Arrowhead Pharmaceuticals Inc. (NASDAQ:ARWR), a biopharmaceutical company, has reported a transformative fiscal year, marked by a substantial collaboration with Sarepta Therapeutics (NASDAQ:SRPT) and advancements in its leading drug candidate, plazasiran. Despite a net loss of $599.5 million for fiscal 2024, the company has a robust cash and investment balance of $681 million and expects its financial resources to support operations into 2028.
Key Takeaways
- Arrowhead Pharmaceuticals ended fiscal 2024 with a net loss of $599.5 million.
- The company's cash and investments stood at $681 million as of September 30, 2024.
- A significant partnership with Sarepta Therapeutics includes a $500 million upfront payment and a $325 million equity investment.
- Plazasiran, Arrowhead's lead program, is making progress with an NDA submitted for FCS and ongoing Phase 3 studies for SHTG.
- Arrowhead introduced two new obesity programs, ARO-INHIBI and ARO-ALK7, targeting adipose tissue with a novel RNAi approach.
Company Outlook
- Arrowhead expects a cash burn of $500-$550 million in fiscal 2025.
- The company's cash runway is projected to extend into 2028, securing its financial position for the near future.
Bearish Highlights
- The company reported a significant net loss for the fiscal year 2024.
Bullish Highlights
- The partnership with Sarepta Therapeutics has the potential to exceed a deal value of $11 billion plus royalties.
- Plazasiran has shown promising results with an 80% reduction in triglycerides in its Phase 3 PALISADE study.
Misses
- There were no specific financial misses reported in the earnings call.
Q&A Highlights
- CEO Chris Anzalone expressed confidence in Arrowhead's drug discovery capabilities, stating that the company is a "machine that spits out high-quality drug candidates."
- Anzalone highlighted the strategic importance of the Sarepta deal, providing substantial capital and the potential for significant additional funding.
- Arrowhead is expected to benefit from Sarepta's capacity to advance up to six new drug candidates into clinical studies.
Arrowhead Pharmaceuticals is narrowing its strategic focus to the cardiometabolic therapeutic area while retaining select early-stage programs and exploring partnership opportunities for non-core assets. The company's potential market opportunity for plazasiran is estimated at $2-3 billion annually, aiming for a commercial launch in mid-2025. With the introduction of two new obesity programs and the anticipated start of Phase 1 studies, Arrowhead continues its commitment to innovation in RNAi therapeutics.
Full transcript - Arrowhead Pharmaceuticals Inc (ARWR) Q4 2024:
Conference Operator: 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.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals: Thank you. Good afternoon and thank you for joining us today to discuss Arrowhead's results for its fiscal 2024 year ended September 30, 2024. With us today from management are President and CEO, Doctor. Chris Anzalone, who will provide an overview over the quarter Doctor. Bruce Given, Interim Chief Medical (TASE:PMCN) 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 Doctor.
James Hamilton, Chief of Discovery (NASDAQ:WBD) and Translational Medicine, who will discuss our earlier stage development programs and Ken Myszkowski, Chief Financial Officer, who will give a review of the financials. We will then 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 and uncertainties, please refer to our SEC filings, including our most recent annual report on Form 10 ks 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?
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Thanks, Vince. Good afternoon, everyone, and thank you for joining us today. Over the years, we built platforms capable of addressing liver, lung, adipose, CNS, skeletal muscle, cardiomyocyte and soon other cell types to bring RNAi therapeutics where a multitude of diseases are. Any one of these would represent an important advance in human health, but together we believe they have revolutionary potential. I don't think it's hyperbole to say that we've created a machine that spits out high quality drug candidates if you just feed it money and gene targets.
Importantly, those drug candidates can be produced quickly relative to other methodologies and given the modality and increasingly validated nature of the platforms, we have an expectation that most will do what they are designed to do. We've always had conviction that building and constantly expanding this machine is critical to our dual mandate of serving as many patients as possible and creating long term durable value. In the early to mid stages of building a company around such a machine, we require partnerships to develop and commercialize non core assets and provide capital for us to develop and commercialize our wholly owned assets, while also reinvesting in the machine to expand its reach and capacity. When this is done well and in a timely fashion, it creates balance for us. Of late, we have become out of balance.
The partnership we announced today with Sarepta is transformational because it returns balance to our business model, helps to focus our investment thesis without constricting upside potential and puts us on a fairly straight path to profitability. Let's take a closer look at the deal. Arrowhead and Sarepta entered into a licensing collaboration agreement that includes select programs utilizing multiple TRIM delivery systems targeting various tissue and cell types. Under the agreement, Arrowhead will advance each program to an agreed upon milestone and then Sarepta will assume responsibility for further development and commercialization. These include select programs from 3 distinct buckets.
1, certain Arrowhead clinical candidates 2, certain Arrowhead non clinical programs and 3, discovery programs to be pursued jointly between Sarepta and Arrowhead. In the clinical candidate bucket, Arrowhead is granting Sarepta an exclusive license to the following 4 programs. 1, ARO DUX4 as a potential treatment for patients with fascioscapulohumeral muscular dystrophy type 1 or FSHD1. ARO DUX4 is currently dosing patients in a Phase onetwo clinical study. 2, ARO DM1 as a potential treatment for patients with Type 1 myotonic dystrophy or DM1.
ARO DM1 is currently dosing patients in a Phase onetwo clinical study. 3, ARO MMP7 as a potential treatment for idiopathic pulmonary fibrosis. ARO MMP7 has completed dosing healthy volunteers in the Phase onetwo clinical study and is currently dosing IPF patients to assess target engagement. And 4, ARO ataxin2 as a potential treatment for spinocerebellar ataxia2 or SKA2. ARO ataxia2 is in a Phase onetwo study that is currently open for enrollment.
In a non clinical bucket, Arrowhead is granting Sarepta an exclusive license to 3 programs that utilize Arrowhead's next generation TRiM platform for subcutaneous administration to the central nervous system. The programs are ARO HTT for Huntington's disease, ARO Ataxin 1 and ARO Ataxin 3 both for spinocerebellar ataxia. Lastly, in discovery programs bucket, Sarepta can propose up to 6 new skeletal muscle cardiomyocyte or CNS targets on which Arrowhead will perform discovery and preclinical development. Sarepta would then receive an exclusive license to those programs and be responsible for clinical development and commercialization. During the 5 year term of the agreement, Arrowhead will be excluded from working on a large list of skeletal muscle targets for its internal use or in partnership with other companies.
Arrowhead will also be providing contract manufacturing services to Sarepta for clinical and eventually commercial drug supply for programs arising out of our collaboration. At close of the agreement, Arrowhead would receive the following: a $500,000,000 upfront cash payment, $325,000,000 to the purchase by Sarepta of Arrowhead Equity priced at $27.25 representing a 35% premium to the 30 day volume weighted average price of Arrowhead stock, $250,000,000 to be paid in annual installments of $50,000,000 over 5 years and up to $300,000,000 in near term payments broken up in 2 separate payments of $100,000,000 $200,000,000 associated with the continued enrollment of certain cohorts in the Phase 1 study of ARO DM1, which Arrowhead may achieve during the next 12 months. Arrowhead is eligible to receive development milestone payments between $110,000,000 $410,000,000 per program and sales milestone payments between $500,000,000 $700,000,000 per program. Arrowhead is also eligible to receive tiered royalties on commercial sales up to the low double digits. The total potential value of this deal exceeds $11,000,000,000 plus royalties.
This is an important deal for both of our companies. In one transaction, it gives Sarepta multiple new promising pipeline opportunities, all with the potential to be best in class in areas where Sarepta has extensive development, regulatory and commercial expertise and where clear synergies exist with their existing organization. The folks at Sarepta are specialists in these areas and we see them as having a high potential to maximize the value of the programs and be a dominant competitor. They are an ideal partner for us. For Arrowhead, the deal answers 2 primary questions the market had about us.
1st, we've seen general acceptance that our technology works and the current and future drug candidates have a good chance of becoming important medicines, but there was a lack of clarity about how we would pay for them. This deal provides us with substantial capital immediately and potential access to very large amounts of additional funding throughout the life of the collaboration and beyond. This cannot be overstated. According to our long term plan and budget, we are now funded toward the end of 2028 and potentially through multiple commercial launches by Arrowhead and our partners. 2nd, we built a massive clinical and preclinical pipeline across different therapeutic areas that has the potential to create substantial value.
But A, it is difficult for the market to properly value everything there, particularly when it has been unclear what would remain wholly owned versus partnered. And B, it is difficult for us to build out clinical and regulatory expertise as well as commercial infrastructure across diverse therapeutic areas. This deal goes a long way to providing a more manageable wholly owned pipeline focused on areas we intend to commercialize ourselves, namely in the cardiometabolic space. This more focused pipeline allows us to take advantage of the expertise we have built in clinical development and regulatory in the cardiometabolic area and our growing medical affairs and commercial presence in the space as well. Now in the cardiometabolic area, we're focusing resources on the following: plazasiran, which is rapidly progressing toward commercial stage zodasiran, which is Phase 3 ready the APOC3 PCSK9 dimer program that we expect to file a CTA on in 2025 ARO INHBE, which should begin enrolling a Phase III study in the next couple of months, ARO Elk7 for which we expect to file a CTA shortly and begin enrollment by mid-twenty 25, additional undisclosed adipose targeted programs, undisclosed CNS programs that leverage our systemic subcutaneous delivery and possible cardiomyocyte targeted programs.
These provide us with near, mid and long term value growth and leverage common resources and expertise making us progressively more efficient for each subsequent program. This is a solid and scalable model. A focused pipeline also allows us to manage the growth of our R and D expenses. 4 clinical candidates and 3 preclinical programs come off our books immediately, while still moving rapidly toward patients who need them. On the discovery side, we believe we have an engine that is second to none and has the potential to create substantial value, so we will not slow that down.
We now have a partner that will take advantage of our significant discovery capacity and take as many as 6 new candidates that we are not yet working on into clinical studies. This is a great use of our discovery engine, represents scalable value creation and leaves us with plenty of capacity for our own future wholly owned programs and additional partnerships. Another important piece of the Sarepta partnership that may be overlooked is the manufacturing component. Providing clinical and commercial material to Sarepta for programs included in this deal soaks up current excess manufacturing capacity in our new Verona manufacturing plant and defray our operating costs. It also provides Sarepta with a high quality cost effective partner for important RNAi medicines that will develop and ultimately commercialize.
Our cardiometabolic focus and the Sarepta license agreement together do not capture all of our promising programs. Rather, we believe there are additional programs that have that programs that we have that could be partnered at some point to capture additional value and ensure that they reach the patients who need them. The programs that sit in this category are the following. ARO RAGE for asthma and COPD, which is Phase 2 ready and we are assessing various options and designs for moving forward. ARO PMPLE3 for MASH, which is also Phase 2 ready and 4 of which we are also considering options.
ARO C3 and ARO CFB in the complement space, which should both have clinical readouts by mid-twenty 25. ARO map T for Alzheimer's and other tauopathies as well as ARO SCNA for Parkinson's, use what we believe is our very promising subcutaneous trim system for CNS delivery and are on schedule for CTAs in 2025. We are excited about each of these programs and while we do not require partners immediately, our current strategy is to eventually find the right companies to develop and commercialize each one. In the meantime, we are assessing timing and possible additional development that could maximize risk adjusted value to us. As part of this pipeline focus, we have decided not to pursue further development of ARO MUC5AC.
To be clear, this decision was not due to any emergent safety issue, but rather the inability to reliably assess target engagement with the availability of biomarkers. While we still believe that ARAMUC5aC is an intriguing target for mucobstructive diseases, we believe that we have programs without this biomarker limitation where we can better allocate capital. We have also made great progress with our lead program and potential first commercial product, plazasiran, from a clinical, regulatory and commercial perspective, which Bruce and Andy will discuss in a moment. We now feel like all the pieces are in place to accelerate growth. Let's review what we see as the key steps that enable that growth.
We have generated important Phase 3 data in the PALISADE study of plazasiran in patients with genetically defined and clinically diagnosed FCS, forming the basis of submission of our first NDA. This is a big step for any biotech company and we were excited to make that submission earlier this month. We now have field and home office medical affairs organizations in place within clinical development. We have also built out the key headquarters commercial infrastructure and are in the process of building out a commercial field team, right sized for this rare disease. We are confident that we will be ready for our potential first commercial launch in 2025 provided we receive positive FDA review and approval.
We have also begun leveraging outsourced resources for European commercial launch providing we receive positive EMA review and approval, which we intend to seek in 2025. We also have a comprehensive plazasarin Phase 3 program for the large patient population with severe hypercholesteridemia or SHTG. We believe there are 3000000 to 4000000 people in the U. S. Making up this population and there are very limited options treatment options at present.
We expect the studies needed for regulatory approval to be fully enrolled by mid year 2025 leading to final patient visits in the middle of 2026 and potential sNDA fine at the end of 2026 or early 2027. We see this as a large patient population with inadequate treatment options that alone could make plazasiran a $2,000,000,000 to $3,000,000,000 per year drug. Further, we continue to see a big opportunity in a larger mixed hyperlipidemia market. Plazasiran has always looked like potentially powerful medicine for secondary prevention of ASCVD as well as primary prevention for high risk patients by the KOL community we've been working with. Addressing this patient population approximately doubles our revenue forecast for plazasiran, but would require a cardiovascular outcomes trial or CVOT for approval.
As such, we are waiting until we have better visibility on additional capital before launching this trial. Arrowhead now has a combination of traits that puts it in the strongest position ever in history of the company. These include substantial immediate capital, the expectation of large amounts of additional non dilutive capital in coming years via existing partnerships, a lead program that is gearing up for commercial launch, a lead program that could see substantial label expansion in coming years, a focused cardiometabolic pipeline that spans early discovery to Phase 3 ready, a discovery engine capable of creating new candidates rapidly, strong partners in place for non core assets, several non core programs that could be partnered in the future for additional non dilutive near and long term capital and a state of the art high capacity manufacturing facility that is qualified for clinical material now and could be qualified for commercial materials soon. With that overview, I'd now like to turn the call over to Doctor. Bruce Gibbon, who will discuss what we've accomplished with plazasiran and the status of the Phase 3 program.
Bruce?
Bruce Given, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: Thank you, Chris, and good afternoon, everyone. It has been a remarkable year for plazasiran. We've had a series of high impact presentations at major international academic meetings accompanied by 4 simultaneous publications and highly selective high impact medical journals. We also initiated our Phase 2 program in severe hypertriglyceridemia or SHTG this summer and culminating with our new drug application or NDA submission to the U. S.
FDA earlier this month. I'll review some of those highlights over the next few minutes. First, it was a great pleasure to submit our NDA for plazasiran in the orphan condition of familial chymal micromenemia syndrome or FCS to the FDA. That started the clock for their validation process, which is expected to take up to 60 days. If the FDA determines that the filing is complete and accepts it for review, they will inform us at that time of the PDUFA date by which a decision on approval may be made.
Because the FDA has granted pizasiran breakthrough therapy designation, we are hopeful for a priority review, but that determination will be made solely at the discretion of the FDA. Our database for the pivotal PALISADE study in subjects with genetically confirmed or clinically diagnosed FCS was only locked on May 16th this year. So this was an excellent performance by the Arrowhead team, especially given that this was the organization's first NDA. We look forward to hearing the FDA's filing decision. If we take a step back to assess the results that have been generated with plazasran over the last year at medical meetings and in publications, a clear picture emerges.
As data from the Phase 2 trials were presented and published in JAMA Cardiology and the New England Journal of Medicine in the first half of the year, we saw in the MIRROR study of patients with mild to moderate hypertriglyceridemia in the context of mixed hyperlipidemia and in patients with severe hypertriglyceridemia in SHASTA-two that posasiran produced a deep and durable reductions in apolipoprotein C3 or apol C3 with quarterly subcutaneous dosing and that these reductions led to deep and durable reductions in triglycerides, remnant cholesterol, apolipoprotein B or apoB and non HDL cholesterol, while substantially increasing HDL cholesterol. As we had anticipated based on human genetic data and our Phase 1 study results. While Phase 2 data require replication and expansion in Phase 3 studies, which I'll describe in a moment, we learned a number of important things from these results. 1st, we evaluated doses from 10 to 50 mg and determined in both of these studies that we could confidently select 25 mg as being at the top of the dose response curve for efficacy, while also having safety and tolerability that appeared favorable. On this basis, we chose the 25 milligram dose administered every 3 months to further Phase 3 development in both mixed hyperlipidemia and severe hypertriglyceridemia.
2nd, the reductions in our lipid targets were substantial and consistent with the human genetic data from individuals who had inherited genetic variance with low or no activity for AMPL who displayed favorable lipid profiles and appear to have reduced risk for cardiovascular disease. Finally, these individuals inheriting loss of function APOC3 genes have been thought to have no negative safety or tolerability issues. And our Phase 2 data suggests that this therapy may well be well tolerated in Phase 3 studies. In fact, subjects from the Phase 2 MIRROR and SHASTA-two studies were offered the opportunity to enter a long term extension study called ARO APOC3-two thousand and three, which was reported out at the American Heart Association Scientific Sessions on November 18th. Those data in 4 18 patients suggested that lipid changes remained essentially unchanged out 15 to 18 months while receiving plazasiran 25 milligrams quarterly with no new safety signals detected.
Hemoglobin A1c was essentially unchanged over that period. Most of you will be familiar with our Phase 3 PALISADE study that reported at the European Society of Cardiology with another simultaneous publication in the New England Journal of Medicine. We observed an 80% reduction from baseline in median triglycerides at month 10 with the 25 milligram dose, while placebo subjects showed a reduction of 17%. The reduction in triglycerides at month 10 was highly statistically significant with p value less than 0.0001. This study also included a 50 milligram quarterly dose group with plazasiran with similar significant results, which together with the results from MIRROR and CHASTA-two have convinced us that we have achieved the maximum efficacy possible for the APOC3 mechanism with the 25 milligram dose regardless of indication.
Because both 25 50 milligrams achieved significant reductions on the primary triglyceride endpoint, we were allowed to assess the significance of our alpha controlled secondary endpoints. In this regard, APOC3 reductions at 10 12 months and average triglyceride reductions at 10 12 months combined were also highly significant. Our final alpha controlled secondary was a comparison of incidence of expert adjudicated cases of acute pancreatitis for the placebo group compared to a combined group of the 25 50 milligrams plazasiran dose cohorts. This important endpoint showed a statistically significant 83% reduction in incidence of acute pancreatitis with posaciran with a p value of 0.029. Not surprisingly, given the reduction in pancreatitis, high percentages of patients reached recognized risk reduction thresholds for triglycerides with a clinical dose of 25 milligrams quarterly.
In fact, 75 percent of patients reached levels below 8 80 milligrams per deciliter and 50% were able to reach triglyceride levels less than 500 milligrams per deciliter. There were a number of exploratory endpoints in this study, which were reported at and simultaneously published in the high impact journal Circulation. Meaningful reductions in remnant cholesterol and non HDL cholesterol were shown as well as increases in HDL cholesterol. The expected increases in mean LDL cholesterol were seen, but remained below guideline levels for cardiovascular risk reduction. Finally, longitudinal data was shown from month 1 through 12 for the clinical 25 milligram dose indicating that the reductions in triglyceride from baseline of approximately 80% were similar whether patients had genetically confirmed or clinically diagnosed FCS, a finding that we believe is important.
Tolerability has been good across all three study populations. The most common treatment emerging adverse events for the PALISADE FCS study were abdominal pain, COVID-nineteen, nasopharyngitis and nausea. For the Phase 2 MIRROR and SHASTA-two studies, the most frequent adverse events were COVID-nineteen, upper respiratory tract infection, headache, type 2 diabetes mellitus and abdominal pain. While all of this was going on, we were also busy obtaining regulatory input and initiating our Phase 3 program for plazasiran in SHTG. Our twin pivotal Phase 3 studies in patients with SHTG called SHASTA-three and SHASTA-four were initiated in the middle of the year.
We now have centers open in the U. S, Europe and China with new centers opening weekly and we have patient screening and enrollment ongoing in all three territories. We are also conducting a Phase 3 study in patients with mixed mixed
: hyperlipidemia named MIR-three, which is
Conference Operator: there to provide safety numbers needed for
Bruce Given, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: the expected SHtG supplement to our plazasiran NDA. All three of these studies are largely patterned after their Phase 2 counterparts, except that patients will receive 4 quarterly doses of 25 milligrams or placebo for a full year of treatment and follow-up before entering into an extension if they so choose. We are also getting ready to start Shasta V, a first of its kind study where the primary outcome will be reduction in acute pancreatitis in patients with SHTG and a history of pancreatitis. This study has not been requested by regulatory authorities and is not considered to be on the critical path for the SHTG submissions. Rather this is a study that we are conducting for payers and to support the market.
Finally, regarding Capitan, our planned outcome study with plazasiran for prevention of cardiovascular events in patients with elevated triglycerides and a history of atherosclerotic cardiovascular disease or ASCVD or at high risk for ASCVD. We continue to receive feedback from global regulatory authorities in our executive committee and expect to have our final dose I'm sorry, our final protocol design in the first half of twenty twenty five. So in summary, an amazing 2024 for plazasiran is setting up a busy and exciting 2025. I will now turn the call over to Andy Davis. Andy?
Andy Davis, Senior Vice President and Head of Global Cardiometabolic Franchise, Arrowhead Pharmaceuticals: Thank you, Bruce. Just over 1 week ago, our team was at the American Heart Association Scientific Sessions 2024 or where we announced new results from the Phase 3 PALISADE study and the open label extension from the Phase 2 MIRROR and CHASTA-two studies of investigational plazasarin. And the feedback we collected on-site from both physicians and patient societies continues to be very encouraging. We hear lots of enthusiasm about the differentiating attributes of plazasterin, which generally fall into 5 value pillars that you've heard me speak about before. First, the reduction in triglycerides has been both deep and durable.
In PALISADE, as Bruce mentioned, plazasterin reduced triglycerides by around 80% from baseline as early as month 1 and maintain this reduction with limited variation throughout the full 12 month treatment period. 2nd, and for really the first time, patients and their doctors see real hope of achieving triglyceride levels below guideline directed risk thresholds associated with acute pancreatitis, such as 880 and even 500 milligrams per deciliter. Around half of the patients at the 25 milligram dose in PALISADE maintained TGs below 500 milligrams per deciliter with approximately 75 percent achieving levels below 8 80 milligrams per deciliter. To support physician education on guideline directed risk thresholds, we announced on FCS Awareness Day earlier this month, the launch of a new disease awareness campaign called We'll Get There Soon. A key focus of our messaging is to educate the physician community about expert guidelines from several professional medical societies, which recommend maintaining triglyceride levels below 500 milligrams per deciliter to reduce the risk of acute pancreatitis.
3rd, the triglyceride reductions in PALISADE were generally consistent in patients with genetically confirmed and clinically diagnosed FCS. As I mentioned at the outset, new results from PALISADE were presented in an oral presentation at and simultaneously published in the journal Circulation. Plazasterin at the 25 milligram dose induced rapid, deep and sustained reductions in APOC3 of greater than minus 90% and in triglycerides of approximately minus 80% independent of gene variance causing FCS. As Bruce mentioned, we believe this supports the potential value of plazasterin in patients with clinically diagnosed disease regardless of genetic status. 4th, plazasterin is the 1st and only investigational medicine to report a statistically significant reduction in the risk of developing acute pancreatitis in patients with genetically confirmed and clinically diagnosed FCS.
This important endpoint showed a statistically significant 83% reduction in the incidence of acute pancreatitis with plazasiran. This is the outcome of most importance for physicians, patients and payers. And lastly, number 5, plazasterin demonstrated favorable safety and tolerability largely similar to placebo and is conveniently dosed every 3 months, reducing the treatment burden on both physicians and patients with only 4 injections per year. To support this value proposition, we've built best in class medical, market access and marketing organizations and our teams are solidly in place. As Chris mentioned, the medical affairs group is fielding medical science liaisons to conduct scientific exchange.
And on the sales and marketing side, we've recently hired our National Sales Director, who will be executing our field force hiring plans over the next several months. We are on track and we're incredibly excited about 2025 and the possibility of bringing investigational plazasarin to those FCS patients and their families who are burdened by this condition. I'll now turn the call over to Doctor. James Hamilton.
James Hamilton, Chief of Discovery and Translational Medicine, Arrowhead Pharmaceuticals: Thank you, Andy. With our sharpened focus on the cardiometabolic therapeutic area, I'd like to discuss our 2 new programs for obesity and metabolic disease. Clearly, there have been advancements in the obesity space of late. This has created excitement in the field and we believe our programs ARO Inhibiny and ARO ALK7 have attractive profiles and may fill gaps in the current standard of care. We held a webinar in August on the obesity and metabolic space as part of our summer series of R and D webinars.
We covered the biology of these targets, our preclinical data and our clinical plans. That presentation is still available as an archive on the website. As a high level refresher, activation of the inhibiny ALK7 pathway instructs adipocytes to store fat. In an environment of nutrient excess, this pathway can become dysfunctional and overactive. Both targets are supported by human genetics where loss of function carriers have favorable body composition and metabolic characteristics compared to non carriers.
ARO Inhibiny is a GalNAc siRNA conjugate intended to silence hepaticinhibinE expression. InhibinE mRNA codes for activeinE protein, which is one of the ligands binding to ALK7 on the adipocyte surface. It's the expression of ALK7 mRNA that is targeted with ARO ALK7, which uses Arrowhead's novel adipocyte siRNA delivery platform. ARO Inhibiny and ARO ALK7 achieved 22% and 50% reduction in fat mass respectively versus saline controls in a mouse diet induced obesity model. Importantly, this is achieved with the preservation of lean mass.
In the same mouse model, when studied in combination with incretin therapy, inhibition of the inhibiny ALK7 pathway can potentiate weight loss with lower doses of incretin therapy, while simultaneously preserving lean mass. Again, for those interested, I refer you to our August Obesity and Metabolic R and D webinar for more preclinical data details. Turning to the clinical studies planned for these molecules, both Phase 1 studies will evaluate single and multiple ascending doses as monotherapy in obese patients as well as multiple doses in obese patients with or without type 2 diabetes in combination with incretin therapy. ARO and Hibbony dosing should initiate very soon and dosing with ARO ALK7 should initiate in 2025. We look forward to providing updates on these studies throughout 2025.
I will now turn the call over to
Ken Myszkowski, Chief Financial Officer, Arrowhead Pharmaceuticals: Ken Myszkowski. Thank you, James, and good afternoon, everyone. As we reported today, our net loss for fiscal 2024 was $599,500,000 or $5 per share based on 119,800,000 fully diluted weighted average shares outstanding. This compares with a net loss of $205,300,000 or $1.92 per share based on $106,800,000 fully diluted weighted average shares outstanding for 2023. Revenue in 2024 was $3,600,000 as there were no new partnership or license agreements executed during the year and no major milestones from previous license agreements were triggered during 2024.
Revenue in 2023 was $240,700,000 Revenue in 2023 primarily relates to our collaboration agreements with Takeda, GSK and Amgen (NASDAQ:AMGN). Total (EPA:TTEF) operating expenses for fiscal 2024 were $604,600,000 compared to $445,700,000 for 2023, an increase of $158,900,000 In 2024 operating expenses excluding non cash stock compensation charges and depreciation and amortization, a better indicator of cash spend were $512,100,000 compared to $355,100,000 in 2023, an increase of $157,000,000 The key drivers of this change were increased research and development costs, primarily candidate costs, which is driven by clinical costs, manufacturing costs and toxicology costs. In particular, during the 3rd fiscal quarter, we kicked off certain large Phase 3 clinical trials for our drug candidate, plazasiran, to address further indications beyond FCS, namely severe hypertriglyceridemia or SHTG. Net cash used in operating activities during fiscal 2024 was $462,900,000 compared with net cash used in operating activities of $153,900,000 in 2023. The increase in cash used in operating activities is driven primarily by higher research and development expenses as well as lower revenue versus the prior year.
Our footprint expansion is complete with only minor final payments to be made over the next few months totaling $8,000,000 We expect very little capital expenditures in fiscal 2025. Turning to our balance sheet, our cash and investments totaled $681,000,000 at September 30, 2024 compared to $403,600,000 at September 30, 2023. The increase in our cash and investments was primarily related to the $450,000,000 equity issuance as well as the $400,000,000 debt facility, partially offset by ongoing cash burn. We expect our largest cash expenditure in 2025 to be related to the Phase 3 studies for plazasiran. We expect that costs for the ongoing studies will start to decrease in 2026 and 2027.
Thus, a large portion of those study costs were incurred in 2024 as start up costs in 2025 as ramp up costs, which then start to decrease in 2026. Our other clinical studies are earlier phase studies, which require much less capital. The collaboration agreement with Sarepta brings in $500,000,000 in upfront cash, dollars 325,000,000 as an equity investment priced at $27.25 per share, representing a 35% premium to the 30 day volume weighted average price and additional near term cash of $350,000,000 Pro form a cash resources at September 30, 2024, including just the upfront cash and equity investment would be $1,500,000,000 We estimate that this partnership agreement extends our cash runway into 2028, during which time we expect plazaciran maybe approved for the additional indication of SHTG. This capital significantly enhances our balance sheet and puts us on very solid financial footing for several years. Turning to financial guidance.
We expect total cash burn in fiscal 2025 to be $500,000,000 to $550,000,000 of which about $62,000,000 to $65,000,000 is related to G and A costs. We expect similar cash burn in 2026 with G and A comprising about $65,000,000 of spend. Incorporating debt repayments and cash inflows, we expect our cash balance at the end of 2025 to be about $1,000,000,000 and we expect our cash balance at the end of 2026 to be between $600,000,000 $650,000,000 We believe our cash runway extends into 2028. These estimates include modest revenue for FCS, but do not include potential revenue from future business development deals. So if these assumptions prove overly conservative, our cash balances may be higher.
Our common shares outstanding at September 30, 2024 were 124,400,000. With that brief overview, I will now turn the call back to Chris.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Thanks, Ken. As I mentioned, Arrowhead is now extraordinarily well positioned to build value in the short, medium and long term. We think all the necessary pieces are in place to execute effectively and efficiently. We are funded into 2028 with additional non dilutive funding expected when existing and potentially new partnerships advance through clinical studies and generate commercial products. We are building out commercial to be ready on day 1 for our first commercial launch of plazasiran in patients with genetically confirmed or clinically diagnosed FCS.
We are eager to receive our PDUFA date from FDA, but our expectation for commercial planning purposes is to be ready to launch in the middle of 2025. Plazasiran, our lead program is also in Phase 3 studies to potentially expand into the large and significantly underserved SHTG population a couple of years after we launch in FCS. If successful, we would if successful, that would provide a potentially large revenue stream. Outside of plazasiran, we have focused our pipeline around a cluster of cardiometabolic programs, providing some mid term opportunities for commercial launches and multiple long term opportunities. We also retain select key early stage programs providing opportunities to build pipeline value while still managing to limit growth in R and D expense.
Lastly, we have a new collaboration partner with extensive clinical regulatory and commercial expertise to advance and commercialize multiple promising candidates outside of our cardiometabolic commercial focus. So we end fiscal 2024 in a strong position across the board and are now well positioned to execute on our long term strategy and bring several important new medicines to patients over the coming years. Thank you for joining us today. And I would now like to open the call to your questions. Operator?
Conference Operator: Thank you. Our first question comes from the line of Ellie Merle from UBS. Your line is open.
Jasmine, Analyst, UBS: Hi. This is Jasmine on for Ellie. Thanks so much for taking our question and congratulations on all the progress. So first just with the deal with Sarepta including a few FDA programs in Huntington's with the subcu delivery, how are you thinking about the future of Airhead CNS franchise from here and particularly where else you'd like to go with the subcu delivery? And then second, just curious on anything you can say about future plans for zodasiran?
Thanks.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure. So thanks very much for the question. So the subcu CNS platform is one that we're really excited about. As you mentioned, HTT will go to Sarepta. We also have MAPT and Alpha Synuclein that we are developing that remain wholly owned as I mentioned in the prepared remarks.
Those are not really core to our business and so those are potentially partnerable at some point. We are trying to determine the optimal time to partner those. We see a number of good potential CNS targets in the cardiometabolic space. And so I do expect that we will develop and retain some wholly owned CNS assets that will be again core to our cardiometabolic business. So stay tuned on that.
I expect that we'll have some updates on that in 2025. Regarding zidasiran, we are trying to figure out our strategy there. At the very least, we see a big opportunity or at least an interesting opportunity in HoFH. And so we have a protocol waiting to go, waiting to start for a Phase 3 study to support HoFH. And we are also exploring how else we may be able to exploit that asset.
Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Luca Iffy from RBC Capital. Your line is open.
Luca, Analyst, RBC Capital: Great. Thanks so much for taking my question. Congrats on the progress and not doing the deal with Sarepta. Maybe two quick ones. Bruce, if I may, we've seen elalili discontinuing their siRNA for A plus C3.
So wondering what was your reaction to that? And then maybe on the deal, Chris, can you just maybe provide any color on whether that deal Sarepta was competitive? And then maybe related, lots of moving parts obviously with the FTC, but any potential risk here in the context of what we saw a year ago between Sanofi (EPA:SASY) (NASDAQ:SNY) and May's? Any color there much appreciated. Thanks so much guys.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure. Bruce, why don't you take I might take yours first and then I'll go after that.
Bruce Given, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: Sure. I of course don't know why Lilly made that decision. It's hard to assess from a distance. Plazasiran is an awfully good drug and it may have set the bar too high. That's a possibility.
But I really can't determine why Lilly would have made that decision one way or the other. Not very fulfilling for you, I know, but that's about the best I could do.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: All right. And thanks for the questions, Luca. So regarding my question, so was the SREP deal competitive? Sure. We were talking to other companies about large strategic deals.
This one made sense to us. There's of course never 100% overlap with respect to what's included in these various strategic deals, but at least philosophically, we were talking to other companies about that. And look, what the potential good news here is that we also have additional assets that I mentioned in the prepared remarks that remain un partnered that are not core to our business. And so I think we have room to do additional partnerships. Nothing I don't think quite as large as what we're talking about here with Sarepta with an overall deal value greater than $11,000,000,000 plus royalties.
But I think there are still good deals that we can do with other companies around other assets and potentially with discovery components. As I mentioned, we've got an extraordinarily productive discovery team that has capacity to serve us and Sarepta as well as other partners. Regarding the HSR risk, like who knows, I can't give you much guidance on that other than from our perspective, there does not seem to be overlap there that make us concerned. But of course, that's not our call to make. We'll just have to see when that comes down.
We expect to have a ruling 30 days after we file. And so sometime in I believe early January is when we would expect to clear
Conference Operator: HSR. Thank you. One moment for our next question. Our next question comes from the line of Andrea Newkirk from Goldman Sachs (NYSE:GS). Your line is open.
Jasmine, Analyst, UBS: Hi, everyone. Thanks for taking my question and congratulations on the Svepta deal. Maybe on the back of that and in the context of the debt financing that you announced on the last earnings call, how are you thinking about paying that down? And is there a particular amount that's maybe earmarked and disrupt the deal that's obligated towards paying off the principal for that facility? And then Ken, maybe a question for you here, if you could quantify the R and D savings that you expect to realize and over what time period we could think about that?
Thanks so much.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure. So we will be paying down the debt through Sarepta as well as through other deals as cash comes in. There are formulas for that. And so we do expect that to contribute to paying down the debt over time. Ken?
So we've taken certain costs out
Ken Myszkowski, Chief Financial Officer, Arrowhead Pharmaceuticals: of the budget, but the main components or the biggest part of our R and D spend relates to those 3 Phase III trials that I mentioned earlier. And we expect those costs to continue over the next 2 years and then decrease by 2027. So it would depend on if there's any new large trials by that time. But over the next 2 years, we'd expect it to remain constant with the guidance and then
Conference Operator: decrease. Thank you. One moment for our next question. Our next question comes from the line of Maury Raycroft from Jefferies. Your line is open.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals0: Hi, thanks for taking my questions and congrats on the deal update today. I wanted to ask about the obesity programs. So for INHIBBI and ALK7, how important are these strategically to the company at this point? And with obesity studies, you can get insight into efficacy relatively quickly. Wondering if you'll run a placebo controlled Phase 1 and can you commit to getting to data from either of these programs sometime next year?
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: I'll take the strategic question. These are important to us strategically. Look, these are really interesting targets, genetically validated. We will be, I believe, the first ones in the clinic with inhibiting, and I think we'll be the first one in the clinic by a long shot with ALKS7. I don't know anybody else who will be in the clinic in the near term with siRNA against adipose.
So we like our positioning here. We like our we like the genetic data. We love our animal data. And so these are important for us. To be honest, if we wanted to partner these, we could have, but these are important for us strategically.
And so we look forward to run these studies and see what we see. James, do you
James Hamilton, Chief of Discovery and Translational Medicine, Arrowhead Pharmaceuticals: want to address the Phase 1? Sure. Yes. On the Phase 1 designs, the both programs are placebo controlled in patients with obesity. The main purpose of the study are, of course, to generate an understanding around safety and PK and some early target engagement biomarker data.
We have some exploratory endpoints in there, but these are primarily focused on safety PK and biomarkers.
Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Jason Gerberry from Bank of America (NYSE:BAC). Your line is open.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals1: Hi, good afternoon. This is Dina on for Jason. Thanks so much for taking our question. Congrats on the deal announcement and the progress this quarter. The first one we had is more of a broad strokes question.
How does the Sarepta agreement change your TRiM discovery engine prioritization by tissue type and targeted number of lead preclinical candidates that you plan to kind of accelerate into the IND stage over the near term? Like do you plan to kind of separately advance preclinical assets for your own internal verticals or for additional partnerships? And then I just had a follow-up on your zodastrine strategy. Is it really safe to say that we could see an execution of a COVT when the company is in a better capital position with costs from the plazasiran studies winding down in 2026 or so? Thank you.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure. So with respect to the CVA question, look, we have always been interested in asking this triglyceride question in outcomes in our KOLs, feel strongly that that posasiran could be a very powerful ASCVD drug. And so we just need to wait to see better visibility on capital in order to start that CBOC. Those can be expensive and time consuming. And so we just want to make sure that we've got the capital in front of us before we start that.
With respect to the first question, sorry, what was that again?
James Hamilton, Chief of Discovery and Translational Medicine, Arrowhead Pharmaceuticals: Our bandwidth for
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: both targets. Yes, right. So look, on Discovery, we really can be an and company, not an or company. We've got plenty of bandwidth to serve Sarepta and to serve ourselves and frankly to serve other partners. James, approximately how many nominations can we do over the last couple of years?
James Hamilton, Chief of Discovery and Translational Medicine, Arrowhead Pharmaceuticals: I mean, we've done close to double digit nominations per year. So 5 to 10 per year is certainly doable. And all of the targets will probably not come in all at once from the partner.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Right. So if we are in the 5 to 10 nomination range per year, this is a 5 year collaboration. And so over those 5 years, we could goodness, we'll have dozens and dozens of nominations over that time. So we've got plenty of room to have a vigorous discovery campaign with ourselves for ourselves as well as for Sarepta as well as for other partners.
Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Patrick Trucchio from H. C. Wainwright.
Your line is open.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals2: Thanks. Good afternoon and congrats on the collaboration. I just have a couple of follow ups on it. Can you tell us how the clinical or preclinical programs are expected to be prioritized within the collaboration with Sarepta and how much input Arrowhead would expect to have in that process? And separately, can you tell us how the collaboration contributes to or accelerates achieving the 2025 strategy?
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure. So I'll take that one first. I don't know that it affects our 2025 strategy so much because we have one more year for 2025 and I don't know if Sarepta can move fast enough to get us a target and for us to get them something that will enter the clinic during that time. So I don't think it's relevant to 2025 necessarily. Regarding prioritization or regarding how we run those, well, so let's see.
So the clinical assets will go to them. We are happy to help them with the transition, but those will ostensibly move to them and they will continue those clinical programs essentially on day 1 again and we're happy to help them, but that will be their purview. The non clinical assets, we will get those 2 CTA ready and then they will take those over and assume all the costs and of course all the burden of running clinical studies with them. Same thing with the discovery bucket. Our job is to get them a CTA ready package, and then they would take those 4 into the clinic.
Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Edward Tenthoff from Piper Sandler. Your line is open.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals3: Great. Thank you. And my congrats too on the financing. You guys have been wheeling and dealing. I love to see it.
When it comes to the 250,000,000 dollars over the 5 year period, firstly, is that considered like an R and D funding or is it what is sort of the classification of that? And how will that be? Is that just straight line amortized or how would you be recognizing that?
Ken Myszkowski, Chief Financial Officer, Arrowhead Pharmaceuticals: So the $250,000,000 payment was just a timing of the payment. The accounting recognition or revenue recognition for that, we need to assess that with the rest of the deal, including the upfront payment and what our performance obligations are. So we'll get more information to you on how we will recognize that
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: revenue. And that's simply $50,000,000 a year over 5 years starting on the 1 year anniversary of the closing of the deal.
Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Mayank Mamtani from B. Riley Securities. Your line is open.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals4: Yes, good afternoon. Thanks for taking my question and congrats on productive quarter and the deal. Just quickly following up on the clozapitant NDA filing strategy, could you confirm what the focus there is on the 25 mg dose level and how do you think of the total patient exposure there to be able to have that broader label that you did evaluate the study for with and without FCS genetic infant patients? And I do have a follow-up.
James Hamilton, Chief of Discovery and Translational Medicine, Arrowhead Pharmaceuticals: Bruce?
Bruce Given, Interim Chief Medical Scientist, Arrowhead Pharmaceuticals: Well, so the filings only for the 25 milligram dose because it performed really at least equally to the 50 milligram dose. So, as I said, all the data for the drug and all the indications at 25 milligrams was the right dose. So I think we're very we feel very solid there. The question if I understood the second question right, I didn't really hear it very well. But if I understood it correctly, we of course don't know at this point how the agency, how the FDA will feel about the question of genetic versus clinical FCS.
We did expand to include the clinically diagnosed FCS patients at the suggestion of the agency. So that says something. But ultimately, we would assume that assuming the agency is happy with the NDA in the end, we won't be discussing indication until the very end. I hope I answered your question there, but I'm not 100% sure I did.
Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Prakhar Agrawal from Cantor. Your line is open.
: Hi. Thank you for taking my questions and congrats on the Sarepta deal. Maybe firstly on the deal, how much of the data did Sarepta see on both DM1 and FSHD programs? Was it mostly limited to the SAD program, SAD cohorts or were you able to see some of the multiple dose data as well? And the second question is on Inovnee.
It's an interesting target preclinical data, very interesting and the genetic evidence is out there. So maybe just broadly, how are you thinking about where this drug fits in the obesity landscape relative to the ingredients out there commercially and that are coming out soon? And how does an RNAi therapy differentiate in obesity? Thank you.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure. So surreptisib and then we have we have not moved into MAD cohorts yet. So all we have is very limited in fact, SAD data, but that's what they saw. Regarding INHIBANI and ALK7, look our job here is not necessarily to put GLP-1s out of business. I think that we have an opportunity to work with GLP-1s as we talked about in the prepared remarks and also in the webinar several months ago.
At least in animal studies, we're able to use a sub therapeutic dose of tirzepatide in combination with either ALK7 or inhibony and show good weight loss, in fact better quality weight loss than tirzepatide alone. That could be possible use. Also maintenance could be a possible use in order to be on a GLP-one and then lose a substantial amount of weight and then keep it off with an immunity or ALK7. They could also be used as monotherapy, who knows. We'll see what the tolerability looks like.
From our perspective, we've as you say, the non clinical data were compelling, the genetic data are compelling. And so we really look forward to seeing how this translates into humans.
Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of David Lebowitz from Citi. Your line is open.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Thank you very much for taking my question. Given the large partnership with Sarepta, what are your thoughts on additional partnerships going forward? Are you intending to take a pause from that or are you still on the lookout? I would say somewhere in between those. We are still on the lookout.
As I mentioned, we were before we did the Sarepta deal, we were in discussions with other companies about large strategic collaborations. Those we are no longer really considering, but there are smaller bite sized collaborations and license agreements that certainly could take place. Look, our hair is not on fire. This is an important deal for us. This gives us a lot of breathing room and gives us frankly what we needed in a number of areas.
And so, I think we can get the right deal or deals done over time. We don't have to have that tomorrow, but I do expect more deals over some period of time. Certainly, we've got the capacity on the discovery side and we've got the assets both non clinical and clinical, that are not core to our metabolic to our cardiometabolic focus. And so I think there's ample ammunition there for additional deals.
Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Key Nikke from Chardan. Your line is open.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals4: Yes. Thank you. Congrats on the deal. Just looking for some further clarification about the plans for lung. I think you said you're still taking RAGE into a Phase 2, maybe first half of next year.
But will you look to partner that? And then beyond that, will you look to pursue any other loan targets? Thank you.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Sure. Look, yes, I think that ultimately RAGE should be partnered. That's going to require large and relatively complicated asthma studies, maybe COPD. With our renewed focus on cardiometabolic, it would make sense for us to find the right partner for that. We don't have to do it tomorrow.
But at some point, it would make some sense to partner that. It could be that it makes sense for us to do a bit more work, some kind of Phase 2 study we'll see in order to increase the value of a partnership. We haven't made those decisions yet. I'm just telling you what's on the table, I guess. Look, we like the pulmonary platform.
I think there's an awful lot we can do there, particularly in deep lung targets. And so my hope is that we continue to develop that. Again, less for ourselves, longer term at least, less for ourselves and more for partners. It doesn't mean that we wouldn't initiate some programs, but it would mean that we'd be doing those largely on spec. My hope is that we can find partners who are interested in helping us develop the right medicines against the right targets in pulmonary.
Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Brendan Smith from TD Cowen. Your line is open.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals5: Hi guys. Thanks for taking the questions. Another big congrats from me on the deal. I guess, piggybacking really on that last question, just on the pulmonary vertical, have you filled that inbound at this point? Or are you in any active discussions about potentially partnering that platform more broadly?
I guess, obviously, our agents kind of lead there, but to your point, there seems to be a lot of optionality for that kind of across the board. So just wondering where you guys are where your head is at on that a little bit more broadly? And then can you just maybe confirm for plazasiran if kind of now this renewed focus on cardiometabolic, does this mean that a commercialization partner is just kind of off the table altogether now and you think you should be able to fully commercialize it across the different segments on your own? Or is that still maybe something you'd consider like post SHTG data before the CVOT reads out? Thanks.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Yes. So we would certainly consider ex U. S. Partners, partner or partners. Within the U.
S, we really see ourselves building out our commercial infrastructure largely around plazasiran and then using that infrastructure to commercialize other cardiometabolic assets as well. But sure, we would certainly consider some ex U. S. Partnership if the right one came around. Again, back to lung, we have spoken with folks about lung as you can imagine.
I don't know I don't have any guidance on when we may get a pulmonary deal done. As I mentioned, my the Sarepta deal is important for us and it allows us to have some breathing room here. And so I don't expect a pulmonary partnership in the very, very near term, but it's certainly something that we have spoken with other companies about and we will continue to do that.
Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Mani Foroohar from Leerink. Your line is open.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals6: Guys, you have Ryan on for Mani. I'll add my congrats on the deal and thanks for taking our questions. So maybe first just a follow-up on a prior question around paying down debt through the BD cash flow from Sarepta and other agreements. So does that mean you plan to utilize this new cash to cover the interest expense on the debt? Or are you planning to actively pay down the principal?
And at the latter, to what degree and on what time horizon should we expect that? And then real quick, maybe just circling back to the $300,000,000 near term milestone for DM1 enrollment, any specifics you guys can provide on the $100,000,000 $200,000,000 milestones and how those are achieved?
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Yes. So I can't get too granular on that. But I can tell you that that has to do, as you mentioned, with the DM1 program and it just has to do with when a certain number of patients have been dosed within some of the early cohorts. We are on track, I believe, to reach that over the 1st 3 or so quarters of 2025. Look, that can change as those studies go on, but at least right now that is our hope, that's our expectation.
Regarding the debt, we know we'll be paying down both interest and principal over time as cash comes in through Sarepta as well as through other partnerships.
Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of William Pickering as an analyst for Bernstein. Your line is open.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals7: Hi, thank you for taking my question and congrats on the deal. You made some reference to cardiomyocyte targets during the prepared remarks and I was wondering if you could expand on what sorts of indications you're interested in here, whether it's rare or higher prevalence, is there a clear demarcation between the CARDIA targets that you want to pursue independently versus what Sarepta has dips on? Thank you.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Yes. So I can't give you too much guidance. I can't give you any guidance, frankly, on what targets we are considering within cardiomyocytes. That's still pretty early. Our non clinical data have been compelling and so we view that as a platform that we can start to really consider bringing into the clinic.
I can tell you Sarepta has not given us any targets yet within cardiomyocytes. I don't know if they have any, in particular they're thinking about right now. They just have the ability to designate some targets within cardiomyocytes as well as skeletal muscle and CNS. So I don't know where they're going to go or when they're going to do that. We have some ideas on targets.
And so my expectation would be that probably sometime in 2025 you might hear a bit more about that.
Conference Operator: Thank you. One moment for our next question. Our next question will be a follow-up from Mayank Mamtani from B. Riley. Your line is open.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals4: Thanks for taking my follow-up. Could you also touch on how your TFR ligand based targeted approach is different than maybe the other vein shuttle approach is being looked at? And what attributes you feel allow you to optimally target, I believe, MAPT, there's a couple of approaches being looked at there? And thanks for taking my follow-up.
James Hamilton, Chief of Discovery and Translational Medicine, Arrowhead Pharmaceuticals: Yes, sure. So we haven't disclosed a lot of details on that. I would refer you to the webinar that we gave a few months ago, what month was that? October. October, where we covered the CNS platforms and talked a little bit more about that specific platform and how it differentiates itself.
Vince Anzalone, Vice President of Investor Relations, Arrowhead Pharmaceuticals: And I think structurally all we said it was TFR targeted, but we didn't describe the structure any more specifically than that.
Conference Operator: Thank you. And as there are no further questions at this time, I would now like to turn it back over to Chris Anzalone for closing remarks.
Chris Anzalone, President and CEO, Arrowhead Pharmaceuticals: Thanks very much everyone for joining us today. This has been an important day for us with this Sarepta deal. We're excited about what that's done for us as a company. We're excited about working with Sarepta. So thanks for joining on the call today and I wish you all a happy Thanksgiving.
Conference Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.
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