inc reported a voluntary pause to enrollment and dosing in its Phase 3 HERO trial and its open-label extension after routine safety monitoring identified reversible cardiac observations in a separate healthy volunteer study. The market reaction was immediate: shares of Aardvark (NASDAQ:AARD) plunged 56% on Monday.
The biotech company said the decision to halt the HERO study - which is testing ARD-101 for hyperphagia in patients with Prader-Willi Syndrome - stems from cardiac signals detected at doses above the intended therapeutic range in a healthy volunteer study. Aardvark emphasized that these observations were reversible and that they occurred in healthy volunteers at higher doses than those administered in the PWS trial.
In its announcement, the company said it is conducting a comprehensive review of the safety data and has paused both enrollment and active dosing in the Phase 3 program out of an abundance of caution. Aardvark noted that the cardiac findings were not seen in prior clinical trials at therapeutic doses.
Operationally, the company now no longer expects to report topline HERO results in the third quarter of 2026. Instead, Aardvark said it will provide updated guidance in the second quarter of this year. The Food and Drug Administration has not placed the trial on clinical hold, and the company indicated it intends to meet with the agency in the near term to discuss the findings and next steps.
Investor response included at least four analyst downgrades following the pause announcement. RBC Capital's Brian Abrahams lowered his view from Outperform to Sector Perform and cut his price target to $6.00 from $18.00. Morgan Stanley's Michael E. Ulz moved the stock from Overweight to Equalweight and reduced his price target to $7.00 from $29.00. Stifel analyst James Condulis downgraded the stock from Buy to Hold with a $6.00 target, down from $24.00. H.C. Wainwright's Raghuram Selvaraju moved his rating from Buy to Neutral.
The company's public statements focus on a methodical review of the safety signal, differentiation between dose levels used in various studies, and forthcoming engagement with regulators. For market participants, the combination of a late-stage program pause, delayed topline expectations and multiple analyst downgrades has translated into a sharp revaluation of the stock in the near term.
Context for investors
While the cardiac observations were reported at doses above the therapeutic target and were reversible, the pause affects the timing of clinical readouts and introduces near-term uncertainty around development progress and investor expectations. Aardvark's note that prior studies at therapeutic doses did not show these findings is a key detail the company is highlighting as it reviews the data and prepares discussions with the FDA.