Arrowhead Pharmaceuticals, Inc.

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 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 that 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 Anzalone, President and CEO of the company.

Chris. 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 Gibbons' final earnings call. He's been a valuable member of the Arrowhead team for almost 15 years. He will continue to help Arrowhead as a trusted advisor, but now that Redemplo 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 in his re-retirement, which is probably more accurate. His contributions to Arrowhead's 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 redemptive FDA approval when she came back to Arrowhead 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, and thank you, James, for taking us into the next chapter for Arrowhead. 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 Redempla. On November 18, we announced that the FDA approved Redempla, 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 10 to 100 times higher than normal, leading to a substantially higher risk of developing acute, recurrent, and potentially fatal pancreatitis. This is Arrowhead's first FDA-approved medicine, marking a major milestone for the company as it transitions into commercial stage. Redempla is the first and only FDA-approved SIRNA medicine for people living with SDS and can be self-administered at home with a simple subcutaneous injection once every three months. Redempla is the first and only FDA-approved medicine to be backed by adequate and well-controlled studies that include patients with genetically diagnosed and clinically diagnosed SDS. After many months of preparation, our commercial team was able to hit the ground running, and I'm happy to report that we have drugged the channel a mere week after approval. We also launched Rely on Redempla, a patient support program providing support services and resources for patients at each stage of the treatment journey with Redempla, including financial assistance options for eligible patients. In addition, we also announced the One Redempla pricing model that creates one consistent price across current and potential future indications. This is important. We are committed to sustainable innovation, and this requires rational drug pricing according to the value of 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. Redempla 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 chylomicronemius in 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 with substantially increased risk of acute pancreatitis are 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 U.S., and while they often have less day-to-day symptoms than FCS patients, they are clearly at high risk for acute pancreatitis. The one redemptive pricing model has these patients in mind. The $60,000 annual WAC price is designed to provide real value to patients and healthcare systems in this population. Our SHASTA III and SHASTA IV Phase III studies are designed to support an SNDA in 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 Redemplo's value, and payers will have time to plan and budget for its possible eventual adoption, pending regulatory review and approval. Outside Redemplo, we have also made good progress with two other pipeline programs in the cardiometabolic space, Zodaciran and aerodimer PA. Let's start with Zodasteran. During the recent period, we dosed the first subject in the Yosemite Phase III clinical trial of Zodasteran, our clinical candidates being developed as a potential treatment for homozygous familial hypercholesterolemia, or HOFH. HOFH is a rare genetic condition that leads to severely elevated LDL cholesterol and early onset cardiovascular disease. Yosemite approximately 60 subjects over the age of 12 will be randomized to receive four doses once every three months of 200 milligrams of Dastarin or placebo. The primary endpoint is the percent change from baseline to month 12 in fasting LDL-C. The Phase II data in this patient population were encouraging, and we hope to have this study fully enrolled in 2026, complete the study in 2027, and if successful, enable an NDA assignment by the end of 2027 and launch in 2028. The next new pipeline program in cardiometabolic is aerodimer PA. In the last quarter, we filed a request for regulatory clearance to initiate a Phase I and II clinical trial of aerodimer PA, being developed as a potential treatment for atherosclerotic cardiovascular disease, or ASCVD, due to mixed hyperlipidemia in which both LDL cholesterol and triglycerides are elevated. This is a very large population without proper treatment options. We believe there are approximately 20 million people in the U.S. with mixed hyperlipidemia. Aeronymer PA is a dual-function RNAi therapeutic designed to silence expression of the PCSK9 and ApoC3 genes in the liver that's designed to reduce both LDL, C, and TGs. This represents an important step forward for the RNAi field as we believe it is the first clinical candidate to target two genes simultaneously in one molecule and an important step forward for preventative cardiology as both LDL and TGs have epidemiologic support as being important drivers of ASCVD risk. Both of these programs fit well strategically with our growing commercial focus on the cardiometabolic space and on the physicians that treat these patients. Also during the quarter, we expanded our clinical pipeline in CNS. We filed a CTA to initiate a Phase I-II clinical trial of Aromap-T as a potential treatment for tauopathies, including Alzheimer's disease. Aromap-T is Arrowhead's first therapy to utilize a new proprietary delivery system, which in preclinical studies has achieved blood-brain barrier penetration and deep knockdown of target genes across the CMS, including deep brain regions, after subcutaneous injections. Non-clinical evaluations in monkeys with subcutaneous administration of Aromap-T using clinically translatable doses, have shown better than 75% knockdown of tissue-level MAPT mRNA in the CNS. Importantly, monkey tissue-level knockdown has translated into CSF tau protein reductions with duration of effect supportive of either monthly or quarterly subcutaneous dose regimens. This is an exciting program, and we look forward to initiating the study shortly. We also continue to make good progress on our first two obesity programs, aero-INHBE, and aero-ALK7. Together, we have randomized 192 patients, all with a BMI greater than 30. Because we started aero-INHBE earlier, it is about two quarters further into the phase one study than aero-ALK7. Our plan has been to share early data at the end of the year, but due to travel schedules and the holidays, this will push a couple weeks later into the early part of January. We also expect to have more wholesome data toward the end of the first half of 2026. We also made important progress in dose development. First, as we announced yesterday, we earned a $200 million milestone payment from Sarepta, following a Drug Safety Committee review and subsequent authorization to dose escalate, and achievement of the second pre-specified patient enrollment target for Arrow DM1. This follows a $100 million milestone earned previously when Arrow had reached the first of two pre-specified enrollment targets and subsequent authorization. The partnership continues to be productive, and we look forward to continued progress. In addition to progress on the strategy partnership, we announced a new global licensing collaboration agreement with Novartis for AeroSNCA, Arrowhead's preclinical stage SIRNA therapy against alpha-synuclein for the treatment of Parkinson's disease. The collaboration includes a limited number of additional targets outside our pipeline that will utilize Arrowhead's proprietary trim platform. Arrowhead received a $200 million upfront payment from Novartis and is also eligible to receive development, regulatory, and sales milestone payments of up to $2 billion. Arrowhead is further eligible to receive tiered royalties on commercial sales up to low double digits. As I mentioned before, the recent approval of Redemplo is clearly the most important recent development. Arrowhead has been busy across the pipeline and in business development during the recent period. Business development and licensing is critical to our business model, so we are pleased to have these two significant deals closed this year. Without a review, I'd now like to turn the call over to Bruce Gibbett. Bruce? Thanks, Chris. Good afternoon, everyone. I'm happy to give my final update to Arrowhead shareholders. At such an important time and with Arrowhead in such a position of strength, we have built something truly unique and powerful at Arrowhead, 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 package insert. Redeflo is approved as an adjunct to diet to reduce triglycerides in adults with FCS. The recommended dose of Redeflo is 25 milligrams, and it can be self-administered at home by subcutaneous injection once every three months. Redeflo 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 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 plazaciran or placebo dosed every three months, and tested two doses of plazacirin versus placebo. The primary endpoint was change in median triglycerides at month 10. There were also multiplicity-controlled secondary endpoints, all of which were statistically significant, including, notably, the occurrence of acute pancreatitis, for which the 25- to 50-milligram doses were combined for comparison to placebo, as called for in the analysis plan. Losazarin achieved deep and durable reductions in median triglycerides as early as one month when the first measurement was taken. Overall, these reductions were around 80% from baseline, and reductions largely maintained medium triglyceride levels below the usual guideline-directed threshold of 500 milligrams per deciliter throughout the year of treatment. 500 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 in triglycerides with redemptive therapy. Plasastran 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 from the early days of our SIRNA developments and part of the Plasastran program and 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. Andy? Thank you, Bruce. It's been exactly one week since the commercial launch of Redemplo, 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 Redemplo, 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, Redemplo 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 12-month treatment period. This compared to a minus 17% reduction in the pooled placebo group. With Redemplo, 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 500 milligrams per deciliter. In Palisade, 50% of patients at the 25 milligram dose achieved TG levels below 500 milligrams per deciliter. with approximately 75% achieving levels below 880 milligrams per deciliter at month 10. Second, the numerical incidence of acute pancreatitis in patients treated with Redempla was lower compared to placebo. As we all know, this is the outcome of most importance for healthcare professionals, patients, and payers. Third, Redempla demonstrated favorable safety and tolerability, importantly, The U.S. approved package insert contains no contraindications, no warnings, and no precautions associated with the use of Redemplo. Fourth, Redemplo 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 redemptive pricing model has been positive. As Chris highlighted, this model creates one consistent price, 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 U.S. 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 dieticians. At launch, we are targeting approximately 5,000 healthcare professionals through personal engagement. And finally, our Rely on Redemplo 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 Redemplo 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 drug available in-channel ahead of schedule. I will now turn the call over to James Hamilton to discuss the broader R&D portfolio. James? 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 plazacirin designed to potentially support supplemental NDA filing to expand the label beyond genetic and clinical STS. Shasta III and Shasta IV are Phase III studies designed to compare reductions in triglycerides with 25 milligrams plazacirin compared to placebo over 12 months of treatment. Between the two studies, we enrolled approximately 750 patients. In addition, the MIRA3 study enrolled approximately 1,400 patients. This study in patients with mixed hyperlipidemia is designed to supplement the safety database when we file the SMDA for plazaciran and 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 MIRA 3 Phase 3 clinical studies in June of 2025. We anticipate completing the primary portions of these studies in mid-2026, with top-line data expected in the third quarter of 26. 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 plazaciran 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 reductions 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-LK7. Both of these programs target the known activin pathway that is involved in signaling to adipocytes to store fat. Arrow Inhibit E inhibits one of the ligands in the pathway, and Arrow Elk 7 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 adipocyte. Arrow Inhibit E started enrolling patients in December 2024, and Arrow Elk 7 initiated in May of 2025. Both programs are currently in phase 1, 2A, first-in-human dose-escalating studies to evaluate safety, tolerability, pharmacokinetics, and pharmacodynamics. Both programs include Part 1, designed to assess single and multiple doses as monotherapy, and Part 2, designed to assess multiple doses in combination with truzepatide. As Eroin hit an E, started about two quarters earlier, we had 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 first week 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, the first week of January worked the best for all schedules. For Arrow Elk 7, 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 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 one cent per share, based on $133.8 million, fully diluted weighted average shares outstanding. This near break-even 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 pertained 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-1 MILESTONE, AND $16 MILLION RELATES TO THE REIMBURSEMENT OF INCURRED COLLABORATION PROGRAM COSTS. ADDITIONALLY, THE LICENSE TO SINOPE FOR GREATER CHINA RIGHTS TO PLAZASRAN CONTRIBUTED $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 costs, 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 prozacrin 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 prozacrin and SHTG. As we have mentioned, the SHTG registration of studies are now fully enrolled, and we expect data to read out next year. Accordingly, the majority of remaining phase three registration of clinical trial costs are expected to occur over the next 12 months. Our SG&A costs increased by 25 year over year, driven primarily by our preparations for the commercialization of Redempto. All of us here at Arrowhead are enormously proud of the capabilities we have built to commercialize Redempto, not only in our commercial function, 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, paired 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 RD 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 leading up to today, which were financially meaningful for Arrowhead and our balance sheet. Firstly, as Chris mentioned earlier on the call, we announced a licensing and collaboration agreement with Novartis for Arrow SMTA. Arrowhead's preclinical stage siRNA program targeting alpha-synucline 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's 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 SREPTA collaboration agreement for Arrowhead DM1, As Chris mentioned, this triggers a $200 million obligation from Sarepta that will be recorded in the first quarter of fiscal 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 DM-1 milestone in fiscal quarter 4, 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 Redempo as a truly transformational event for the company, we do not anticipate that the commercial sales of Redempo 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 With that, I will now turn the call back to Chris.