ARROWHEAD PHARMACEUTICALS, INC. Q2 FY2025 earnings call

• Chris Anzalone highlighted the company's progress towards launching plozasiran this year, pending regulatory approval, and the progress of Phase III studies for SHTG. He also discussed the layers of value including obesity and CNS candidates.
• Bruce Given provided an update on the cardiometabolic pipeline, including plozasiran's regulatory submissions (PDUFA date Nov 18, 2025), Phase III studies for SHTG, and medical affairs efforts to educate the medical community.
• Andy Davis talked about commercialization progress for plozasiran, including building the sales team, market access efforts, and connecting with potential patients.
• James Hamilton updated on obesity programs ARO-INHBE and ARO-ALK7, their Phase 1/2 study progress, and progress on other programs like ARO-C3.
• Ken Myszkowski reviewed financials, including revenue recognition from the Sarepta agreement and the company's cash position.

For the quarter ended March 31, 2025, revenue was $542.7 million, driven by the license and collaboration agreement with Sarepta. Net income was $370.4 million or $2.75 per share. No revenue was recorded in the prior year quarter. The revenue relates to the significant deal with Sarepta, with initial fixed contract revenue allocated to license agreements and performance obligations. Cash and investments totaled $1.1 billion at March 31, 2025.

• Anticipate launching plozasiran this year pending regulatory approval.
• Expect to fully enroll Phase III studies for SHTG this summer.
• Funded into 2028 with potential multiple launches of wholly owned and partnered programs.
• Expect $90 to $125 million of revenue to be recognized over the next 12 months related to the Sarepta agreement, with the balance recognized over 5 years.

• Regulatory review delays for plozasiran could impact the launch timeline.
• Uncertainties in the biotech market may affect capital access.
• Competition in the RNAi and obesity spaces could impact market share.

Q: Congrats on the progress and thanks for taking my question. And best wishes to Ken, and welcome, Dan. For INHBE [ph] 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 seeing on how you're setting expectations for initial monotherapy and potential combo data?

A: James Hamilton responded that it's a first-in-human study, looking forward to seeing data on weight loss, body composition, and biomarkers, with hope to see loss of visceral fat and retention of lean muscle mass.

Q: Hey guys, thanks for taking my question. Just ahead of the plozasiran 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.

A: Bruce Given stated that labeling negotiations with the FDA are ongoing, and their data on pancreatitis is different from Ionis' as they used definite pancreatitis criteria, and it's unclear how the FDA will view it.

Q: Hey guys, thanks so much. Very helpful. Okay, thanks for taking my question.

A: You’re welcome.

Q: Hey guys, thanks for taking my question. Just ahead of the plozasiran 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.

A: Bruce Given stated that labeling negotiations with the FDA are ongoing, and their data on pancreatitis is different from Ionis' as they used definite pancreatitis criteria, and it's unclear how the FDA will view it.

Q: Thanks, 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 are viewing these compounds? Are they core to your portfolio or there is potential here for partnering?

A: Christopher Anzalone said they are open to discussing partnerships for C3 and Factor B, and James Hamilton talked about the data from ARO-C3 in IgA nephropathy showing reductions in complement activity and proteinuria.

Q: 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-ALK7 as well as ARO-INHIBE through clinical development? And do you have interest or capacity to advance both? Or would you look to make a decision of one versus the other following the initial data sets?

A: Christopher Anzalone said it doesn't cost much to do preclinical and Phase I development for both, and they plan to take both through Phase I and then decide based on safety, PD, and efficacy data, with potential for partnership.

Q: 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 are thinking about SHASTA-5 study design? What patients will be enrolled? And maybe most importantly, how many patients do you need to actually hit the stat? So if you can talk about powering assumptions, that would be much appreciated. And then maybe bigger picture on plozasiran. Chris, how are you thinking about commercialization of the molecule ex U.S.? Are you planning to do that by yourself? Or you're still looking for a partner? Anything you can talk there, much appreciated. Thanks a lot, A: Bruce Given discussed the SHASTA-5 study design as an outcome study to demonstrate pancreatitis risk reduction, with details to be shared later, and Christopher Anzalone said they are open to finding partners for plozasiran ex U.S. and are preparing for Europe.

Q: Great. Thank you very much. Appreciate it for taking the questions. So important to note that you guys have the review, not ever reviewed. Do you anticipate an adcom or anything like that? And what other steps are you taking in preparation or hopeful approval and likely launch? Thanks.

A: Christopher Anzalone said there's no anticipation of an adcom at this time, and Bruce Given discussed the importance of educational efforts for market opening in FCS.

Q: Good afternoon. Thanks for taking the question.Maybe just another one on plozastiran and the upcoming FCS launch. It sounds like you guys are making good progress in launch prep, but maybe you could just talk about or remind us the U.S. 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.

A: Christopher Anzalone discussed the U.S. patient population for FCS and the efforts of the analytics and marketing teams to identify patients.

Q: Yes, good afternoon, thanks for taking our questions. And congrats to Ken for 16 years of service. Just maybe on the INHBE [ph] quick follow-up on the SAD data. Is there anything that you are you can are willing to share what maybe the learnings there were. And on the MAD Part 1b and Part 2, which is the combination other sequential? Or are they happening in parallel? And I'll just have follow-up for Ken, if I may.

A: Andy Davis said the combo and non-combo studies are in parallel, and Ken Myszkowski discussed partnership-related milestones factored in the 2028 runway guidance.

Q: This is Brian [ph] on for Mani, thanks for taking the question. Maybe just a quick financial one. I noticed you guys started to pay down that credit facility. I'm just wondering, should we expect that to continue over the course of the year? Or is this more of just a onetime pay down to kind of bring that total down? Thanks.

A: Ken Myszkowski said the onetime pay down was due to the Sarepta agreement and future payments are tied to cash flow from milestones.

Q: Hey good morning guys. Maybe just similar to a couple of earlier questions. I wanted to ask a little bit more on your for the CNS assets. So is the plan as of today to carry those forward internally? Or are you 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 of that market. Thanks.

A: Christopher Anzalone and James Hamilton discussed that CNS assets are held internally for now with potential for partnering, and for MAPT, the Phase I design is to evaluate safety and PD markers, with no specific subsets of AD targeted yet.

Q: Hi thank you for taking my questions and congratulations on the quarter. SO Ionis has the SO Phase III SHDG readouts coming soon. If Altazarosan 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 5 to readout. And anything else you will be focusing [indiscernible] reads out? Thank you.

A: Christopher Anzalone discussed that their program focuses on definite pancreatitis and the importance of a purpose-built study for payers in Europe.

Q: Hi everyone. This is Ike [ph] Lee on for David Lebowitz. Thank you for taking our question. We have one on pricing for plozasiran, how do you think about launching this in FCS and then waiting for the SHTG data in term, we expect something like Tringolza, also getting a label expansion in SAG 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.

A: Christopher Anzalone discussed the plan to adjust pricing based on approval for broader indications, starting with ultra-orphan pricing for FCS and potentially lowering it for broader SHTG approval.