Shares of Aardvark Therapeutics Inc. (NASDAQ:AARD) dropped sharply in premarket trading after the Food and Drug Administration placed a full clinical hold on the company’s investigational new drug application for ARD-101.
The regulatory action covers all studies conducted under the IND, including the Phase 3 HERO trial assessing ARD-101 for hyperphagia in people with Prader-Willi Syndrome and the Phase 3 open-label extension (OLE) trial. The hold follows a previously disclosed voluntary pause the company initiated after safety observations.
The FDA's decision traces to safety signals observed in a healthy volunteer study. Aardvark reported reversible QRS prolongation in volunteers dosed at twice the level used in the HERO trial. In that cohort, two participants experienced a greater than 25% delay in QRS interval, a threshold the company treats as significant under its protocol. The company also noted similar QRS changes in a follow-on healthy volunteer cohort dosed at 800 mg twice daily without any dose escalation.
Aardvark said it is actively engaged with FDA officials to resolve the clinical hold and to identify a path forward for the ARD-101 program. As part of its immediate response, the company plans to unblind the clinical data collected so far across both the randomized HERO trial and the OLE to review the totality of efficacy and safety information.
Enrollment and dosing figures reported by the company indicate that, as of February 27, 2026, 68 patients had been dosed in the randomized, controlled HERO trial and 19 patients had been dosed in the OLE trial.
On the funding side, Aardvark reported holding $91.2 million in cash, cash equivalents and short-term investments as of March 31, 2026. The company states that this liquidity is expected to be sufficient to fund projected operations into mid-2027.
Market reaction was accompanied by analyst reassessments. Morgan Stanley analyst Michael E. Ulz downgraded Aardvark from Equalweight to Underweight and reduced his price target to $3.00 from $7.00. BTIG analyst Jeet Mukherjee lowered his rating from Buy to Neutral. On the uncertainty ahead, Ulz commented:
"Overall, while the unblinded data could provide insights, it could take some time and a path forward remains unclear,"
The company’s next steps focus on engagement with regulators and internal review of blinded trial results through unblinding. How quickly discussions with the FDA progress and what the unblinded data reveal will determine whether the ARD-101 program can resume clinical activity and under what conditions.
Contextual note - The clinical hold is procedural in nature and applies to all ongoing studies under this IND. Aardvark’s immediate actions - engaging the FDA and unblinding trial datasets - are intended to clarify the risk-benefit profile of ARD-101 using the available information to date.