Earnings call transcript: Arrowhead Pharma Q3 2025 misses forecasts

Arrowhead Pharmaceuticals reported a Q3 fiscal 2025 net loss of $1.26 per share, falling short of analysts’ expectations of a $0.86 loss per share. Revenue also missed the mark, coming in at $27.8 million compared to the forecasted $53.9 million. Following these results, Arrowhead’s stock price decreased by 1.53% in after-hours trading, closing at $16.06. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 5.15, and analysts project substantial revenue growth of 186% for fiscal 2025.

Key Takeaways

• Arrowhead’s Q3 revenue and EPS fell short of forecasts, with a significant revenue miss.
• The company expects milestone payments from its collaboration with Sarepta.
• Key product Plodasiran is awaiting FDA approval, with a decision expected in November 2025.

Company Performance

Arrowhead Pharmaceuticals experienced a challenging Q3, with a net loss of $175.2 million, slightly higher than the $170.8 million loss in the same quarter last year. Despite this, the company remains optimistic about future growth, driven by its innovative RNAi therapeutic platforms and upcoming product launches. InvestingPro analysis shows the company holds more cash than debt on its balance sheet, with liquid assets exceeding short-term obligations - two of several ProTips available to subscribers.

Financial Highlights

• Revenue: $27.8 million, primarily from the Sarepta collaboration.
• Earnings per share: Loss of $1.26, compared to last year’s $1.38 loss.
• Cash and investments: $900.4 million as of June 30, 2025.

Earnings vs. Forecast

Arrowhead’s actual EPS of -$1.26 was worse than the forecasted -$0.86, representing a 46.51% negative surprise. Revenue also fell short by 48.48%, indicating significant challenges in meeting market expectations this quarter.

Market Reaction

Following the earnings announcement, Arrowhead’s stock declined by 1.53% in after-hours trading. The stock’s movement reflects investor concerns over the company’s ability to meet financial targets, particularly given its current 52-week range of $9.57 to $27.34.

Outlook & Guidance

Looking forward, Arrowhead anticipates multiple drug launches between November 2025 and 2028, including Plodasiran, with an FDA decision expected in November 2025. The company also projects milestone payments from Sarepta, which could bolster its financial position. Based on InvestingPro’s Fair Value analysis, the stock appears slightly undervalued at current levels, with analyst price targets ranging from $17 to $80 per share.

Executive Commentary

CEO Chris Anzalone emphasized the company’s commitment to innovation, stating, "We are now able to address gene targets in five different areas: hepatocytes, pulmonary, adipose, skeletal muscle, and CNS." He also highlighted the unique positioning of their triglyceride-lowering drugs as pancreatitis prevention tools.

Risks and Challenges

• Ongoing losses and missed financial targets may impact investor confidence.
• Regulatory challenges could delay product launches, affecting revenue growth.
• Competitive pressures in the biotechnology sector could impact market share.

Q&A

During the earnings call, analysts questioned the company’s strategy for its triglyceride-lowering drugs and the potential impact of its collaboration with Sarepta. Executives provided insights into their obesity and CNS program development, indicating a focus on expanding their therapeutic platforms. For a comprehensive analysis of Arrowhead Pharmaceuticals, including detailed financial health scores and expert insights, access the full Pro Research Report, available exclusively on InvestingPro.

Full transcript - Arrowhead Pharmaceuticals Inc (ARWR) Q3 2025:

Conference Operator: Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals conference call. Throughout today’s recorded presentation, all participants will be in a listen only mode. After the presentation, there will be an opportunity to ask questions. I will now hand the conference over to Vince Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Thank you. Good afternoon, everyone.

Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals: Thank you for joining us today to discuss Arrowhead’s results for its fiscal twenty twenty five third quarter ended 06/30/2025. With us today from management are President and CEO, Doctor. Chris Anzalone, who will provide an overview Doctor. Bruce Gibbon, Interim Chief Medical Scientist, who will provide an update on late clinical and regulatory, Andy Davis, Senior Vice President and Head of the Global Cardiometabolic Franchise, who will provide an update on commercialization activities, Doctor. James Hamilton, Chief Medical Officer and Head of R and D, who will discuss our earlier stage development programs, and Dan Appel, Chief Financial Officer, who

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: will give a review of

Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals: the financials. Following management’s prepared remarks, we will open the call to questions. Before we begin, would like to remind you that comments made during today’s call contain certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are forward looking statements and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in any forward looking statements. For further details concerning these risks and uncertainties, please refer to our SEC filings, including our most recent annual report on Form 10 ks and our quarterly reports on Form 10 Q.

I’d now like to turn the call over to Chris Anzalone, President and CEO of the company. Chris?

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Thanks Vince. Good afternoon everyone and thank you for joining us today. Before discussing the progress we’ve made over the past quarter, I’d like to address questions surrounding our partnership with Sarepta Therapeutics. Sarepta has recently experienced high profile setbacks in products and programs that are unrelated to those licensed from Arrowhead. Nevertheless, the situation has negatively affected our stock price, so I’d like to talk about what we think is important from an Arrowhead shareholder perspective.

Sarepta recently announced a strategic restructuring plan that includes cost cutting measures and a pipeline review that prioritizes funding, development and commercialization of the programs the company can license from Arrowhead. Sarepta management has clearly stated that it believes this represents the future of the company, and this gives us confidence that Sarepta will continue to meet its financial, development and commercial obligations under the agreement. The collaboration is continuing to operate as expected, which is of course a good thing for Arrowhead. It represents a source of capital to fund internal programs, platforms and commercial build out, while ensuring the assets licensed to Sarepta are developed and commercialized. Should Sarepta fail to meet its obligations, the agreement has clear termination provisions that in our view would cause potentially valuable assets and associated intellectual property to be returned to Arrowhead without Arrowhead having to repay any of the capital we have received from Sarepta.

That would also be an acceptable outcome. Let’s now move on to our progress in the recent period. The biotech market has been challenging over the past several years, but we have no control over the broader sentiments. What we can control is our drive to serve patients and create shareholder value. We view these broadly as three interrelated mandates: to create value, to create novel medicines capable of real impacts on human health, to generate the capital to fund development of them, and to build an engine to drive the growth of both.

We made important progress in all these areas during the recent period. Let’s begin with development. This is clearly led by Plodasiran. We continue to have productive interactions with regulators in The US and Europe about our market authorization applications for the treatment of FCS and we look forward to our November 18 US PDUFA date. We are also on track with commercial build out and our complete team is nearly assembled to support an FCS launch.

Further, we achieved full enrollment in CHASTA-three, CHASTA-four and MIRROR III, Arrowhead’s Phase three studies designed to support regulatory submissions for clozaran in the treatment of severe hypertriglyceridemia or SHTG. These studies enrolled approximately 2,200 patients in 24 countries in a very short period of time. The primary endpoint is focused on triglyceride reduction at twelve months. So with full enrollment reached in June 2025, we are on track for study completion by mid-twenty twenty six. Zosasiran, Arrowhead’s candidate designed to reduce expression of ANGPTL3, is being developed as a potential treatment for homozygous familial hypocholesterolemia or HOFH, a rare genetic condition that leads to severely elevated LDL cholesterol and early onset cardiovascular disease.

We initiated the Yosemite Phase three study and enrolled the first patients in July. Approximately 60 subjects over the age of 12 will be randomized to receive four quarterly doses of two hundred milligrams of Zydasiran or placebo. The primary endpoint of Yosemite is the percent change in fasting LDL cholesterol from baseline to month twelve. We think that given our phase two data, this feels like a relatively low risk phase three, potentially enabling a commercial opportunity that overlays well with the team we are building for Flodasiran. Therefore, with a relatively small investment in a one year 60 subject phase three study, we see an opportunity to extract more value from the commercial infrastructure we are already building.

Beyond ladasiran and zodasiran, there are two additional investigational RNAi based candidates developed by Arrowhead that are currently in late stage pivotal studies. Vazirsiran, being developed for alpha-one antitrypsin liver disease, is partnered with Takeda. Arrowhead retains fiftyfifty profit share in The US, 20 to 25% royalties outside The US, and up to $527,500,000 of remaining regulatory and commercial milestones. Takeda has guided that its phase three study could be fully enrolled this year and the study has a primary endpoint at two years. Volpasiran being developed for ASCVD is licensed to Amgen, which announced that its phase three cardiovascular outcomes trial was fully enrolled in the 2024.

We are eligible for up to $485,000,000 of remaining milestones related to this program. I highlight these four late stage drug candidates because we expect them to be substantial value drivers in the near to mid term. They also set up the possibility of multiple launches between November 2025 and the 2028. As we discussed in the past, clodasiran and our later stage drug candidates together form the basis of our near term value proposition. But these are enhanced by several programs underneath them, all of which made good progress in the recent period.

Broadening out the cardiometabolic franchise are our first two obesity candidates ARO I and HBE and ARO ALKSSA. ARO INHBE began a Phase onetwo study early in the year and we recently announced that we dosed the first subject in Phase onetwo clinical trial of ARO ALK7, which we believe is the first investigational RNAi therapeutic to enter clinical studies targeting adipose tissue. We expect to have initial early data sets for both candidates at the end of the year. Expanding the cardiometabolic franchise, we expect to reach the clinic this year for what we believe will be the first RNAi dimer in clinical studies. It is designed to reduce expression of both PCSK9 and APOC3 and could be a powerful agent in the treatment of ASCVD in patients with mixed hyperlipidemia.

There is substantial unmet medical need in this large patient population and we should have a good idea how well this drug candidate lowers LDL C and triglycerides in 2026. We continue to make good progress in manufacturing, toxicology studies and clinical trial planning and we are on track to file a CTA in the coming months. Our burgeoning systemically delivered CNS franchise is also a potential near to mid term value driver. Should this platform translate from primates to humans, we think it would represent a transformational leap forward in CNS therapies. Importantly, later this year we expect to file a CTA for ARO MAPT, our wholly owned candidate against Alzheimer’s disease and various tauopathies.

We are hopeful that we can achieve initial proof of concept with this platform and candidate as early as late twenty twenty six. Beyond these, we have a wealth of other clinical stage programs to drive longer term value and service sources of capital through business development. In fact, we are on track to meet our 2025 initiative whereby we would have 20 individual drug candidates in clinical studies or at market by the 2025. Nine of these are partnered. The 11 wholly owned clinical candidates serve as potential partnering targets and provide value redundancy for our other programs and we expect several data readouts through the end of the year.

Together, these give us tremendous amounts of ammunition to create value. This brings us to the second important component of building durable value, an adequate source of financing independent of the capital markets. We currently have a strong balance sheet relative to our needs over the next few years. In addition, we have made important progress sourcing new capital in the recent period. We recently announced that our Viscernum Therapeutics majority owned subsidiary signed an asset purchase agreement whereby Sanofi will acquire rights to develop and commercialize clodasiran as a potential treatment for SCS and SHTG in Greater China.

Viserum will receive an upfront payment of $130,000,000 and be eligible to receive milestone payments of up to $265,000,000 upon approval of clodasiran in FCS and SHTG in Mainland China. Arrowhead is further eligible to receive royalties on net commercial product sales in Greater China as part of the Arrowhead Viscernal license which was assigned in part to Senhovi. When we co founded Viscerna in 2022, we saw Greater China as an important but undervalued potential future market for multiple programs in Arrowhead’s pipeline. We licensed Chinese rights for Plazasiran, Zodasiran and ARO HSC to Vyserga, which received outside funding to support development. Sanofi has a strong presence in China and is well positioned to assume commercialization of plodasiran should it be approved by Chinese regulatory authorities.

We have not used any Arrowhead funds to advance China specific development or regulatory activities, and upon closing we will own approximately 56% of Vesserna. There are tax considerations and other costs, but we ultimately expect to realize a sizable amount from this deal. We hope that over time we may monetize Chinese rights to zodasiran and ARO HSC in a similar fashion. The next key capital building event I want to mention is reaching the first of two pre specified enrollment targets in phase onetwo clinical study ARO DM1 for the treatment of type one myotonic dystrophy, which is partnered with Sarepta. Reaching this milestone triggered a 100,000,000 payment, which is due from Sarepta within sixty days to when it was earned.

We believe we are on track to meet the second enrollment target at the end of the year, which would trigger an additional $200,000,000 payment. Our large pipeline and expectation that we have cash into fiscal twenty twenty eight suggests that we have the first two categories of value creation under control. This leads us to the third priority, creating an engine to drive the growth of both. I think it is rather clear that we have built this as well. We are now able to address gene targets in five different areas: hepatocytes, pulmonary, adipose, skeletal muscle, and CNS.

We also believe we are capable of synuclein two genes with a single molecular entity using our Dimer technology. This gives us broad reach to go where disease is and coupled with our expectation of introducing three to four new drug candidates into clinical studies every year, we expect to continue to grow our ability to impact human health very rapidly. This also reads on our ability to continue to access significant capital through business development before and after achieving substantial product revenue. Ultimately, we are doing all of this to bring important medicines to the patients who need them and this does not happen without careful preparation. We are building a right sized commercial organization staffed with what we think are the top people in the field with extensive experience in cardiometabolic and rare disease.

We’ve made strong progress in market access, analytics, operations, marketing and building a commercial sales team. US launch preparations are now in full swing for Prozacitor and NSCS and we intend to be launch ready even before our PDUFA date on November 18. With that overview, I’d now like to turn the call over to Bruce Gibbett. Bruce?

Bruce Gibbett, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: Thanks, Chris, and good afternoon, everyone. Since we last spoke, we’ve continued the forward momentum in our development of posazaran to treat FCS and severe hypertriglyceridemia. Our US NDA to support FCS treatment was submitted last year and our PDUFA date is 11/18/2025. Filings in Europe, Australia, and Canada are all progressing as well. We are reassured that the cadence of our interactions with US and global regulators has not changed nor have any expectations of adhering to established timelines.

Two months ago, we completed enrollment in our Shasta severe hypertriglyceridemia development program, well ahead of expectations. The Shasta program is comprised of Shasta three and Shasta four, two adequate and well controlled trials designed to meet the statutory requirement of substantial evidence requirement for effectiveness, along with the support of MIRROR III trial in mixed hyperlipidemia, which provides additional safety data in a relevant patient population to satisfy regulatory requirements for a complete file. The sizing of the phase three SHASTA-three and four studies was informed by the needs of regulatory authorities to demonstrate safety while confirming the efficacy suggested by the phase two SHASTA-two trial, where the primary endpoint of difference in triglycerides at week twenty four compared to baseline for the twenty five milligram dose was minus 53%, with a p value less than 0.0001, which was accompanied by a numerical decrease in adjudicated events of acute pancreatitis. The two Shasta phase three trials are similarly designed, totaling around seven hundred patients, and are very highly powered to demonstrate statistically significant improvement in triglycerides with twenty five milligrams of posasiran compared with placebo over twelve months of treatment. After accounting for randomization allocation in the Shasta studies, the placebo controlled double blind MIRROR III study was designed to demonstrate statistically significant improvement in triglycerides with twenty five milligrams posazaran compared with placebo over twelve months of treatment, and is also expected to achieve a high level of significance, while primarily serving to enhance the safety database for the SHTG filing.

Assuming positive data, these three separate phase three studies should support our planned sNDA filing for SHTG in the 2026. Although Shasta three and four were not prospectively designed to be outcome studies, given the sizing of the combined studies and the observed event rate in the SHASTA-two study, we hope to observe at least a favorable trend in posasiran’s impact at documented acute pancreatitis within the studies. However, the SHTG program also features a unique outcome study named Shasta-five, designed to directly assess the ability of posasiran to reduce the time to first event of positively adjudicated acute pancreatitis in high risk SHTG patients. While it is possible that this trial will be submitted to regulatory agencies for possible inclusion in labeling, the primary audience and impetus for this study is actually National Health Technology Assessment Organizations. On the basis of observational data demonstrating the causal link between elevated triglycerides and risk of pancreatitis and observed effects of posazaran in SHCG patients, it is expected that less than one hundred and fifty patients will be recruited to accrue sufficient events in this outcome study.

We look forward to presenting more details on design and rationale of this study at an upcoming major medical meeting. The broader cross functional cardiometabolic clinical team has been present at key medical congresses this past quarter, including ENDO, National Lipid Association, and the American Society of Preventive We continue to share new data to demonstrate the value of posasiran, and the reception from the scientific and clinical communities has been engaged and enthusiastic. Turning our attention to zodasiran, another genetically validated RNAi drug designed to reduce expression of angiopoietin protein like three, or ANGPTL3, is now in development for the treatment of homozygous familial hypercholesterolemia, a rare genetic disorder characterized by exceptionally high LDL cholesterol levels due to very low or absent LDL receptor function. The results of Gateway, our open label phase two study in this population were presented this year at the European Atherosclerosis Society and showed robust and durable reductions in LDL C and other atherogenic lipoproteins. The efficacy results were similar to those of epinecumab, a monoclonal antibody against ANGPTL3 that requires monthly infusions.

But with posasiran, the dosing is convenient quarterly subcutaneous dosing. We are pleased to report Yosemite, the phase three study of zodasiran in HoFH began earlier this year and the first patient was randomized last month. Assuming successful demonstration of safety and efficacy, data from Yosemite could support regulatory filings for zodasiran as early as 2028 or 2029. I will now turn the call over to Andy Davis. Andy?

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Thank you, Bruce. The FDA PDUFA date for clazazarine set for November 18 is now less than four months away, and I’m pleased to report that our commercialisation preparations are fully on track. When I last updated you in May, we were in the midst of building out our commercial sales organisation. I’m proud to share that as of this month, our national sales leader, full team of regional sales leaders, and fit for purpose field force of rare disease specialists are now on board and undergoing training. By the end of this month, the team will begin engaging with key healthcare professionals, advancing FCS disease education in preparation for launch.

Our market access team continues to execute exceptionally well against our pre approval information exchange strategy. To date, we’ve connected with payers representing over 85% of US covered lives, delivering compelling data on the clinical value and anticipated profile of plazasiran. We remain highly encouraged by payer interest, particularly in plazasiran’s potential to deeply lower triglycerides, support achievement of guideline directed goals, namely less than five hundred milligrams per deciliter, and significantly reduce the risk of acute pancreatitis. We’re also seeing positive developments in the FCS landscape, which reinforce our confidence heading into launch. The significant unmet need in the FCS community is clear and acknowledged by both payers and providers.

On the payer front, dynamics appear to be favorable, with access being granted to both genetically confirmed patients and those patients satisfying the diagnostic scoring tools designed to discriminate patients with SHCG from those whose signs, symptoms, and medical history mimic genetic FCS. This is especially motivating given that plazasiran is currently the only APOC3 inhibitor to demonstrate clinical results in both genetic and clinical FCS in a phase three registrational study. And from a provider perspective, the specialty mix we’re observing, preventative cardiologists, endocrinologists and lipidologists, is exactly what we anticipated and aligns well with our launch targeting strategy. In summary, we remain on schedule and energized by the opportunity to bring investigational Plazasiran to individuals living with FCS and their family. We’re excited for what Plazasiran, a potential first in class siRNA therapy, could mean to those suffering from this difficult disease.

I’ll now turn the call over to James Hamilton. James? Thank you Andy. I’d like to provide an overview and updates on several of our early stage clinical and translational development programs. In obesity, our ARO Inhibin E and ARO ELK7 programs, both targeting the Activin pathway, are currently being investigated as treatments for obesity in phase one studies.

The Inhibit E study is currently enrolling multi dose cohorts using ARO Inhibit E in combination with tirzepatide. The ARO ALK7 study is in the single dose escalation phase with multi dose and combination cohorts opening soon. We anticipate sharing data from both the ALK7 and Inhibiting E studies at the end of the year. Regarding our muscle clinical programs partnered with Sarepta, the ARO DM1 phase one2a study has completed the single dose cohorts and is now enrolling multi dose cohorts of patients with myotonic dystrophy. Similarly, the ARO DUX4 phase one 2a study has nearly completed enrollment of single dose cohorts and the first year long multi dose cohort is open for enrollment.

Consistent with previous guidance, we are on track for data availability by year end. However, final timing on data release is determined by Sarepta. Our wholly owned ARO MAP program is on track for submission of a CTA by year end. As a reminder, ARO MAPT uses subcutaneous administration of a novel siRNA delivery platform designed to deliver siRNA targeting CNS tau protein expression across the blood brain barrier. Tau aggregated into neurofibrillary tangles is believed to be one of the causative factors of Alzheimer’s disease and is also causative of various other tauopathies.

Nonclinical evaluations in monkeys with subcutaneous administration of ARO MAPT using clinically translatable doses have shown better than 75% knockdown of tissue level of MAPT mRNA in the CNS. Importantly, monkey tissue level knockdown has translated into CSF tau protein reductions of better than 75% with duration of effect supportive of either monthly or potentially quarterly subcutaneous dose regimens. The monkey CSF tau protein knockdown data are an important translational step as we move this program towards the clinic. Full preclinical data will be presented at an upcoming scientific conference. I will now turn the call over to Dan Appel.

Dan Appel, Chief Financial Officer, Arrowhead Pharmaceuticals: Thank you, James, and good afternoon, everyone. As we reported today, our net loss for the quarter ended 06/30/2025 was $175,200,000 or a loss of $1.26 per share based on 139,000,000 fully diluted weighted average shares outstanding. This compares with a net loss of 170,800,000.0 or a loss of $1.38 per share for the prior year quarter ended 06/30/2024, based on 124,200,000.0 fully diluted weighted average shares outstanding in that prior year quarter. Revenue for the quarter ended 06/30/2025 was $27,800,000 driven almost entirely by the recognition of revenue related to our license and collaboration agreement with Sarepta. Of the $27,800,000 roughly $20,000,000 related to the ongoing recognition of initial Sarepta consideration and $7,000,000 related to reimbursement of collaboration related costs.

After the end of our third fiscal quarter, we announced two important events, each of which will have a positive impact on our financial position. First, there is the $100,000,000 DM1 milestone payment from Sarepta, which Chris mentioned earlier on the call. As this event occurred after June 30, revenue associated with this milestone will be recognized in our fiscal fourth quarter financial results. We anticipate achieving the second D1 development milestone valued at $200,000,000 by the end of the calendar year. Second, on August 1, announced that Sanofi signed an agreement to acquire exclusive rights to develop and commercialize investigational plazasiran in Greater China from Viscerna Therapeutics, Arrowhead’s majority owned subsidiary.

Viscerna will receive $130,000,000 upfront upon closing. Additionally, Vyserta will receive up to $265,000,000 in potential future regulatory milestone payments and potential royalties associated with the sales of plazasiran in Greater China. We expect to record revenue of $130,000,000 in the fourth quarter associated with the upfront payment only. Turning to expenses, total operating expenses for the quarter ended 06/30/2025 $193,300,000 compared to $176,100,000 in the prior year quarter, or an increase of $17,200,000 The year over year increase was driven by, amongst other things, roughly $10,000,000 of higher R and D costs primarily as a result of our phase three registration of trials for posasiran in SHTG, as well as higher costs related to active candidates in the preclinical stage. It’s worth bearing in mind that year to date approximately 70% of our clinical trial spend can be attributed to the phase three registration of trials for plazasiran in SHTG.

As Bruce mentioned, these studies are now fully enrolled and we expect data to read out next year. Additionally, as planned, SG and A costs have increased by $7,000,000 year over year, driven primarily by our preparations for commercialization in advance of the FDA’s upcoming PDUFA action date later this year on November 18. Turning to cash, net cash used in operating activities during fiscal quarter three twenty twenty five was $154,700,000 compared with net cash used in operating activities of $115,400,000 in the prior year quarter. The increase in cash used in operating activities is driven by several factors including the aforementioned higher operating expenses and timing of clinical trial payments. Turning to the balance sheet, our cash and investments totaled $900,400,000 as of 06/30/2025.

Our common shares outstanding as of the end of this quarter were 138,100,000.0. And with that, I will now turn the call back over to Chris.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Thanks Dan. ERAVED continues to achieve strong execution in discovery, clinical, regulatory and business development. Our pipeline has become increasingly insured with four ERAVED discovered candidates currently in pivotal Phase three studies. In addition, our commercial build out is designed to make us launch ready very quickly should blazasterin receive regulatory approval on the 11/18/2025 PDUFA date. And lastly, have a strong balance sheet that we think gives us the financial resources to continue to move multiple innovative new medicines through the clinical and regulatory process and ultimately get them to the patients who need them.

Thank you for joining us today and I would now like to open the call to your questions.

Conference Operator: Thank you. At this time we’ll conduct the question and answer session. As a reminder, to ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please limit to one question.

Please stand by while we compile the Q and A roster. Our first question comes from Maury Raycroft of Jefferies. Your line is now open.

Maury Raycroft, Analyst, Jefferies: Good afternoon. This is Farzin on for Maury. So thank you for taking our question. When thinking about your own SHTTP models with ongoing three and four, how are you thinking about the prospects of competitor and its programs that we’re reading out in September from the core studies, especially with respect to the triglyceride reduction as well as signals in the acute pancreatitis?

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: So I’ll answer that, and Bruce, you can add anything that you think is necessary. Look, we have no control over other people’s studies. It’s difficult to compare two drugs across two different studies or more frankly in this respect. And so we’re just focused on our own studies here. We’ve had very good data in our Phase two studies.

We’ve had very good data in our Phase three study in FCS. And we think we’ve got a best in class triglyceride reducer here. We look forward to seeing what the FHTG data look like, but that is our expectation. Go from there. Bruce, do you have anything to add on that?

Bruce Gibbett, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: Not really. As you said, we it’s hard to compare across studies. I will say that, you know, what they have, you know, relayed about their patient population looks quite similar to our patient population at the time of enrollment. So I think it will be interesting for us to see what their data actually shows when they report it out in September and then probably in more detail at a later academic presentation. So we’ll follow with interest, but how much bearing it has is always hard to tell.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: And what is key here in the studies and then once we are at market are two primary things I think. One is how deeply can you reduce triglycerides from baseline? And second is how many patients can get to goal? Whether that goal is defined as triglycerides below eight eighty or below 500. I think those are the key points here.

We expect physicians to look at that, we expect patients to look at that.

Jason Gerberry, Analyst, Bank of America: Got it. Thank you.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: You’re welcome.

Conference Operator: Thank you. Our next question comes from Jason Gerberry of Bank of America. Your line is now open.

Jason Gerberry, Analyst, Bank of America: Hey, guys. Thanks for taking my questions. So, another question on the SHTG program. If I heard you right, so it sounds like what you’re confirming is your baseline demographics of your two Phase III studies look similar to the published baseline demographics that Ionis had published for its core studies. I guess that would be in terms of the two key subgroups, which is ultra high triglyceride levels and past history of AP.

And I’m curious, you know, your thoughts, Ionis indicated that they are seeing events on a blinded basis, at least 13, with like a skew of like 700 drug, 300 placebo, something like that. So, I’m just kind of curious as absorb that because like the event rate’s the big unknown here. So I’m just kind of curious, has your thoughts changed at all around probability of showing at least a strong numerical trend by pooling the Shasta four and five studies? Thanks.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Bruce?

Bruce Gibbett, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: You know, I think it’s difficult to answer that question, Jason. And the reason is because we count true adjudicated cases of pancreatitis. The Ionis approach is not just counting pancreatitis, but also abdominal pain. And of course abdominal pain can be non specific, Although the effort is to determine that abdominal pain when it occurs is actually not related to other elements such as alcohol or gallstones for instance.

Jason Gerberry, Analyst, Bank of America: But it is a little bit

Bruce Gibbett, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: of an apples and oranges comparison of actual pancreatitis to abdominal pain events. So it’s hard to know what they’re gonna show in the end regarding pancreatitis, which I think is the most important measure. Abdominal pain matters in SHTG and high triglycerides. It can be debilitating for patients and difficult, but it’s not a fatal thing where pancreatitis produces organ damage and can lead to fatality. So it’s a much different animal for physicians to manage and of course for payers to deal with as well.

So that part of it’s harder to assess, and I’m not sure that we’ll get granularity on that even when they announce their results in September. So it’s a little bit difficult to say, Jason, at this time. We will track abdominal pain as well, but we’re really focused on acute pancreatitis, given that that’s the real disease with severity.

Jason Gerberry, Analyst, Bank of America: And will you guys be publishing your baseline demographics, I don’t know, in the next six to nine months or so?

Bruce Gibbett, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: Yes, I think we will. We’ll be submitting that for a future medical conference for sure.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Okay, thank you. You bet.

Conference Operator: Thank you. Our next question comes from David Lebowitz of Citi. Your line is now open.

David Lebowitz, Analyst, Citi: Hi there, this is Mary Kate on for David today. Thanks so much for your overview of the anticipated FCS launch. I guess how does this treatment address the clinical unmet need in this space and maybe what feedback are you receiving from physicians ahead of this potential launch? Thank you.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Andy, you take that and Bruce add anything that you think should be added. Yeah, happy to take that. So thank you for the question, Mary Kate, related to clinical unmet need. What we know with respect to familial myeloproliferative syndrome patients that they suffer from physical symptoms, including abdominal pain and of course, as Bruce mentioned, acute pancreatitis, which can lead to recurrent pancreatitis, necrotizing pancreatitis, and in some instances fatality. And so one of the big things that we believe plazastrin addresses as far as meeting the unmet need, first and foremost, is a deep reduction of triglycerides the level that have never been seen before with existing therapies in this space.

We’ve talked about an 80% reduction from baseline seen in the PALISADE study. But moreover, the outcome of interest of course is reduction in acute pancreatitis risk. And posastron is the only agent in a registrational phase three study that has demonstrated a statistically significant reduction in acute pancreatitis risk in PALISADE. So those are two of the primary unmet needs that we believe clozastrin can address in FCS. I would say moreover, just from a patient convenience and tolerability perspective, clozastrin does continue to have a very desirable profile with only quarterly dosing.

So four injections a year, which is very different than the current treatment regimens that are available for these patients presently. So hopefully that addresses your question around why we believe clazazarine fills some important unmet clinical needs.

Conference Operator: Thank you. Our next question comes from Patrick Trucchio with H. C. Wainwright and Co. Your line is now open.

Patrick Trucchio, Analyst, H.C. Wainwright: Thanks. Good afternoon, and congrats on all the progress. I’m just wondering, you know, as payer access appears favorable for both genetically confirmed and clinically defined FCS, is any differentiation in the coverage path, you know, for high risk, severe high triglyceride patients, particularly those that don’t have a pancreatitis history? And I guess I’m just wondering if you can speak to your expectations for pricing between FCS and severe high triglyceride indications, particularly just given the different population sizes of medical cost burden.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: So regarding pricing, we’re not prepared to opine too much on a potential SHTT price. We are still looking into that. We certainly would expect that to be a lower priced drug than FCS. But beyond that, we’re still working on that question.

Conference Operator: Thank you. One moment for your next question. Our next question comes from Prakhar Agarwal from Cantor. Your line is now open.

Prakhar Agarwal, Analyst, Cantor: Hi. Congrats on the quarter, and thank you for taking my questions. So maybe on the Sarepta situation, I think Sarepta also owns 10,000,000 plus shares of Arrowhead stock. So what could be a practical solution here to solve for this if Sarepta intends to sell their shares? And secondly on SSTG, maybe a question for Andy.

What sort of commercial activities you are doing to educate the community about how SSTG is different from the lipid market? It seems that the Street has been anchored to lipid pricing and the update there for the drugs. Any color there would be helpful. Thank you.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure. Yes, Sarepta does own some airline chairs. Their lockup period is still in effect right now. I can’t tell you what their plan is for those shares. I can tell you that we have had inbound interest in acquiring shares and so I’m not so worried that if they decide to sell those that they can buy a buyer, they certainly could.

But I don’t know what their longer term plans are in terms of holding onto those shares and for how long. Andy, you want to address the Yeah, thanks Prakhar. As it relates to education, of course we have active medical education in the form of our medical science liaisons who are conducting scientific exchange. Moreover, there is independent medical education, continued medical education that’s ongoing related to individuals with extremely high triglycerides, the unmet medical need, burden of disease, and education around clinical study results, certainly in the case of Palisade. I would say a lot of the education that’s happening now in the community is related to education around the disease burden, around goal attainment, namely an education around the guideline directed risk threshold of five hundred milligrams per deciliter.

And then of course, the focus on the outcome of interest, which is acute pancreatitis events. And so that largely is the focus of our education. And as our commercial field team gets out into

Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals: the field towards the end

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: of this month, of course, they will be highly focused on a similar disease to education as well. I hope that answers your question. And your question is an astute one. Yes, triglycerides can be found on the standard lipid panel. But when people think about lipid drugs, they generally think about them in the context of ASCVD.

This is not what this drug is. Clozastaran is not an ASCVD drug. Clozasiran is a pancreatitis drug and I think should be thought of as such and priced as such, to be honest. So yes, this is a lipid parameter, but this is not an ASCVD drug. This is a pancreatitis drug.

And there are populations that are at a substantial risk of pancreatitis, acute pancreatitis with high levels of triglycerides. So I think that’s the way you need to look at it.

Prakhar Agarwal, Analyst, Cantor: Thank you.

Conference Operator: Thank you. Our next question comes from Eliana Merrill of UBS. Your line is now open.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals0: Hi, this is Joseph for all for Eli. Thanks for taking my question and congrats on initiating the EUSCEVITY trial for zodasiran. I’m wondering if you can talk about your latest on your estimations of the size of the HOFH addressable patient population. Thank you.

Bruce Gibbett, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: Know, Anthony, you’re probably one of the world experts on that. Why don’t you take that one?

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Yeah, the literature would suggest that the prevalence for HoFH is anywhere from roughly one in five hundred thousand to one in a million persons. And so there’s been quite a lot of evidence produced in the HoFH space over the years as new therapies have become available. So we see the accessible population for OH being similar to those estimates.

Conference Operator: Thank you. Our next question comes from Edward Tenthoff of Piper Sandler. Your line is now open.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals1: Great. Thank you very much. I’d say a little housekeeping question, if I may. Congrats on the Lysurna deal. So does that cash go to Arrowhead and is it able for you guys to invest that?

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: So the cash goes into Lysurna and a portion of that, a large portion of that will be distributed to shareholders of Viscerna. And as I mentioned in the prepared remarks, at closing we’ll own about 56% of Viscerna. Not all will go out. There will be some tax liabilities. And also you need to leave some cash into the company because as I mentioned, they also have ongoing studies with Flavasiran related to FHPG, although we will take that over.

They also have studies for zodasiran. They also have ARO HSD studies ongoing. It’s not a huge cost, but there is some cost there. And ultimately, again, as I mentioned in the prepared remarks, our goal here is to monetize the China rights for zildasiran and the China rights for ARO HSD in a similar manner that we did for roclodasiran. So anyway, story short is we will bring home I think a substantial amount of that capital, but not all of this.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals1: Great. That’s helpful. And then when it comes to the R and D, the annual R and D from Sarepta, is that paid all at once on the annual anniversary? Thanks.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Yes. So they will pay us $50,000,000 a year for five years, and that payment is due in the first quarter of every year. So I believe it’s February. Is that right, I think it’s February. So we have $100,000,000 due now for the first DM1 milestone, 200,000,000 that we think will trigger at the end of the year, and then a further 50,000,000 due for the annual payment in February.

Dan Appel, Chief Financial Officer, Arrowhead Pharmaceuticals: Great. Thanks, guys.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: You’re welcome.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals2: Thank you.

Conference Operator: Our next question comes from Luca Issy of RBC Capital Markets. Your line is now open.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals3: Great. Thanks, guys, for taking the question. This is Shelby on for Luca. Can you just talk about the initial presentation for posazaran? Our understanding is that initial approval will be for prefilled syringes.

So is that correct? And if so, what is the path to have this in the form of an auto injector? How should we think about that timeline? Thanks.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure. Andy, you want to discuss that and then Bruce, you can talk about more of the granularity of the auto injector? Yeah, that’s right, Shelby. So our initial presentation for plazasiran in the SCS space will be a prefilled syringe. And there is development underway for an auto injector in the SHTG space.

Bruce, if you want to comment any more on that.

Jason Gerberry, Analyst, Bank of America: Yeah, would just say that the auto

Bruce Gibbett, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: injector will be either available at the time of launch for the SHTG indication or soon thereafter. That’s our current expectation.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals2: Great, thanks.

Conference Operator: One moment for your next question. Our next question comes from Mani Furuhar of Leerink. Your line is now open.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals4: Hi, guys. We have Ryan on for Mani. Thanks for taking our question, and congrats on the quarter. Maybe shifting over to the INHIB readout later Can you just share a little detail around which cohorts we should expect to see data from whether that’s the sad mad combo and then internally?

What are you guys really hoping to see here relative to the other data sets from muscle sparing agents that we’ve seen so far? Thanks.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Yeah, sure, I can take that. We’ll have data from all of those cohorts that you mentioned, SAD, MAD, as well as the combination cohorts. And we’ll be measuring a handful of different biomarkers, including PD biomarkers like measurable activity in the blood. Of course, we can look at body composition based on MRI and weight loss changes in body weight. Then of course, we’ve got a whole host of lipid parameters and glycemic control parameters that we’ll look at.

Conference Operator: Thank you. One moment for your next question. Our next question comes from Mike Ulz of Morgan Stanley. Your line is now open.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals0: Good afternoon, and thanks for taking the question. Maybe just a follow-up on the last question related to the obesity updates later this year. Just curious if you see what you want to see there. What would be some of the scenarios around next steps for those programs? Thanks.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Yeah, so those are hard questions. I don’t think we go into most studies with an idea that if we see X, we will move forward in some manner. If we see Y, we will move forward. In some other manner, if we see Z, we won’t move forward. We’re in the truth seeking business.

We will do the study and we’ll see what the data look like and then move on from there. I don’t mean to evade your question. We don’t go in to these studies with any sort of preconceived ideas about what might come next until we see some data.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals0: Understood, thank you.

Bruce Gibbett, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: Yeah, would just sort of add to that, that we need to keep in mind that these are novel mechanisms. These are not just another GLP-one agonist access sort of drug. We’re looking at different behaviors and really looking for white space opportunities here, it’s very hard to predict those. It’s much easier to answer a question like that if you’re coming in with the tenth GLP-one agonist. But it’s quite hard to answer that question when you’re dealing with a completely novel mechanism that has not been in humans before.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals0: Makes sense. Thank you.

Conference Operator: Thank you. Our next question comes from Joseph Thome of TD Cowen. Your line is now open.

Jason Gerberry, Analyst, Bank of America: Hi, there. Good afternoon, and thank you for taking my question. Maybe on the MIRROR III study, I guess, given that these patients will likely have a lower mean fasting triglyceride level, is there an increased risk that potentially this patient subset would be more at risk to self adherence of or self liberalization of diet or maybe a little bit less adherence to background lipid lowering therapy than what you might see in CHAFTA-threefour? And I guess could that create some variability in the AE profile or endpoints? I guess why or why not?

And then when you think about the readouts for these three trials, would these all come at the same time and it would be one top line release or would these be discrete for them? Thank you.

Bruce Gibbett, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: So taking that first question, look, in clinical trials we do our best to try to encourage participants to follow the protocol. We give them frequent dieting advice and reminders. It’s hard to estimate whether they’re going to behave all that differently than the SHTG population. I would say that we did two trials in mixed hyperlipidemia in the last few years, one with posasiran, one with zodasiran. And I wouldn’t say that the behavior in those trials was all that different than we saw at Shasta two or Palisade with respect to adherence to the protocol.

It was pretty good for both. May be partly we pay a lot of attention to the detail of execution of clinical trials, and we tend to have a low dropout rate and a pretty good adherence rate, probably in no small part because of that. But I’m not too concerned about that. And of course we have placebos in these trials and you expect the placebo behavior to sort of mimic the behavior that you get in the active treatment arm. So hopefully whatever you see balances out anyway relative to placebo.

I don’t think we’re expecting anything particularly different.

Jason Gerberry, Analyst, Bank of America: Great, thank you. And then the last part was, are these going to read out at the same time on the top line or will these be three separate releases?

Bruce Gibbett, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: I don’t think we’ve really come to a determination on that. In theory, we’ll have the data from these two trials fairly close together, but I don’t think they will all show up on the same day. So I’ll leave it to Chris, you know, if he wants to predict, you know, how we’ll make that decision a year from now.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: My first thought on that is that, you know, yes, they are three separate studies, but they’re part of one grander study. And so it would seem to make sense to release them all at once. But I’ll be honest with you, we haven’t really discussed that. Perfect. Thank you very much again.

Conference Operator: Thank you. Our next question comes from William Pickering of Bernstein. Your line is now open.

Jason Gerberry, Analyst, Bank of America: Hey, guys. Congrats on the progress, and thank you for taking my question. It’s about your DM1 program. At your muscle R and D day last year, you indicated you were planning to dose up to twelve MPK in that initial study. My understanding is the highest dose under the current protocol is six MPK, and that’s unchanged from when Sarepta licensed the product last November.

Is my understanding correct? And if so, what was the rationale for reducing that max dose versus the prior plan and for having a lower max dose than the FSHD study? Thank you.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure. We still can go up to twelve mgs per kg in the current study, the DM1 study.

Conference Operator: Thank you. One moment for your next question. Our next question comes from Madison Elsadi of B. Riley. Your line is now open.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals5: Hey, guys. Congrats on the quarter, thanks for taking our question. I guess maybe going back to obesity. Given the size, the sample size, I guess, is it your assumption that any statistical conclusions are achievable? Or is that kind of precluded here?

And just assuming a competitive muscle sparing weight loss is achieved, where do you think you need to land on frequency of dosing to be competitive given there are other muscle sparing candidates being developed, including other siRNA candidates? Thanks.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure. So this phase one study is really hypothesis generating. There’s not that powering necessarily that goes into cohort size. I think the effect size that we would see from this study would be used to power a subsequent study down the road. And then in terms of frequency, we’re looking at the most frequent probably quarterly dose administration.

So I’m not sure if there’s anything out there that can match that frequency to date. It’s certainly not the GLP-1s, at least not that I’ve seen. And some of the muscle sparing molecules are probably more frequent than that. So we’re looking at quarterly to every six months. Beyond that I don’t really see any benefit to even less frequent dosing.

So I think we’re in a pretty good place in terms of frequency of dose administration at quarterly dosing. Got it. That’s very helpful. Thanks.

Conference Operator: Thank you. Our next question comes from Morgan Lamberty of Goldman Sachs. Your line is now open.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals2: Hi. Thank you for taking our question. This is Morgan on for Andrea Newkirk. Kind of going back to obesity, and specifically ARO ALK7, can you speak more to how you’re delivering siRNA to adipocytes? And then recognizing that it has not been explored in humans, what gives you confidence in the safety profile?

What potential risks could you see in this targeting? And is there good loss of function data out there for us to see? Thank you.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure, yeah. See if we can hit all of those maybe in reverse order. There are data on loss of function ALK7 loss of function carriers, we know there are at least a few homozygous walking around that seem to not have any issues. Then of course there’s a lot of heterozygous ALK7 loss of function carriers that seem otherwise phenotypically normal. They can be protected from things like type two diabetes and have an improved body composition, improved BMI adjusted waist to hip ratio.

The molecule itself does use a ligand targeted approach that’s selected for adipose tissues, adipocytes. So there is a ligand driven approach that’s facilitating uptake of the siRNA into the cell. And then beyond the human genetic data, what gives us confidence from a safety standpoint to start the study is of course all the non GLP and GLP tox studies that we’ve done in nonhuman primates and in rodent species. And of course in those we go up to doses, many multiples of the doses we plan to use in the clinical trial. And those were all completed without any dose limiting toxicity.

So I think we’re in a pretty good position as far as safety goes going into this phase one study.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals2: Awesome. Thank you so much.

Conference Operator: Thank you. This concludes the question and answer session. I would now like to turn it to Chris Anzalone, CEO, for closing remarks.

Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Thank you all for joining us today, and I wish you all a good end of the summer, we will see you next quarter.

Conference Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.

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