Arrowhead Pharmaceuticals Inc (ARWR) 2025 Q4 法說會逐字稿

Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals conference call.

(Operator Instructions)

I will now hand the conference call over to Vince Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

Thank you, [Andrew]. Good afternoon and thank you for joining us today to discuss Arrowhead's results for its 2025 fiscal year ended September 30, 2025.

With us today from management are President and CEO, Dr. Chris Anzalone, who will provide an overview; Bruce Given, outgoing Chief Medical Scientist, who will provide an overview of the REDEMPLO FDA approval; Andy Davis, Senior Vice President and Head of the Global Cardiometabolic franchise, who will provide an update on commercialization activities; Dr. James Hamilton, Chief Medical Officer and Head of R&D, who will discuss our development programs; and Dan Apel, Chief Financial Officer, who will review the financials.

Following management's prepared remarks, we will open up the call to questions.

Before we begin, I would like to remind you that comments made during today's call contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

All statements, other than statements of historical facts, are forward-looking statements; and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements.

For further details concerning these risks and uncertainties, please refer to our SEC filings, including our most recent annual report on Form 10-K and our quarterly reports on Form 10-Q.

I'd now like to turn the call over to Chris Anzalone, President and CEO of the company. Chris?

Thanks, Vince. Good afternoon, everyone. Thank you for joining us today.

Before we begin, I'd like to announce that this will be Bruce Given's final earnings call. He's been a valuable member of the Arrowhead team for almost 15 years. He will continue to help Arrowhead as a trusted adviser. But now that REDEMPLO has received its first FDA approval, he will be stepping back from day-to-day operational responsibilities. Hopefully, he can finally enjoy his time and retirement -- or his re-retirement, which is probably more accurate.

His contribution to Arrowhead's success, both current and future, have been critical. We owe him a heartfelt thank you.

Later in the call, you will hear from Bruce who will discuss the REDEMPLO FDA approval, which he came back to Arrowhead and out of retirement to help us get across the finish line. Bruce leaves us in a strong position, with a very strong group of leaders across the organization. As you all know, James Hamilton has already assumed much of Bruce's prior responsibilities as Chief Medical Officer and Head of R&D.

Thank you, again, Bruce, for getting us to today. Thank you, James, for taking us into the next chapter for Arrowhead.

Let's now turn to our business and what progress we've made during the recent period. This has been a very busy and enormously productive in the last few months.

The most impactful change is the FDA approval of REDEMPLO. On November 18, we announced that the FDA approved our REDEMPLO, indicated as an adjunct to diet to reduce triglycerides in adults with familial chylomicronemia syndrome or FCS.

FCS is a severe rare disease, with an estimated 6,500 people in the United States living with genetic or clinical FCS, characterized by triglyceride levels that can be 10 times to 100 times higher than normal, leading to a substantially higher risk of developing acute, recurrent, and potentially fatal pancreatitis.

This is Arrowhead's first FDA-approved medicine, marking a major milestone for the company, as it transitions into commercial stage. REDEMPLO is the first and only FDA-approved siRNA medicine for people living with FCS and can be self-administered at home with a simple sucutaneous injection once every three months. REDEMPLO was the first and only FDA-approved medicine to be backed by adequate and well-controlled studies that include patients with genetically diagnosed and clinically diagnosed FCS.

After many months of preparation, our commercial team was able to hit the ground running. I'm happy to report that we have the drug in the channel, a mere week after approval.

We also launched Rely On REDEMPLO, a patient support program, providing support services and resources for patients at each stage of the treatment journey with REDEMPLO, including financial assistance options for eligible patients.

In addition, we also announced the One-REDEMPLO pricing model that creates one consistent price across current and potential future indications. This is important. We are committed to sustainable innovation. This requires a rational drug pricing, according to the value of medicine offers to patients and healthcare systems. It also means that we will not ask different patients to pay different amounts for the same drug, based solely on what disease they've been diagnosed with.

REDEMPLO is a pancreatitis drug. When we think about pricing, we look to those patient populations who are at a greatest risk of acute TG-related pancreatitis. The patients we are serving now are also those at greatest risk of pancreatitis, people with FCS. This includes those with the defined set of mutations, as well as those who share the same level of (inaudible) and symptoms but with more heterogeneous and often less well-characterized genetic backgrounds, who we refer to as clinically defined or phenotypic FCS.

The broader patient population wiith substantially increased risk of acute pancreatitis are those with persistent colonic anemia; meaning, fasting triglycerides greater than 880 milligrams per deciliter. We believe there are approximately 750,000 of these patients in the US. While they often have less day-to-day symptoms in FCS patients, they are clearly at high risk for acute pancreatitis.

The One-Redemplo pricing model has these patients in mind. The $60,000 annual WACC price is designed to provide real value to patients and healthcare systems in this population.

Our SHASTA-3 and SHASTA-4 Phase 3 studies are designed to support an sNDA in this population. While those studies are ongoing and we are actively serving the FCS population, we will have time to help payers properly appreciate REDEMPLO's value. Payers will have time to plan and budget for its possible eventual adoption, pending regulatory review and approval.

Outside of REDEMPLO, we have also made good progress with two other pipeline programs in the cardiometabolic space, zodasiran and ARO-DIMER-PA.

We'll start with zodasiran. During the recent period, we dosed the first subject in the YOSEMITE Phase 3 clinical trial of zodasiran, our clinical candidate being developed as a potential treatment for homozygous familial hypercholesterolemia or HoFH.

HoFH is a rare genetic condition that leads to severely elevated LDL cholesterol and early onset cardiovascular disease. YOSEMITE (inaudible) 60 subjects over the age of 12 will be randomized to receive four doses once every three months of the 200-milligram zodasiran for placebo. The primary endpoint is the percent change from baseline to (inaudible) in (inaudible) LDL-C.

The Phase 2 data in this patient population were encouraging. We hope to have this study fully enrolled in 2026, completed the study in 2027, a successful enabling-NDA filing by the end of 2027, and launch in 2028.

The next pipeline program is in cardiometabolic is AERO-DIMER-PA. During the last quarter, we filed a request for regulatory clearance to initiate a Phase 1/2 clinical trial of AERO-DIMER-PA, being developed as potential treatment for atherosclerotic cardiovascular disease or ASCVD, due to mixed hyperlipidemia in which both LDL cholesterol and triglycerides are elevated.

This is a very large population without proper treatment options. We believe there are approximately 20 million people in the US with mixed hyperlipidemia. AERO-DIMER-PA is a dual-function RNAi therapeutic, designed to silence expression of the PCSK9 and [APOC3G] in the liver, that's designed to reduce both LDL-C and TGs. This represents an important step forward for the RNAi field, as we believe it is the first clinical candidate to target two genes simultaneously in one molecule; and an important step forward for preventative cardiology, as both LDL and TG have epidemiologic support as being important drivers of ASCVD risk.

Both these programs fit well strategically with our growing commercial focus on the cardiometabolic space and on physicians to treat these patients.

Also, during the quarter, we expanded our clinical pipeline in CNS. We filed a CTA to initiate a Phase 1/2 clinical trial of ARO-MAPT as potential treatment for [tauopathies], including Alzheimer's is. ARO-MAPT is Arrowhead's first therapy to utilize a new proprietary delivery system, which, in preclinical studies, has achieved blood-brain barrier penetration and deep (inaudible) across the CNS, including deep brain regions, after subcutaneous injections.

Non-clinical evaluations in monkeys with subcutaneous administration of ARO-MAPT using clinically translatable doses have shown better than 75% knockdown of the tissue level MAPT mRNA in CNS. Importantly, monkey tissue-level knockdown has translated into CSF tau protein reductions, with duration of effect supported by either monthly or quarterly subcutaneous-dose readiness. This is an exciting program. We look forward to initiating the study shortly.

We also continue to make good progress on our first two obesity programs, ARO-INHBE and ARO-ALK7. Together, we have randomized 192 patients, all with the BMI greater than 30.

Because we started ARO-INHBE earlier, it is about two quarters further into the Phase 1 study in the (inaudible). Our plan has been to share early data at the end of the year but due to travel schedules and the holidays, this will push a couple of weeks later into the early part of January. We also expect to have more fulsome data toward the end of the first half of 2026.

We also made important progress in [business] development. First, as we announced yesterday, we earned a $200 million milestone payment from Sarepta, following the drug safety committee review and subsequent authorization to dose escalate and achievement of the second prespecified patient enrollment target for ARO-DM1. This follows a $100 million milestone earned previously when Arrowhead reached the first of two prespecified enrollment targets and subsequent authorization to dose escalate in a Phase 1/2 clinical study of ARO-DM1.

This partnership continues to be productive. We look forward to continued progress.

In addition to progress on Sarepta partnership, we announced a new global licensing collaboration agreement with Novartis for ARO-SNCA, Arrowhead's preclinical stage siRNA therapy against (inaudible) for the treatment of (inaudible). 1The collaboration includes a limited number of additional targets outside our pipeline that will utilize Arrowhead's proprietary TRiM platform.

Arrowhead received a $200 million upfront payment from Novartis and is also eligible to receive development, regulatory, and sales milestone payments of up to $2 billion. Arrowhead is further eligible to receive tiered royalties on commercial sales up to low-double digits.

As I mentioned before, the recent approval of REDEMPLO is clearly the most important recent development. Arrowhead has been busy across the pipeline in key business development during the recent period. Business development and licensing is critical to our business model so we are pleased to have these two significant deals closed this year.

With that overview, I'd now like to turn the call over to Bruce Given. Bruce?

Thanks, Chris. Good afternoon, everyone.

I'm happy to give my final update to Arrowhead shareholders at such an important time and with Arrowhead in such a position of strength. We have built something truly unique and powerful at Arrowhead.

With the first FDA approval behind us, it feels like the right time for me to step back into retire.

So let's review some of the key parts of the recent FDA approval that we announced last week. Mostly, I'll discuss the label and information contained in the packages.

REDEMPLO is approved as an adjunct to diet to reduce triglycerides in adults with FCS. The recommended dose of REDEMPLO is 25 milligrams. It could be self-administered at home by subcutaneous injection, once every three months.

REDEMPLO has no contraindications, warranties, or precautions. The most common adverse reactions include hyperglycemia, headache, nausea, and injection-site reactions.

The FDA submission was supported by clinical data from the Phase 3 PALISADE study in patients with both genetic FCS and those with the same clinical manifestations of disease but without solely a genetic cause referred to as clinically diagnosed FCS. The blinded portion of the trial compared a year of therapy with plozasiran or placebo dosed every three months; and tested two doses of plozasiran versus placebo.

The primary endpoint was change in median triglycerides at 11. There were also multiplicity-controlled secondary end points, all of which were statistically significant, including, notably, the (inaudible) of acute pancreatitis for which the 25- to 50-milligram doses were combined for comparison to placebo, as called for in the analysis plan. Plozasiran achieved deep and durable reductions in median triglycerides as early as one month, when the first measurement was taken.

Overall, these reductions were around 80% from baseline. Reductions largely maintained medium triglyceride levels below the usual guideline-directed threshold of 500 milligrams per deciliter throughout the year of treatment.

500 milligrams per deciliter is the recognized threshold where the risk of pancreatitis increases, relative to a normal population. Importantly, patients with genetic FCS versus clinical FCS showed similar reductions from baseline.

We see the clinical FCS population having the same high unmet need as the genetic FCS group. As such, we think it is crucial to have shown that both patient populations showed similar large reductions from baseline in triglycerides with REDEMPLO therapy.

Plozasiran is also labeled as having reduced the rate of adjudicated pancreatitis events versus placebo, a very welcome finding for FCS patients and their caregivers; and an important validation of the reductions in triglycerides can, in fact, lead to reductions of (inaudible).

Let me close by saying that it's gratifying to have been a part of Arrowhead from the early days of our siRNA developments; and part of the plozasiran program and its inception and, again, over the last several years.

More importantly, it's exciting to hear the enthusiasm about this new medicine for patients, caregivers, and physicians.

I'd also like to wish all of you an enjoyable Thanksgiving holiday.

I'll now turn the call over to Andy Davis. Andy?

Thank you, Bruce.

It's been exactly one week since the commercial launch of REDEMPLO. The early feedback we've received from healthcare professionals, patient societies, and payers has been very encouraging. We hear lots of enthusiasm about the differentiating attributes of REDEMPLO, which generally fall in five value pillars, some of which the team has touched on briefly already.

First, the reduction in triglycerides is both significant and sustained. In PALISADE, REDEMPLO reduced triglycerides by an unprecedented minus 80% from baseline as early as month one; and maintained this marked production, with minimal variation throughout the full 12-month treatment period. This compared to a minus 17% reduction in the pooled placebo group.

With REDEMPLO, patients now have real hope -- many, for the first time -- of achieving triglyceride levels below guideline-directed risk thresholds associated with acute pancreatitis, such as 500 milligrams per deciliter.

In PALISADE, 50% of patients at the 25-milligram dose achieved TG levels below 500 milligrams per deciliter, with approximately 75% achieving levels below 880 milligrams per deciliter at month 10.

Second, the numerical incidence of acute pancreatitis in patients treated with REDEMPLO was lower compared with placebo. As we all know, this is the outcome of most importance for healthcare professionals, patients, and payers.

Third, REDEMPLO demonstrated favorable safety and tolerability. Importantly, the US-approved package insert contains no contraindications, no warnings, and no precautions associated with the use of REDEMTILO.

Fourth, REDEMPLO can be self-administered at home, with a simple subcutaneous injection, once every three months; just four injections per year. Physicians tell us this infrequent dosing schedule is likely to reduce the treatment burden on physicians, patients, and caregivers.

And fifth, early feedback on the One-REDEMPLO pricing model has been positive. As Chris highlighted, this model creates one consistent price $60,000, per patient per year across current and potential future indications, such as severe hypertriglyceridemia. Again, this means that we will not ask different patients to pay different amounts for the same drug, based solely on what disease they have.

We have been in important discussions with payers and early signs for market access are encouraging. As a reminder, we believe there are an estimated 6,500 people in the US living with genetic or clinical FCS.

The prescriber base comprises specialist physicians such as lipidologists, endocrinologists, preventive cardiologist, and internal medicine physicians with a focus on lipid disorders. These specialists often operate within multidisciplinary teams that may include gastroenterologists, advanced practice providers, and specialized dietitians. At launch, we are targeting approximately 5,000 healthcare professionals through personal engagement.

Finally, our Rely On REDEMPLO patient support program is operational and designed to make every step of the journey easier. This program is designed to assist patients and physicians with insurance verification, financial assistance options, a first-dose starter kit, and supplemental injection training.

We launched just one week ago but our care coordinators are already actively processing REDEMPLO start forms, conducting patient welcome calls, and engaging payers to obtain approvals.

As Chris stated, we're happy to announce that we already have drug available in channel, ahead of schedule.

I will now turn the call over to James Hamilton to discuss the broader R&D portfolio. James?

Thank you, Andy.

I'd like to give a quick review of the status of our late-stage Phase 3 studies and also, describe the design in a couple of our early-stage programs.

Let's start with the suite of Phase 3 studies of plozasiran, designed to potentially support supplemental NDA filing to expand the label beyond genetic and clinical FCS. SHASTA-3 and SHASTA-4 are Phase 3 studies, designed to compare reductions in triglycerides with 25 milligrams plus aspirin compared with placebo over 12 months of treatment. Between the two studies, we enrolled approximately 750 patients.

In addition, the MIRROR-3 study enrolled approximately 1,400 patients. This study in patients with mixed hyperlipidemia is designed to supplement the safety database when we file an sNDA for plozasiran in severe hypertriglyceridemia. We are not planning to seek approval in the mixed hyperlipidemia patient population.

We completed enrollment in the global SHASTA-3 and SHASTA-4, as well as MIRROR-3 Phase 3, clinical studies in June of 2025. We anticipate completing the primary portions of these studies in mid-2026, with top-line data expected in the third quarter of '26. If successful, we plan to make submissions before the end of 2026 for regulatory review and potential approval.

The SHTG program also features a study named SHASTA-5 to directly assess the ability of plozasiran to reduce the risk of acute pancreatitis as the primary endpoint in SHTG patients at high risk of acute pancreatitis. We are currently enrolling patients in that study.

Of note, we will also be assessing pancreatitis risk reductions in SHASTA-3 and SHASTA-4, a key secondary endpoint. But SHASTA-5 is the first event-driven study to assess acute pancreatitis as the primary endpoint.

I'd also like to provide an update on our obesity programs, ARO-INHBE and ARO-ALK7. Both of these programs target the known Activin pathway that is involved in signaling to [adipocytes] to store fat.

ARO-INHBE inhibits one of the ligands in the pathway (inaudible) ARO-ALK7 inhibits the receptor on the (inaudible) that these ligands bind. Essentially, we are trying to reduce the message sent to store fat and the way the message is received at (inaudible).

ARO-INHBE started enrolling patients in December 2024 and ATO-ALK7 initiated in May of 2025. Both programs are currently in Phase 1/2a first-in-human dose-escalating studies to evaluate safety, tolerability, pharmacokinetics, and pharmacodynamics. Both programs include [Part 1], designed to assess single and multiple doses as monotherapy. [Part 2] is designed to assess multiple doses, in combination with (inaudible).

As ARO-INHBE started about two quarters earlier, we have more mature data in that study. The study is nearly fully enrolled. We are on schedule and currently planning to share initial data from this program around the first week of 2026. This is a rather robust first-in-man study that's collecting multiple measures of drug activity and pathway activity. We are eager to share initial findings.

We were originally planning on sharing first data around the end of the year but due to the holidays and travel, the first week of January were the best for all schedules.

For ARO-ALK7, we intend to provide a brief snapshot of early safety and target engagement results from that study.

Both targets have strong genetic validation. Both programs have yielded promising results in preclinical studies. So it will be interesting to see similarities and differences in patient response in clinical trials.

I will now turn the call over to Dan Apel.

Thank you, James. Good afternoon, everyone.

I'll provide a brief outline of our financial results.

As we reported today, our net loss for fiscal year 2025 was $2 million or a loss of $0.01 per share, based on $133.8 million fully diluted weighted average shares outstanding. This near-breakeven result compares with a net loss of approximately $599 million or a loss of $5 per share, based on $119.8 million fully diluted weighted average shares outstanding in fiscal year 2024.

Revenue for fiscal year 2025 totaled $829 million and was driven entirely by our license and collaboration agreements with Sarepta, Sanofi, and GSK. Of the $829 million, roughly $697 million pertained to the Sarepta arrangement; of that, $697 million $587 million relates to the ongoing recognition of initial Sarepta consideration; (inaudible) [$4 million] relates to the achievement of the first DM1 milestone; and $16 million related to the reimbursement of current collaboration program costs.

Sditionally, the license Sanofi for Greater China (inaudible) plozasiran contributed $130 million to our fiscal 2025 revenue. Lastly, to round things out, we recorded $2.6 million earlier in the year related to a milestone payment under the GSK HBV agreement.

Turning to expenses, total operating expenses for fiscal year 2025 were approximately $731 million compared to $605 million for fiscal 2024, an increase of $126 million. The year-over-year increase was driven by $101 million of R&D expenses and $25 million of higher SG&A costs, both of which I will explain in brief.

The key drivers of research and development spend included costs to run our clinical trials, our clinical manufacturing costs, as well as expense expenses related to active programs in the preclinical stage.

2025 R&D costs were heavily impacted by our Phase 3 clinical trials for plozasiran and SHTG. It's worth noting that in fiscal year 2025, nearly two-thirds of our clinical trial spend can be attributed to the late-stage development of plozasiran and SHTG.

As we have mentioned, the SHTG registration of studies are now fully enrolled. We expect data to read out next year. Accordingly, the majority of remaining Phase 3 registration of clinical trial costs are expected to occur over the next 12 months.

Our SG&A costs increased by $25 million year over year, driven primarily by our preparations for the commercialization of REDEMPLO.

All of us here at Arrowhead are enormously proud of the capabilities we have built to commercialize REDEMPLO, not only in our commercial function but also across regulatory; supply chain; order to cash; and, indeed, across all of our enabling support functions.

Turning now to cash flow, net cash provided by operating activities during fiscal year 2025 was $180 million compared with net cash used in operating activities of $463 million in the prior year for a net positive change year over year of $643 million. This increase in cash from operating activities was driven by cash received from licensing and collaboration agreements, partially offset by the aforementioned increase in R&D and SG&A costs.

Turning to the balance sheet, our cash and investments between the available-for-sale securities totaled $919 million as of September 30, 2025, compared to $681 million as of September 30, 2024. The increase in our cash and investments was primarily related to our licensing and collaboration agreement with Sarepta, Sanofi, and GSK, partly offset by our ongoing cash burn.

Our common shares outstanding as of the end of the quarter were $135.7 million, down $2.4 million from the prior quarter due mainly to the repurchase of shares from Sarepta.

I use this opportunity to reiterate two developments that are subsequent to the fiscal year and meeting up today, which were financially meaningful for Arrowhead and our balance sheet:

Firstly, as Chris mentioned earlier on the call, we announced a licensing and collaboration agreement with Novartis for ARO-SNCA, Arrowhead's preclinical-0stage siRNA program targeting alpha (inaudible) for the treatment of synucleinopathies, such as Parkinson's disease.

Novartis will also be able be to select a limited number of additional collaboration targets, outside of Arrowhead's current pipeline, to be developed using our proprietary TRiM platform. The closing occurred last month. We have already received $200 million in the bank as an upfront payment.

As a reminder, we also got to receive up to $2 billion in future milestone payments from Novartis, as well as royalties on commercial sales.

Secondly, just yesterday, we announced we earned our second development milestone under the Sarepta collaboration agreewmnt of ARO-DM1. As Chris mentioned, this trigger a $200 million obligation from Sarepta that will be recorded in the first quarter of fiscal 2026. We expect to receive the cash in January of 2026. This is, of course, additional to the $100 million earned for the first DM1 milestone in fiscal quarter-four 2025.

Finally, we are not providing detailed financial guidance at this time for the coming fiscal year. Beyond reiterating that while we view the launch of REDEMPLO as a truly transformational event for the company, we do not anticipate that the commercial sales of REDEMPLO will have a substantial impact on our financial statements in fiscal year 2026.

We also believe our cash runway, even in the absence of any further capital from new deals or other sources and all the while funding a broad ambitious set of commercial clinical programs, to be sufficient to extend into fiscal year 2028.

With that, I will now turn the call back to Chris.

Thanks, Dan.

Arrowhead has been working to bring important medicines to patients in need for over 15 years. As Bruce mentioned, it's very gratifying to see REDEMPLO approved by the FDA and the overwhelmingly encouraging feedback we received from the FCS community.

While REDEMPLO is just one part of a large pipeline that we've created to help potentially millions of patients in a diverse set of disease areas, we spent years building the TRiM platform to enable us to bring RNAi where it is needed. We are now able to address seven different cell types and have current clinical programs in five of these.

Further, we will meet our 20 in 25 goal, whereby we will have 20 individual drugs candidates in clinical trials by the end of this year. Our partner has been helpful (inaudible) judicious, with approximately half of our clinical pipeline wholly owned and have partnered.

We have late-stage studies ongoing, again, both independently and with partners, that may potentially lead to multiple new commercial loans over the next few years. In addition, we have a strong financial position that enables us to properly invest in our growth today and in the future.

We believe we now have everything we need to be in the next class of large and ultimately profitable biotech companies.

Thanks for joining us today. I would now like to open the call to your questions. Operator?

(Operator Instructions)

Luca Issi, RBC Capital Markets.

Bruce, congrats in your re-retirement, I should say. All the best in your next chapter.

And then, maybe if I can stick with you, can you just maybe talk about what's the plan to show a benefit in terms of acute pancreatitis for plozasiran? Are you confident just the [3] and [4] in Q3 2026 can actually hit acute pancreatitis? Or is the base-case scenario those two trials are maybe under power to show a benefit and you actually need SHASTA-5 to actually hit on acute pancreatitis, (inaudible) enriched for (inaudible) pancreatities.

The only reason why I'm asking is it looks like you doubled the size of the end, I should say, in the SHASTA-5 trial, according to click (inaudible), as of Monday last week. Again, any color there, much appreciated.

Sure, Luca. Thank you for your kind regards.

SHASTA-3 and 4 were powered on the basis of triglyceride reduction, which is the primary endpoint. We did not specifically powered SHASTA-3 and 4 for pancreatitis.

However, it was on our mind; and, as was also done in the core studies, there is the intent and by design, the capability, to pull both SHASTA-3 and 4 for evaluating versus placebo on reduction of pancreatitis.

Of course, we only have one dose of plozasiran instead of two different doses like we had, for instance, in the Phase 2 program.

There's, I would say, reasonably good power for seeing a difference in acute pancreatitis. But we're not dependent on it because we've designed SHASTA-5, specifically, to obviously be able to have a primary endpoint of acute pancreatitis.

We did change the design in SHASTA-5, recently, to making a more generalizable population in patients with persistent (inaudible) and a history of pancreatitis. The original design was a much more enriched population. But it would have actually been less representative than the duly designed trial.

So it's not so much a matter that we've increased power so much as we broadened the power the patient population to be more inclusive of the high-risk population in SHTG.

We certainly -- we oftentimes refer to it as a (inaudible) approach. There's obviously a decent chance that we will show statistical significance in the SHASTA-3 and 4 programs. But we're not entirely dependent on that because of SHASTA-5, which is a study -- the first of its kind (inaudible) specifically designed to demonstrate a benefit versus placebo in acute pancreatitis.

Prakhar Agrawal, Cantor Fitzgerald.

Congrats on the quarter, as well as the updates throughout the quarter.

Maybe on the obesity side, I had a couple of questions. On (inaudible) for the update early next year, if you can just provide more details on how much data will be disclosed, especially on the (inaudible) side. How much follow-up will you have on (inaudible) for both monotherapy and combo cohorts?

Also, the same question on ARO-ALK7, what cohorts will be disclosed and will there be any weight loss data at all from ALK7 early in the year?

Yeah. Sure, Prakhar. This is James. I can cover that.

For (inaudible), it's a little bit ahead, as Chris mentioned, probably by a couple of quarters. The study is nearly fully enrolled. We have a good amount of data in both the SAD and MAD healthy volunteer or obese healthy volunteer cohorts. We'll have biomarker data, MRI data, as well as safety in those cohorts.

And then, the combo cohorts are almost fully enrolled. I think we're waiting on a few more diabetic patients to enroll the highest-dose combo cohorts. That should have -- probably not through end of study but ample post-dose follow-up in both the diabetic and the non-diabetic cohorts from (inaudible).

And then, ALK 7 will be a little bit more limited, focused mostly on monotherapy, safety, and knockdown data -- knockdown of target for that study.

Yeah. Keep in mind here that we want to present data that are interpretable. We're not going to have all cohorts. We're not going to have all patient data in all cohorts, even if they're fully enrolled. We don't get data in real time, necessarily. And so you'll have probably two bites of the apple -- maybe three bites. But, certainly, two bites of the apple.

Our goal here (inaudible) data is to give you an idea about how these are going and then, the (inaudible) should come out once we have the more fulsome data set in the later in '26.

Maury Raycroft, Jefferies.

Congrats on the progress. Best wishes, Bruce, in retirement.

I was going to ask a follow-up to Luca's question earlier. We're expecting to see the patient baseline profile for your SHTG pivotals next week. What are your estimates on AP events accrual, based on your patient's baseline characteristics; and also, your change in plans to broaden AP adjudication criteria.?

Maury, I think it's a little bit hard to answer the question, just because we have adapted our protocols now to go ahead and adopt the -- to modify (inaudible) criteria since those have been accepted by both FDA and EMA -- here in the US, at least payers.

This is really going to be our first experience with using that particular scale, which makes it a little hard to estimate exactly how many events we will have. So it's hard to say.

What you will see next week is you will see the percentage of patients that had a history of pancreatitis that were enrolled in the study. Based on that, that -- I think you'll see that there's a good chance that we'll have the necessary number of events.

But I'm a little bit uncomfortable trying to give any real predictions, when we're using a scale that we haven't used before.

Jason Gerberry, Bank of America.

This is [Gina], on for Jason. Congrats on all the progress this quarter. Just a couple from us.

First on your ARO-MAPT program, can you maybe just discuss which aspects of the drug is differentiated from (inaudible) recently failed anti-tau antibody and what [comp] still gives you the confidence in the target after the failure?

And then, just based on your current cash position and the progress that you've made on these partners -- partnership milestone triggers, do you have any maybe updates on your visibility on launching a CVOT study? Is that more tied to seeing how the FCS and potential TG launches are progressing?

And then, can you just remind us, like, any potential milestone triggers from the Sarepta programs that you're expecting in 2026?

All right. I (inaudible) three questions. James want to take the first one.

Sure. Yeah. I'll take the first 1 on the MAPT program.

The J&J antibody, the monoclonal, as well as other monoclonals, our IV-administrated monoclonal antibodies, probably a small fraction of those molecules cross the blood-brain barrier; and then, are primarily focused on binding to extracellular (inaudible) that's been released for damaged cells or has been secreted and that can propagate (inaudible) find it to tau outside of the cell.

Our approach is very different. We use a targeting ligand to facilitate delivery of the siRNA across the blood-brain barrier into the neuron and silence the expression of tau. So we're turning off the faucet for all of the expression in preventing the (inaudible) to form in the first place.

We should get that -- over time, be able to reduce the level of intracellular tau and extracellular tau, whereas the monoclonal antibodies are really just able to get the extracellular tau.

That's the key differentiator.

On the other two questions, I'll answer the last one first, the Serapta (inaudible). We are eligible to receive the first of $50 million annuities in February. We expect that over the next several months.

That's correct? February, right, Dan?

Yeah.

On the visibility on the CVOT -- so that CVOT, as you know, is for the DIMER. That's a big opportunity for us. And so we are moving as quickly as we can to that CVOT. We'll have a good idea, I think, this summer, if we have a drug.

We'll know (inaudible) knockdown. We'll know (inaudible) knockdown. We'll know LDL decreases. We'll triglyceride decreases.

So given what those data look like, I think, again, as early as this summer, I think we'll know if we have something that really could be an important treatment (inaudible) mixed hyperlipidemia patients.

Should that be successful, should now look good, we are not waiting on anything to start those studies other than finishing the Phase 1/2. Our plan is to be able to roll directly into pivotal studies after the Phase 1/2 studies. Again, should they all go well and there's nothing gating there other than the data looking good.

We also are hoping to have parallel pivotal studies, one that will be a CVOT and one that we'll be looking at simply lowering LDL over the course of the year. As you know, that has been an approval endpoint in the past for (inaudible) inhibitors. We think that could be a good way to get to market very quickly; and, frankly, help us to pay for the CVOT.

That's our plan now. We'll have a much better idea about how quickly we can move in the summertime, once we start to see those data. We're really looking forward to seeing those data.

Edward Tenthoff, Piper Sandler.

Great. Bruce, wishing you all the best. James, wishing you all the best of luck. It really is a super exciting time for the company.

I wanted to get a sense, just with respect to upcoming data readouts next year, specifically asking, do you think you'll have your first look from the AERO-DIMER-PA next year? What other data sets beyond the obesity data in the first half should we be thinking about?

Thanks, Dan. We have a bunch of, I think, potentially, a very interesting data readout throughout 2026. As you mentioned, obesity will be the first. As I mentioned, we should have two bites of that Apple or thereabouts.

We'll have our first early data set in the very first part of January. And then, as the data mature in both those programs, say, towards the end of the second quarter, something around then, we'll have a much larger data set. We think those are important.

In the summertime, we expect to have DIMER data. We think those are extraordinarily important. The idea that we might have a drug candidate that can simultaneously the lower LDL and triglycerides to treat the 20 million or so people in the United States with mix hyperlipidemia is a very exciting opportunity. Again, I think we'll know if we have something that could really fit there in the summertime.

Also, in the summertime, I think we'll have our first bit of ARO-MAPT data. We'll be looking for tau levels in (inaudible). That, also, would be extraordinarily exciting. We can be, at once, sitting on one of the most exciting potential Alzheimer's drugs in the clinic. Hopefully, we'll be de-risking the entire blood barrier platform that can enable us to treat a variety of CNS diseases. And so that's an important readout.

Of course, also in the third quarter or so, we expect to have the readout for SHASTA-3 and 4 that are designed to enable the (inaudible) by the end of the year. And then, of course, at the end of the year, we expect to have file our (inaudible).

Look, there will be other things happening during the year. But those, to me, like, the primary ones.(inaudible) in the market (multiple speakers).

We will be really looking forward to seeing how -- the adoption curve that REDEMPLO is going to have.

Great. Any update on (inaudible), just to be comprehensive?

Yeah. Thank you. Yes. As you know, Ed, the data, so far, for (inaudible) has been enticing. We've seen that we can knockdown (inaudible) deeply, both looking at circulating biomarkers, as well as tau. That's super interesting.

Where we've struggled is looking for biomarkers to show potential clinical benefit. And so rather than running directly into a large asthma or (inaudible) Phase 2, we were hoping to have a baby step to see some evidence of that.

And so we have started a challenge study. I don't expect to have data in '26, maybe at the very end of '26, but we've just started that. And so my hope is that that will show us that knocking down range is an important thing.

Look, it's been an undrugged target for some time. Now, we can drug it. So now, let's see let's see what that does for us.

I think at the end of that, we can then ask ourselves, do we want to build out a pulmonary franchise or do we want to partner that? I think a positive challenge study readout would allow us to partner that under attractive terms.

Mani Foroohar, Leerink Partners.

Congrats on the progress on the first product launch. Best wishes also to Bruce on his re-retirement, though something tells me you're going to pop up again soon. I don't think you're done with us.

Aporopos of the question, can I -- I want to follow up on the broader pipeline. I know Ted touched on new Arrowhead study, et cetera. How do we think about Arrow DIMER application, in terms of pursuing CVOT and the right target for that technology?

Where are the right places for you to put that to work now that you've got a very different place in terms of your balance sheet?

Actually, Bruce, do you want to take where that can fit?

Yeah. I'm happy to take that.

Obviously, we're excited about plozasiran and (inaudible) inhibition, generally, for patients with severe hypertriglyceridemia. That's been, essentially, a very, very poorly treated population for a long time.

LDL, the LDL side of the equation, on the other hand, has been really a different story. Other than HOFH, there is a pretty good number of tools in the tool chest for dealing with LDL, the patients on that LDL side of the equation, especially patients with heterozygous familial hypercholesterolemia, which is a pretty good size population for instance.

But the 20-some million patients in the US alone that have mixed hyperlipidemia has been an interesting population. We could address the LDL part. We've done really a terrible job, historically, of being able to address the triglyceride piece of that. The (inaudible) analysis that have been done (inaudible) CVOT has shown that for the same LDL reduction, you can really rank order the risk that patients have by how high the triglycerides are.

Of course, the Mendelian randomization data has also said that triglycerides are independent predictor of events and mortality in that mixed hyperlipidemia population. It is huge. It's a very good population. So there's never really been a very good way of addressing both sides of the problem in mixed hyperlipidemia, both the LDL and the triglycerides.

Here, we're talking about a drug that could potentially do it with a single, say, quarterly injection, get both their LDL and their triglycerides, probably on top of the (inaudible). I think you're going to always have a statin there if the patients can tolerate it.

But you could have a daily (inaudible) at a quarterly DIMER injection and potentially treat that 20 million patients to low-risk levels of LDL and triglycerides. That would be quite an amazing opportunity, I think, from a marketing perspective compared to what you can do today, which is you can probably get the LDL taken care of today but you probably can't do much at all worthwhile in the triglycerides.

This is what makes this to us such an interesting proposition.

Yeah. As you know, Mani, what we used to -- our former strategy was to make plozasiran and REDEMPLO a (inaudible). Step 1 is FCS; step 2 (inaudible) HCG, step 3, after CVOT, would be this -- would be to be a part treatment in mid hyperlipidemia.

Once we were able to perfect, at least in animals, the DIMER platform, it didn't make sense any longer. We like the idea of keeping REDEMPLO as a pure-play pancreatitis drug, full-stop. Now, I think we'll have a tool to more completely treat that next hyperlipidemia population, should this time translate well from animals to humans.

That's helpful. As a follow-up, when you think about potential DIMER applications, et cetera, how are you thinking about the data next year from Horizon and potentially applications of combining what hopefully will be a validated (inaudible) target with other approaches to risk elevating elements of a lipid profile?

Yeah. Sure. Of course, our siRNA targeting (inaudible) is partnering with Amgen. So we would have to work with them on any DIMER applications. But there are other applications beyond, of course, (inaudible) and [AOCI].

We're looking at other DIMERS in the CV space, both turning the (inaudible) and [extrahepatic] cell types. So this is probably not the only DIMER that you'll see out of Arrowhead.

Patrick Trucchio, H.C. Wainwright.

Congrats on the progress. I have a few follow-up questions.

Just the -- first is just regarding REDEMPLO. I'm wondering if the FDA has provided clarity on what level of pancreatitis evidence will be required for a future of pancreatitis risk reduction claim in the -- particularly, in the high-risk SHTG patient population.

Separately, I'm wondering if there's been discussions around potential pediatric pathway, just given FCS presents in childhood.

And then, just a follow-up on the MAPT program, I'm wondering what level of CSF tau knockdown or biomarker response would you consider clear clinical proof of concept in humans, just given, I think, you have greater than 75% knockdown in the [NHP] data?

Bruce, let me take the (inaudible) first; and then, take that to you.

The (inaudible) level of AP that we think the FDA is required to have it on the label.

Yeah. We have that discussion with the FDA -- specifically, what it would take to get a claim per se. I'm not sure we really felt that was necessary. I think physicians have no real question about the relationship of triglycerides to pancreatitis risk, especially now that it's been has been proven. Payers haven't seemed to be concerned about that either, at least in the US.

So I'm not sure what the value of a claim would be. Of course, at this point, it's untested, whether the agency would consider providing that claim. I don't know that we've really thought of it as being necessary, Patrick, to be clear.

In (inaudible). But Patrick, is your question on SHTG or FCS?

It's around, actually, the high-risk SHTG patient population?

Yeah. But the answer is the same, I think. We, at least, have not approached -- asking that when they give a claim, what it would take to get that claim? It's very possible that what they would require is something like SHASTA-5.

But the SHASTA-5 was really designed primarily on the possibility that the payers in countries outside the US might require an actual dedicated outcome study. So it was more payer-focused than it was regulatory-focused.

We really were not committed, one way or the other, about whether it be submitted to regulators asking for a label change. We were more interested, really, in protecting the possibility that there would be payers outside of the US that would require a specific proof of concept in a dedicated study.

So we really haven't raised this with regulators anywhere on a global basis at this point.

Do you want to address the (inaudible) question?

The (inaudible) question, we absolutely plan to do pediatric work in FCS. We we have those plans in place. We have a pediatric plan in Europe and in the US. The only thing pulling us back, right now, is just that we have to have a formulation that we can use for weight-based dosing.

That's just -- we're in the process of getting that formulation put together. So that we can go ahead and do those studies. But we're absolutely planning on doing that.

James, do you want to talk about (inaudible) knockdown?

Yeah. Sure. In terms of what we're looking for -- based on the (inaudible) data, as you mentioned, at the tissue level, we were seeing 75%-plus reductions and similar reductions in the CSF in monkeys.

We typically translate well from (inaudible) into the clinic, into the humans. I think, based on some of the other data out there with the (inaudible) administered [ASO], they were able to achieve CSF reductions of about 50% to 60%.

Those CSF reductions corresponded to new movements in tau (inaudible) signals. So I think that's probably where we're aiming for in our clinical study -- is at least 50% to 60% reduction in the CSF.

That's what others have shown. That seems to have translated into a meaningful (inaudible) path signal.

Andrea Newkirk, Goldman Sachs.

Maybe one more on the REDEMPLO launch. Recognize it's only been about a week since the approval but now that you have launched, just curious if you'd be willing to comment on your expectations for the cadence of the initial launch here in FCS. How you think it may be similar or different from that of the Tryngolza launch, particularly in the context of the significant pricing differential that you have?

Yeah. Happy to take that, Andrea. This is Andy.

We do have very high ambitions for the REDEMPLO launch, expected it to be best-in-class. As you know, there are a number of reasons why we believe that to be the case, largely around the attributes of REDEMPLO that we do believe make it a special molecule in this category.

We talked about, obviously, the significant and sustained TG reduction. We've talked about the reduced incidence of acute pancreatitis. But even more importantly, we hear a lot of positive feedback around the safety and tolerability profile -- so no contraindications, no warnings, and no precautions. We do have a lot of physicians and patients who are enthusiastic about the once everythree month dosing regimen.

So with those product attributes, we have very high ambitions for the launch of REDEMPLO in FCS, specifically.

Mike Ulz, Morgan Stanley.

Congratulations on all the progress, as well.

Maybe just a follow-up on the SHASTA-3 and 4 studies. You mentioned adopting the modified (inaudible) criteria. Just curious now that you've seen some more detail around the core studies, are you considering any adjustments or fine-tuning to your studies, going forward?

Other than adapting the (inaudible) criteria, I think we're feeling pretty good about the design. It was negotiated with the FDA. I don't think we saw anything in core that would cause us to see to change anything else. There's nothing that comes to mind.

James, would you see it any differently -- closely this to --?

Yeah. I agree. It didn't inspire any changes in the protocol.

Madison El-Saadi, B. Riley.

I wanted to ask about your neuromuscular franchise. Just given your [integrin-targeted] delivery mechanism, which one could assume maybe safer and perhaps more targeted on TfR-mediated approach. Should we expect PK knockdown and splice correction data comparable to the peer benchmark levels?

Relatedly, wondering which dose do you anticipate observing really optimal biomarker activity. I believe, previously, you said that even a low dose may be active.

Sure. I think most of that will defer to Sarepta. I probably can't comment on the dose where we'd expect to see maximum knockdown. We don't know that yet. So I wouldn't want to venture a guess there yet.

In terms of the knockdown, I think that is probably -- a goal is to have something that looks be similar to or equivalent to what others have shown for (inaudible) knockdown and splice correction with this platform.

Got it. And then, if I may, are there any (inaudible) cells associated with hitting a certain threshold? Or are there milestones largely related to the regulatory progression?

Yeah. It will base (inaudible) on regulatory and commercial. There are no activity-based or [PD]-based milestones.

Joseph Thome, TD Cowen.

Just another quick one on the DIMER. Just curious, based on your work in SHTG, what proportion of patients are already on an anti-PCSK9 treatment? Is this an undertreated population on both sides?

And then, can you give us an indication in terms of the triglyceride and LDL cutoffs that you're looking at in patients enrolled into the early DIMER study?

Sure. Yeah. I think, based on the work that we've done, a lot of those patients may be on a statin, probably less so on (inaudible) rates. A very (inaudible) on PCSK9 is actually not that commonly used in that population.

In terms of the cutoffs in the inclusion criteria, we allow patients in that study with mixed hyperlipidemia and triglycerides up to 80% so there's a pretty high threshold; and they have to have either a non-HDL of 100 or an LDL greater than 70 to get into the study.

They have to have true mixed hyperlipidemia, both high triglycerides and high -- non-HDL or LDL cholesterol.

I'll now hand the call back over to President and CEO, Chris Anzalone, for any closing remarks.

Thanks very much for joining us today.

Again, thank you to Bruce for all he has brought to the company. He is re-retiring. He is not going to be gone, however. I do trust that he will still be around and helping us out, going forward.

Again, thanks to Bruce. Thanks to James for continued and ongoing leadership.

Again, thank you, all, for joining us today. I hope you have a pleasant Thanksgiving holiday.

Ladies and gentlemen, thank you for participating. This does conclude today's program. You may now disconnect.