Analyst Conference Summary

biotechnology

conference date: November 26, 2024 @ 1:30 PM Pacific Time
for quarter ending: September 30, 2024 (fiscal Q4, fourth quarter 2024)

Forward-looking statements

Overview: Filed NDA for plozasiran and sealed a big deal with Serapta.

Basic data (GAAP):

Did not give results for the 4th fiscal quarter. Gave annual results.

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

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

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

For fiscal 2024 reported revenue of $4 million, net loss of $599 million, and net loss per share of $5.00.

Guidance:

Funded to end of 2028. $500 to $550 million cash burn in fiscal 2025, similar in 2026.

Conference Highlights:

CEO Christopher Anzalone said "Arrowhead is well positioned, both individually and with partners, to advance and ultimately commercialize important new medicines using our proprietary TRiM technology. We have the potential to impact the lives of millions of patients in need. We believe we now have all the necessary pieces in place to drive significant value for shareholders in the short-term, mid-term, and, more importantly, over the long-term as we seek to build a sustainable, financially sound business. Key events have occurred during the recent period that we see as potentially transformational for Arrowhead. Earlier this month, we submitted our first NDA to the U.S. FDA for investigational plozasiran, paving the way for Arrowhead to potentially launch our first commercial product in 2025, subject to FDA review and approval. We also took steps to meaningfully strengthen our balance sheet, including entering into a large licensing and collaboration agreement with Sarepta Therapeutics, which was announced today. Sarepta is an important new partner with extensive clinical, regulatory, and commercial expertise and this collaboration will help us advance and commercialize multiple promising Arrowhead-discovered drug candidates that fall outside of our current commercial focus on the cardiometabolic therapeutic area." The deal puts us in a fairly straight path to profitability. Makes our wholly-owned pipeline more manageable.

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

Today announced a major licensing and collaboration deal with Sarepta Therapeutics. Arrowhead will receive $835 million upon closing (in 2025): $500 million cash and a $325 million equity investment priced at a 35% premium ($27.30). Will also receive $250 million over five years. Also possible $300 million in the next year as a current Phase 1/2 study, ARO-DM1, continues enrollment. Possible $10 billion in milestone payments, plus tiered royalties on sales up to low double digits. Licensing out ARO-DUX4, ARO-DM1, ARO-MMP7, ARO-ATXN2, all clinical stage, plus the preclinical ARO-HTT, ARO-ATXN1 and ARO-ATXN3. Also allows Sarepta to select six new targets for discover. All using the TRiM platform for RNAi.

ARO-APOC3 (now plozasiran) for FCS (Familial Chylomicronemia Syndrome) NDA submitted to FDA on November 18, 2024. Read out additional Phase 2 data at ACC in fiscal Q2 2024, showing robust improvements. SHTG (severe hypertriglyceridemia) Phase 3 begun in fiscal Q2 2024. Planning several new studies. The Phase 3 trial for FCS (familial chylomicronemia syndrome) 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. Could launch commercially in 2025. Also in Q3 2024 read out positive new resluts from Phase 2 and Phase 3 studies at AHA.

In Q3 2024 Arrowhead closed with Sixth Street for a $500 million credit facility, with a seven year term.

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 Q3 2024 filed in New Zealand to initiate a Phase 1/2a clinical trial of ARO-INHBE, an investigational RNAi therapeutic for obesity. Preclinical studies showed novel mechanism may preserve muscle mass compared to approved obesity therapies.

ARO-MUC5AC program will cease. Has better candidates.

In fiscal Q3 2024 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.

Spent considerable time reviewing the data on plozasiran and plans going forward. Marketing teams are already in place and field force will be hired over the next few months. [competing with the Ionis product, Olezarsen]

Footprint expansion is complete, plans little capital expense in 2025.

See also the Arrowhead Pharmaceuticals pipeline page.

Cash and equivalents (including investments) ended at $681 million, up sequentially from $437 million. $na million cash used in operations. In fiscal Q4 signed a $500 million senior secured credit facility with Sixth Street and took $400 out on the facility.

Annual 2024 Operating expenses of $605 million included $506 million for R&D and $99 million for G&A. Leaving operating income of negative $601 million. Other expense $11 million. Tax benefit $3 million.

Q&A selective summary:

Sarepta, CNS franchise. We are excited about sub-q platform. HTT will go to Sarepta. Others may be partnered elsewhere, we also have a list of other potential targets.

Zodasiran? Working on a strategy, is an interesting opportunity. Looking at a Phase 3 protocol.

Sarepta deal competitive? Sure, we were talking to other companies about potential large deals. We have additional assets, non-core, that could also be partnered. Our discovery team could also support more outside interests.

Paying down Sixth Street debt? We will be paying it down over time, including using Sarepta deal cash.

Obesity? Strategically important. We like our positioning and animal data. We decided to not partner them though we could have. Phase 1 will focus on safety, PK, and biomarkers.

We have lots of bandwidth to serve more companies with discovery. We can do 5 to 10 per years.

We do not know how the FDA will react to the question of clinical v. genetic FCS.

RAGE? It would make sense to find a partner for RAGE. We may do a bit more work to increase the value to us. We like our pulmonary platform, so will continue to develop it, but mostly for partners.

OpenIcon Analyst Conference Summaries Main Page

Search

More Analyst Conference Pages: