US-Listed Rare Disease Biotech Hit With Full Clinical Hold; Data Unblinding Ahead
Research Report

1.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 
2. This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.

For additional disclosures, please click here.

Disclosures for H.C. Wainwright & Co., Aadvark Therapeutics Inc., July 20, 2026

This material is confidential and intended for use by Institutional Accounts as defined in FINRA Rule 4512(c). It may also be privileged or otherwise protected by work product immunity or other legal rules. If you have received it by mistake, please let us know by e-mail reply to [email protected] and delete it from your system; you may not copy this message or disclose its contents to anyone. The integrity and security of this message cannot be guaranteed on the Internet. H.C. WAINWRIGHT & CO, LLC RATING SYSTEM: H.C. Wainwright employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector. The price objective is calculated to estimate the potential movements in price that a given equity could reach provided certain targets are met over a defined time horizon. Price objectives are subject to external factors including industry events and market volatility. RETURN ASSESSMENT Market Outperform (Buy): The common stock of the company is expected to outperform a passive index comprised of all the common stock of companies within the same sector. Market Perform (Neutral): The common stock of the company is expected to mimic the performance of a passive index comprised of all the common stock of companies within the same sector. Market Underperform (Sell): The common stock of the company is expected to underperform a passive index comprised of all the common stock of companies within the same sector.

Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.

H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer. I, Raghuram Selvaraju, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies. None of the research analysts or the research analyst’s household has a financial interest in the securities of Aardvark Therapeutics, Inc. and Rhythm Pharmaceuticals, Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of June 30, 2026 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Aardvark Therapeutics, Inc. and Rhythm Pharmaceuticals, Inc.. Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report. The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. The firm or its affiliates received compensation from Aardvark Therapeutics, Inc. for non-investment banking services in the previous 12 months. The Firm or its affiliates did not receive compensation from Aardvark Therapeutics, Inc. and Rhythm Pharmaceuticals, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm does not make a market in Aardvark Therapeutics, Inc. and Rhythm Pharmaceuticals, Inc. as of the date of this research report. The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results. This report is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. This research report is not intended to provide tax advice or to be used to provide tax advice to any person. Electronic versions of H.C. Wainwright & Co., LLC research reports are made available to all clients simultaneously. No part of this report may be reproduced in any form without the expressed permission of H.C. Wainwright & Co., LLC. Additional information available upon request. H.C. Wainwright & Co., LLC does not provide individually tailored investment advice in research reports. This research report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this research report. H.C. Wainwright & Co., LLC’s and its affiliates’ salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies that reflect opinions that are contrary to the opinions expressed in this research report. H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data on the company, industry or security discussed in the report. All opinions and estimates included in this report constitute the analyst’s judgment as of the date of this report and are subject to change without notice. Securities and other financial instruments discussed in this research report: may lose value; are not insured by the Federal Deposit Insurance Corporation; and are subject to investment risks, including possible loss of the principal amount invested.

On July 20, 2026, analyst Raghuram Selvaraju, Ph.D., of H.C. Wainwright & Co. reiterated a Neutral rating and instituted a US$6.00 per share price target on Aardvark Therapeutics Inc. (AARD:NASDAQ), implying roughly 2% upside from the July 17, 2026, closing price of US$5.86, following the imposition of a full U.S. Food and Drug Administration (FDA) clinical hold on the company's lead asset, ARD-101, and the company's plan to unblind accumulated clinical data.

Clinical Hold and Planned Data Unblinding

Selvaraju reminded investors that the FDA earlier this year placed a full clinical hold on Aardvark's Investigational New Drug (IND) application for ARD-101, tied to the company's previously disclosed voluntary pause in development of the asset. The hold covers all clinical studies conducted under the IND, including the Phase 3 HERO trial (AVK-101-301) evaluating ARD-101 for hyperphagia in patients with Prader-Willi Syndrome (PWS) and the Phase 3 open-label extension (OLE) study (AVK-101-302). Aardvark remains in active discussions with the FDA on resolving the hold and establishing a path forward for the program.

Alongside those discussions, the company intends to unblind clinical data gathered to date across both HERO and the OLE trial in order to weigh the totality of efficacy and safety information and inform its decision on next steps. As of February 27, 2026, 68 patients had been dosed in the randomized controlled HERO trial and 19 patients in the OLE trial. The analyst noted that the near-term unblinding could provide a sufficient basis for lifting the restrictions.

Development Timeline Impact

While the ultimate consequences of the hold cannot be assessed with certainty, Selvaraju speculated that "the HERO trial may need to be repeated in its entirety even under a best-case scenario," though he pointed out that the study's evaluation period runs only 12 weeks. Conservatively, he estimated the hold — even if lifted later this year — could extend the ARD-101 development timeline in PWS by 18 to 24 months. No patients had been dosed in any study of the fixed-dose combination candidate ARD-201, which incorporates ARD-101, but the fate of that combination remains uncertain for as long as the ARD-101 hold stands.

Financial Position and Estimates

Aardvark closed 1Q26 with US$91.2 million in cash, cash equivalents and marketable securities and no debt, resources management expects to fund operations into mid-2027. That equates to US$4.17 in cash per share against a book value of US$3.99 per share, with 21.9 million shares outstanding, a market capitalization of US$128 million, and an enterprise value of US$37 million.

For 1Q26, the company reported research and development expense of US$16.6 million and general and administrative expense of US$5.9 million, producing a net loss of US$21.6 million, or US$0.99 per share. H.C. Wainwright models a full-year 2026 net loss of US$83.1 million, or US$3.80 per share, narrowing to US$51.2 million, or US$1.98 per share, in 2027. No revenue is forecast in either year.

Valuation and Risks

The price target rests on a discounted cash flow methodology applying a 12% discount rate and a 2% terminal growth rate, combined with downwardly revised probabilities of approval for ARD-101 — now 20% in PWS, 10% in hypothalamic obesity (HO), and 5% in mass-market obesity via the ARD-201 combination regimen. Those inputs generate an enterprise value of approximately US$168 million and a total firm value of US$200 million, equating to US$6.00 per share on an assumed 31.9 million fully diluted shares as of mid-2027.

Risks flagged in the report include failure to lift the existing clinical hold, negative results from the Phase 3 HERO trial, inability to secure timely approval in PWS, failure to generate positive data from the Phase 2 HONOR trial in HO, or the Phase 2 ARD-201 studies in mass-market obesity, partnership risks, geopolitical risks, and possible medium-term equity dilution.

Shares of Aardvark Therapeutics traded at US$5.86 as of July 17, 2026, within a 52-week range of US$3.35 to US$17.94. Reaching the US$6.00 target would deliver a return of approximately 2%.

Also referenced in the report was Rhythm Pharmaceuticals, Inc. (RYTM:NASDAQ), which H.C. Wainwright rates Buy with a US$105.00 price target; the stock was priced at US$106.60 with a market capitalization of US$7.31 billion as of July 17, 2026.