ARROWHEAD PHARMACEUTICALS, INC. Q4 FY2026 earnings call

• Commercial Launch Progress (Regemplo): The launch for Familial Chylomicronemia Syndrome (FCS) is progressing well with strong demand. As of late November, there were over 1,250 cumulative new-to-brand prescriptions (a 63% increase in Q4), over 860 distinct prescribers, and coverage for over 160 million U.S. lives. The company emphasizes "pipe-building" metrics (prescriptions, prescriber count, payer coverage) over immediate revenue due to reimbursement friction.
• SHTG Launch Preparation: Arrowhead is preparing for a potential U.S. launch of Plazaciran for Severe Hypertriglyceridemia (SHTG) in Q2 2027. The SNDA was submitted under the FDA’s STAR pilot program for priority review. Clinical data from Shasta 3 and 4 showed median triglyceride reductions of 79-81% and a 78% reduction in acute pancreatitis events vs. placebo.
• Pipeline Advancements:
  • AeroDimer PA: Demonstrated simultaneous silencing of PCSK9 and ApoC3 with significant lipid reductions in mixed hyperlipidemia. Interim data shows mean maximal reductions of 89% in PCSK9 and 95% in ApoC3.
  • Aromat-T (CNS): Produced substantial tau reductions (73% mean, 85% max) in CSF after subcutaneous administration, validating blood-brain barrier delivery capabilities. Multi-dose cohorts are enrolled, and early Alzheimer’s patient cohorts are ongoing.
  • Zodaciran: Enrollment completed for the Phase III Yosemite study in homozygous familial hypercholesterolemia (HoFH), targeting mid-2027 completion.
• Strategic Partnerships & Deals: No appetite for partnering Regemplo or Plazaciran in the US due to the desire to build an independent commercial infrastructure. Aromat-T is also considered too scarce/valuable to partner currently. Opportunities remain in Obesity/MASH and other CNS targets.
• Financial Restructuring: Completed refinancing with Sixth Street, replacing high-cost debt with a $400 million senior secured term loan at a lower interest rate (SOFR + 5.5%) with no scheduled amortization until 2031. This eliminates cash sweep requirements tied to product sales.

Arrowhead Pharmaceuticals operates as a single integrated business segment focused on RNA interference (RNAi) therapeutics. For the fiscal year ended September 30, 2026, total revenue was $450.8 million, representing a decrease from $829.4 million in FY2025. Revenue composition included: $317 million from the Sarepta collaboration; $89 million from the Novartis collaboration; $25 million upfront payment from Madrigal; $13.3 million from Sanofi; and approximately $6.6 million in net product revenue from the commercial launch of Regemplo (Redemplo). The company does not report financial performance by distinct product segments for internal management purposes beyond these collaboration and product lines.

• Revenue Guidance: Management explicitly stated it is "too early to provide guidance" for revenue or financial performance related to the SHTG launch. They will wait for FDA label approval and initial payer experience before setting forward-looking financial targets.
• PDUFA Expectations: The company expects to receive its PDUFA date within 50 days of the November 2nd SNDA submission, anticipating a decision in Q2 2027.
• Launch Timeline: Confirmed target for a rapid U.S. SHTG launch in the second calendar quarter of 2027, subject to FDA approval.
• Data Readouts: Expected to share obesity ALK7 data by end of 2026; AeroDimer PA data in H1 2027; HoFH (Zodaciran) data in H2 2027; and initial Aromat-T patient data in H2 2027.

• Reimbursement Friction: Significant challenges exist in converting written prescriptions into paid shipments due to prior authorization processes and payer policies. This "middle of the funnel" bottleneck limits near-term revenue visibility despite strong prescription demand.
• Market Education: Educating patients and providers on the need to treat severe hypertriglyceridemia to prevent acute pancreatitis may take time, potentially slowing adoption in the broader SHTG population beyond the highest-risk groups.
• Competitive Landscape: While Ionis's launch issues are viewed as execution-specific, competition from Amgen (Lp(a)) and others remains a factor. Arrowhead notes that while they have differentiated data, market dynamics can shift.
• Clinical Development Risks: Continued risk associated with the success of late-stage trials for Zodaciran, AeroDimer PA, and Aromat-T. Safety signals (e.g., injection site reactions, pyrexia in AeroDimer) require careful dose optimization.
• Regulatory Uncertainty: Approval and labeling for SHTG are subject to FDA review, including potential conditions regarding accelerated approval pathways.

Q: Analyst asked if competitor (Ionis) softness indicates broader market headwinds and how Arrowhead reconciles this with their bullish outlook. / A: CEO dismissed Ionis issues as communication and execution missteps, not market reality. He highlighted Arrowhead's structural advantages as a second entrant, allowing them to learn from competitors' mistakes and engage payers earlier. Prescription and prescriber growth rates have accelerated recently, indicating strong pent-up demand for SHTG treatment once available. The company is building payer relationships now to ensure a rapid launch upon approval.

Q: Analyst sought clarification on the definition of "rapid launch," questioning if it refers to revenue growth or leading indicators like prescriptions. / A: Management clarified that "rapid launch" is defined by three leading indicators: new-to-brand prescriptions, breadth of prescribers, and payer coverage/lives covered. While revenue is important, it is lagging due to reimbursement frictions. In FCS alone, 160 million lives are already covered. These metrics will continue to be tracked to demonstrate successful market penetration into the larger SHTG population.

Q: Analyst asked about pricing strategy for SHTG given competitor friction and whether current pricing supports broad access. / A: CFO and Commercial Head expressed confidence in the $45,000 annual price point. They noted that published payer policies for competitors appear consistent with labels, suggesting similar acceptance for Regemplo. Pre-approval discussions with payers have not yielded pushback on pricing. They believe the value proposition is clear enough to sustain negotiations without needing to adjust price significantly.

Q: Analyst inquired about the registration strategy for AeroDimer PA, specifically why LDL-C lowering is prioritized over composite endpoints. / A: CMO explained that LDL-C is the most validated surrogate endpoint for regulatory approval. While triglycerides are relevant, LDL-C approval offers a clearer path to market entry in the mixed hyperlipidemia population. This strategy aims for a quicker time to approval for a large addressable market. If approved based on LDL-C, they plan to pursue further data on triglyceride benefits.

Q: Analyst asked about the sequencing of CNS programs (Alzheimer’s vs. MAP-T/FTD/PSP) and what data would justify advancing registrational studies. / A: CMO outlined that safety and tau knockdown data from multi-dose healthy volunteers will come first. Subsequent data from early Alzheimer’s patients will include bridging biomarkers like p-tau-181/217 and PET tau scans. Qualitatively, the company is moving "quickly" in PSP and FTD but "slowly" in Alzheimer’s, focusing initially on establishing safety and target engagement across all indications before committing to specific registrational pathways.