Analyst Conference Summary

biotechnology

conference date: May 12, 2025 @ 1:30 PM Pacific Time
for quarter ending: March 31, 2024 (fiscal Q2, second quarter fiscal 2025)

Forward-looking statements

Overview: Sarepta deal provides signicant cash runway.

Basic data (GAAP):

Revenue was $543 million, up sequentially from $2.5 million, and up from $0 million year-earlier. Revenue is from up-front payments and milestones, not sales.

Net income was $370 million, up sequentially from negative $173 million, and up from negative $125 million year-earlier.

Diluted EPS was $2.75, up sequentially from negative $1.39, and up from negative $1.02 year-earlier.

Guidance:

Now funded into 2028.

Conference Highlights:

CEO Christopher Anzalone said "We are on schedule to launch plozasiran this year, pending regulatory approval, with what we think is a best-in-class profile with meaningful differentiation from currently available therapies in FCS. We are also well on our way to fully enrolling Phase 3 studies designed to support regulatory submissions for the large SHTG patient population. Following the closing last quarter of the agreement with Sarepta Therapeutics, Arrowhead is now funded into 2028 with no current needs for further cash infusions from an equity raise or other sources. During that period, we see the potential for multiple commercial launches of both wholly owned programs that we intend to launch independently, and programs being developed and commercialized by partners. In addition, we believe our TRiM technology platform is the broadest and best in the field, giving us many opportunities to receive additional capital inflows from business development in areas that are outside of our core commercial focus." Believes has potential for more capital inflows from business development.

Arrowhead is also developing two novel potential obesity treatments. Gave brief descriptions of several other potential drugs, including neurological ones.

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 late 2026. Planning several further studies. Could launch commercially for FCS in 2025. Plans filings in EU and other nations. 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.] Hiring sales team.

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. Also testing ARO-ALK7 in same indication.

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 Q2 2025 Arrowhead announced topline results from Part 2 of a Phase 1/2 Study of ARO-C3 in patients with IgA nephropathy. ARO-C3 achieved deep and sustained reductions in alternative pathway complement activity and proteinuria. Mean sustained reductions in C3 of greater than 87%, AH50 of greater than 76%, and Wieslab AP of greater than 89% through week 24. Mean reduction in spot urine protein-to-creatinine ratio (UPCR) of 41% by week 24.

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 $1.1 billion, up sequentially from $553 million. $na million cash generated in operations.

Operating expenses of $162 million included $133 million for R&D and $28 million for G&A. Leaving operating income of $381 million. Other expense $12 million. Taxes $2 million.

Q&A selective summary:

Obesity drugs, said to be used in combinations? No guidance on what we expect to see. This is a new pathway. The real benefit would be the quality of weight loss, retention of muscle mass. First data towards end of 2025.

Plozasiran pancreatitis benefit, differentiation from olezarsen? We have not discussed this with FDA yet. We like our data, did our study differently. We used a different criteria for pancreatitis, so it is hard to compare the trials. We used a more conservative route than Ionis. Can't guide on label at this point, that is up to the FDA. The focus will be on triglyceride reduction.

Zodasiran HZFH, expansion beyond? We discussed that with FDA. They wanted a large expensive trial for a small sliver of patients. So for now just HZFH.

ARO-C3, CFB? We are open to partnering them. We believe the drugs work. We could build out our own commercial presense, but would prefer a partnership.

We may develop further obesity assets, there are a ton of metabolic targets out there.

How many patients in Shasta study? First trial to attempt to show improvement in pancreatitis. No saying number of patients yet. Depends on the rate of pancreatitis we see. No one has done a trial like this before.

We are open to finding partners outside the U.S. for plozasiran.

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