Analyst Conference Summary

biotechnology

conference date: February 10, 2025 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2024 (fiscal Q1, first quarter fiscal 2025)

Forward-looking statements

Overview:

Basic data (GAAP):

Revenue was $2.5 million, up sequentially from $na million, and down from $3.6 million year-earlier. Revenue is from up-front payments and milestones, not sales.

Net income was negative $173 million, down sequentially from $na million, and down from negative $133 million year-earlier.

Diluted EPS was negative $1.39, down sequentially from $na, and down from negative $1.24 year-earlier.

Guidance:

Expects to have about $1 billion in cash balances at the end of 2025.

Conference Highlights:

CEO Christopher Anzalone said "During the recent period, Arrowhead signed and closed a potentially transformational licensing and collaboration agreement with Sarepta Therapeutics and submitted our first NDA for investigational plozasiran, which was subsequently accepted for filing by the U.S. FDA. The company is now well positioned for growth with plans for an independent commercial launch in 2025 and the potential for multiple partner launches over the coming few years. Phase 3 studies of plozasiran in severe hypertriglyceridemia are on pace to be fully enrolled in 2025 with potential study completion in 2026. We see emerging high-value potential in our obesity and CNS programs entering early clinical studies. Arrowhead is currently funded into 2028 with further cash runway potential with multiple wholly owned candidates providing opportunities for additional partnerships"

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

On November 26, 2024 announced a major licensing and collaboration deal with Sarepta Therapeutics. This closed in February 2025. 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.

In Q1 2025 the FDA accepted the NDA for plozasiran for FCS (familial chylomicronemia syndrome) and assigned a PDUFA data of November 18, 2025. There is no plan for an advisory committee meeting. SHTG (severe hypertriglyceridemia) Phase 3 begun in fiscal Q2 2024; potential launch in 2026. Planning several further studies. Could launch commercially for FCS in 2025. Plozasiran marketing teams are already in place and field force will be hired over the next few months. [competing with the Ionis product, Tryngolza (Olezarsen), approved by FDA in December 2024. Believes differentiated and superior.]

In Q4 2024 began a Phase 1/2a clinical trial of ARO-INHBE, an investigational RNAi therapeutic for obesity. In preclinical studies, ARO-INHBE reduced body weight and fat mass with a novel mechanism of action that may better preserve lean muscle mass than approved obesity therapies. Claims "dramatic" results.

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 in Q2 2025.

In Q4 Presented interim results from a Phase 1/2a study of ARO-CFB, targeting complement factor B as a potential treatment for complement mediated diseases.

Arrowhead has additional non-core programs that could be sold or licensed out, like ARO-RAGE.

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

See also the Arrowhead Pharmaceuticals pipeline page.

Cash and equivalents (including investments) ended at $553 million, down sequentially from $681 million. $146 million cash used in operations.

Operating expenses of $164 million included $137 million for R&D and $27 million for G&A. Leaving operating income of negative $161 million. Other expense $14 million. Taxes $0.1 million.

Q&A selective summary:

ARO-INHBE, monotherapy or add-on? Study in monotherapy, also in combination. We have not made a decision yet about the path going forward. Obesity is not a one-size-fits-all condition. We are developing a suite of candidates.

Novartis LPa candidate v. Amgen Olpasiran? Limited view of Novartis, but excited by Olpasiran, licensed to Amgen.

APOc3 feedback from doctors? Plozasiran is viewed as highly differentiated, they are excited about it.

Pancreatitis outcome study timeline? It is a novel study, rate of enrollment unknown. But an important study, especially for payers, including in EU.

SHTG plans? In Europe would be looking for a partner.

Plozasarin competitive position in real world? Compare the Balance and Palisade studies. Reduction of triglycerides is better for Plozasarin. For FCS patients that means achieving guideline goals to reduce risk of acute pancreatitis. We also achieved a statistically significant reduction in pancreatitis. We have a very strong safety despite have fewer doses per year (every 3 months).

It is hard to predict what Olezarsen results for SHTG will look like. We have a better idea of how Plozasiran will perform because of prior data. But having two treatments out there will help to educate physicians and expand the pie, rather than competing for a fixed pie.

For the transfers to Sarepta, we will complete the current studies. We will not release data. That will be up to Sarepta.

To some extent starting new programs depends on our getting further capital.

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