ARWR - NASDAQ

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

Thank you, Andrew. Good afternoon, and thank you for joining us today to discuss Arrowhead Pharmaceuticals' results for its 2025 fiscal year ended September 30, 2025. With us today from management are President and CEO, Dr. Christopher Anzalone, who will provide an overview; Bruce Given, outgoing Chief Medical Scientist, who will provide an overview of the Rodemplo 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 Appel, 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 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 Christopher Anzalone, President and CEO of the company.

Thanks, Vince. Good afternoon, everyone, and 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 Pharmaceuticals team for almost fifteen years. He will continue to help Arrowhead Pharmaceuticals as a trusted adviser, but now that Rodemplo has received its first FDA approval, he will be stepping back from day-to-day operational responsibilities and, hopefully, he can finally enjoy his time in retirement. Or his re-retirement, which is probably more accurate. His contributions to Arrowhead Pharmaceuticals' success, both current and future, have been critical, and we owe him a heartfelt thank you. Later in the call, you will hear from Bruce, who will discuss the Rodemplo FDA approval when he came back to Arrowhead Pharmaceuticals 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. So thank you again, Bruce, for getting us to today. Thank you, James, for taking us into the next chapter for Arrowhead Pharmaceuticals. 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 last few months. The most impactful change is the FDA approval of Rodemplo. On November 18, we announced that the FDA approved Rodemplo, 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 ten to 100 times higher than normal, leading to a substantially higher risk of developing acute recurrent, potentially fatal pancreatitis. This is Arrowhead Pharmaceuticals' first FDA-approved medicine, marking a major milestone for the company as it transitions into a commercial stage. Rodemplo is the first and only FDA-approved siRNA medicine for people living with FCS and can be self-administered at home with a simple subcutaneous injection once every three months. Rodemplo is the first and only FDA-approved medicine to be backed by adequate 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, and I'm happy to report that we have the drug in the channel a mere week after approval. We also launched Reliant Rodemplo, a patient support program providing support services and resources for patients at each stage of the treatment journey with Rodemplo, including financial assistance options for eligible patients. In addition, we also announced the one Rodemplo pricing model that creates one consistent price across current and potential future indications. This is important. We are committed to sustainable innovation. This requires rational drug pricing according to the value a 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. Rodemplo is a pancreatitis drug, and when we think about pricing, we look to those patient populations who are at 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 a defined set of mutations as well as those who share the same level of chylomicronemia 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 would substantially increase the risk of acute pancreatitis for those with persistent chylomicronemia, meaning fasting triglycerides greater than 880 milligrams per deciliter. We believe there are approximately 750,000 of these patients in the US, and while they often have less day-to-day symptoms than FCS patients, they are clearly at high risk for acute pancreatitis. The one Rodemplo pricing model has these patients in mind, and the $60,000 annual WAC price is designed to provide real value to patients and healthcare systems in this population. Our Shasta 3 and Shasta 4 Phase III studies are designed to support an sNDA for this population, and while those studies are ongoing and we are actively serving the FCS population, we will have time to help payers properly appreciate Rodemplo's value, and payers will have time to plan and budget for its possible eventual adoption and regulatory review and approval. Outside of Rodemplo, we have also made good progress with two other pipeline programs in the cardiometabolic space.

Thanks, Chris. Good afternoon, everyone. I'm happy to give my final update to Arrowhead Pharmaceuticals shareholders at such an important time and with Arrowhead Pharmaceuticals in such a position of strength. We have built something truly unique and powerful at Arrowhead Pharmaceuticals, and with the first FDA approval behind us, it feels like the right time for me to step back and 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 packaged insert. Rodemplo is approved as an adjunct to diet to reduce triglycerides in adults with FCS. The recommended dose of Rodemplo is twenty-five milligrams, and it can be self-administered at home by subcutaneous injection once every three months. Rodemplo has no contraindications, warnings, 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 III PALISADE study in patients with both genetic FCS and those with the same clinical manifestations of the 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 Rodemplo or placebo dosed every three months and tested two doses of Rodemplo versus placebo. The primary endpoint was the change in median triglycerides at month ten. There were also multiplicity-controlled secondary endpoints, all of which were statistically significant, including notably the occurrence of acute pancreatitis, for which the twenty-five and fifty-milligram doses were combined for comparison to placebo as called for in the analysis plan. Rodemplo achieved deep and durable reductions in median triglycerides as early as one month when the first measurement was taken. Overall, these reductions were around eighty percent from baseline, and reductions largely maintained median triglyceride levels below the usual guideline-directed threshold of five hundred milligrams per deciliter throughout the year of treatment. Five hundred 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 as having the same high unmet need as the genetic FCS group, and as such, we think it is crucial to have shown that both patient populations showed similar large reductions from baseline triglycerides with Rodemplo therapy. Rodemplo 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 that reductions in triglycerides can, in fact, lead to reductions in pancreatitis. Let me close by saying that it's gratifying to have been a part of Arrowhead Pharmaceuticals from the early days of our siRNA developments and part of the Rodemplo program at its inception and again over the last several years. And more importantly, it's exciting to hear the enthusiasm about this new medicine from 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.

Thank you, Bruce. It's been exactly one week since the launch of Rodemplo, and 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 Rodemplo, which generally fall into 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, Rodemplo reduced triglycerides by an unprecedented minus 80% from baseline as early as month one and maintained this marked reduction with minimal variation throughout the full twelve-month treatment period. This compared to a minus 17% reduction in the pooled placebo group. With Rodemplo, 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 five hundred milligrams per deciliter. In PALISADE, fifty percent of patients at the twenty-five milligram dose achieved TG levels below five hundred milligrams per deciliter, with approximately seventy-five percent achieving levels below eight hundred and eighty milligrams per deciliter at month ten. Second, the numerical incidence of acute pancreatitis in patients treated with Rodemplo was lower compared with placebo. As we all know, this is the outcome of most importance for healthcare professionals, patients, and payers. Third, Rodemplo demonstrated favorable safety and tolerability. Importantly, the US-approved package insert contains no contraindications, no warnings, and no precautions associated with the use of Rodemplo. Fourth, Rodemplo 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 Rodemplo pricing model has been positive. As Chris highlighted, this model creates one consistent price of $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, and the prescriber base comprises specialist physicians such as lipidologists, endocrinologists, preventive cardiologists, 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. And finally, our Reliant Rodemplo 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 Rodemplo start forms, conducting patient welcome calls, and engaging payers to obtain approvals. And as Chris stated, we're happy to announce that we already have the drug available in the channel ahead of schedule. I will now turn the call over to James Hamilton to discuss the broader R&D portfolio.

Thank you, Andy. I'd like to give a quick review of the status of our late-stage Phase III studies and also describe the design of a couple of our early-stage programs. Let's start with the suite of Phase III studies of Rodemplo designed to potentially support a supplemental NDA filing to expand the label beyond genetic and clinical FCS. Shasta 3 and Shasta 4 are Phase III studies designed to compare reductions in triglycerides with twenty-five milligrams of Rodemplo compared with placebo over twelve months of treatment. Between the two studies, we enrolled approximately 750 patients. In addition, the MIRROR III study enrolled approximately 1,400 patients. This study in patients with mixed hyperlipidemia is designed to supplement the safety database we file the sNDA for Rodemplo 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 III Phase III clinical studies in June 2025. We anticipate completing the primary portions of these studies in mid-2026 with top-line data expected in the second half of 2026. 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 Rodemplo 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 reduction in Shasta 3 and Shasta 4 as a key secondary endpoint, but Shasta 5 is the first event-driven study to assess acute pancreatitis as the primary endpoint. I would also like to provide an update on our obesity programs ARO Inhibit E and ARO ALK7. Both of these programs target the known active impact that is involved in signaling to adipocytes to store fat. ARO Inhibit E inhibits one of the ligands in the pathway, and ARO ALK7 inhibits the receptor on the adipocyte that these ligands bind. So essentially, we are trying to reduce the message sent to store fat and the way the message is received at the end of the service. ARO Inhibit E started enrolling patients in December 2024, and ARO ALK7 initiated in May 2025. Both programs are currently in Phase I/IIa, first-in-human dose-escalating studies to evaluate safety, tolerability, pharmacokinetics, and pharmacodynamics. Both programs include Part one, designed to assess single and multiple doses as monotherapy, and Part two designed to assess multiple doses in combination with other therapies. As ARO Inhibit E started about two quarters earlier, we have more mature data in that study. The study is nearly fully enrolled, and we are on schedule and currently planning to share initial data from this program around the middle of 2026. This is a rather robust first-in-man study that is collecting multiple measures of drug activity and pathway activity, and we are eager to share initial findings. We were originally planning on sharing the first data around the end of the year, but due to the holidays and travel, January worked 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, and both programs have yielded promising results in preclinical studies. So it will be interesting to see similarities and differences in patient response in the clinical trials. I will now turn the call over to Dan Appel.

Thank you, James, and 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 for 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 for 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 pertain to the Sarepta arrangement. Of that $697 million, $587 million relates to the ongoing recognition of initial surrender consideration, $94 million relates to the achievement of the first EM-one milestone, and $16 million relates to the reimbursement of incurred collaboration program costs. Additionally, the license to Sanofi for Greater China rights to Rodemplo added $130 million to our fiscal 2025 revenue. And 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 higher R&D expenses and $25 million of higher SG&A, 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 expenses related to active programs in the preclinical stage. 2025 R&D costs were heavily impacted by our Phase III clinical trials for Rodemplo 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 Rodemplo and SHTG. As we have mentioned, the SHTG registration studies are now fully enrolled, and we expect data to read out next year. Accordingly, the majority of remaining Phase III registration clinical trial costs are expected to occur over the next twelve months. Our SG&A costs increased by $25 million year-over-year, driven primarily by our preparations for the commercialization of Rodemplo. All of us here at Arrowhead Pharmaceuticals are enormously proud of the capabilities we have built to commercialize Rodemplo, not only in our commercial functions 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 is 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, including 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 agreements 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'll use this opportunity to reiterate two developments that are subsequent to the fiscal year and leading up to today, which were financially meaningful for Arrowhead Pharmaceuticals and our balance sheet. Firstly, as Chris mentioned earlier on the call, we announced a licensing and collaboration agreement with Novartis for ARO SMTA, Arrowhead Pharmaceuticals' preclinical stage siRNA targeting alpha-synuclein for the treatment of synucleinopathies, such as Parkinson's disease. Novartis will also be eligible to select a limited number of additional collaboration targets outside of Arrowhead Pharmaceuticals' current pipeline to be developed using our proprietary TRiM platform. The closing occurred last month, and we have already received $200 million in the bank as an upfront payment. As a reminder, we are also eligible 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 agreement for ARO DM1. As Chris mentioned, this triggered a $200 million obligation from Sarepta that will be recorded in 2026, and we expect to receive the cash in January of 2026. This is, of course, additional to the $100 million earned for the first ARO DM1 milestone in fiscal quarter four of 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 Rodemplo as a truly transformational event for the company, we do not anticipate that the commercial sales of Rodemplo 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 Pharmaceuticals has been working to bring important medicines to patients in need for over fifteen years. As Bruce mentioned, it's very gratifying to see Rodemplo approved by the FDA and the overwhelmingly encouraging feedback we received from the FCS community. But Rodemplo is just one part of a large pipeline 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 twenty in twenty-five goal whereby we will have 20 individual drug candidates in clinical trials by the end of this year. Our partnering has been helpful but judicious, with approximately half of our clinical pipeline wholly owned and half partnered. We have late-stage studies ongoing, again, both independently and with partners, that may potentially lead to multiple new commercial launches 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, and I would now like to open the call to your questions. Operator?

Thank you. To ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. And we ask that you please limit yourself to one question. One moment, please. Our first question comes from the line of Luca Issy with RBC Capital Markets.

Bruce, congrats on your re-retirement, I should say. So all the best in the next chapter. And then maybe if I can stick with you, can you just maybe talk about what's the plan to show in terms of acute pancreatitis for Rodemplo? Are you confident just the three and four in Q3 2026 can actually hit acute pancreatitis? Or is the base case scenario, those two trials, are maybe underpowered to show benefit and you actually need Shasta five to actually hit on acute pancreatitis given the positive death population is enriched for history of acute pancreatitis. The only reason why I'm asking is it looks like you doubled the size of the n, I should say, in the Shasta five trial according to clinicaltrials.gov. As of Monday last week. So, again, any call there, much appreciated. Thanks so much.

Well, I sure will. And, you know, thank you for your kind regards. Shasta three and four were powered on the basis of triglyceride reduction, which is the primary endpoint. So, you know, we did not specifically power Shasta three and four for pancreatitis. However, it was on our mind, and as was also done in the core studies, you know, there is the intent and by design, the capability to pool both Shasta three and four for evaluating versus, you know, placebo on reduction of pancreatitis. And, of course, we only have one dose of Rodemplo, instead of two doses, you know, two different doses like we had, for instance, in the Phase II program. So, you know, there's, I would say, reasonably good power for, you know, for seeing a difference in acute pancreatitis. But we're not dependent on it because we've designed Shasta five specifically to, obviously, be able to have a primary endpoint of acute pancreatitis. We did change the design of it in Shasta five recently to make it a more generalizable population in patients with persistent chylomicronemia and a history of pancreatitis. The original design was a much more enriched population, but it would have actually been less representative than, you know, the duly designed trial. So it's not so much a matter that we've been powered so much as we, you know, broadened the power of the patient population to be more inclusive of the high-risk population in SHTG. So, you know, we certainly we oftentimes refer to it as a belts and suspenders approach. You know, there's a, you know, obviously, a decent chance that we will show statistical significance in the Shasta three and four programs, but we're not entirely dependent on that because of Shasta five, which is a, you know, study. The first of its kind specifically designed to demonstrate a benefit versus placebo in acute pancreatitis.

Got it. Thanks so much. Congrats again.

Thank you. One moment, please. Our next question comes from the line of Prakhar Agrawal with Cantor Fitzgerald.

Hi. Thank you for taking my questions and congrats on the quarter as well as the update throughout the quarter. Maybe on the obesity side, I had a couple of questions. So on ARO Inhibit E for the update early next year, if you can just provide more details on how much data will be disclosed, especially on the MAD side. And how much follow-up will you have on ARO Inhibit E for both monotherapy and combo cohorts? And also the same question on ARO ALK7. What cohorts will be disclosed and will there be any weight loss data at all from ARO ALK7 early in the year? Thank you so much.

Yeah. Sure, Prakhar. This is James. I can cover that. So for ARO Inhibit E, it's a little bit ahead, as Chris mentioned, probably by a couple of quarters. So 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. So we'll have biomarker data, MRI data, and 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 in the highest dose combo cohorts and should have probably not through the end of the study, but ample post-dose follow-up in both the diabetic and the nondiabetic cohorts from ARO Inhibit E. And then ARO ALK7 will be a little bit more limited, focused mostly on monotherapy safety and knockdown data, knockdown of the target for that study.

Yeah. And keep in mind here that we want to present data that are interpretable, and 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. So you'll have probably two bites of the apple, maybe three bites, but certainly two bites of the apple. You know, our goal here is this first round of data is to give you an idea about how these are going. And then, you know, the fuller story should come out once we have the more wholesome datasets in later 2026.

Got it. Thank you so much.

You're welcome. Thank you. Our next question comes from the line of Maury Raycroft with Jefferies.

Hi, thanks for taking my question and congrats on the progress and best wishes, Bruce, in retirement. I was gonna ask a follow-up to Luca's question earlier. We're expecting to see the patient baseline profile for your SHTG pivotal next week. What are your estimates on AP events to accrual based on your patient's baseline characteristics? And also your change in plans to broaden the AP adjudication criteria.

You know, Maury, I think it's a little bit hard to answer just because we have adapted our protocols now to go ahead and adapt the modified Atlanta criteria, you know, since those have been accepted by both FDA and EMA, and here in the US, at least payers. And this is really gonna 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. And, you know, based on that, you know, that, I think you'll see that, you know, there's a good chance that we'll have, you know, the necessary number of events. But I'm a little bit uncomfortable trying to give any real prediction when we're using a scale that we haven't used before.

Understood. That's helpful. Thanks for taking my question.

Thank you. And our next question comes from the line of Jason Gerberry with Bank of America.

Hi. This is Gina on for Jason. Congrats on all the progress this quarter, and thank you so much for taking part in the question. Just a couple from us. I guess, first on your ARO MAPT program, maybe just discuss which aspects of the drug are maybe differentiated from A and J's recently failed anti-tau antibody and what kind of still gives you the confidence in the target after the failure. And then based on your current cash position and the progress that you've made on these partner milestone triggers, do you have any updates on your visibility on launching a CVOT study? Is that more tied to seeing how the FCS and central SHTG launches are progressing? And then can you just remind us of any potential milestone triggers from the Sarepta programs that you're expecting in 2026? Thank you so much.

Alright. I count three questions. James, want to take the first one?

Sure. Yeah. I'll take the first one on the MAPT program. So the J and J antibody, the monoclonal as well as other monoclonals, are, you know, IV administrated monoclonal antibodies. Probably a small fraction of those molecules cross the blood-brain barrier and then are primarily focused on binding to that extracellular tau. So tau that's been released from damaged cells or has been secreted and that can propagate and bind to tau that's 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 to silence the expression of tau. So we're sort of turning off the faucet for all of the expression and preventing the neurofibrillary tangles to form in the first place. We should get that over time to 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. So that's the key differentiator.

And on the other two questions, I'll answer the last one first. Sarepta milestones. So we are eligible to receive the first of $550 million annuities in February. So we expect that over the next several months. That's correct. February. Right, Dan?

Yes. Correct.

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. You know, we'll know PCSK9 knockdown. We'll know APOC3 knockdown. We'll know LDL decreases. We'll know triglyceride decreases. And 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 for these mixed hyperlipidemia patients. Should that be successful? Should that look good? We are not waiting on anything, you know, to start those studies other than finishing this Phase I/II. Our plan is to be able to roll directly into pivotal studies after these Phase I/II 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, you know, one that will be a CVOT and then one that will be looking at simply lowering LDL, you know, over the course of the year. As you know, that has been an approval endpoint in the past for PCSK9 inhibitors. And we think that could be a good way to get to market very quickly and, frankly, help us to pay for the CVOT. So 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 data. We're really looking forward to seeing those data.

Thank you.

Thank you. And our next question comes from the line of Edward Tenthoff with Piper Sandler.

Great. Thank you very much. And Bruce, wishing you all the best, and 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 Aerodimer PA next year? And what other datasets beyond the obesity data in the first half should we be thinking about?

Thanks, Ted. We have a bunch of, I think, potentially very interesting data readouts throughout 2026. As you mentioned, obesity will be the first. You know, as I mentioned, we should have two bites of an apple or thereabouts, and we'll have our first early dataset, you know, in January. And then as the data mature in both those programs, say towards, you know, the end of the second quarter or something around then, we'll have a much larger dataset. We think those are important. In the summertime, we expect to have dimer data. I think those are extraordinarily important. You know, the idea that we might have a drug candidate that can simultaneously lower LDL and triglycerides to treat twenty million or so people in the United States with mixed hyperlipidemia is a very exciting opportunity. And, again, we'll 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. And we'll be looking for tau levels in the CSF. That also would be extraordinarily exciting. We could be sitting on one of the most exciting potential Alzheimer's drugs in the clinic. And, hopefully, we'll be derisking the entire blood-brain barrier platform that can enable us to treat a variety of CNS diseases. So that's an important readout. Of course, also in the third quarter or so, we expect to have the readout for Shasta three and four. You know, that are designed to enable the sNDA by the end of the year. And then, of course, at the end of the year, we expect to file our sNDA. So look, there will be other things happening during the year, but, you know, those to me feel like the primary ones. And, of course, we'll be in the market. You'll be in the market, and, you know, we will be really looking forward to seeing the adoption curve that Rodemplo is gonna have.

Great. Any update on ARO RAGE just to be comprehensive? Thank you.

Yeah. Thank you. Yes. So as you know, Ted, the data so far for ARO RAGE have been enticing. You know, we've seen that we can knock down RAGE deeply, both looking at circulating biomarkers as well as valve. You know, 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 COPD Phase II, we were hoping to have a baby step to see some evidence of that. So we have started a challenge study. 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 RAGE is an important thing. Look, it's been an undruggable target for some time, and now we can drug it. So now 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? And I think a positive challenge study readout would allow us to partner that under attractive terms.

Great. Well, guys, congrats on all the great progress. I'm really excited to see the Rodemplo launch. It's a great job.

Thank you, Ted.

Thank you. Our next question comes from the line of Mani Foroohar with Leerink Partners.

Yes. Thanks for taking the question. Congrats on the progress in the first product launch. And best wishes also to Bruce on his re-retirement. So something tells me you're gonna pop up again soon. I don't think you're done with us. Apropos of the question, can I want to follow-up on sort of broader pipeline? I know Ted touched on new ARO RAGE study, etcetera. How do we think about Aerodimer application in terms of pursuing CVOT, the right target for that technology? And where are the right places for you to put that to work? Now that you've got sort of a very different place in terms of your balance sheet?

I'm happy to take that. You know, obviously, we're excited about the Rodemplo and APOC3 inhibition generally for, you know, patients with severe hypertriglyceridemia. You know, that's been a very, very poorly treated population, you know, for a long time. You know, the LDL side of the equation, on the other hand, has been really a different story. And other than HoFH, you know, there's a pretty good number of tools in the tool chest for dealing with LDL. You know, the patients on that LDL side of the equation, patients with heterozygous familial hypercholesterolemia, which is, you know, a pretty good-sized population, for instance. But the twenty-some million patients in the US alone that have mixed hyperlipidemia has been an interesting population. You know, we could address the LDL part, but we've done really a terrible job historically of being able to address the triglyceride piece of that. And, you know, the post hoc analyses that have been done of CVOT have shown that for the same LDL reduction, you can really rank order the risk, you know, that patients have by how high their triglycerides are. And, of course, the Mendelian randomization data has also said that triglycerides are an independent predictor of events and mortality in that mixed hyperlipidemia population is huge. It's a very big population. So, you know, there's never really been a very good way of addressing, you know, both sides of the problem in mixed hyperlipidemia, both the LDL and the triglycerides. And here we're talking about a drug that could potentially do it with a single, you know, say, injection, you know, get both their LDL and their triglycerides, probably on top of the statins. I think you're gonna always have a statin there if the patients could tolerate it. But you could have a daily statin and a quarterly dimer injection, and that's and potentially, you know, treat, you know, that twenty million patients, you know, to low-risk levels of LDL and triglycerides. That would be, you know, 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, you know, worthwhile in the triglycerides. So this is what makes this, you know, to us, such an interesting proposition.

Yeah. As you know, Mani, what we used to former strategy was to make Rodemplo, you know, a three-step drug. Step one is FCS. Step two is SHTG. Step three after a CVOT would be this, you know, would be to be part of a treatment in mixed hyperlipidemia. Once we were able to perfect, at least in animals, the dimer platform, it didn't make any sense any longer. You know, we like the idea of keeping Rodemplo as a pure play pancreatitis drug. Full stop. And now I think we'll have a tool to more completely treat that mixed hyperlipidemia population should this dimer translate well from animals to humans.

That's helpful. And as a follow-up, when you think about potential dimer applications, etcetera, how are you thinking about the data next year from Horizon and how and potential applications of combining what hopefully will be a validated APOC3 target with other approaches to their risk-elevating elements of the lipid profile?

Yeah. Sure. So of course, our siRNA is targeting LPA is partnered with Amgen. So we would have to work with them on, you know, any kind of dimer applications. But there are other applications beyond, of course, the PCSK9, APOC3. I mean, we're looking at other dimers in the CV space, both targeting the hepatocytes and extrahepatic cell types. So this is probably not the only dimer that you'll see out of Arrowhead Pharmaceuticals.

Alright. Thanks, guys. That's really helpful, and congrats again.

Thank you. And our next question comes from the line of Patrick Trucchio with H.C. Wainwright.

Congrats on all the progress. I have a few follow-up questions. Just the first is just regarding, I'm wondering if the FDA has provided clarity on what level of pancreatitis evidence would be required for a future pancreatitis risk reduction claim, particularly in the high-risk SHTG patient population. And separately, wondering if there's been discussions around a potential pediatric pathway just given that FCS presents in childhood? And then just 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 seventy-five percent knockdown in the NHP data?

So the first one is less level of AP that we think the FDA is required to have it on the label. Yeah. You know, we have not discussed with the FDA specifically what it would take to get a claim per se. I'm not sure we've really felt that was necessary. I mean, I think physicians, you know, have no real question about the relationship of triglycerides to pancreatitis risk, especially now that it's been proven. And payers haven't seemed to be concerned about that either, at least in the US. So I'm not sure, you know, what the value of a claim would be. And, of course, at this point, it's untested, you know, whether the agency, you know, would consider providing that, you know, that claim. I don't know that we've really thought of it as being necessary, Patrick, to be clear. In FCS. 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. You know, we at least have not approached asking them, you know, when they give a claim, what it would take to get that claim. It's very possible that what they would require is something, you know, like Shasta five. But, you know, the Shasta five was really designed primarily, you know, on the possibility that the payers in countries outside the US might require a dedicated outcome study. So it was more payer-focused than it was regulatory-focused. And, you know, we know, we really were not committed one way or the other about whether it'd 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, you know, a specific proof of concept in a dedicated study. So we really haven't raised this with regulators, you know, anywhere on a global basis at this point.

In terms of what we're looking for based on the data, as you mentioned, at the tissue level, we were seeing seventy-five percent plus reductions. And similar reductions in the CSF in monkeys. I mean, we typically translate well from cynos into the clinic into humans. And I think based on some of the other data out there with the intrathecal intrathecally administered ASO, and they were able to achieve CSF reductions of about 50% to 60% and those CSF reductions corresponded to improvements in tau PET signals. So, you know, 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 tau PET signal.

Great. Thanks so much.

Thank you. Your next question comes from the line of Andrea Newkirk with Goldman Sachs.

Good afternoon. Thanks for taking the question. Maybe one more on the Rodemplo 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 and how you think it may be similar or different from that of the Triglyceride launch, particularly in the context of the significant pricing differential that you have? Thank you so much.

Happy to take that, Andrea. This is Andy. So we do have very high ambitions for the Rodemplo launch. Expected to be the best in class. And as you know, there are a number of reasons why we believe that to be the case. Largely around the attributes of Rodemplo 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. And we do have a lot of physicians and patients who are enthusiastic about the once every three-month dosing regimen. So with those product attributes, we have very high ambitions for the launch of Rodemplo in FCS specifically.

Thank you. And our next question comes from the line of Mike Ulz with Morgan Stanley.

Good afternoon. Thanks for taking the question, and congratulations on all the progress as well. Maybe just a follow-up on the Shasta three and four studies. You mentioned adopting the modified Atlanta criteria. Just curious now that you've seen some more detail around the core studies, are you considering any sort of, you know, adjustments or fine-tuning to your studies going forward? Thanks.

Other than adapting the ATLANTIC criteria, I think we're, you know, feeling pretty good about the design and, you know, it was negotiated with the FDA. I don't think we saw anything in core that, you know, would cause us to, you know, see a need to change anything else. There's nothing that comes to mind. You know, James, would you see it any differently? You don't look closely at this too.

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

Great. Thank you.

Thank you. Our next question comes from the line of Madison Elsadi with B. Riley.

Good afternoon. Thanks for taking our question. I wanted to ask about your neuromuscular franchise. Just given your integrin-targeted delivery mechanism, which, you know, one could assume may be safer and perhaps more targeted than a TFR-mediated approach. Should we expect DMPK knockdown and splice correction data comparable to kind of the pure benchmark levels? And, relatedly, wondering what dose do you anticipate observing really optimal biomarker activity? I believe previously, you said that even a low dose may be active. Thanks.

Sure. Yeah. I think most of that will defer to Sarepta. Probably can't comment on the dose where we'd expect to see maximum knockdown. We don't know that yet. And so I would, you know, want to venture a guess there yet. In terms of the knockdown, I mean, I think that is probably a goal is to have something that looks at least similar to or equivalent to what others have shown for DMPK knockdown and splice correction with this platform.

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

Yeah. Based only on regulatory and commercial, there are no sort of activity-based or PD-based milestones.

Got it. Got it. Thanks.

Thank you. And our last question comes from the line of Joseph Tome with TD Cowen.

Hi there. Good afternoon. Thank you for taking my question. 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, you know, an under-treated population on both sides? And then can you give us an indication in terms of the triglyceride and LDL cutoffs that you're looking in patients enrolled into the early dimer study? Thank you.

Sure. Yeah. I think based on the work that we've done, I mean, a lot of those patients may be on a statin, probably less so on fibrates and very few of them on PCSK9 inhibitors. Actually, they're not that commonly used in that population. In terms of the cutoffs and the inclusion criteria, so we allow patients in that study with mixed hyperlipidemia or triglycerides up to 880. So it's a pretty high threshold. And they have to have either that non-HDL of a 100 or an LDL greater than 70 to get into the study. So they have to have true mixed hyperlipidemia, both high triglycerides and high non-HDL or LDL cholesterol.

Thank you. 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, you know, for all he has brought to the company. He is re-retiring. He is not going to be gone, however, and I do trust that he will still be around and helping us out going forward. So, again, thanks to Bruce and thanks to James for continued and ongoing leadership. Again, thank you all for joining us today, and I hope you have a pleasant Thanksgiving holiday.