Arrowhead Pharmaceuticals, Inc.

Ladies and gentlemen, welcome to 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 over to Vincent Angeloni, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

Thank you, Justin. Good afternoon, everyone, and thank you for joining us today to discuss Arrowhead's results for its fiscal 2022 fiscal year, ended December 30th, 2022. With us today from 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 Chief Commercial Officer, and Patrick O'Brien, our 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 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 statement. 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. With that said, I'd like to turn the call over to Chris Anzalone, President and CEO of the company. Chris?

Thanks, Vince. Good afternoon, everyone, and thank you for joining us today. Quickly, Vince Exalema spoke, and he said that our fiscal fourth quarter ended December 30th. What he meant was September 30th of 2021. 2022 our fourth fiscal quarter in periods since our last call has been highly productive we've seen clear progress across across our large and balanced pipeline large because it now includes 12 drug candidates in clinical trials and balanced because it spans multiple therapeutic areas and includes six partner programs and six that are wholly owned it is a good representation of that which makes us different we are a company built on an increasingly validated technological platform applied to a large number of varied diseases across multiple organ systems, where development is uncommonly rapid from idea to the patients in need, and we use targeted, disciplined partnering to help finance development of our wholly-owned drugs. This is who we are, and these factors are not new. What is new is the growing sense of clarity we are achieving. I think that this is a recurring theme of this update. We have increased clarity as to the makeup of our multiple phase three programs, increased clarity as to how we intend to use our late stage drug candidates in different patient populations, increased clarity as to when we expect proof of concept from our earlier stage programs, increased clarity as to where we plan to go next with the expansion of our platforms into new cell types, increased clarity as to how large we think our pipeline of clinical candidates will be over the next few years, and increased clarity about how we intend to finance our growing pipeline. Let's touch on some of these. First, we expect to report on progress for the CSRN, our AAT program partnered with Takeda in the near term. We would like to report top line data from the phase two sequoia study at the same time we provide guidance on the phase three study design. Ideally, Takeda and Arrowhead would do these together. Takeda submitted a phase three protocol to the US FDA at the end of last quarter and is waiting for feedback. We expect Takeda to receive that feedback shortly if there are any comments at all. We believe the FDA's feedback from prior meetings has been appropriately incorporated into the study design, so we do not expect any major surprises. I believe we have clarity on the future development paths and timelines as well as what the Sequoia data are telling us, and we will share that as soon as we can. Second, we are gaining a clear understanding about how our cardiometabolic programs perform in different patient populations, and thus are better able to determine the positioning of each, and importantly, the development paths and studies needed to seek approval for various indications. Javier will talk about this in a moment, but the interim analyses for the Shasta 2 and Muir studies of AeroApoC3 and the Arches 2 study of AeroANS3, which we presented at AHA and at an analyst investor event shortly thereafter, gave us some critical insights that are helping to accelerate the path to phase three studies. We are working on determining the optimal paths, and we expect to have further clarity, including from multiple anticipated regulatory interactions in 2023. At present, we plan to pursue studies to enable us to treat patients with homozygous familial hypercholesterolemia, or HOFH, and heterozygous familial hypercholesterolemia, or HEFH, with AROANGE3. We hope this would enable us to pursue a staged commercial strategy whereby we could serve the small HOFH market first and grow into the HEFH market after those larger studies are complete and supplemental regulatory approval is obtained. For AeroApoC3, we are conducting studies now to enable us to treat FCS patients, followed by treating patients with severe hypertriglyceridemia, and eventually the broad population with mixed dyslipidemia. As with the HOFH to HEFH approach, we like the staged commercial strategy and hope we can serve a small FCS market rather quickly, then expand to the larger SHTG population, and eventually the even larger mixed dyslipidemia populations when those studies are complete and their respective supplemental regulatory approvals are obtained. Third, we have line of sight on timelines for initial interim clinical results for two of our pulmonary programs. James will give details on the status but Arrow RAGE and Arrow MUC5AC are progressing well, and we anticipate being able to provide interim data publicly in the first half of 2023. Should we have data that provides clinical proof of concept, I think this would be a potentially big de-risking event for the candidates and for the pulmonary platform generally. We believe we've made a lot of progress with the platform since our Generation 1 candidate, Arrow ENAC, and gaining clarity on how the Generation 2 candidates perform will be exciting. Importantly, we are performing various analyses to assess pharmacodynamics using different methods, so we are confident that we should be able to define knockdown and duration of effect at different dose levels and different time points. The arrow MMP7 Phase I started later than arrow RAGE and arrow MUC5AC, but dosing healthy volunteers should begin imminently. Fourth, our Arrow C3 program continues to progress well, and we expect to have interim knockdown and safety data in the first half of 2023. This is an important program for us because, A, it is squarely in our wheelhouse as an hepatocyte target, and B, because of the variety of opportunities we can pursue in various complement-mediated and complement-associated diseases. Fifth, we continue to expand our platform into new cell types and have made enough progress to give us line of sight as to when we can discuss one of them publicly. I expect to provide guidance about our next cell type and initial targets by the end of the first half of 2023. Our goal is to continually expand our platform to gain access to a new cell type every 18 to 24 months. So far, we are ahead of that goal, and you should be hearing more about the work that has gone into the newest cell type and encouraging preclinical results we are generating. Sixth, we have a good idea about how large we think we can grow our pipeline in the near to midterm and are announcing our 20 and 25 program. We plan to have 20 individual drug candidates in clinical trials or in the market in 2025. Between our hepatocyte directed programs, our pulmonary programs, potential skeletal muscle targeted programs, and new cell types, we believe we'll hit 20 in the year 2025 between wholly owned drug candidates and partner programs. This will be a remarkable achievement that has the potential to touch millions of lives and create substantial value. Seventh, we have better clarity about our financial resources. We currently have partnerships with five different companies, and we expect to receive milestone payments from each over the next 12 months. Further, our expanding platforms give us the ability to continue to do new business development deals that could continue to provide capital to fund our own programs. Notwithstanding access to capital via these means, we recently decided to sell the potential royalties we would receive from Amgen on future El Paso Rand sales to Royalty Pharma. We received $250 million in cash up front and up to $160 million in additional payments contingent on the achievement of certain clinical, regulatory, and sales milestones. This allows us to continue investing in our wholly owned programs, which we think are advancing rapidly toward potential commercialization, and also continue to invest in our expanding pipeline and platform technology. Our overarching goal is to bring important medicines to patients as quickly as possible. I believe there are two critical interrelated pieces to that. One, develop and commercialize some drugs ourselves, and two, substantially increase our market capitalization so we can do more of number one. That is a prize we need to keep our eye on, so every decision we consider should be made by asking ourselves if it gets us closer to or farther from that goal. In my mind, the decision to sell these future royalties clearly gets us closer to that goal. With that overview, I'd now like to turn the call over to Dr. Javier San Martín. Javier?