Arrowhead Research Corporation 2026 Q3 Earnings Call

Thank you. Good afternoon, everyone. Thank you for joining us today to discuss Arrowhead's results for its fiscal 2026 third quarter ended June 30, 2026. With us today for management are President and CEO, Dr. Chris Anzalone, who will provide an overview, 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 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.

All statements other than statements of historical fact 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.

Thanks, Vince. Good afternoon, everyone, and thank you for joining us today. Arrowhead is now on the strongest footing in its history. Two weeks ago, we reported positive top-line phase III results from the global SHASTA-3 and SHASTA-4 studies in patients with severe hypertriglyceridemia, or SHTG, and we expect additional results to be presented later this month at the European Society of Cardiology conference. These data made clear to us that REDEMPLO is a needed therapy for SHTG patients. To that end, we announced today that we have acquired a priority review voucher, which can accelerate the regulatory review process in the United States from 10 months to six months, potentially bringing this important medicine to patients as quickly as possible. To me, this is an expression of Arrowhead values, push to create the best medicines and be creative and aggressive to rapidly get them to patients who need them.

Let's talk about the SHASTA-3 and 4 top-line results. Both studies met their primary endpoint and every pre-specified secondary endpoint, a clean sweep across two pivotal trials. Median triglyceride reductions from baseline were 79% and 81% in SHASTA-3 and SHASTA-4, respectively. These results were deep, durable, and remarkably consistent across both studies. Just as encouraging, safety and tolerability remained favorable and consistent with everything we've seen in prior studies. We observed no new safety signals, no clinically meaningful differences in routine laboratory measures, no clinically meaningful adverse changes in liver enzymes, no hypersensitivity cases, and no thrombocytopenia signal. In a pre-specified MRI-PDFF subgroup, there was no statistically significant difference in mean liver fat content between plozasiran and placebo. The acute pancreatitis findings are, in our view, the standout results. Across the broad SHTG population, patients with triglycerides above 500 milligrams per deciliter, with or without history of pancreatitis.

In the highest-risk subgroup, patients with triglycerides above 880 milligrams per deciliter and a history of acute pancreatitis, we saw a 100% reduction in events versus placebo. Detailed results are expected to be presented at a hotline late-breaker at the European Society of Cardiology Congress on August 30th, followed by an Arrowhead webcast on August 31st. We intend to submit an sNDA to the FDA before the end of 2026, followed by additional global filings. If approved, SHTG would represent a substantially larger commercial opportunity than FCS, and it would let us utilize the infrastructure we're building today for a much broader patient population. We believe the SHASTA results materially de-risk our most important near-term label expansion opportunity and further strengthen the foundation of our cardiometabolic franchise.

As we consider how we could fit into SHTG therapeutic paradigms, we think of REDEMPLO in three ways: safe, simple, and strong. Safe because of the impressive tolerability we saw in the PALISADE Phase III and resulting clean label in FCS, combined with what we saw in SHASTA-3 and 4 across multiple measures, including quiet liver enzymes, no hypersensitivity, and no increase in liver death. Simple because of quarterly dosing, no anticipated need for liver enzyme monitoring, and a 25 milligram dose for all patients rather than having to titrate up. Strong because of unprecedented reductions in triglyceride levels from baseline across multiple studies. We see this as a clearly compelling value proposition for patients, healthcare providers, and payers. Therefore, the speed at which we can bring zodasiran to the broader SHTG population is critical.

The possibility of shaving four months off the approval process through the priority review voucher we acquired is important. We have a saying at Arrowhead that is even etched in the floor of one of our facilities. It is that every day matters. This is a driving principle for us from discovery to early development, to late-stage clinical, to regulatory interactions, and ultimately to the last mile, getting important medicines to the patients who need them. Turning to execution of this last mile, our U.S. REDEMPLO launch for FCS continued to build real momentum during the quarter. We've seen greater than doubling of prescriptions quarter on quarter. Andy will talk through our progress in a moment, including prescription and market access progress, and I think you'll come away as encouraged as we are.

This launch in FCS has given us valuable experience and a scalable foundation to build on. Physicians are identifying previously untreated FCS patients, prescribing activity is broad, and our team is building the capabilities we'll need for a much larger potential SHTG launch. We also continue to expand REDEMPLO's reach outside the United States. In May, Australia's Therapeutic Goods Administration approved REDEMPLO as the first and only medicine approved for FCS in Australia, including genetically confirmed and clinically diagnosed adults. In June, the European Commission formally granted marketing authorization, making REDEMPLO the first and only oligo-based medicine authorized by the EC for adults with FCS diagnosed through either clinical criteria or genetic testing. Together with our approvals in the United States, Canada, China, and Australia, the EU authorization gives REDEMPLO an approved footprint across five geographies, an important achievement we're very proud of.

We're now working through country-specific reimbursement and launch processes while Sanofi leads commercialization in Greater China. All of the commercial infrastructure we are building is intended not only to hopefully bring plozasiran to SHTG patients, but also to serve as the basis for our broader cardiometabolic franchise, which we expect to include plozasiran, ARO-DIMER-PA, obesity treatments, and other candidates you will hear more about in coming quarters. We're building a large number of potential medicines that could use the same commercial channels, hopefully providing us with substantial scalability and cost-effective growth. We view plozasiran as providing us with a strong value foundation. Our intention is to build on that aggressively, and we have made good progress recently toward that end. At EASL, we presented interim phase I/IIa data for ARO-INHBE in obesity in MASH, and the results were compelling.

ARO-INHBE achieved dose-dependent active and E reductions with a mean maximum reduction over 85% after a single 400 mg dose, with effects persisting beyond 3 months. In a small subgroup of obesity and elevated baseline liver fat receiving at least 200 mg as monotherapy, the placebo-adjusted post-dose reduction in liver fat was 44%. The program has been generally well-tolerated, and we're now engaging regulators on potential phase II designs and endpoints. We continue to make progress in the ARO-ALK7 phase I/II program and expect to release more data from that study in the fourth quarter. Further, we expect to file a CTA for a new obesity candidate against an undisclosed target by the end of this year. Our June cardiometabolic R&D webinar highlighted plozasiran and ARO-DIMER-PA.

The plozasiran U70 phase III study in HoFH patients is fully enrolled, and we expect to have data in Q3 2027 and hopefully file an NDA by the end of 2027. ARO-DIMER-PA is designed to silence both APOC3 and PCSK9 and therefore reduce both LDL cholesterol and triglycerides. We believe this could be a uniquely powerful therapy for the roughly 20 million people in the United States with both elevated LDL and triglycerides. We expect to release early data from our phase I study in September. During the quarter, we also presented our subcutaneous CNS delivery work around ARO-MAPT at TIDES. This is an important piece of our pipeline, and we expect to release early data from our phase I study in September.

This is a potentially exciting data set, not only because of the potential of ARO-MAPT against Alzheimer's disease and other pathologies, but also because we think it could provide the first clinical proof of concept that we are able to address brain targets with RNAi using a simple, subcutaneously administered conjugate. Our partnership strategy remains a key part of our model and value proposition. In May, we announced an exclusive worldwide license agreement with Madrigal for ARO-PNPLA3, a program for a genetically defined MASH population. Phase I data showed liver fat reductions of up to 46% after a single dose in homozygous carriers of the PNPLA3 I148M variant, with rapid onset, durability through at least 24 weeks, and no clinically meaningful adverse events observed.

Under the agreement, Arrowhead received a $25 million upfront payment and is eligible for up to $975 million in development, regulatory, and sales milestones and tiered royalties to mid-teens. We believe that Arrowhead is something truly unique in biotech today. We have an approved product and positive pivotal data that we believe supports a potentially much larger indication that we think could drive peak sales in the $3 billion to $4 billion per year range. We have commercial infrastructure that is effective, growing, and capable of being the basis for multiple additional products. We have a set of platforms that enable us to address liver, adipose, muscle, lung, and CNS targets, and we believe virtually everything we have introduced to the clinic has translated from animal models to humans.

By the end of this year, we expect to have 23 individual drug candidates in clinical trials, 11 wholly owned, 12 partnered, and we have a high degree of confidence that the overwhelming majority of these could eventually be approved products. We have the potential for substantial future partner income from our milestones and royalties, and we have the financial resources to keep this engine running and growing. As you look to the patients we can help and the value we can create, of course, look to zodasiran, but also look to the engine we have built and the dozens of new medicines we can bring to patients. With that overview, I'd now like to turn the call over to Andy Davis.