Arrowhead Pharmaceuticals Q2 2025 Earnings Report

Arrowhead Pharmaceuticals EPS Results

• Actual EPS: $2.75
• Consensus EPS: -$0.06
• Beat/Miss: Beat by +$2.81
• One Year Ago EPS: -$1.02

Arrowhead Pharmaceuticals Revenue Results

• Actual Revenue: $542.71 million
• Expected Revenue: $116.27 million
• Beat/Miss: Beat by +$426.44 million
• YoY Revenue Growth: N/A

Arrowhead Pharmaceuticals Announcement Details

• Quarter: Q2 2025
• Date: 5/12/2025
• Time: After Market Closes
• Conference Call Date: Monday, May 12, 2025
• Conference Call Time: 4:30PM ET

Arrowhead Pharmaceuticals (NASDAQ:ARWR) is a biopharmaceutical company specializing in the discovery, development and commercialization of ribonucleic acid interference (RNAi) therapeutics. Utilizing its proprietary Targeted RNAi Molecule (TRiMTM) platform and advanced delivery systems, Arrowhead aims to silence disease-causing genes and address a broad range of unmet medical needs. The company’s pipeline spans multiple therapeutic areas including cardiovascular, metabolic, respiratory, renal, hepatic and infectious diseases.

Founded in 2008 and headquartered in Pasadena, California, Arrowhead has built a robust research and development organization with both in-house and collaborative efforts. Since its initial public offering in 2014 (NASDAQ: ARWR), the company has advanced several programs into clinical trials, including candidates targeting chronic hepatitis B, alpha-1 antitrypsin deficiency and hemophilia. Arrowhead’s scientific team has published extensively on mechanisms of RNAi and delivery strategies, contributing to a deeper understanding of gene silencing therapeutics.

Arrowhead maintains strategic partnerships and research collaborations with major pharmaceutical firms to enhance its development capabilities and accelerate clinical progress. These collaborations provide access to complementary expertise, specialized resources and expanded geographic reach. The company’s research sites are located across the United States, and its clinical trials also engage investigators and patients in Canada, Europe and Asia.

Under the leadership of Chief Executive Officer Christopher Anzalone and Chief Financial Officer Quentin Magee, Arrowhead continues to expand its pipeline and strengthen its technology platforms. The company is committed to rigorous clinical development, regulatory engagement and eventual commercialization of RNAi-based medicines that offer new treatment options for patients with serious diseases worldwide.

Arrowhead Pharmaceuticals Q2 2025 Earnings Call Transcript

Key Takeaways

• Upcoming First Commercial Launch of Plutasiran with a PDUFA date set for November 18, 2025, targeting familial chylomicronemia syndrome (FCS) pending regulatory approval.
• Strong Phase 3 FCS Data showed ~80% mean triglyceride reduction, with 75% of patients below 880 mg/dL and 50% below 500 mg/dL, supporting efficacy and tolerability in FCS patients.
• Rapid Enrollment in SHTG Phase 3 Program (JASTA-3 and 4) expected to fully enroll this summer, alongside CHEST-5 outcome study to evaluate acute pancreatitis risk reduction.
• Transformational Sarepta Collaboration secured $1.375 billion in upfront and milestone payments, strengthening the balance sheet and funding operations through mid-2028 without equity dilution.
• Diverse Late-Stage Pipeline includes obesity candidates (ARO-INHBE and ARO-ALK7 dosing soon) and CNS programs (ARO-MAPT, ARO-HTT, ARO-SNCA) poised for clinical initiation.

Presentation

[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.

[Vincent Anzalone, Vice President, Investor Relations at Arrowhead Pharmaceuticals]

Thank you, and good afternoon, everyone.

[Vincent Anzalone, Vice President, Investor Relations at Arrowhead Pharmaceuticals]

Thank you for joining us today to discuss Arrowhead's results for its fiscal twenty twenty five second quarter ended 03/31/2025. With us today from management are President and CEO, Doctor. Chris Anzalone, who will provide an overview Doctor. Bruce Given, Interim Chief Medical Scientist, who will provide an update on our cardiometabolic pipeline Andy Davis, senior vice president and head of 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 Ken Myskowski, our outgoing Chief Financial Officer, who is retiring this week, who will give a review of the financials. We also welcome Dan Appel, our incoming CFO, who is also with us on the call today. Following management's prepared remarks, we will open the call to questions. Before we begin, I 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, please refer to our SEC filings, including our most recent annual report on Form 10 ks and our quarterly reports on Form 10 Q.

[Vincent Anzalone, Vice President, Investor Relations at Arrowhead Pharmaceuticals]

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

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Thanks Vince.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Good afternoon everyone and thank you for joining us today. Before I start, I want to say thank you to Ken and wish him the best in his retirement. Ken has been a valuable member of the Arrowhead team and he retires at a time of great financial strength for the company. The financial organization that Ken built over the years is very capable and provides strong support to our ambitious development and commercialization plans. From all of us at Arrowhead, thank you for all the important contributions over the last fifteen years.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

I'm also excited that Dan Appel will join us as our new CFO at a critical time for Arrowhead. We expect to make the transition from development stage to commercial stage with the planned launch of Plutasiran this year pending regulatory review and approval. Dan is an accomplished pharmaceutical executive who can make immediate and important impact on our business. Let's now talk about our business and the progress we've made toward our short, mid and long term goals. Arrowhead is at an important point, both in terms of capabilities and potential value as we drive our organization toward our first commercial launch, which we anticipate this year.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Following this, we expect multiple additional independent and partner launches over the next few years. The combination of commercial expansion, our extraordinarily productive discovery engine, the increasingly validated nature of our platforms and RNAi modality, our large pipeline of clinical stage assets, our strong balance sheet and clear access to additional non dilutive capital together provide us with a level of upside potential and stability that I believe is a priority in our industry. This is always attractive, but it's even more valuable at a time when biotech markets have been depressed for the past several years and the near term capital markets are uncertain at best. As the current biotech market weakness causes people to weigh the trade off of stability versus the potential for explosive value growth, I think we have the tools for both. I view our value proposition in layups.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Layer one is Flavasiran, constitutes our primary near and mid term value driver and provides a strong base for us. Flodasiran has shown to be a potent triglyceride lowering agent across multiple clinical studies in hundreds of patients. We believe there are three to four million people in The US alone who suffer from severe hypertriglyceridemia or SHTG as defined by fasting triglyceride levels above 500. We are preparing to launch into a small subgroup of this population, patients with familial chylomicronemia syndrome or SCS, and have a PDUFA date of 11/18/2025. We also completed the submission of a marketing authorization application or MAA with the EMA and are working through additional planned submissions in other select geographies.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

The phase three data supporting our regulatory submissions were consistent and encouraging. Genetically defined and clinically defined FCS patients responded similarly with reductions in triglycerides of about 80% from baseline. Approximately seventy five and fifty percent of patients who had triglycerides go below eight eighty and five hundred milligrams per deciliter respectively, which are discussing guidelines in the academic literature as important goals for minimizing pancreatitis risk. These are truly impressive levels to achieve in FCS patients as the mean baseline triglyceride level in the study was approximately 2,500. Flodasiran was generally well tolerated and showed triglyceride reductions in one hundred percent of patients treated at the primary endpoint of ten months.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Our hope of treating FCS patients is important. This is an historically underserved population and we believe clodestrant could be an important medicine for them. However, we view this as just the beginning. JASTA-three, JASTA-four, and MIRROR III are phase three studies designed to support a supplemental NDA and other applications on a global basis to enable us to treat a broader SHTG population. These studies are moving rapidly and we believe they could be fully enrolled this summer.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

We are also in the process of initiating CHEST-five, which is an outcome study to specifically evaluate the risk reduction of acute pancreatitis in high risk patients with SHTG. We think this is an innovative strategy to potentially demonstrate meaningful value for patients, physicians, and payers. Our second layer of value may be our initial obesity candidates and initial CNS candidates. Regarding the former, ARO INHBE is currently dosing in obese patients and we expect ARO ALK7 to begin dosing in obese patients shortly. Both are designed to intervene in a biological pathway regulating fat storage.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

ARO I NHBE targets hepatocytes with the same TRiM platform using several ongoing clinical studies and has been in thousands of patients. It is designed to reduce hepatocyte expression of actin E, which is a ligand for adipose ALK7. ARO ALK7 is the first adipocyte targeted siRNA with a new TRiM platform that in animal models has shown good uptake in adipose tissue and high levels of target gene knockdown with a long duration of that may enable Q4 month, Q6 month, or less frequent administration. ARO ALP7 is designed to reduce the expression of the ALP7 receptor itself in adipose tissue. Both programs demonstrated substantial reductions in visceral fat versus control while simultaneously preserving lean mass in animal models.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Both targets are also supported by human genetics, where loss of function carriers have favorable body composition and metabolic characteristics compared to non carriers without any apparent safety cost. It's a varied treating pathway that we believe may fill some important gaps left by standard of care obesity treatments addressing some of the shortcuts of the GLP-one GIP class. The possibility of a long acting agent that are well tolerated spare muscle mass and enable visceral fat loss without dependence on caloric restriction with excitement. ARO INAV began dosing a Phase onetwo study in December 2024, and we anticipate having some initial data by the end of twenty twenty five. As I mentioned, we expect ARO IL-seven to begin dosing shortly, and we should have some initial data soon after ARO INHBE results become available.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Studies in both candidates include single dose and multiple dose monotherapy arms in obese subjects, subjects, as well as multiple dose arms that include combinations with tirzepatide. Our CNS B2B platform has made great strides in recent years. We have a substantial amount of preclinical data across multiple animal models that make us optimistic that we can deliver potent RNAi drugs to the brain via simple subcutaneous injection. Delivering large molecule drugs systemically and getting past the blood brain barrier has been a holy grail virtually as long as complex biological drugs have been developed, and we expect to be in the clinic late this year. Our first candidate ARO MAPT targets the tau protein for potential treatment of Alzheimer's.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

We expect to follow that with ARO HTT licensed to Sarepta against Huntington's disease by the end of the year. In the first half of twenty twenty six, we expect to bring ARO SNCA to the clinic, which targets alpha synuclein for potential treatment of Parkinson's. These are all well validated targets against very important diseases for which effective agents have long been sought, and we look forward to seeing how they translate from animals to humans. A third layer of value could come from our other phase three drugs. We expect to begin enrolling a yearlong phase three study of Zodasiran homozygous familial hypercholesterolemia or HOFH shortly.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

The HOFH the HOFH patients excuse me. The HOFH patients treated with zodasiran in phase one and phase two studies give us confidence that they may have a potent LDL I'm sorry, that it may have a potent LDL C lowering agent that only requires quarterly dosing in this important at risk patient population. The sales infrastructure we are building for pledasiran could easily deleverage those populations, so this feels like a straightforward, relatively rapid, low risk, and low cost expansion of our commercial presence. Zydisiran is our drug candidate against AAT liver disease. Our prior studies give us confidence that it could be an effective agent to reverse fibrosis in this largely unserved patient population.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Vadisiran is partnered with Takeda, and they have publicly guided that Phase III studies could complete enrollment this year. They are two year studies to primary endpoint. While this is partnered, our economics are substantial with fiftyfifty profit share in The US, twentytwenty 5% royalties ex US, and up to $527,000,000 of remaining milestones. While we view these as our primary near and mid term value drivers, there are substantial pieces of our business underneath them providing redundancy and additional upside potential. They include four wholly owned additional phase two ready clinical programs in AEROS P3, AERO CFB, AERO Rage, and AERO PMPLA3.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Two phase two programs partnered with GSK against chronic hepatitis B infection and MATCH. Another phase three program partnered with Amgen in olpasiran, four phase onetwo clinical programs partnered with Sarepta, three designated preclinical programs partnered with Sarepta, one of which I already mentioned in HTT, and six additional preclinical programs to be named by Sarepta. And of course, underlying all of this is a discovery engine that we believe is second to none in the siRNA field. We expect this to continue to drive value as the basis for many additional wholly owned drugs and through future partnerships. With all these layers, one can reasonably ask how many of these would be required to create a large, productive, sustainable pharmaceutical company.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

We indeed have many opportunities to create durable value. Importantly, we believe we have the capital and access to substantial additional capital to support our work. The Sarepta deal was a critical component of this. During the last quarter, we closed the global license and collaboration agreement with Sarepta Therapeutics, materially strengthening our balance sheet. This transaction brought in $500,000,000 as an upfront payment and $325,000,000 through the purchase by Sarepta of Arrowhead common stock at $27.25 per share.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Arrowhead will also receive $250,000,000 to be paid in annual installments of $50,000,000 over five years. In the short term, we have potential to receive an additional $300,000,000 in milestone payments associated with the continued enrollment of the Phase onetwo study of ARO D1, which we are on track to achieve during the next few quarters. Taken together, this adds up to $1,375,000,000 in cash payments. The total potential value of this deal, including upfront payments, equity investments, and potential milestones exceeds $11,000,000,000 We are also eligible to receive peer royalties on commercial sales. This will be a transformational deal in any environment.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

As I mentioned, with the state of biotech equity markets today, we feel very good about not having to raise equity capital at this time to fund our growth as we become a commercial company. We are now funded in June 2028 and through multiple important milestones that we think can drive substantial value for our shareholders.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

With that overview, I'd now like to turn the call over to Bruce Gibbett. Bruce?

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

Thanks, Chris, and good afternoon, everyone. Arrowhead has been working in RNAi interference for nearly twenty years. During that time, we have made great strides creating a modality that is increasingly scalable, reliable, potent, and generally well tolerated. We've also made great strides bringing RNAi to where it is needed. In addition to delivering to hepatocytes, are now able to address lung, CNS, muscle, adipose, and cardiomyocytes.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

We have always been a great R and D platform company, and we are now taking a next step forward as we seek our first marketing approval for clozasiran in familial catamycromelia syndrome, or SVS. Most of you will be aware of the results of our Phase three PALISADE study, which was published in the New England Journal of Medicine last year and showed statistically significant responses on all primary and alpha controlled secondary endpoints, including a large reduction in the primary endpoint of triglyceride reduction of ten months, as well as reduction in incidence of confirmed pancreatitis in the protocol defined comparison of placebo and the combined twenty five and fifty milligram dose groups. Following pre NDA discussions with the FDA, a marketing application for approval for use in FCS was submitted on 11/16/2024, and accepted for review by FDA with PDUFA date of 11/18/2025. At this time, we are not anticipating being asked to participate in advisory committee meetings. We can frequently ask whether the changes in Washington have impacted the review.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

While we have no special insights into the inner workings of the agency, our impression has been that the review is progressing as we would have anticipated, and we know of no FDA personnel or timing changes affecting our program at this time. We have also had routine pre filing meetings with EMA and appointed CHMP repertoires that culminated in the submission of a marking authorization application or MAA on 02/28/2025, which was confirmed to be valid for review on 03/20/2025. Our plan is to seek approval in The UK following approval in either The US or Europe by leveraging the international recognition procedure. We've also had pre filing meetings with the Canadian and Japanese regulatory authorities and have plans for filing marketing applications in those and other jurisdictions as well. We are hopeful that these filings will lead to Arrowhead's first commercial launch, possibly beginning as early as late this year.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

As welcome as we believe that clozasiran will be for SCS patients, this is just the beginning of the story for this important drug. While we were studying clozasiran at SCS, we were also evaluating the drug in much larger patient populations, including severe hypertriglyceridemia or SHTG, defined as patients with fasting triglycerides above 500 milligrams per deciliter, but without genetic SCS, as well as in patients with mixed hyperlipidemia. These important studies led to publications last year in the New England Journal of Medicine, JAMA Cardiology, and Circulation Journals. After receiving end of phase two feedback from FDA and EMA, we have initiated a phase three program in severe hypertriglyceridemia. This program is designed to meet key standards based on guidance documents from the International Council of Harmonization.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

Key requirements and drug design considerations include two pivotal placebo controlled trials in SHTG patients and a safety database of at least 1,500 patients treated with posastron compared with placebo for twelve months. Hence, SHAPSA three and four are very similar studies designed to demonstrate statistically significant improvement of triglycerides with twenty five milligrams per vaginal compared to placebo over twelve months of treatment. The two trials told around 700 patients that are highly high given the results from the two trials safety data, chapters three and four are supplemented by a supportive year of pretrial with mixed type of imaging. Also blinded to appearing twenty five milligrams quarterly with the first placebo for one year, with a planned enrollment of about 1,400 We have previously guided that we expect the last patient to be randomized in the SHCT program this year. Based on enrollment to date, we now anticipate the last patient to enroll sometime this summer.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

We've been encouraged by the enthusiasm of our investigators as indicated by the rapid enrollment and also by a very low premature discontinuation rate for adverse events and other reasons. The last patients entered will be treated for one year before the database can be locked, the data analyzed, and hopefully submissions made to regulatory authorities seeking approval for use in SHGG patients. Thus, before the end of the summer, it should be possible to narrow the potential timing for SHTG supplemental NDA submission. The SHTG program also features a first of its kind study named Shasta V to directly assess the ability of posastron to reduce the risk of acute pancreatitis in SHTG patients with a purpose designed outcome study. We are conducting this study expressly to meet the needs of sophisticated payers, especially outside of The U.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

S. It is not gaining for the SHTG filing and it's unlikely to be complete prior to those submissions. We do hope that it will be completed during the review process in Europe and elsewhere to be available pricing discussions with most of the national payers post approval. We can now provide precise timing of assumptions, not only because of uncertain timing of enrollment, but also because as an outcome study, treatment will continue until the required number of events have been collected rather than for a fixed duration. Screening is underway at centers currently open for trials and so the trial is underway.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

More information on design will be presented following presentation at major medical meetings. The R and D group is also playing its role in growing the awareness that new treatments are reaching the market for treating FCS. Our medical affairs team reporting into R and D continues to play a vital role in educating the medical community. Our medical science liaisons are actively engaging healthcare professionals in scientific exchange, helping them better understand and raising awareness of familial catamacral disease syndrome, the significant unmet medical needs, and the growing body of clinical data now available. The team has been present at key medical conferences during this last quarter, including the American College of Cardiology meeting, the European Episclerosis Society and British Episclerosis Society joint meeting, and the European Society of Endocrinology meeting taking place presently.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

In parallel, our public patients team continues to generate and disseminate important data to support these scientific efforts and expand awareness within the clinical community. Most recently at EAS, an abstract authored by experts in the field titled PALISADE, posasiran decreases risk of acute pancreatitis and improves indices quality of life in FCS was featured. The authors concluded in the abstract that in patients with FCS, losastran markedly reduced triglycerides and risk of pancreatitis with promising changes in indices for quality of life. Those of you who have watched us for a while know that we have another agent in our cardiometabolic pipeline that, like lisdasiran, has very strong support for continued genetics. I'm describing zidasiran, an RNAi drug designed to reduce expression of angioepoietin protein like three, or ANGPTL3.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

This drug also produced strong results in two phase IIs, including ARTIS-two in mixed hyperlipidemia, also published in the Journal Medicine, as well as the Gateway study in HOFH patients, with data presented last week at the European Atherosclerosis Society Conference. However, as we've discussed previously, we saw vodastiran as positioned in the crowded LDL space where the unmet medical need has largely been addressed by statins and PCSK9 inhibitors. But there is an important population where we think zodastriene would make an important contribution without requiring an outsized commitment of resources by Arrowhead, this being for patients with homozygous familial hypercholesterolemia. These patients have exceptionally high LDL cholesterol levels, and because their genetic abnormalities usually result in very low or absent LDL receptor function, are usually not able to get to goal LDL levels, even with maximal statin and PCSK9 therapy. This leaves them with very high risk of suffering cardiovascular events and early mortality.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

Monoprolin antibody against HPGR3 has already been proven effective in these patients, but requires monthly intravenous infusions and can lead to immunologic reactions. We conducted an exploratory phase two study in this population and saw similar benefit, but with convenient quarterly subcutaneous dosing. Moreover, these patients are usually cared for by physicians which largely overlap the physicians who treat SCS and SHTG, making the potential marketing of zudasiran in these patients efficient for us were to be approved. We have designed a Phase III study of similar size to our Phase III PALISADE study comparing zudasiran two hundred milligrams quarterly to placebo and expect to be enrolling patients this year. Assuming successful demonstration of safety and efficacy and successful regulatory submissions, zodasiran could join posaziran in the market as early as 2028 or 2029.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

As I said at the beginning of my remarks, we hope to see clozasiran emerge as our first commercially available drug to treat SCS patients as early as this year. Based on our expected completion enrollment in the SHTG Phase three study this summer, we could see SHTG phase three completion in the summer of twenty twenty six and an end in the FDA filing shortly thereafter. Interestingly, also before completion of the DECADE, based on public guidance, progress with phase three partnered programs for alpasiran and opioid related and fasciziran in liver disease associated with alpha-one antitrypsin disease could result in approvals for these programs in a similar timeframe, as well as with the possibility that some of our less mature and partnered programs for important orphan diseases might also find approval in that time. It takes patients in this business to see an important new platform rise to primates. We feel there is some good reason to have confidence that RNA interference with joint small molecule drugs and monoclonal antibodies as a foundational technology in drug development, especially as the field, which we see Arrowhead still leading, continues to push into new cell types, opening up additional important diseases to be addressed.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

I'll now turn the call over to Andy Davis. Andy?

[Andy Davis, SVP of Cardiovascular & Head of Metabolic Franchise at Arrowhead Pharmaceuticals]

Thank you, Bruce. With the PDUFA date for plazasiran set for November 18, just six months away, I'm pleased to share that our commercialization efforts are advancing rapidly and with strong momentum. As discussed by Bruce, the medical affairs team is in the field helping educate the physician universe and facilitating publication of the results of Arrowhead's clinical trial. We're also making strong progress in building our commercial sales team. A national sales leader and a full complement of regional sales leaders are now on board and focused on hiring and onboarding top tier talent with deep rare disease and therapeutic area expertise.

[Andy Davis, SVP of Cardiovascular & Head of Metabolic Franchise at Arrowhead Pharmaceuticals]

Interest has been very encouraging with thousands of resumes in the queue. And we're on track to fully hire and train our sales force by late summer, ensuring ample time for target validation and disease state education in advance of launch. A market access team is executing effectively on our pre approval information exchange, or PIE, strategy directed toward health care decision makers to help them plan for our potential approval. We've now engaged with payers representing a significant number of US covered lives, delivering compelling content on the clinical value and anticipated profile of plazasiran. We're encouraged by their interest in plazasiran, especially regarding its potential to reduce triglycerides and acute pancreatitis risk.

[Andy Davis, SVP of Cardiovascular & Head of Metabolic Franchise at Arrowhead Pharmaceuticals]

Additionally, our analytics team is deploying innovative technologies to identify individuals potentially living with FCS. We're connecting with these potential patients through disease state education efforts, including opportunities for them to opt in for continued communication and support. Across our research and stakeholder engagement, the clinical attributes of plazasiran continue to resonate strongly. Our market research suggests that plazasiran's deep and durable triglyceride reduction is compelling to numerous stakeholders. The PALISADE study showed that posazarine reduced triglycerides by approximately 80% for baseline as early as month one.

[Andy Davis, SVP of Cardiovascular & Head of Metabolic Franchise at Arrowhead Pharmaceuticals]

With this effect sustained over twelve months and with limited variability, while placebo subjects showed variable changes ranging from plus 10 to minus 18%. As a reminder, the primary endpoint in PALISADE was the median percent change from baseline and fasting triglyceride levels at month end, where Plazasiran demonstrated a placebo adjusted change of minus 59% with the planned commercial twenty five milligram dose. Our market research also suggests that healthcare providers, caregivers and patients have a strong desire to see triglyceride levels fall below expert guideline threshold, such as eight eighty milligrams per deciliter and even five hundred milligrams per deciliter. In PALISADE, seventy five percent of patients at the twenty five milligram dose achieved levels below eight eighty, and approximately fifty percent achieved levels below 500. Numerous expert guidelines emphasize the importance of maintaining triglyceride levels below five hundred milligrams per deciliter as the aspirational goal to reduce acute pancreatitis risk.

[Andy Davis, SVP of Cardiovascular & Head of Metabolic Franchise at Arrowhead Pharmaceuticals]

Finally, we received feedback that patients are looking for a treatment option that minimizes disruption to their lives. Plazasiran shows a favorable dosing and safety profile. And as a reminder, Plazasiran is conveniently administered once every three months, potentially minimizing treatment burden and improving adherence. As our US launch preparations continue at full speed, we're equally pleased to report steady progress on our European commercial efforts as well. We've already established a field medical presence and are actively engaging in scientific exchange at key European scientific meetings, laying a strong foundation for a successful rollout.

[Andy Davis, SVP of Cardiovascular & Head of Metabolic Franchise at Arrowhead Pharmaceuticals]

We remain on track and deeply motivated by the opportunity to bring investigational plazasiran to individuals living with FCS and their families in both The United States and priority countries outside The United States. We believe this potential first in class siRNA therapy will mark a major advancement, and we're fully committed to unlocking its patient's impact. I'll now turn the call over to James Hamzee.

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

Thank you, Andy. First, I'd like to provide a status update on our two early stage obesity programs, ARO Inhibit E and ARO ALK7.

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

ARO Inhibit E is designed to reduce expression of activin E, which is a ligand for adipose ALK7, while ARO ALK7 is designed to reduce expression of the ALK7 receptor itself, both of which are involved in regulating adipose storage of fats. These programs have the potential to reduce visceral fat mass while simultaneously preserving lean mass, which we demonstrated in preclinical models and are now evaluating in clinical studies. ARO inhibiting began dosing in December of twenty twenty four and is progressing on our planned timeline. As a reminder, phase onetwo study will evaluate ARO inhibiting monotherapy administered to obese otherwise healthy volunteers in both single and multiple dose escalation cohorts. The SAG cohort dosing is now complete and the multi dose monotherapy cohorts are actively enrolling.

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

The study is also evaluating multiple doses of ARO inhibitor E in combination with tirzepatide and these combination cohorts are actively enrolling now on our planned timeline. We anticipate the ARO ALK7 clinical program will be up and running shortly. The design of this study is very similar to the ARO inhibiting study with SAD and MAD monotherapy cohorts and MAD cohorts in combination with tirzepatide. This study will also enroll obese otherwise healthy volunteers. Both studies are designed to assess safety, tolerability, pharmacokinetics, pharmacodynamics, and multiple exploratory obesity efficacy endpoints.

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

We anticipate that some initial data may be available for ARO inhibiting around the end of twenty twenty five and potentially for ARO ALK7 shortly thereafter. Our muscle targeted programs partnered with Sarepta, ARO DUX4 for FSHD and ARO DM1 for myotonic dystrophy type one also continue to make good progress in the phase onetwo studies which are ongoing. While the decision to release data will be made jointly with Sarepta, it is our expectation that initial data release is possible in 2025. Lastly, I want to highlight some top line results from part two of the phase onetwo clinical study of ARO C3 designed to reduce liver production of complement component three as a potential therapy for various complement mediated diseases. In patients with IgA nephropathy or IGAN, ARO C3 achieved deep and sustained reductions in alternative pathway complement activity and proteinuria.

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

The max mean reductions in C3 was 89% serum age 50, which is an alternative pathway hemolytic acid reduced by eighty five percent. ARO C3 also led to an important improvement in proteinuria with a mean reduction in spot UPCR of 41% and a maximum individual reduction of 89% from baseline up through week twenty four. ARO C3 was generally well tolerated and the observed duration of effect is supportive of once every three months or less frequent subcutaneous dosing. We are very pleased with these results and are planning to present fuller data set at the upcoming European Renal Association or ERA Congress in June. I will now turn the call over to Ken Myszkowski.

[Ken Myszkowski, CFO at Arrowhead Pharmaceuticals]

Thank you James and good afternoon everyone. As we reported today our net income for the quarter ended 03/31/2025 was 370,400,000.0 or $2.75 per share based on 134,500,000.0 fully diluted weighted average shares outstanding. This compares to a net loss of 125,300,000.0 or $1.02 per share based on 123,300,000.0 fully diluted weighted average shares outstanding for the quarter ended 03/31/2024. Revenue for the quarter ended 03/31/2025 was 542,700,000.0 No revenue was recorded in the quarter ended 03/31/2024. Revenue in the current period relates to our license and collaboration agreement with Sarepta.

[Ken Myszkowski, CFO at Arrowhead Pharmaceuticals]

As you know, agreement with Sarepta was significant and included many assets including clinical assets, preclinical assets, and other assets to be developed. Accounting guidance requires that we allocate consideration to several items including the value of the licenses we transfer, the ongoing work of certain clinical trials that we will oversee, as well as expected obligations regarding future assets to be developed. Initial fixed contract revenue to be allocated included the upfront payment of $500,000,000 the premium paid on a stock purchase of $84,000,000 and $250,000,000 related to the five year annual milestone payments. This totals to about $834,000,000 majority of which was allocated to the license agreements and recognized immediately. And the balance will be recorded as we fulfill our performance obligations.

[Ken Myszkowski, CFO at Arrowhead Pharmaceuticals]

We recognized revenue of $542,700,000 during the quarter ended 03/31/2025 and we expect the balance to be recognized over the period that we satisfy these performance obligations. These obligations include overseeing certain clinical trials as well as performing R and D work related to future clinical candidates. We expect $90,000,000 to $125,000,000 of revenue to be recognized over the next twelve months solely related to the revenue recognition of the initial fixed contract revenue. The balance will be recognized over the next five years, five or so years, most of it will be recognized in the first half of that time period. We also expect future revenue related to cost reimbursement for certain discovery and manufacturing activities.

[Ken Myszkowski, CFO at Arrowhead Pharmaceuticals]

Future near term milestones of $300,000,000 related to the DM1 program are expected to be earned in the next few quarters and will be recorded in their entirety as revenue at that point, as would any other future milestone payments and royalties. Total operating expenses for the quarter ended 03/31/2025 were $161,500,000 compared to $126,200,000 for the quarter ended 03/31/2024. Key drivers of this change were increased candidate costs as the company's pipeline of clinical candidates both increased and advanced into later stages of development. Net cash provided by operating activities during the quarter ended 03/31/2025 was $460,100,000 compared with net cash used in operating activities of 92,400,000 for the quarter ended 03/31/2024. The increase in cash provided by operating activities is driven by the cash received for the Sarepta agreement.

[Ken Myszkowski, CFO at Arrowhead Pharmaceuticals]

Turning to our balance sheet, our cash and investments totaled $1,100,000,000 at 03/31/2025. Our common shares outstanding at 03/31/2025 were 138,100,000.0. With that brief overview, I will now turn the call back to Chris.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Thanks, Ken. AeroMed is in a strong and stable position as a business, and we have made meaningful progress toward our long term goal of developing and ultimately commercializing new innovative medicines for millions of patients. We are on schedule to launch Flodasiran this year pending regulatory approval with what we think is a best in class profile with meaningful differentiation from currently available therapies in FCS. We are also well on our way to fully enrolling in this summer our suite of phase three studies designed to support regulatory submissions for the large SHTG patient population. We are funded into 2028 and potentially through multiple launches of wholly owned and partnered programs in late stage development.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

In addition, we believe our technology platform is the broadest and best in the field, giving us many opportunities to receive additional capital inflows from business development in areas that are outside of our core commercial focus. Thank you for joining us today, and I would now like to open the call to your questions.

[Operator]

And our first question comes from Maury Raycroft of Jefferies. Your line is open.

[Maury Raycroft, Equity Research Analyst at Jefferies]

Hi, congrats on the progress and thanks for taking my question. And best wishes to Ken and welcome Dan. Let's see, for inhibiting and ALK7, you've noted that the goal there is not to compete with GLP-1s but to be used in combination. What's the latest you're saying on how you're setting expectations for initial monotherapy and potential combo data? I guess what you want to see in the initial update including changes on weight loss, body composition and relevant biomarkers.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Yeah, thanks, Maury. So look, we're not giving any guidance on what we expect to see because, you know, this is a first in human study. The animal data were compelling. You know, we saw good weight loss as a monotherapy. We saw good weight loss in combination with tirzepatide.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

This is a, as you know, this is a new pathway that we think could fill some of the massive amounts of white spaces in the GLP one GIP current standards. So so, you know, look, we're looking forward to seeing what we see. The real benefits here we think are potentially not just weight loss, but quality weight loss. Are we seeing the loss of visceral fat? Are we seeing a retention of lean muscle mass?

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

We saw that in animal models, you know, we hope to see that in humans as well. And also in animals, we did not see this was not the result of caloric restriction. It was it was, you know, in the context of normal feeding. That would also be that sort of thing be helpful. So let's just see what we see.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

I think we'll have our first flood of data towards the end of this year. And then it should be data rich, you know, gosh, virtually every quarter to the next year or so after that.

[Maury Raycroft, Equity Research Analyst at Jefferies]

Got it. That's helpful. Okay. Thanks for taking my question.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

You're welcome.

[Operator]

Thank you. And our next question comes from Jason Gerberry of Bank of America. Your line is open.

[Jason Gerberry, MD & Equity Research Analyst - Biotech & Pharma at Bank of America Merrill Lynch]

Hey, guys. Thanks for taking my question. Just ahead of the positive urine FDA review decision, I'm wondering how you think about the robustness of your pancreatitis data and how that might look or feel a little bit differently in the package insert. I noticed Trin Golzat just has a mention of the numerical incidence reduction in the clinical section, and I'm wondering if you guys feel like based on a policy that you might get, you know, maybe a more robust front page reference to the pancreatitis benefit. Anything you can just offer on the potential aspects of label differentiation would be much appreciated. Thanks.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

Yeah, hi, this is Bruce. You know, we haven't had any labeling negotiations with the FDA at this point, which as you would expect, I mean, we're still in the midst of the review process and label negotiations come later. So it's really impossible for me to estimate how they may view things. We obviously like our data quite a bit. We did our study differently in that we looked at patients that had confirmed pancreatitis using the ATLANTIC criteria, while Ionis used a they developed a scale that also included possible and probable pancreatitis, which actually don't meet the Atlanta criteria as definite pancreatitis.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

So frankly, it's a little bit of an apples and oranges comparison, and I really don't know how that might play out during labeling discussions or even in the market. But it is a little bit apples to oranges. Went, I guess, you might say is a more conservative route that we think especially for instance with payers in Europe, especially that might turn out to be important. But, you know, it's you know, clearly these drugs are extremely helpful, not just in reducing triglycerides, but also in turning that reduction in triglycerides into reduced abdominal pain and even pancreatitis. So, you know, we'll see.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

I really can't give you any guidance for what labeling is gonna look like. That's, you know, that, you know, in our business, you know, we do the studies, we submit, you know, the FDA reviews and the FDA decides. So ultimately, it's gonna be up to them. We'll obviously discuss it with them, but I can't speak for them at all.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

And let me just add here more broadly. The biology here is clear. In these patients, the higher the triglycerides, the higher the risk of pancreatitis, the higher the risk of abdominal pain. And so the goal here is to get triglycerides as low as you can. So while we are monitoring for pancreatitis, of course, in the CHAFTA-three and CHAFTA-four studies, are looking at abdominal pain.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

The real thing to focus here on is how low can we get triglyceride. And as we mentioned in the remarks, well as presented in the past, we get something like seventy five percent of patients in that phase three study below eight eighty and something like fifty percent below 500. And that's a real feat for these FCS patients who, as we mentioned, came into a study with a mean triglyceride level of 2,500. I think that's what we need to focus on here.

[Jason Gerberry, MD & Equity Research Analyst - Biotech & Pharma at Bank of America Merrill Lynch]

Got it. Thanks, guys.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Welcome.

[Operator]

Thank you. And our next question comes from Ellie Merle of UBS. Your line is open.

[Jasmine Fels, Associate Analyst at UBS Group]

Hey, this is Jasmine on for Ellie. Thanks so much for taking our question. So, first for plazasiran and SHTG, just on acute pancreatitis, can you talk about what the latest is that you're expecting for your baseline rate of AP in your population for Shasta three and four? And what do you think the magnitude of effect that you think that you can show here is? And then just quickly, second on zodosiran, can you clarify your current expectations in terms of potentially expanding beyond HoFH here? Thanks.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Let me take the second one first with zodastiran. You know, the expansion beyond HOFH, you know, would be in potentially some sort of high risk, you know, HEFH population. And that's actually something discussed with the agency and proposed a narrow approach of looking only at those patients that despite the actual therapy, not able to get to the goal of LDL reduction that would be associated with the greatest reduction of risk. They just weren't comfortable with that because they thought, well, I can't speak for why, but they, you know, maybe because they thought it was going to set precedent, you know, they, you know, to get into HEFH, they wanted a full, you know, a full program, you know, multiple adequate well controlled trials, 1,500 patients or more safety, etcetera. And it didn't make sense to us, you know, to go after such a sliver of high risk patients with a very expensive, very long program.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

So we're going to stay focused on HLFH. And we do not anticipate at this time that we would expand Zidastriam but beyond HLFH. It's just not feasible. It's not a good use of our resources. Going back to clozastramid, if I understood your question of what we think the mean entry triglycerides might look like and what sort of response we might see, you you would expect the tests are pretty good that we'll pretty much replicate what we saw in phase two.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

And in phase two, the main triglycerides in the SHTG population in that study were around 900, I think, maybe eight fifty to 900. And as I said, our placebo adjusted change was 53% reduction. So substantial, large reductions in triglycerides, which is why we said this trial is really overpowered because even with a smaller trial, phase two, we have p value less than 0.2. It should be an impressive, can't say it will, but it should be an impressive, we expect it to be an impressive reduction in triglycerides. The mean enrollment triglycerides probably could be neurogradinide.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Did I get your question right, Ellen? Did I understand your question?

[Jasmine Fels, Associate Analyst at UBS Group]

Yeah, we also were just interested in the mean of what you expect for acute pancreatitis, kind of a baseline.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Oh, in the pancreatitis study. Okay. Well, I would expect that's going to be closer to the FCS, to the Palisade baseline. So I would expect that the pancreatitis study baseline, you know, it surprise me if it's around two thousand. Could be a little bit lower because, you know, patients, especially when they've had a history of pancreatitis, they're more susceptible to repeat pancreatitis even at lower values.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

But it won't shock me if it turns out to be somewhere around two thousand.

[Jasmine Fels, Associate Analyst at UBS Group]

Okay, thanks so much. Very helpful.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

You're welcome.

[Operator]

Thank you. Our next question comes from Patrick Tuccio of H. C. Wainwright and Company. Your line is open.

[Patrick Trucchio, Managing Director at H.C. Wainwright & Co.]

Thanks and good afternoon and congrats on all the progress. I was actually curious about your ARO C3 and ARO CFB programs and your latest thinking regarding the potential positioning of these compounds in complement mediated diseases and how you're viewing these compounds? Are they core to your portfolio or there's potential here for partnering? Thanks.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Sure. I'll take the second part of that and I'll leave the first part and more for James. Look, we are open to discussing partnerships for C3 and Factor B. Those drugs, at least in my mind, those drugs work. They do what they're designed to do.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Lower their to read, they lower Factor D respectively. And we think there's a number of places they can go. If push came to shove, we could certainly build out a commercial presence within a fairly narrow set of opportunities. But if we can find the right partnerships, I think that would be more beneficial to us. We'll just see if we can find the right partnerships with the right economics.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

And right now it's too early to tell. James, you wanna talk about some of the opportunities?

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

Yeah, sure. So the data that we talked about earlier today with ARO C3, of course, that's the IGAN data. We're still pending some data in the C3G population with that molecule.

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

And of course, ARO CFB is also applicable to be used in those renal disease populations, potentially in some of the hematologic complement mediated indications as well. And we think based on what we've seen so far with ARO C3 that it stacks up pretty well against the other complement mediated drugs approved or being studied in the renal indications in terms of proteinuria reduction. We talked about the forty one percent reduction in proteinuria with ARO C3. I think that relative to what else is out there is pretty competitive, particularly when you look at the infrequent dose administration that can be used with RNAi dosing every three or every four months, that could have some advantages.

[Operator]

Thank you. Our next question comes from Andrea Newkirk of Goldman Sachs. Your line is open.

[Andrea Newkirk, Biotechnolgy Equity Research at Goldman Sachs]

Good afternoon. Thanks for taking our question. James, maybe one for you as you think about entering the obesity space. How are you thinking about advancing both ARO ELK7 as well as ARO inhibi through clinical development? And do you have interest or capacity to advance both?

[Andrea Newkirk, Biotechnolgy Equity Research at Goldman Sachs]

Or would you look to make a decision of one versus the other following the initial data sets?

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

Sure. Yeah, so our thoughts with those, from a cost standpoint, it doesn't cost us that much to do the preclinical and at least the phase one development. And we have ARO inhibin E, which targets the hepatocyte expression uses the so called GalNAc technology for delivery. That technology is pretty well vetted. We know what the the safety profile at least of the platform is, and we know that we should be able to knock down the gene target in the hepatocyte.

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

Contrast, Arrow ALK7 uses a completely different platform. The animal data looked really compelling with that molecule, but the platform has never been in humans before. So presumably there's a little bit more risk there just because the platform hasn't been derisked. Our thought was to take both of those through phase one and then get a look at the data at both the safety and the PD and efficacy data, and then choose one to move forward. And there may be opportunity for partnership either with one or both of those potentially.

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

But that was the thought of why we brought both of them into the clinic. And let's also be clear, I do not expect these to be our last two obesity assets. With our ability to address lymphocytes and our ability to address potentially CNS via this blood brain barrier platform that we've got, there are a ton of really compelling metabolic and obesity targets that I think you'll see coming down the pike in the near term as well.

[Andrea Newkirk, Biotechnolgy Equity Research at Goldman Sachs]

Okay, thank you so much.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Thank

[Operator]

you. And our next question comes from Luca Izzi of RBC. Your line is open.

[Luca Issi, Senior Biotechnology Analyst at RBC Capital Markets]

Oh, great. Thanks so much for taking my question. Congrats on the progress. Maybe Bruce, circling back on a prior question, can you just maybe remind us how you're thinking about SHAPTA-five study design? Patients will be enrolled, and maybe most importantly, how many patients do you need to actually hit the staff?

[Luca Issi, Senior Biotechnology Analyst at RBC Capital Markets]

So if you can talk about powering assumptions, that'd be much appreciated. And then maybe bigger picture on posaster and Chris, are you thinking about commercialization of the molecule ex US? Are you planning to do that by yourself or you're still looking for a partner? Any thoughts there, much appreciated. Thanks so much.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

Yeah. So again, this trial will be, we believe, the first ever trial where demonstrating a benefit in pancreatitis is the primary endpoint. So it's similar to a MACE trial from the standpoint of, you know, we're going to count events and when we hit a certain number of events, we'll analyze. We haven't yet divulged what that number of events is. You know, I think we probably will in the future, but so far we haven't.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

But we have a pretty good idea of obviously what that is. But we also haven't said how many patients we're targeting. But again, my guess is that we may continue to enroll depending on sort of what the rate of pancreatitis is that we're seeing in the early days. But the trial itself is a trial enriched from the perspective that it requires that patients have had a history of pancreatitis, including history of pancreatitis in the recent past, which those patients are at higher risk of pancreatitis you know, than hypertriglyceridemia patients that have never had pancreatitis events. You know, but again, no one's ever done a trial like this before.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

So understanding exactly, you know, what the observed risk will be is something that we'll get some understanding. Of course, I'll be blinded, but we'll get some understanding as the trial gets underway and it gets moving. And that will sort of determine, but it's certainly not the size of C. Or anything like that. It's much smaller, given the reduction of pancreatitis we saw in Palisade, for instance.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

But we haven't I think we'll give more detail in the future, but we're not ready to give all the deep detail at this point.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Hey, Luca. So regarding your question on filgotinib, so as you know, we're full speed ahead in The US for FCS and potentially FACG Oakland. Rest of world, we are open to finding partners. We are preparing right now in Europe. Andy, you want to discuss how we're approaching that right now.

[Andy Davis, SVP of Cardiovascular & Head of Metabolic Franchise at Arrowhead Pharmaceuticals]

Yeah, Luca. So we think the European markets in particular, the large four European markets in The UK lend themselves extremely well to commercialization for a rare disease like FCS. Many of these patients on their patient journey are triaged through a small number of centers of excellence. And so with limited infrastructure and resources, we believe we're able to help these potential FCS patients through those centers of excellence. And so as far as priority markets outside the outside The US, those large markets in Europe and UK and also Canada are a priority for us.

[Luca Issi, Senior Biotechnology Analyst at RBC Capital Markets]

Got it. Thanks so much, guys.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Thank you.

[Luca Issi, Senior Biotechnology Analyst at RBC Capital Markets]

Thank you.

[Operator]

And our next question comes from Edward Tenthoff of Piper Sandler. Your line is open.

[Edward Tenthoff, Sr. Research Analyst at Piper Sandler Companies]

Great. Thank you very much. Appreciate taking the questions. So, know, to note that you guys are either not fever reviewed. Do you anticipate an AdCom or anything like that?

[Edward Tenthoff, Sr. Research Analyst at Piper Sandler Companies]

And what other steps are you taking in preparation for hopeful approval and likely launch? Thanks.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

Well, as far as the AdCom goes, we've not been advised that there's an expectation for a Natcom. So at this time, we don't think that Natcom's in our future. As you probably know, the agency could change their opinion on that at any time if data develops in their analysis that makes them want to have an ad count for some reason. But at this point, there's no anticipation of an ad count. So the likelihood, I suppose it's lower every day we get closer to potential approval.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

We can't say we won't have one because they can decide at any time that they need one, but we don't see it though. And then the second part of it is

[Vincent Anzalone, Vice President, Investor Relations at Arrowhead Pharmaceuticals]

The second part was what actions are we taking to be ready for lunch?

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

Yeah, so I mean, I guess we talked a bit about that from the R and D perspective. We had an educational mission our medical affairs function and MSLs. So that's very much just a matter of helping physicians be ready for a new drug coming into the SCS space where really there hasn't been a promotional effort up until the Ionis launch ever really first. There's a big challenge in this.

[Edward Tenthoff, Sr. Research Analyst at Piper Sandler Companies]

Embrace, do you think the launch of Ionis is helpful in terms of sort of priming the pump a little bit there and then hopefully you guys coming in with a better therapy afterwards? Thank you.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

Well, look, I think any orphan disease that has had essentially no approved therapies has always benefited from as much educational effort as you can get. And history tells us, and I could quote many examples, where the first approved drug really did not fully open that market. It often takes two or more companies, you know, to be promoting into a space, even an orphan space, to really get those markets to open up and grow. So it's paradoxical because people might think you're better off being alone. In many ways, you're actually better off when there are multiple competitors.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

Now, yes, they find it out who gets the most share in the end, but actually the more educational noise, the better when you're trying to open up a market like SCS. And the exact same will be true for SHGG as well. You know, more noise is better than less. And yes, the best drug usually wins the share battle, but the pie gets much bigger with more education going on.

[Edward Tenthoff, Sr. Research Analyst at Piper Sandler Companies]

That's really helpful. Thanks.

[Operator]

Thank you. Our next question comes from Mike Ulz of Morgan Stanley. Your line is open.

[Michael Ulz, Executive Director at Morgan Stanley]

Good afternoon. Thanks for taking the question. Maybe just another one on posazaran and the upcoming SCS launch. It sounds like you guys are making good progress in launch prep, but maybe you could just talk about or remind us The US patient population and then some of the progress you're making identifying patients and if there's any way to try and accelerate that trend. Thanks.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Yeah, thanks for the call, Mike. You'd be familiar with the epidemiological data suggesting that the prevalence of FCS in The United States would be one to thirteen per million. And so that spans anywhere from the hundreds of patients in The US to mid single digit thousands. And we think the variability around the single digit thousands is really around whether you think about genetic FCS or even clinically diagnosed FCS. That's why there's some variability there.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

As a reminder, of course, in Palisade, we studied plazasiran in both the genetically confirmed and clinically diagnosed patients and showed similar results. And so that's how we think about the broader market for FCS. As far as patient identification, I would say that our internal team here, our analytics team, and our marketing team is comprised of seasoned professionals who have cut their teeth in cardiometabolic and lipids specifically, and are really using the latest technologies to patient find and ultimately to support those individuals who may have SCS and don't know that they have SCS. So patient finding will be absolutely critical as we move into this space as it is with any ultra rare condition. And we feel like we have the people and the capabilities to excel there.

[Michael Ulz, Executive Director at Morgan Stanley]

Got it. Thank you.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Thank you.

[Operator]

Thank you. And our next question comes from Mayank Mantani of B. Riley Securities. Your line is open.

[Mayank Mamtani, Senior Managing Director at B. Riley Securities]

Yes. Good afternoon, team. Thanks for taking our questions, and and congrats to Ken for, sixteen years of service. Just maybe on the Innovin E, a quick follow-up on the SAD data. Is there anything that you are you you can or willing to share what what maybe the learnings there were? And and on the on the MAD part one b and part two, which is the combination, are are those sequential, or are they are they happening in parallel? And I have just one follow-up for Ken, if I may.

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

Yes, sure. On the second part of the question, the combo studies and the MAD non combination studies, those are in parallel. So those are enrolling at the same time. And then I think in terms of what we can share, as Chris said earlier, we'll have to wait and see later this year what kind of data that we have available.

[Mayank Mamtani, Senior Managing Director at B. Riley Securities]

Okay. Understood. And, Ken, what what partnership related milestones are factored in your this 2028 runway guidance? If if you could maybe just clarify that. Thanks for taking our question and congrats, Ken.

[Ken Myszkowski, CFO at Arrowhead Pharmaceuticals]

So we've included the near term milestones that we expect to get from Sarepta. And beyond that, there are other milestones. If we think they are probable of happening, then we've included those as well. But we're not providing specifics on that.

[Mayank Mamtani, Senior Managing Director at B. Riley Securities]

Understood. Thank you.

[Operator]

Thank you. And our next question comes from Mani Faroohar of Leerink. Your line is open.

[Analyst]

Hey, good. You have Ryan on for Mani. Thanks for taking our question. Maybe just a quick financial one. I noticed you guys started to pay down that credit facility.

[Analyst]

Just wondering, should we expect that to continue over the course of the year or was this more of just a one time pay down to kind of bring that total down? Thanks.

[Ken Myszkowski, CFO at Arrowhead Pharmaceuticals]

So the one time pay down was because of the Sarepta agreement. There will be future payments on that, but it's only related to times when we have cash flow coming in from milestones and such. So it's only attributable to when we have some cash that's coming in.

[Analyst]

Got it. Thanks.

[Ken Myszkowski, CFO at Arrowhead Pharmaceuticals]

Thank you.

[Operator]

And our next question comes from Brendan Smith of TD Cowen. Your line is open.

[Brendan Smith, Director & Senior Analyst at TD Cowen]

Thanks for taking my questions guys.

[Brendan Smith, Director & Senior Analyst at TD Cowen]

Maybe just similar to a couple earlier questions I wanted to ask a little bit more on your latest thing into the CNS assets. So is the plan as of today to carry those forward internally or are you already kind of thinking that these could potentially be partnered or licensed? And then maybe more specifically for MAPT, are there any subsets of the AD population you'll look to target first? Just kind of wondering how we should think about the potential design there and segmentation in that market. Thanks, guys.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

James, why don't you take the MMT and then I'll take the both questions.

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

Sure. This is the second question on MAPT. Not at this point for the phase one design. It's not entirely finalized yet, but suffice it to say that the main goal of the study will be to evaluate safety and measure PD markers of knockdown of tau, various subtypes of tau in different populations.

[Dr. James Hamilton, Chief Medical Officer at Arrowhead Pharmaceuticals]

So we've not specifically pinned down subtypes of AD that we plan on studying.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

And regarding your first question, so as we talked about, our first three candidates in the clinic are expected to be MAPT towards the end of this year for Alzheimer's. HTT for Huntington, that's already licensed to Sarepta. We expect that to be this year too, by the end of the year. And then first part of next year, alsimoguline for Parkinson's. So HT is already off the docket right now. We've been clear to potential partners that MAPT is off limits right now. We view that as a potentially very high value target. Look, we don't know yet this CNS BBB platform is gonna translate from animals to humans, we will see. And so this is a bet that we're making, but we think it's a good one given the data we've seen in the preclinical models and given the validated nature of MAPTA targets.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

So we're holding on to that for right, at least for right now, we'll see where that goes in the future.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Absolutely look, we like that target a lot. And if a partner comes in with the right partner comes in with the right kind of deal, we would certainly consider partnering that. So that we don't feel quite as strongly at least in the near term as we do on MAP T. And then look, those are the first three of we think many. Once we have this platform validated in humans, we're gonna run.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

There's a number of additional good targets that we are developing internally. My expectation is if we see that this translates as we hope it does, you're gonna see a large number of additional CNS targets, some of which we will hold on to, some of which we'll partner.

[Brendan Smith, Director & Senior Analyst at TD Cowen]

Got it. Sounds good. Thanks guys.

[Vincent Anzalone, Vice President, Investor Relations at Arrowhead Pharmaceuticals]

You're welcome.

[Operator]

Thank you. And our next question comes from Prakhar Agrawal of Cantor Fitzgerald. Your line is open.

[Prakhar Agrawal, Managing Director at Cantor Fitzgerald]

Hi, thank you for taking my questions and congratulations on the quarter. So Ionis has the Phase III SHTG readouts coming soon. If olezarsan achieves statistical significance on pancreatitis events in Phase III, How does that impact your development strategy to have the pancreatitis reduction data in the label around the time of launch versus waiting for Shasta five to read out? And anything else you will be focusing on when ELISARS on the HHTG trial reads out? Thank you.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

Well, you know, it'll be interesting to see whether they can accrue enough events, you know, to actually achieve anything there. We'll see. From our perspective, was not a good enough bet for us to rely on that, especially in Europe to do that. Our program is also designed to look at pancreatitis events, albeit we look at definite pancreatitis. We look at possible cases.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

We just don't think that, we think there's a high chance that that's gonna worry the health technology authorities in Europe. So we really felt that we had to be, it had to be definite pancreatitis from our perspective. But we are adjudicating any pancreatitis that occurs in Shasta three or Shasta four and we are, you know, we have written those studies so that we can merge those two trials for the purpose specifically of pancreatitis. And we intend to do that. But ultimately, you know, that for us feels like a high risk strategy in all comers SHTG.

[Bruce Given, Chief Medical Scientist at Arrowhead Pharmaceuticals]

And again, I think that purpose built study rather than a secondary endpoint will be much more agreeable to the payers, the most sophisticated, difficult payers in the world, which mostly the European payers and some other places as well.

[Operator]

Thank you. And our next question comes from David of Citi. Your line is open.

[Analyst]

Hi everyone. This is Ike Lee on for David Lebowitz. Thank you for taking our question. We have one on pricing for Plosacirin. How do you think about launching this in FCS and then waiting for the SHTG data in the interim?

[Analyst]

We expect something like Trangosa also getting a label expansion in SHTG and therefore having to move from an ultra rare pricing scheme into something that is a little bit cheaper. Is that something on your mind yet as you look towards commercialization? What are your thoughts on potentially having to navigate the ultra rare versus much more prevalent disease pricing schemes? Thanks.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Sure. Look, I think we can have and we are having transparent and open conversations with payers. Should we be lucky enough to have clodazepirin approved in FCS? It's relatively narrow population. And so we would need to get reimbursed at a high level that is commensurate with omepamolecular.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Should we be lucky enough to have, you know, Shafta three and four, you know, read out well and get approved for a broader label, of course, we would bring the price down conceptually. So that we know on a more granular level about what those two prices are. We just don't know at this point. It's going depend upon a lot. So conceptually, that is our strategy, but I can't get more granular than that at this point.

[Operator]

Thank you. I'm showing no further questions at this time. I'd like to turn it back to Chris Anzalone for closing remarks.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

I will thank everyone for joining us today. It is bittersweet to end this call. This is the last time that I'm going have Ken on my left during these calls. As we mentioned in prepared remarks, I really appreciate his great work for the last sixteen years. And I'm going to miss having him here.

[Christopher Anzalone, President, CEO & Chairman of Board at Arrowhead Pharmaceuticals]

Having said that, I'm, of course, excited to have Dan on board today to my right, maybe to my left, once Ken's gone. But thank you all for joining us today.

[Operator]

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Participants

Executives

• Vincent Anzalone, Vice President, Investor Relations
• Christopher Anzalone, President, CEO & Chairman of Board
• Bruce Given, Chief Medical Scientist
• Andy Davis, SVP of Cardiovascular & Head of Metabolic Franchise
• Dr. James Hamilton, Chief Medical Officer
• Ken Myszkowski, CFO

Analysts

• Maury Raycroft, Equity Research Analyst at Jefferies
• Jason Gerberry, MD & Equity Research Analyst - Biotech & Pharma at Bank of America Merrill Lynch
• Jasmine Fels, Associate Analyst at UBS Group
• Patrick Trucchio, Managing Director at H.C. Wainwright & Co.
• Andrea Newkirk, Biotechnolgy Equity Research at Goldman Sachs
• Luca Issi, Senior Biotechnology Analyst at RBC Capital Markets
• Edward Tenthoff, Sr. Research Analyst at Piper Sandler Companies
• Michael Ulz, Executive Director at Morgan Stanley
• Mayank Mamtani, Senior Managing Director at B. Riley Securities
• Analyst
• Brendan Smith, Director & Senior Analyst at TD Cowen
• Prakhar Agrawal, Managing Director at Cantor Fitzgerald