Arrowhead Pharmaceuticals, Inc.

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 over to Vince Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

Thank you. And good afternoon, everyone. Thank you for joining us today to discuss Arrowhead's results for its fiscal 2025 second quarter, ended March 31st, 2025. With us today from management, our president and CEO, Dr. Chris Anzalone, who will provide an overview. Dr. Bruce Given, interim chief medical scientist, who will provide an update on our cardiometabolic pipeline. Andy Davis, senior vice president and head of 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 earlier stage development programs, and Ken Muskowski, our outgoing Chief Financial Officer who is retiring this week, who will give a review of the financials. We also welcome Dan Appel, our incoming CFO, who is also with us on the call today. 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, 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 Anzalone, President and CEO of the company. Chris.

Thanks, Vince. Good afternoon, everyone, and thank you for joining us today. Before I start, I want to say thank you to Ken and wish him the best in his retirement. Ken has been a valuable member of the Arrowhead team, and he retires at a time of great financial strength at the company. The financial organization that Ken built over the years is very capable and provides strong support to our ambitious Thank you for all the important contributions over the last 16 years. I'm also excited that Dan Appel will join us as our new CFO at a critical time for Arrowhead. We expect to make the transition from development stage to commercial stage with the planned launch of Pladaciran this year, pending regulatory review and approval. Dan is an accomplished pharmaceutical executive who can make immediate and important impact on our business. Let's now talk about our business and the progress we've made toward our short, mid, and long-term goals. Arrowhead is at an important point both in terms of capabilities and potential value as we drive our organization toward our first commercial launch, which we anticipate this year. Following this, we expect multiple additional independent and partner launches over the next few years. The culmination of commercial expansion the increasingly validated nature of our platforms and RDI modality, our large pipeline of clinical stage assets, our strong balance sheet, and clear access to additional non-diluted capital together provide us with a level of upside potential and stability that I believe is a priority in our industry. This is always attractive, but it's even more valuable at a time when biotech markets have been depressed for the past several years, and the near-term capital markets are uncertain at best. As the current biotech market weakness causes people to weigh the tradeoff of stability versus the potential for explosive value growth, I think we have the tools for both. I view our value proposition in layers. Layer one is Fladaciran. It constitutes our primary near and midterm value driver and provides a strong base for us. Fladaciran has shown to be a potent triglyceride lowering agent across multiple clinical studies in hundreds of patients. We believe there are 3 to 4 million people in the U.S. alone who suffer from severe hypertriglyceridemia, or SHTG, as defined by fasting triglyceride levels above 500 milligrams per deciliter. We are preparing to launch into a small subgroup of this population, patients with familial chylomicronemia syndrome, or SDS, and have a PDUFA date of November 18, 2025. We also completed the submission of a marketing authorization application, or MAA, with the ENA, and are working through additional plan submissions in other select geographies. The Phase III data supporting our regulatory submissions were consistent and encouraging. Genetically defined and clinically defined FCS patients responded similarly, with reductions in triglycerides of about 80% from baseline. Approximately 75 and 50% of patients who had triglycerides go below 880 and 500 milligrams per deciliter, respectively. which are discussing guidelines in the academic literature as important goals for minimizing pancreatitis risk. These are truly impressive levels to achieve in FCS patients, as the mean baseline triglyceride level in the study was approximately 2,500 milligrams per deciliter. Cladaciran was generally well-tolerated and showed triglyceride reductions in 100% of patients treated at the primary endpoint of 10 months. Our hope of treating FCS patients is important. an historically underserved population, and we believe flibasterin could be an important medicine for them. However, we view this as just the beginning. Shasta 3, Shasta 4, and Muir 3 are Phase 3 studies designed to support a supplemental NDA and other applications on a global basis to enable us to treat a broader SHCG population. These studies are moving rapidly, and we believe they could be fully enrolled this summer. We are also in the process of initiating Shasta 5, and payers. Our second layer of value may be our initial obesity candidates and initial CNS candidates. Regarding the former, Arrow INHBE is currently dosing in obese patients, and we expect Arrow ALK7 to begin dosing in obese patients shortly. Both are designed to intervene in a biological pathway regulating fat storage. Arrow INHBE targets parasites with the same trim platform using several ongoing clinical studies and has been in thousands of patients. It is designed to reduce hepatocyte expression of active in E, which is a ligand for adipose ALK7. ALK7 is the first adipocyte-targeted siRNA with a new trim platform that, in animal models, has shown good uptake in adipose tissue and high levels of targeting knockdown with a long duration of that may enable Q4 month, Q6 month, or less frequent administration. ALK7 is designed to reduce Both programs demonstrate substantial reductions in visceral fat versus control while simultaneously preserving lean mass in animal models. Both targets are also supported by hemogenetics where loss of function carriers have favorable body composition and metabolic characteristics compared to non-carriers without any apparent safety costs. It's a very intriguing pathway that we believe may fill some important gaps left by standard of care obesity treatments addressing some of the shortcomings of the GLP-1 GIP class. The possibility of long-acting agents that are well-tolerated, spare muscle mass, and enable visceral fat loss without dependence on caloric restriction is exciting. AeroINHPE began dosing a Phase 1-2 study in December 2024, and we anticipate having some initial data by the end of 2025. As I mentioned, we expect AeroAlt7 to begin dosing shortly, and we should have some initial data soon after AeroINHPE results become available. Studies in both candidates include single-dose and multiple-dose monotherapy arms in OB subjects, as well as multiple-dose arms that include combinations with triseptide. Our CNS BDD platform has made great strides in recent years. We have a substantial amount of preclinical data across multiple animal models that make us optimistic that we can deliver potent RNAi drugs to the brain via simple subcutaneous injection. Delivering large-molecule drugs systemically and getting past the broad blood-brain barrier has been a holy grail virtually as long as complex biological drugs have been developed, and we expect to be in the clinic late this year. Our first candidate, AeroMapT, targets the tau protein for potential treatment of Alzheimer's. We expect to follow that with AeroHTT, licensed to Sarepta against Huntington's disease by the end of the year. In the first half of 2026, we expect to bring AeroSNCA to the clinic, which targets alpha-synuclein for potential treatment of Parkinson's. These are all well-validated targets against very important diseases for which effective agents have long been sought, and we look forward to seeing how they translate from animals to humans. A third layer of value could come from our other Phase III drugs. We expect to begin enrolling in year-long Phase III studies of Dasaran for homozygous familial hypercholesterolemia, or HOFH, shortly. The HOFH patients the HOFH patients treated with sodasturant in Phase I and Phase II studies give us confidence that they may have a potent LDL, I'm sorry, that it may have a potent LDL C-lowering agent that only requires quarterly dosing in this important at-risk patient population. The sales infrastructure we are building for sodasturant could easily be leveraged to those populations, so this feels like a straightforward, relatively rapid, low-risk, and low-cost expansion of our commercial press. Zazisaran is our drug candidate against AAT liver disease. Our prior studies give us confidence that it could be an effective agent to reverse fibrosis in this largely unserved patient population. Zazisaran is partnered with Takeda, and they have publicly guided that Phase III studies could complete enrollment this year. They are two-year studies to prior endpoint. While this is partnered, our economics are substantial. We're a 50-50 profit share in the U.S., 20-25% royalties ex-U.S., and up to $527 million of remaining milestones. While we view these as our primary, near, and midterm value drivers, there are substantial pieces of our business underneath them, providing redundancy and additional upside potential. They include four fully-owned additional Phase II-ready clinical programs in Aero C3, Aero CFB, Aero RAGE, and Aero PMPLA-3. Two Phase II programs partner with GSK against chronic hepatitis B infection and MASH, another Phase III program partnered with Amgen in El Paso, and four Phase I-II clinical programs partnered with Sarepta, three designated preclinical programs partnered with Sarepta, one of which I already mentioned in HTT, and six additional preclinical programs to be named by Sarepta. And, of course, underlying all of this is a discovery engine that we believe is second to none in the SIRNA field. We expect it to continue to drive value as a basis for many additional O1 drugs, and through future partnerships. With all these layers, one can reasonably ask how many of these would be required to create a large, productive, sustainable pharmaceutical company. We indeed have many opportunities to create durable value. Importantly, we believe we have the capital and access to substantial additional capital to support our work. The Sarepta deal was a critical component of this. During the last quarter, we closed the Global License and Collaboration Agreement with Sarepta materially strengthening our balance sheet. This transaction brought in $500 million as an upfront payment and $325 million through the purchase by Sarepta of Arrowhead Common Stock at $27.25 per share. Arrowhead will also receive $250 million to be paid in annual installments of $50 million over five years. In the short term, we have potential to receive an additional $300 million in milestone payments associated with the continued enrollment of the Phase 1-2 study of Arrow D1, which we are on track to achieve during the next few quarters. Taken together, this adds up to $1.375 billion in cash payments. The total potential value of this deal, including upfront payments, equity investments, and potential milestones, exceeds $11 billion. We are also eligible to receive tiered royalties on commercial sales. This will be a transformational deal in any environment, as I mentioned with state of biotech equity markets today, we feel very good about not having to raise equity capital at this time to fund our growth as we become a commercial company. We are now funded into 2028 and through multiple important milestones that we think can drive substantial value for our shareholders. With that overview, I'd now like to turn the call over to Bruce Geddes. Bruce?