Analyst Conference Summary

biotechnology

conference date: August 8, 2024 @ 1:30 PM Pacific Time
for quarter ending: June 30, 2024 (fiscal Q3, third quarter 2024)

Forward-looking statements

Overview: Continuing to develop pipeline.

Basic data (GAAP):

Revenue was $0 million, sequentially from $0 million, and down from $16 million year-earlier. Revenue is from up-front payments and milestones, not sales.

Net income was negative $170 million, down sequentially from negative $125 million, and down from negative $103 million year-earlier.

Diluted EPS was negative $1.38, down sequentially from negative $1.02, and down from negative $0.96 year-earlier.

Guidance:

none

Conference Highlights:

CEO Christopher Anzalone said "Arrowhead had a very productive quarter with several high-profile presentations at medical and scientific congresses, as well as publications in high impact journals. Our clinical results have been strong and are receiving significant attention. Across our diverse pipeline, we continue to make good progress in later-stage clinical studies and are approaching commercialization of both our wholly owned and partnered RNAi therapeutics. We also made critical progress on the financial front with two separate inflows that strengthen our balance sheet following our strategic decision to focus our resources in cardiometabolic on plozasiran, our most near-term commercial opportunity with a potential launch in 2025, provided plozasiran receives regulatory approval in familial chylomicronemia syndrome." Expects to have 20 clinical stage or marketed products in 2025. But focus is on most advanced product, Plozasiran. New financing should help us get to cash-flow break even.

All pieces are now in place to transition to a commercial company.

In third fiscal quarter ended Arrowhead received a $50 million milestone payment from Royalty Pharma for completing enrollment in the Phase 3 trial of Olpasiran with Amgen. It is for lowering lipoprotein(a) levels.

ARO-APOC3 (now plozasiran) for hypertriglyceridemia read out additional Phase 2 data at ACC in Q2 2024, showing robust improvements. Enrollment completed in Q3 2022 for Phase 2 for SHTG (severe hypertriglyceridemia), with Phase 3 begun in Q2 2024. Planning several new studies. The Phase 3 trial for FCS (familial chylomicronemia syndrome) completed enrollment in Q2 2023. Topline results reported in Q3 2024 included meeting primary endpoint, secondary endpoints, 80% median triglyceride reduction and 94% APOC3 reduction at the higher dose. Full data at European Society of Cardiology on September 2, 2024. Will have an investor call on September 3. Could launch commercially in 2025; preparing for that.

Zodasiran (formerly ARO-ANG3) also read out Phase 2 data at AHA showing reduced levels of triglicerides and LDL cholesterol for mixed dyslipidemia. Hope to launch Phase 3 after regulatory feedback.

In Q2 initiated a Phase 1/2a study of ARO-CFB for complement renal disease.

In Q3 2024 preclinical ARO-INHBE shouwed promising results for obesity and metabolic diseases.

In Q3 Arrowhead completed animal chronic GLP toxicology studies for ARO-RAGE. Goal is to treat inflammatory pulmonary disease. Began Phase 2 asthma study; promising early data. At European Repiratory Congress data demonstrated deep and durable gene silencing for asthma.

In Q3 Arrowhead completed chronic GLP toxicology studies for ARO-MMP7 for treatment of idiopathic pulmonary fibrosis (in animals). Believes safe to proceed to Phase 2 study.

In Q3 2024 presented preclinical data for ARO-TSLP for asthma.

In Q3 2025 presented preclinical data for ARO-IAV for influenza A viruses.

In the fall plans to announce a modality that can cross the blood-brain barrier.

See also the Arrowhead Pharmaceuticals pipeline page.

Cash and equivalents (including investments) ended at $437 million, down sequentially from $523 million. $115 million cash used in operations. Received $50 million milestone payment in fiscal Q3 from Royalty Pharma. In Q4 signed a $500 million senior secured credit facility with Sixth Street.

Operating expenses of $176 million included $152 million for R&D and $24 million for G&A. Leaving operating income of negative $176 million. Other income $2 million. Tax benefit $0 million.

Will have webinars for obesity/metabolic (8/14/2024); and nervous system (9/25/2024).

Q&A selective summary:

FCS data v. Ionis? Our presentation will give more detail on endpoints. All statistically significant. Pancreatitis data is exciting.

ARO-RAGE Phase 2, getting started? Developing plans.

Deal with 15% annual interest rate? We have reached the point we can take on debt. But it has to be long dated, given our path to profitability. 7 year term, no coupon, risk sharing, non-dilutive. Cost of capital is reasonable compared to the cost of equity capital.

Payers for FCS? Trial had clinical FCS and genetics defined FCS. What payers will hopefully do is go along with the label, hopefully all the patients that we studied.

Plozasiran progress to NDA filing? We will have a pre-NDA meeting with the FDA. We are in the pre-submission phase. Goal is to file by year end 2024.

ARO-TSLP? We think it could be part of a combination therapy. No plan to bring it forward as a monotherapy.

Muscle landscape? There is no one item. We watch the literature and our competitors. We want to be best in class for any indication we pick.

The low-hanging fruit for dimers is hepatocytes.

Additional partnerships? No prediction, but we speak with companies all the time.

CFD data should be available later this year.

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