Arrowhead Pharmaceuticals, Inc.

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

Good afternoon, everyone. Thank you for joining us today to discuss Arrowhead's results for its fiscal 2022 third quarter ended June 30, 2022. With us today for management, our president and CEO, Dr. Christopher Anzalone, who will provide an overview of the quarter. Dr. Javier San Martin, our chief medical officer, who will provide an update on our mid and later stage clinical pipeline. Dr. James Hamilton, our senior vice president of discovery and translational medicine. who will provide an update on our earlier stage programs, and Ken Muskowski, our Chief Financial Officer, who will give a review of the financials. In addition, Tracy Oliver, our newly appointed Chief Commercial Officer, and Patrick O'Brien, who was recently promoted to Chief Operating Officer and General Counsel, will both be available during the Q&A portion of the call. Before we begin, I would like to remind you the 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 violence, including our most recent annual report on Form 10-K and our quarterly reports on Form 10-Q. With that said, I'd like to turn the call over to Christopher Anzalone, President and CEO of the company. Chris.

Thanks, Vince. Good afternoon, everyone, and thank you for joining us today. Before I cover key events in progress during the previous quarter, I want to talk about some recent management additions that make us a stronger company today and, importantly, as we grow into a vertically integrated commercial stage pharmaceutical company. We are currently conducting one phase three study for a wholly owned drug candidate, and I expect us to begin one or two additional phase three studies next year. As such, there are important strategic decisions we need to begin considering that will affect how we ultimately commercialize these drug candidates. We are thrilled to welcome Tracy Oliver as our chief commercial officer to start to build out our commercial infrastructure and more immediately. contribute to the planning of our late stage programs to ensure that our future commercial requirements are harmonized with clinical data sets and ultimate drug labels. Tracy has over 30 years of global experience in the biopharmaceutical industry, leading both R&D and commercial organizations. Prior to joining Arrowhead, she had her own consulting practice focused on providing guidance to small emerging commercial stage biotech companies on the proper strategy, timelines, methods, and ultimately the build out of new commercial organizations. Those skills and experience are critical to Arrowhead as we look to take the next steps in our growth as a company. Prior to her consulting business, Tracy was with Shire Pharmaceuticals through the acquisition of Bexalta and was global head of new product planning and device strategy. Prior to that, she held several commercial roles at Baxter and Bexalta, including establishing a new oncology franchise and leading the North America immunology business unit and autoimmune franchise. Tracy began her career in the biopharmaceutical industry with Johnson & Johnson, and served as Head of Orthobiotech Nephrology Business Unit in Canada, Ortho McNeil Neurologics, and McNeil Pediatrics in the USA. As we continue this type of growth in personnel and departments, we need to be more deliberate in our drive to continue operational excellence. There can be a tendency toward an inverse relationship between the size of an organization and its ability to operate efficiently, creatively, and rapidly. It is important to us that we maintain our operational excellence as we grow And Patrick O'Brien, our general counsel, will now also take on the role of chief operating officer to help ensure this. I will now move on to review some of our recent progress. We view setbacks as a normal part of innovation, and if we can learn something from them, they may serve as an investment in the future. The recent progress we've made in our pulmonary platform is a good example of this and a powerful illustration of how fast Arrowhead can move. As you know, our first candidate in the clinic using the pulmonary targeted trim platform was aeroENAC for the treatment of cystic fibrosis. Last year, we decided to pause enrollment in the aeroENAC first in human clinical study as we further investigated some findings from a nonclinical toxicology study that suggested some local lung inflammation after chronic treatment at certain high doses. Many open questions remained. James will speak to what we learned in more detail later in the call, but after extensive investigation, consultation with internal and external toxicology experts, and additional studies, it appears that findings were consistent with what is called lung macrophage overload. Essentially, the volume of material, not necessarily the specific drug or target, was swamping the lung's clearance mechanisms and causing an inflammatory response. So the clear way to move forward is to understand the amount of material that triggers this phenomenon and develop more potent, longer-acting candidates to stay below the assumed cumulative dose threshold. I believe we have done that for our next generation candidates, AeroRage and AeroMuck 5AC, resulting in three important improvements. First, we think we can now achieve better knockdown with less exposure. Second, we think we can give a single dose as opposed to our previous need to dose on three consecutive days. And third, we believe we can now stretch the dose interval substantially. For example, AeroENAC was going to be dosed three times every two or three weeks And arrow rage has duration that potentially lasts multiple months after a single dose. Each of these improvements are important on their own, but together we believe they dramatically change the profile of our next generation pulmonary candidates. So where are we now? The work and lessons that went into this happened over an extended period, culminating this quarter in, this last quarter, in two important events. We held a pulmonary R&D day to go over our findings and present non-clinical data from our next generation candidates, AeroRage and AeroMuck5AC. And then shortly after, we began dosing patients in two clinical studies. As I said, I think this is a great example of what Arrowhead is capable of. We went from pausing enrollment of the AeroENAC clinical program to initiating clinical studies and dosing human subjects with next generation candidates that potentially have dramatically improved profiles in about 12 months. There was an enormous amount of work, thought, creativity, technology and innovation that enabled this result. The pulmonary trim platform is an important expansion of our technology that we expect will help a large number of patients and create a substantial amount of value. But it is just one example of how we are growing our platform. We expect many more going forward. Another set of key accomplishments during the quarter relate to execution on our later stage programs for our cardiometabolic candidates, AeroApoC3 and AeroANS3. Between the two candidates, we have five active clinical studies that range from ultra-rare disease populations to high prevalence diseases. The design and execution of clinical studies for diseases on opposite ends of the size spectrum typically have different tactics and require specialized expertise. I'm happy to report that our clinical development and clinical operations teams have been successfully running all of these studies. On the rare disease side, The Phase III Palisade study of AeroApoC3 in patients with FCS is efficiently enrolling patients, and we have worked hard during the quarter to identify and open new countries and sites that should contribute to rapid enrollment of the study. In addition, during the quarter, we initiated the Phase II Gateway study of AeroAng3 in patients with HOFH. This study is also enrolling patients efficiently, and we look forward to seeing data in the future. On the high-prevalence disease side, we have three ongoing studies. For AeroApoC3, we are running the Shasta2 Phase 2 study in patients with severe hyperglyceridemia and the Muir Phase 2 study in patients with mixed dyslipidemia. We have executed well on both studies, and we believe we are on schedule for readouts in both studies in 2023. In fact, we recently reached total planned enrollment for Muir. For AeroAng3, there is one high-prevalence disease study, the Phase II Arches II study in patients with mixed dyslipidemia. This study was fully enrolled earlier in the year and should be complete at the end of the year and enable a readout in the first half of next year. The other two accomplishments from the recent quarter that I want to highlight are related to corporate goals that aim to maximize the value of our technology over the long term. First, we announced that we broke ground on the construction of a new commercial-scale manufacturing facility and received awards of up to $18.5 million in incentives to invest in the local region and create new jobs. This is an important investment to narrow its future as a vertically integrated commercial stage Barasuba company. It helps us control the manufacturing process, both operationally and strategically, for our wholly owned programs and potentially for our partner programs in the future. It potentially reduces the cost of our clinical and commercial drug supply, and importantly, helps eliminate any future bottlenecks related to drug manufacturing. Lastly, related to corporate goals during the last quarter, we also announced that Arrowhead formed Vicerna Therapeutics, a joint venture with Bevo Capital, in which Arrowhead is a majority shareholder, to expand the reach of innovative medicines in Greater China. Arrowhead licensed four investigational RNAi therapeutics to Vicerna for cardiometabolic diseases in mainland China, Hong Kong, Macau, and Taiwan. Vivo Capital provided $60 million in initial funding to Vicerna. This transaction potentially allows us to expand our reach into geographies that are beyond our core focus while retaining a substantial economic interest. So in summary, Arrowhead had a productive quarter where we saw progress in our pipeline of industry-leading RNAi therapeutics, our wide-reaching and expanding trim technology platform, and our corporate goals. With that overview, I'd now like to turn the call over to Dr. Javier San Martin. Javier?