Arrowhead Pharmaceuticals (NASDAQ:ARWR) Q2 2026 Earnings Call

0:00 Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals Conference Call. Throughout today's presentation, all participants will be in listen only mode. After the presentation, there will be an opportunity to ask questions. Instructions will follow at that time. I will now hand the conference call over to Vince Anzalone, Senior Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

0:29 Good afternoon and thank you for joining us today to discuss Arrowhead's results for its fiscal twenty twenty six second quarter ended 03/31/2026. With us today from management are President and CEO, Doctor. Chris Anzalone, who will provide an overview Andy Davis, Senior Vice President and Head of the Global CardioVentabolic Franchise, who will provide an update on commercialization activities Doctor. James Hamilton, Chief Medical Officer and Head of R and D, who will discuss our development programs and Dan Appel, Chief Financial Officer, who will give a review of the financials. Following management's prepared remarks, we will open 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.

1:23 All statements other than statements of historical fact are forward looking statements and are subject to numerous risks and uncertainties that could actual results to differ materially from those expressed forward in 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 ks and our quarterly reports on Form 10 Q. I'd now like to turn the call over to Chris.

1:55 Thanks, Mint. Good afternoon, everyone, and thank you for joining us today. During the fiscal second quarter, in the period since our last earnings call, we have continued to execute well against our commercial, R and D and corporate goals. Arrowhead is now on the strongest footing of our history. For commercial, we have a clear line of sight to expand our commercial opportunities and footprint. Our pipeline is larger than ever, our discovery capabilities are broader than ever, and our balance sheet is stronger than ever. This is an historic time for our company. We are uniquely positioned to deliver important medicines to the patients who need them and to create substantial value for our shareholders. Let's talk about some of our recent progress and begin with commercial. As you recall, the FDA approved Radevlo in November 2025 as an adjunctive diet to reduce triglycerides in adults with FCS.

2:47 FCS is a severe, rare disease with an estimated six thousand five hundred people in The U. S. Living with genetic or clinical FCS, characterized by TG levels that can be 10 to 100 times higher than normal. This leads to a substantially increased risk of developing acute, recurrent, and potentially fatal pancreatitis. As we reported last quarter, The U. S. Regenblow launch was off to a strong start. That momentum has continued into the current quarter, and we are now seeing around 30 new prescriptions written each week. Greater than 400 prescriptions have been written since launch, and more than 10% of these have been for patients switching from our competitors APOC3 inhibitor. Of course each prescription needs to be fully adjudicated with payers before becoming paid claims, but we offer a robust quick start program to support these FCS patients in the interim.

3:36 The volume of physicians writing prescriptions and the number of patients receiving rodevilod continues to exceed our initial expectations. With respect to pricing, we updated Rodenplo's U. Wholesale acquisition cost, or WACC, to $45,000 per patient per year. This represents a premium to our competitors WACC pricing. We believe this is appropriate given that clinical data suggests we have a clearly and demonstrably superior product in terms of TG reduction, safety profile, and convenience. As part of the One Redemplo unified pricing model, this price is intended to remain consistent across FCS and SHCG if that indication is approved. We continue to see this strategy as potentially simplifying payer contracting and eliminating pricing complexity that could complicate future formulary negotiations.

4:28 Response from payers to this strategy has been positive and our interactions to date have been productive. Beyond The US, we secured positive regulatory action in four additional geographies for Rademplo in patients with genetically confirmed and clinically defined FCS. We received approvals from the Australian Therapeutic Goods Administration, the Chinese National Medical Products Administration, and Health Canada. In addition, the European Medicines Agency's Committee for Medicinal Products for Human Use adopted a positive opinion recommending the approval of Radepla. This is an impressive result achieved by our global regulatory team in a very short period, and further reflects the strength of our clinical data in FCS and the value that Ridepla offers to patients. Ridepla will be available later this year in Canada, and we anticipate it will be marketed independently by Arrowhead.

5:19 Pending a marketing authorization decision from the European Commission, we expect to launch Ridemplo later this year in select EU countries, and likely in The UK as well. In Greater China, Redunde will be marketed by Sanofi. In addition to our regulatory team, the rest of the R and D organization has performed extremely well and has made progress in the broader portfolio. Our drive to expand our platforms in order to increase the number and types of diseases we can address continues, even as we grow as a commercial entity. During the recent period we have made rapid progress across the pipeline, including programs targeting genes expressed in liver, skeletal muscle, adipose, CNS, and the lung, as well as the first dual functional siRNA designed to silence the expression of two genes with a single molecule.

6:08 We believe the depth and breadth of our clinical pipeline is unmatched, and we expect to continue to lead the field in innovation. Importantly, many of these programs will have clinical readouts this year, so investors and others may start to properly value the broader pipeline. As we look to near term clinical data releases, we anticipate four important events. First, the phase three Shasta three and four studies of glosasteride NSH TG patients should be ready for top line data release in Q3. This is an important readout that will drive our anticipated supplemental NDA or sNDA as we seek to expand the population of patients we can treat with possessor. We expect it to continue to see a favorable safety profile and substantial reduction in TGs, and we are cautiously optimistic that we could see an improvement in acute pancreatitis risk.

6:59 Second, we expect to have early data from the ongoing phase onetwo study of Arrow Dimer PA in patients with mixed hyperlipidemia in Q3. We believe this will be the world's first clinical data of a single RNAi molecule designed to simultaneously silence the expression of two proteins. If we see good reduction of PCSK9 and APOC3 and therefore reductions in LDL cholesterol and TGs, we could have a very powerful and unique therapy for the roughly twenty million people in The U. S. Living with mixed hyperlipidemia. More broadly, the data could provide initial clinical proof of concept for our growing dimer platform and pipeline. We expect to see additional dual functional dimers in the clinic in 2027.

7:46 Third, we expect to have early data from the ongoing phase onetwo study of ARO MAP T around the end of Q3 or early Q4. As you'll recall, this is our first candidate using our CNS platform designed to deliver RNAi molecules to the brain via simple subcutaneous administration. Our ARO MAPT targets the tau protein, which is increasingly validated for the potential treatments of Alzheimer's and other tauopathies. We believe that positive early data could be substantially disruptive. It could represent a great leap forward in treating topologies and more broadly open the door to using RNAi to treat a broad range of conditions from neurodegenerative disorders to obesity. The early ARO MAPT data are encouraging, expect a substantial expansion of our CNS pipeline beginning at the end of twenty twenty six.

8:40 Fourth, we expect to provide clinical updates on ARO INHBE and ARO L7 throughout the second half of the year. Regarding ARO INHBE, we plan to present additional data at various conferences and launch a phase two study. For ARO ALK7, we expect to provide additional data from the ongoing phase onetwo study. We see these as potentially important therapies for metabolic disorders and represent our first steps into obesity and NASH. We expect to have additional candidates in this space by the end of the year and into 2027. Moving on to financial and portfolio management, Arrowhead took important steps to ensure that we are properly funded to advance our commercial and development portfolio. We also entered into a license agreement for a program that achieves clinical proof of concepts, but is not one that we wish to take forward.

9:31 This is key to Arrowhead's strategy since we are extraordinarily productive in discovery and early development, but cannot commercialize everything independently. Let's talk about the steps we took. First, we dramatically strengthened our balance sheet, allowing us to push multiple programs toward commercialization and potentially through multiple independent and partner launches. During the quarter we completed the largest fundraising Arrowhead has ever conducted. We closed concurrent public offerings of $700,000,000 of zero percent coupon convertible senior notes and $230,000,000 of common stock. Both offerings were several times oversubscribed, reflecting investor confidence in our portfolio and our ability to continue to build value. Second, and just this week, we announced an exclusive worldwide license agreement with Matagorh Pharmaceuticals for ARO PMPLA3, Arrowhead's clinical stage program designed to treat a genetically defined population of MADH patients.

10:27 Under the terms of the agreement, Matagol will pay a $25,000,000 upfront payment to Arrowhead. Arrowhead is also eligible to receive development, regulatory and sales milestone payments of up to $975,000,000 Arrowhead is further eligible to receive tiered royalties up to mid teens. Matrigo's leadership in the NASH space makes it a natural and attractive partner to advance Arrowgate PLA3 into Phase II studies and toward potential commercialization. This transaction with Matrigo underscores Arrowhead's disciplined business development strategy, demonstrating our ability to partner high potential, clinically validated programs with leading organizations. With that overview, I'd now like to turn the call over to Andy Davis. Andy? Thank you Chris, and good afternoon everyone. It has now been approximately five and a half months since the FDA approval of Redemplo on 11/18/2025, and we continue to be very pleased with the trajectory of the launch.

11:22 Today I would like to cover five areas: prescription and patient dynamics, payer coverage developments, pricing strategy, commercial infrastructure expansion, and our international and SHTG outlook. Let's start with prescription and patient dynamics. Ridemplo's launch continues to build strong and consistent momentum. Through the fiscal second quarter ending 03/31/2026, we have seen prescriptions accelerating week over week, growing nearly threefold from the start to the end of the quarter. That momentum has continued into the current quarter with total prescriptions written exceeding 400, representing over 40% growth over just the last four weeks alone. The awareness and conviction driving this prescription growth are encouraging.

12:08 Redemplo awareness among the prescribers who matter most has increased meaningfully. Critically, this awareness has translated into conviction. Nearly all Redemplo prescribers surveyed report being satisfied or highly satisfied with the product, and Redemplo is perceived strongest on the efficacy outcomes FCS patients care about most triglyceride reduction and acute pancreatitis risk reduction. The patient mix continues to reflect what we expected Approximately eighty five percent of prescriptions are from patients naive to the APOC3 class, a strong signal that physicians are identifying and treating SCS patients who have never had access to an effective therapy, which patients largely account for the remainder. Patient persistence data is equally encouraging.

12:53 Refill activity is accelerating meaningfully, an important early validation of both clinical effectiveness and patient satisfaction for DENTLO's one quarterly dosing profile. Geographic distribution of prescribing is balanced across the country. This breadth of prescriber activation across all territories signals that patient identification capability is building at scale across the organization, not just concentrated in a handful of high volume centers, and this gives us confidence in the durability of the prescription growth trajectory. Turning to payer access, we are making meaningful and consistent progress. Our market access team has been actively engaged with the largest payers in the country, covering the vast majority of U. S. Lives, to support continued patient access.

13:39 These discussions are proceeding as expected and in some cases have already led to Rodento's improved coverage. Additional formulary coverage decisions are expected in the coming months across both commercial and government segments.

13:52 A particularly important development in the payer landscape is the diagnostic pathway flexibility that major payers are recognizing. The coverage policies taking shape across major payers reflect both genetic testing and clinical criteria as valid routes to diagnosis. This is critical for ensuring that all appropriate redemptible patients can access treatment, because a meaningful proportion of real world SCS patients are clinically diagnosed rather than genetically confirmed, and policies that require genetic confirmation as a prerequisite would create an unnecessary and inappropriate barrier. As Chris mentioned, we have made a proactive decision to reduce the list price of Redempt Load to $45,000 per patient per year. This decision reflects our commitment to optimizing market access for FCS patients and is consistent with our belief that a competitive and rational price point accelerates formulary decisions and reduces friction in the prior authorization process.

14:48 We have always believed that Redemplo's clinical profile is best in class, and the $45,000 per year price point reflects the premium value supported by the clinical evidence. With the FCS launch performing ahead of our expectations and with potential expansion into SHTG on the horizon, we are making deliberate and sequenced investments to scale our commercial infrastructure. I will speak more on this in the future, but the field infrastructure we are building will be sized and structured for both the current expanded SDS accessible population and also the future SHCG opportunity as it unfolds in the future. On international expansion, Redemplo received regulatory approval in both Canada and China in January, and most recently in Australia last month. All three markets are currently in pre launch phase as we work through the pricing and reimbursement frameworks in each country. We look forward to providing updates on those timelines as they develop.

15:41 Also last month CHMP, the Committee for Medicinal Products for Human Use, recommended EU marketing authorization for Rodentlow in Europe for SDS without requiring genetic confirmation. Consequently, we anticipate an EMA approval decision in the June to July timeframe. We intend to commercialize Redemplo directly in Europe, supported by contracted infrastructure, which encompasses market access strategy, account management deployment, medical science liaison support, and broader stakeholder engagements including medical congresses and patient group engagement. We believe this model is the right approach for Arrowhead and are pleased with the readiness of that team as we approach the anticipated EMA decision. Finally, I want to comment on the SHTG program, which represents the most significant near term value catalyst for the cardiometabolic franchise.

16:32 We are approaching what we expect to be a highly meaningful series of milestones. Top line results from SHASTLA-three and SHASTLA-four, our two registrational phase three studies in severe hypertriglyceridemia, are expected in Q3. We head into the data readout with confidence grounded in the strength of Redempto's established mechanism of action and the consistency of the APOC3 biology we have observed across our full clinical program to date. We also intend to present the data at a major medical congress, which we hope will be with a simultaneous publication in a top tier medical journal. We then expect to file an sNDA with the FDA before the end of twenty twenty six with an anticipated regulatory approval based on an expected standard review timeline targeted in second half of twenty twenty seven. Additional regulatory filings in other jurisdictions are planned to follow thereafter.

17:21 The SHTG opportunity represents a patient population that is substantially larger than SCS, with over 1,000,000 high risk patients in The United States alone. The commercial infrastructure investments we are making for SCS today are also designed with that launch in mind. In summary, the Ridempo launch is progressing well and continues to exceed our expectations across prescription volume, patient dynamics, and payer access. Physician satisfaction and forward prescribing intents are both extremely strong, refill activity is accelerating, and we have a series of highly anticipated milestones in the second half of twenty twenty six that we believe will be transformative for the cardiometabolic franchise and for Arrowhead. With that, I'll turn the call over to James Hamilton to discuss the broader R and D portfolio.

18:07 Thank you, Andy. As Chris mentioned, we have a very broad pipeline with over 20 clinical programs, so I will focus on areas with upcoming readouts. First I'd like to announce that we are planning to host three webcasts over the coming months as part of our R and D webinar summer series. Each webcast will cover specific aspect of our pipeline where we expect to have upcoming data readouts this year. These include cardiometabolic, including posazaram, zodasiran, and aerodimer PA obesity, including ARO inhibiting E and ARO ALK7 and ARO MAPT, including the blood brain barrier or BBB platform. I'll now give status updates from the quarter on these specific areas. First, let's review the suite of posasiran phase three studies, SHASTA-three, SHASTA-four, SHASTA-five, and MIRROR III, designed to support supplemental NDA filings to expand the Redemplo label beyond genetic and clinical SCS into patients with SHTG.

19:10 CHAFTA-three and CHAFTA-four together enrolled over seven fifty patients and have a primary endpoint of change in triglycerides from baseline with key secondary endpoints of acute pancreatitis rates. MIR-three, which enrolled over 1,400 patients, is designed to supplement the Shasta studies with additional patient safety data. We are also enrolling patients at high risk of acute pancreatitis in the Shasta-five to directly assess the ability of posazaran to reduce the risk of acute pancreatitis as the primary endpoint. Should Shasta three and Shasta four show statistically significant improvement in acute pancreatitis risk, we will reassess whether there is added value in continuing Shasta five. We remain on schedule to complete the blinded portion of the Shasta three, Shasta four at NIER three in mid-twenty twenty six to support a planned top line data readout in the third quarter.

20:08 This would further support our plans for an sNDA submission, or SHTG, before the end of this year. Before moving on to zivasiran, I'd like to highlight a presentation we made with new long term efficacy and safety data for plazasiran across a spectrum of patients with hypertriglyceridemia at the American College of Cardiology Conference in March. The data were from a two year open label extension of the two phase 2b double blind placebo controlled studies of posazaran, CHASTA-two conducted in adults with severe hypertriglyceridemia, and MIRROR, which enrolled patients with hypertriglyceridemia.

20:50 During the two year open label extension, patients saw median reductions in their triglycerides of eighty three percent in SHTG patients from Shasta two and sixty seven percent in HTG patients from MIRROR, with additional reductions in remnant and non HDL cholesterol. Ninety six percent of SHTG patients achieved TGs below 500 per deciliter, and sixty three percent achieved TGs below one hundred and fifty milligrams per deciliter, with ninety three percent of HTG patients achieving TGs below one hundred and fifty milligrams per deciliter. Importantly, no adjudicated acute pancreatitis events occurred in any patient receiving posazaram during the two year phase 2b open label extension study.

21:39 These findings support the potential of plazasiran as a promising new approach in managing patients with moderate to severe HTG phenotypes who are at risk of AP and potentially other cardiometabolic comorbidities. I'd now like to give a quick update on the Yosemite Phase III study of zodasiran, which is being developed as a potential treatment for homozygous familial hypercholesterolemia, or HoFH, a rare genetic condition that leads to severely elevated LDL cholesterol and early onset cardiovascular disease. Zodasiran is the fourth investigational RNAi based candidate developed by Arrowhead to reach late stage clinical studies. Yosemite is designed to enroll approximately sixty individuals with HoFH over the age of 12 who will be randomized two to one to receive five doses of two hundred milligrams zodiacin or placebo.

22:36 The primary endpoint is the percent change from baseline to month twelve in fasting LDL cholesterol. Enrollment has been on track and we are confident that the study can be fully enrolled this year to enable study completion and potential NDA filings before the end of twenty twenty seven. The last program within cardiometabolic is Arrowhead PAMPA, the first dual functional siRNA designed to silence the expression of two genes with a single RNAi molecule. Arrowhead's AMRPA is being developed as a potential treatment for ASCVD due to mixed hyperlipidemia by silencing expression of both PCSK9 and APOC3. In January we initiated a phase one2a placebo controlled dose escalating study to evaluate the safety, tolerability, pharmacokinetics, pharmacodynamics, and effects on LDL cholesterol and triglycerides using single dose Arrow dimer PA in Part one and multiple doses in Part two in up to seventy eight adults with mixed hyperlipidemia.

23:46 Enrollment in this study has been rapid, and we are on schedule to have sufficient data to provide the first clinical readout to Q3 of this year. This is a very interesting program, and we think the preclinical data has been highly compelling. We have some innovative ideas on late stage trial designs and that potentially accelerate the path to regulatory approval. So we're eager to have a first clinical readout to start moving ahead with later studies if supported by initial data. Lastly, I'd like to give an update on the status of the ARO MAP T first in human study. ARO MAP T is being developed as a potential treatment for tauopathies, including Alzheimer's disease, progressive neurodegenerative disease characterized by cognitive and functional decline.

24:33 Alzheimer's disease is the most common cause of dementia affecting an estimated thirty two million people worldwide, and is part of a group of neurodegenerative diseases called tauopathies that are marked by abnormal tau accumulation and formation of tau tangles in neurons. Tau related pathology may be a critical driver of neurodegeneration and targeting tau as a promising strategy to potentially slow or stop cognitive and functional decline. AROMAT T is Arrowhead's first investigational RNAi based therapy to achieve a new proprietary delivery system, which in preclinical studies has achieved blood brain barrier penetration and deep knockdown target genes across central across the central nervous system, including deep brain regions after subcutaneous injection.

25:25 This underscores Arrowhead's leadership in the delivery of siRNA to multiple tissues and cell types throughout the body, utilizing our proprietary and differentiated targeted RNAi molecule, or TRiM platform. In December 2025 we dosed the first subjects in a phase onetwo clinical trial of AROMAT. This study is a placebo controlled dose escalating study to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of AROMAT in up to 64 healthy subjects and up to 48 patients with mild cognitive impairment due to Alzheimer's disease and mild Alzheimer's disease dementia. In Part 1a of the study, healthy subjects will receive one or three weekly doses of ArrowMap T or placebo by subcutaneous injection.

26:18 In Parts 1B and Part two healthy volunteers and Alzheimer's disease patients respectively will receive multiple escalating doses of Arrow MAPT or placebo. We are nearing completion of enrollment of the single dose portion of the study in healthy volunteers and have begun enrollment in the multi dose cohorts in both healthy volunteers and patients with Alzheimer's disease. This keeps us on pace for an initial data readout at the end of Q3 or early Q4. I will now turn the call over to Dan Appel. Thank you, James, and good afternoon, everyone. As we reported today, net loss for the quarter ended 03/31/2026 was $132,700,000 or a loss of $0.93 per share, based on 142,400,000 fully diluted weighted average shares outstanding.

27:13 This compares to net income of $370,400,000 or $2.75 per share for the quarter ended 03/31/2025, based on 134,500,000 fully diluted weighted average shares outstanding in that quarter.

27:32 Recall that in the prior year quarter we recorded over $540,000,000 in revenue solely related to the disruptive transaction that was executed at that time. Revenue for this quarter totaled $74,000,000 driven primarily by our licensing collaboration agreements with Sarepta and with Novartis. Of this amount, approximately $42,000,000 related to the Sarepta collaboration. This includes $28,000,000 from ongoing recognition of the initial Sarepta consideration, dollars 10,000,000 related to reimbursement of incurred preclinical collaboration program costs, and $4,000,000 for our clinical supply provided to them under a clinical supply agreement. In addition, we recognized $20,000,000 of the $200,000,000 upfront payment received from Novartis in October, bringing year to date recognition of Novartis upfront to $54,000,000 with the remaining $146,000,000 to be deferred over time as we fulfill our preclinical obligations.

28:33 We also recorded $11,000,000 related to the asset purchase agreements between Sanofi and Viscerna to develop and commercialize investigational plodasiran in Greater China. Viscerna, as you know, is our majority owned subsidiary with operations in China, and the amount recognized is almost entirely due to the January approval of FCS in that region by the Chinese National Medical Products Administration. As mentioned previously, we are not intending to headline specific with DevFlow product sales numbers until such time as they become a meaningful driver to our financials. That said, net sales can be derived from our disclosures, as the difference between total net revenue and collaboration revenue, and represents approximately $1,000,000 for the quarter.

29:22 This is our first full quarter of Redempto sales, and on a unit basis that figure compares favorably to the first full commercial quarter of the other approved APOC3 inhibitor. Turning now to expenses, total operating expenses for the quarter were approximately $215,000,000 roughly flat with operating expenses in the first fiscal quarter. This compares to $162,000,000 in the prior year quarter, representing an increase of $53,000,000 year over year. This increase was driven by $40,000,000 of higher R and D expenses and $13,000,000 of higher SG and A expenses, fully in line with our expectations. The increase in R and D expense was primarily attributable to ongoing progression of our phase three registration studies for filastramine and SHTG, as well as our early stage pipeline programs including the Dimer and MAPT.

30:21 Fiscal year to date almost two thirds of the clinical trial spend can be attributed to our plazasiran phase three studies. As James already mentioned, the registration of SHTG studies for plazastram should read out in December, and clinical trial spend for these programs should thereafter moderate accordingly. SG and A expenses increased year over year compared to the prior year's second fiscal quarter, driven primarily by ongoing investments to support the commercialization of Redempta. As previously discussed, we are continuing to build our commercial capabilities to fully support the FCS launch. We continue to leverage and invest in these capabilities to support Redemplo and FCS, while also positioning the organization to support a potential future launch in SH-twelve.

31:12 And we ultimately expect to leverage these same capabilities for the advancement of cisidastrin for the treatment of HoFH. Turning to the balance sheet. Cash and investments on hand totaled nearly $1,800,000,000 as of 03/31/2026. Common shares outstanding at quarter end were $140,600,000 To provide a little color, in this quarter alone we brought in over $1,000,000,000 including approximately $850,000,000 net from our January financing transactions, inclusive of a concurrent offering of 0% convertible senior notes and common stock, along with the associated capped call transaction.

31:58 Other notable inflows in the quarter included the $200,000,000 received from Sarepta on achieving the second E01 program milestone, as well as the $50,000,000 anniversary payment under the Sarepta long term collaboration agreement.

32:13 All of this is very much in line with the information provided previously during our February earnings call. We believe our strong balance sheet provides us with significant financial flexibility to support ongoing clinical development, to advance current and future commercialization activities, and to execute against our long term strategic priorities. With that brief overview I will now turn the call back to Chris. Thanks Dan. As we build out our commercial team and focus on efficiently bringing REGENEFLO to the patients who need it, we have not left sight on continuing to expand our pipeline and ultimately increasing the number of medicines we can offer to a wide variety of patients. Our business has become more complex as we grow in all these areas, but we continue to innovate and execute well.

33:00 We see multiple key potential value creating events in the second half of twenty twenty six that together speak to our priorities. Here are just a few of the events we are tracking. JASPA-three, JASPA-four, and MURRA-three, which is a suite of phase three clinical studies designed to support an sNDA for young blood in patients with SHCG, is on schedule for completion and top line readout in Q3. The first clinical readout of ARO Dimer PA targeting both PCSK9 and APOC3 for LDL and TG lowering is also expected in Q3. The first clinical readout for AROMAb T is expected around the end of Q3 or early Q4. It is being developed as a potential treatment for tauopathies including Alzheimer's disease, and is our first program using the CNS delivery platform designed to cross the blood brain barrier after systemic delivery via subcutaneous administration.

33:56 Additional ARO I and HPD and ARO VAC7 data releases are planned in 2026 for this novel non incretin strategy, which had quite encouraging early data, particularly in diabetic obese patients in combination with tirzepatide and with liver fat reductions as monotherapy or in combination with tirzepatide. As James mentioned, we are planning to webcast three presentations as part of our summer series of R and D webinars to go over cardiometabolic broadly, obesity, and ARO MAPT. These can serve as a review of the programs and results to date and as a primer with potentially important readouts coming up later this year. Thank you for joining us today and I would now like to open the call to your questions. Thank you. At this time we will now conduct the question and answer session.

34:49 As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please note that each analyst is permitted to ask one question. Should you have a follow-up question, you will need to get back in queue. Please stand by while we compile the Q and A roster.

35:17 Our first question comes from the line of Edward Tenthoff from Piper Sandler. Your line is now open. Great. Thank you. And thanks for all the detail and the update today. My question really has to do with looking at the upcoming SH, severe hypertriglyceridemia readouts. When it comes to pancreatitis as a secondary, Is the plan to pool Shasta four, three and four? And what are sort of the assumptions around pancreatitis?

35:56 Thank you. Yeah, thanks for the question. This is James. Yeah, you've got that right. The plan is to pull both of those studies, Shasta three and four, and we'll analyze, do a meta analysis of those two studies to look at pancreatitis event rates, both rates of events in individual patients, and then total number of overall events. And I think that's kind of all I can say on that, we're still blinded and like we said should have the data in Q3. Great, looking forward to that. Thank you. Thank you. One moment for our next question.

36:49 Our question comes from Jason Gerberry of Bank of America. Your line is now open. Hey, guys. Thanks for taking my question. I just wanted to probe in a little bit more on the inhibitory and ALK7 updates later this year and get your latest thoughts on these modalities. And I think investors have soured a little bit on inhibit after the wave data update.

37:13 So just wanted to get your perspective on kind of what you need to see from these upcoming readouts advance one or both for obesity treatment versus any alternative potentially considering for a mass indication? Thanks.

37:31 Yeah, hi Jason, this is James. Sure, happy to cover those questions. You know, we've been saying all along really that we thought that this inhibiting outset and access is interesting, but we thought the approach was to combine with GLP-1s, and that's still our standpoint here, we think that

37:56 there's potential particularly in the type two diabetics for additional weight loss on top of tirzepatide or other GLP-1s with either ALK7 knockdown or inhibit E knockdown. What we've seen from the clinical study that we talked about earlier this year from inhibit E with inhibit E knockdown is really clear redistribution of fat out of the liver, even with monotherapy but also with combination therapy, and some additional changes and improvements in body composition reductions in total fat and visceral fat, particularly in that type two diabetic population. So I think that we look forward to more of the same and sharing more of that little liver fat data here in the coming quarter or so, and then in the second half of the year providing some additional updates on changes in body composition and some of the other parameters that we showed back in January.

39:08 Thank you. One moment for our next question. Our next question comes from Brian Chang of JPMorgan. Your line is now open. Hi, guys. This is Ron on for Brian. Congrats on the quarter. Just wanted to ask, can you guys give more color on the interactions you've had with payers that led to the recent price lowering? And what has been the feedback since your competitor's action last month? Thank you. Yeah, hi Ron, this is Andy. So our interactions with payers today have been consistent, have been positive, we're seeing payer policies, and these are public payer policies that reflect the ability to diagnose FCS patients through multiple diagnosis pathways, in particular through the clinical criteria that we saw in Palisade. So really, really positive conversations with payers about payer policies and about future coverage.

40:18 Okay, and just a quick follow-up, could you guys how should we think about the impact here to gross to net following the price lowering? Gross to net. Dan can take that. What's our assumption on gross to net with the new pricing policy? Yeah, so we, I mean we ignore the I actually answered your second question, we ignore the WACC, as Chris already explained, to make it premium priced to the competitor there. We are not actually going give guidance on gross to net. We have not seen anything substantial in that regard, nor do we currently expect it. You know, other than things that are statute statutory required such as Medicaid rebates and the manufacturing discount program and the like.

41:08 So we have a policy at the moment not to provide any sort of guidance on that at this stage. And let's just be clear, the lowering of the WACC from 60 to 45 had nothing to do with any pushback from payers to the contrary, I think that those interactions have been quite positive. This is a lowering of the WACC in expectation of an expansion in the market into SHTG, and to ensure that we are, the the payers would not require a step through with our competitor. As we talked about, we are priced at a premium here, we think that's appropriate given the characteristics of our drug versus the competitor's drug, and we think 45 actually long term is probably quite a good price in terms of maximizing access to the drug across various subpopulations within SHTG.

42:12 Great, thank you so much. You're welcome. Thank you. One moment for our next question. Our next question comes from Mike Olds from Morgan Stanley. Your line is now open. Hey, guys. It's Avi Novak on the line for Mike. Thank you for taking our questions and congrats on the quarter. I guess among the patients who were switchers, could you characterize, I guess, the motivations for switching to Redemplo? Was it due to its clinical profile, or could it be more payer related? Thanks. Hi Mike, this is Andy. Thanks for the question. We've seen really diversity of reasons for switch that include efficacy, safety, and tolerability, and a variety of other reasons as well.

42:58 So I wouldn't say there's one particular reason driving switch. There's a multitude of reasons. Okay, great. Thanks for taking our questions. Thank you. One moment for our next question. Our next question comes from Mary Raycroft from Jefferies. Hi, thanks for taking my question. Maybe just a follow-up to Ted's question earlier on Shasta three and four. Just wondering if there's an updated perspective on whether the blinded AP event rates are tracking in line with your expectations and whether you'd be able to generate enough events by the time this study completes, or could you potentially even keep the study blinded a little bit longer to get an adequate number of total events?

43:51 Yeah, hi Maury, this is James, I'll take that question. So we're not giving any guidance on or of blow by blow details on the number of events we're seeing. Suffice it to say we feel comfortable with the number of events we have seen, and you know the big reveal will be in Q3, but no plans to extend the study or stay blinded for a longer period at this time. Got it. Okay, thanks for taking my questions. Thank you. One moment for our next question. Our next question comes from Mani Faroohar from Leerink. Your line is now open.

44:39 Hi, Yohavon from Mani. Thanks for taking my question. Congrats on the quarter. So, yeah, can you talk about how the Phase three data from Biogen will inform your strategy for aromatase? And maybe also can you just comment on your internal expectations for this readout? Thank you. I don't think any of us caught that. Could you say that again? Think the line is a bit muddled. Oh, sorry. No, yeah, I was asking if you could talk about the Phase III cilia data from Biogen and how it won't form your strategy for our map key. You also talk about your general expectation. Sure, yeah, I can take that. This is James.

45:26 So the I'm assuming you're referring to the ASO targeting MAPT from Biogen and Ionis that's supposed to read out here in maybe this quarter or early next quarter. Yeah, I mean I hope those data look good and I hope that they show an improvement in the cognitive rating scales I think that would be broadly a positive for Arrowhead and for the tau hypothesis in general. Of course that study is in Alzheimer's disease, a positive readout would support our Alzheimer's programs. That being said, even if those data are not positive, I think we can still we still have the option of pursuing all the other tauopathies, right, because a knockdown approach of tau should improve any condition that's really driven by tau gain of function or tau pathology, so things like progressive supranuclear palsy or corticobasal dementia or some of the real specific MAPT gain of function frontotemporal dementia disorders, those are all fair game for us as we think about phase twos and phase three down the road.

46:42 So hopefully the Biogen data are positive if it's not, it's not the end of the world for our program because we can still pursue the tauopathies. Great, thank you. Thank you. One moment for our next question. Our next question comes from Joseph Tone from TD Cowen. Your line is now open. Hi there. Good afternoon and thank you for taking my question. Just as we're thinking about the potential outcomes for the JASA-threefour studies later this year, do you expect that you'll have to show differentiated efficacy versus what Ionis has shown in addition to the dosing benefit in order to keep that even slightly premium pricing? And then just a point of clarification, are you characterizing the AP events in SHA-thirty four the same way that you characterize them in the long term Shasta two extension that was recently presented? Thank you.

47:40 Why don't I take the second part first about the characterization? The answer is no, so the Shasta two study we used the strict ATLANNA criteria to look at pancreatitis events, whereas in the Shasta threefour pooled analysis we're using this sort of modified ATLANNIC criteria that has that definite probable and possible pancreatitis. And regarding the premium pricing, let's just see what those data look like. Historically we look at data side by side, with the large caveat, it of course is difficult to compare different clinical studies with different patient populations. What we have seen consistently is superior triglyceride reduction, superior safety profile, and of course superior convenience. We expect those to continue, and should that be the case, then we would expect that a premium is still appropriate.

48:40 Great, thank you. Thank you. Our next question comes from Patrick Trucchio of H. C. Wainwright. Your line is now open. Hi. Thanks so much. Just regarding your business development strategy, I was hoping you could give us some additional details just in terms of which assets you would be looking to bring forward on your own versus those that you may partner? And then just more broadly, how you're thinking about how RNAi kind of fits into the broader genetic medicines sort of portfolio? And how RNAi is looking sort of competitively against modalities like gene editing, etcetera?

49:30 Sure. Look, think that RNAi is at the forefront of genetic medicine for the foreseeable future. Now look, it's not the right modality for everything, but for those diseases that are characterized by the overproduction of something, if we can address that cell type then RNAi is a very attractive modality. But when we think about RNAi versus gene editing, the way I feel at least is that RNAi is relatively straightforward and conservative approach, right, it is a reversible approach, and in our hands we can have very long durability, so you can almost get the best of both worlds where you have a low needle burden, if you will, but the ability to come off drug should some new biology come out to suggest that you don't actually want to knock down that gene product.

50:34 That's not the case in gene editing, and I think that gene editing does have a place in the world of medicine, it's just quite unknown right now because I don't know what happens to these edited genes ten years from now, don't think anybody does. Notwithstanding as the biology changes and it could be that sometime in the future we decide that you might not want to knock on a certain gene product. So for those horrible diseases that are terminal, it could be worth taking a risk to do gene editing, but frankly for all others, if you can address something with RNAi, that feels to me a better approach.

51:21 Regarding business development, you know this is a dynamic question. Right now we feel pretty good about our existing pipeline in terms of that which is wholly owned right now, you know we like that idea of pushing all these forward ourselves, with the possible exception of C3 and Factor B, we like those programs a lot, drug candidates appear to do what they're intended to do and they seem to well tolerated, those are just really outside of our core focus at present, and so those are a couple of assets that we could partner with the right partner at some point. Everything else feels pretty good right now, know, that may change as we talk to other companies and as our pipeline grows, we don't feel a real sense of urgency to do additional deals on existing clinical programs other than maybe C3 Factor V.

52:27 Thank you. Our next question comes from Amin from B. Riley Securities. Your line is now open. Hi, everyone. Congratulations on the quarter. This Amin Chirli on behalf of Madison Alsadi. I just wanted to ask, as you think about the next generation of the Dimer platform, is a construct combining Inhibitor ALK seven with a non overlapping mechanism target, something you're evaluating for obesity or other indications? Thank you. Yes. We move on to the next question.

53:26 Yes. Our next question comes from Luka Issy from RBC Capital Markets. Your line is now open. Oh, great. Hi, team. This is Shelby on for Luka, and thanks for taking the question. Given Ionis has announced a new price at $40,000 and has first mover advantage, can you walk us through the rationale to continue to price for Dimplo at a premium versus that par in SHTG, maybe as a way to kind of undercut their pricing since you're coming in second? Just wondering the rationale behind that. Thanks.

54:14 Yeah, thanks, Shelby. As Chris previously mentioned, we do believe Redemplo is a best in class APOC3 inhibitor, and that it commands premium pricing as a consequence of that, and there are a variety of reasons for that. Chris touched on some of them including the depth of knockdown for APOC3 as a target, the depth of PG reduction we saw that from PALISADE with an 80% reduction from baselines. We saw that with the numerical decrease in acute pancreatitis from PALISADE. We've seen that also with an FDA label that has no contraindications, no warnings, and no precautions. And then lastly, with a convenient dosing schedule that's only four injections a year. When you sum up the totality of those attributes, we just believe it's a best in class APOC3 inhibitor and as a consequence should be premium priced.

55:14 Thank you. Our next call, our next question comes from Jen Gia from Cantor Fitzgerald. Your line is now open. Hi, thanks for taking my question. This is Jennifer Jia on for Prakhar Agarwal. I'd like to understand a little bit more on the expectations for ARO Dimer readout later this year. So, what efficacy are you hoping to see And what does it take to take this forward to a larger trial? And if it's positive, do you consider going straight to a cardio outcomes trial? Or will you still need to compete a phase two? Yeah, hi Jennifer, this is James. Happy to address that question. So the great thing about this program is that all of the relevant biomarkers and even biomarkers that you could use potentially for approval are blood based, right? We can measure PCSK9, we can measure APOC3 in the blood, and we can measure LDL cholesterol and triglycerides, APOB, non HDL cholesterol are all pretty easy for us to measure, so that's what we'll be primarily focused on as well as safety in this initial data readout.

56:29 In terms of where we go from here, you know, think we're working on that now, and there may be some additional limited phase two work which we could even consider doing as part of this study, but then moving quickly into an outcome study down the road. So more to come on the development plan and the study designs, but looking forward to the readout later this year. Great, thanks. Thank you. Our next question comes from Kihei Nakae from Chardan Capital Markets. Your line is now open. Yes, thank you. A question about the Madrigal licensing agreement for PMPLA.

57:21 Help us understand from a capital allocation strategy perspective, why it makes sense for you to do this deal at this time as opposed to taking the drug further on your own? Yes, good question. So let me just take it back and remind everyone that where Arrowhead hemophilia came from. We didn't develop this on our own independently. This was part of our deal with Janssen that was centered around HPV, FSB, but also included a couple of additional targets. This was one of those targets. And so we developed it for them, they did the phase one, the phase one was compelling, you know, after only a single dose they saw about a 40% reduction in liver fat in homozygous patients.

58:14 So that was interesting to us. Janssen, as I understand it, decided to get out of NASH, and so the asset was returned to us, we didn't spend any money on this. As we look at taking this forward, we think it's a really compelling target for a company that's focused in NASH, largely. This is a genetically defined population, and that's sort of the good news and the bad news, The good news is it's quite specific, the challenge there is that there will be a companion diagnostic component to this, and it made sense for us to find a pure play NASH a company to take this forward, and of course and Medigle is I think the best out there right now, so it didn't really make sense for us to spend much money right now to do a phase those studies could be a bit long and more expensive than made sense for us. We've got a very large pipeline, we've got some really interesting programs that we are pushing ourselves, and I just think that our ROI is probably better by allocating capital to those programs that we are more confident that we will hold on to long term.

59:36 So that's where we are thrilled to have Navirol as a partner, we're thrilled to have them develop that drug, think it's a good drug, and we're thrilled to have them commercialize it eventually. We feel good about the deal. Great, thank you. Thank you. This concludes the question and answer session. I would now like to turn it back to Chris Anzalone for closing remarks. Thanks, everyone, for joining us today. We look forward to seeing you in the future. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.