Arrowhead Pharmaceuticals, Inc. (ARWR) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Arrowhead Pharmaceuticals REDEMPLO FDA Approval Conference Call. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the Arrowhead website following the conclusion of the event. I'd now like to turn the call over to Vince Anzalone, Vice President of Finance and Investor Relations at Arrowhead Pharmaceuticals. Please go ahead, Vince.

Thank you, Tara, and thank you all, everybody, for joining us today to discuss the FDA approval of REDEMPLO to reduce triglycerides in adults with familial chylomicronemia syndrome or FCS. Next slide, please, Tara. One more. Thanks. Before we begin, I'd 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-K and our quarterly reports on Form 10-Q. Next slide, please. With us today from management are President and CEO, Dr. Chris Anzalone, who will provide an overview of the FDA approval; Dr. James Hamilton, Chief Medical Officer and Head of R&D, who will provide background on FCS and describe key parts of the FDA-approved label; Dr. Bruce Given, Interim Chief Medical Scientist, who will provide a review of the PALISADE Phase III data; and Andy Davis, Senior Vice President and Head of Global Cardiometabolic Franchise, who will provide an update on our U.S. commercial launch plans. Dan Apel, Chief Financial Officer; and Patrick O'Brien, Chief Operating Officer and General Counsel, will also be available during the Q&A session. Following these prepared remarks, we will open the call to questions. I'd now like to turn the call over to Chris Anzalone, President and CEO of the company. Chris?

Thanks very much, Vince, and thank you all for joining us today. Next slide, please. It is my distinct pleasure to introduce REDEMPLO, the first RNAi-based medicine that is approved by the FDA to reduce triglycerides in adults with familial chylomicronemia syndrome, or FCS. This is also Arrowhead's first approved product and one that utilizes our proprietary targeted RNAi molecule platform or TRiM. REDEMPLO is a great example of what we believe we can continue to build, leveraging the TRiM platform, important precision medicines that are well tolerated, convenient to use and uniquely effective. Next slide. REDEMPLO is positioned as a promising new medicine for FCS patients. Unprecedented median triglyceride reductions of 80% from baseline were seen. Patients with genetically confirmed FCS as well as those with clinically defined FCS were included in our Phase III study and both populations responded similarly. Reduced incidence of acute pancreatitis was seen. REDEMPLO has a strong label with no contraindication or warnings and precautions. Importantly, it was well tolerated with no signs of drug-related platelet decline, hypersensitivity or antidrug antibodies. REDEMPLO is administered as a convenient at-home subcutaneous injection once every 3 months, and our commercial team is ready and excited to launch today. Next slide. The road to approval for REDEMPLO has been long but productive. We have been studying and developing RNAi technology for nearly 20 years now, and there is simply no substitute for the time and resources we have invested in this modality. It started with technology licensed from Caltech, included our acquisition of Roche's RNAi business in 2011 and Novartis' RNAi business in 2014 and has culminated in extensive in-house development that led to TRiM platform and our ability to address 7 different cell types, 5 of which have representative candidates in clinical trials now. APOC3 has been validated as a potentially good target to lower triglycerides for some time now, but has been difficult to drug safely and effectively. We nominated ARO-APOC3 as a potential clinical candidate in July 2018 and randomized our first healthy volunteer in a Phase I study in March 2019. The first SHTG patient was randomized in the SHASTA-2 Phase II study in May 2021, and the first mixed hyperlipidemia patient was randomized in the MUIR-2 Phase II study in September 2021. January 2022 saw the first FCS patient randomized in the PALISADE Phase III study, results from which were published in the New England Journal of Medicine in September 2024, and we filed the plozasiran NDA soon thereafter in November 2024. The SHASTA-2 results were published in the New England Journal of Medicine in April 2024, and we initiated the Phase III studies to support an sNDA in SHTG patients with the MUIR-3 and SHASTA-3 and 4 studies beginning in May and July 2024, respectively. SHASTA-3 and SHASTA-4 studies were fully enrolled just 11 months later in June 2025. This road has not ended with REDEMPLO's approval as we anticipate SHASTA-3, SHASTA-4 and MUIR-3 to read out in Q3 2026, and we hope to file the sNDA for an SHTG indication in Q4 2026. Next slide. Let's now talk about the health care burdens of FCS. First, diagnosis has been a challenge. Typically, approximately 5 physicians are seen before a diagnosis is made and about half of all patients are misdiagnosed. Once a patient is being seen for FCS, there are a number of types of specialists that generally provide treatment, including endocrinologists, lipidologists, cardiologists, pancreatologists, primary care physicians and dietitians. There is a substantial human cost to FCS. Most pressing is the increased incidence of acute pancreatitis. This is always a serious medical condition that can require hospitalization and in some instances, can be fatal. Importantly, with each acute pancreatitis event, subsequent events become more likely and more severe. It is critical to keep patients from having any events and if possible, a first event. In addition to acute pancreatitis, FCS patients commonly suffer from recurrent abdominal pain and brain fog, substantially compromising quality of life and contributing to lost productivity. The economic costs are also high. Each pancreatitis event can have direct medical costs exceeding $60,000. As I mentioned, once a patient has a single event, they are more likely to continue to have events and the severity of future episodes and therefore, cost to treat can also increase. Over 90% of episodes require an inpatient stay with an average stay of 10 days. Adding this to lost productivity, substantial pain and discomfort and diminished quality of life in a setting where future pancreatitis events can increase in rate and severity make FCS a truly costly condition. Next slide. We are all in this business to help patients. As such, it is helpful to personalize what we are doing and put names and faces to the diseases we seek to treat. We know Scott well and have interacted with him extensively as we have learned more about what FCS patients live with every day. Symptoms began in childhood. And when Scott was in his 20s, he began having eruptive xanthomas and suffered severe abdominal pain. His triglycerides were eventually tested and even though they were severely elevated, nothing was done. Scott struggled for 23 years before finally being diagnosed. He talks about the relief he felt when there was a name ascribed to what he had been living through, even though there was no treatment available for FCS. In all, he has endured 25 pancreatitis attacks, untold days and nights in various hospitals, the uncertainty associated with never knowing when an attack may come and the need to always know the location of the nearest hospital. In 1 year, he spent 2 years in the ICU every 8 weeks, missing life at home and unable to maintain his career. For every Scott we know, there are many others we do not. We are thankful to him for helping us understand the human cost of this disease and are thrilled to now be able to offer treatment. Next slide. Let's now move to pricing. We're happy to announce with the One REDEMPLO pricing model that creates one consistent price across current and future indications. We are committed to sustainable innovation, and this requires rational drug pricing according to the value of a medicine offers to patients and health care systems. It also means that we will not seek -- we will not ask different patients to pay different amounts for the same drug. REDEMPLO is a pancreatitis drug regardless of the patient type that will eventually use it. The One REDEMPLO price is based on its value for patients in the broader severe hypertriglyceridemia or SHTG market that are at the greatest risk of acute pancreatitis. Generally speaking, this would be those patients with triglycerides greater than approximately 880 milligrams per deciliter. We are currently only approved for treating FCS patients and of course, we'll only be marketing to this much smaller patient population now. However, we have ongoing Phase III studies in SHTG patients and pending successful outcomes of those studies, regulatory review and approval, we hope to bring REDEMPLO to those patients in the future. It simply makes ethical and strategic sense to us if our price reflects REDEMPLO's long-term value in the high-risk SHTG population. While the SHTG studies are ongoing and we are only serving the FCS population, we will have time to work with payers to demonstrate that the One REDEMPLO price offers real value in the high-risk SHTG population. The annual One REDEMPLO WACC price is $60,000. Next slide. REDEMPLO is a pancreatitis drug, but Arrowhead is also active across other lipid disorders with different sequelae. The far right of this figure represents severe hypertriglyceridemia. This is characterized by TGs greater than 500 milligrams per deciliter with the extreme condition defined as genetically defined or clinically defined FCS. The primary sequelae at this end of the spectrum is increased risk of acute pancreatitis and REDEMPLO sits squarely here. On the other end of the spectrum is patients with homozygous familial hypercholesterolemia, or HoFH. These patients will not have elevated TGs, but will generally have LDL cholesterol greater than 400 milligrams per deciliter. They are at substantially increased risk of atherosclerotic cardiovascular disease, or ASCVD, even at a young age. We are developing investigational zodasiran, an RNAi drug candidate designed to reduce ANGPTL3 expression to treat these patients. We have ongoing Phase III studies in support of zodasiran and expect them to be complete in 2027. In the middle of the spectrum is patients with mixed hyperlipidemia. This large population have elevated TGs in the 150 to 500 milligrams per deciliter range and elevated LDL cholesterol. We believe there are approximately 20 million people in the U.S. with these lipid parameters, and they are at increased risks of ASCVD. We are developing what we believe to be the world's first RNAi DIMER to treat this population. ARO-DIMER-PA is designed to reduce expression of both PCSK9 and APOC3 in a single molecule and thereby reduce both LDL-C and TGs. We are very excited about this concept and drug candidate and expect to begin dosing mixed hyperlipidemia patients in a Phase I/II study over the next 2 months and expect to have an idea of how well it translates from animals to humans by the middle of 2026. So between REDEMPLO, zodasiran and ARO-DIMER-PA, we hope to eventually treat the entire spectrum of LDL and triglyceride disorders. This is indeed an exciting portfolio of potential cardiometabolic medicines. I'd now like to turn the call over to Dr. James Hamilton. James?

Thank you, Chris. If you move to the next slide. Proper metabolism of dietary fat is critical to survival. It starts in the intestine where lipids are broken down and absorbed by enterocytes, which repackage triglycerides into chylomicrons. Chylomicrons are secreted into the lymphatic system where they eventually make their way into venous circulation. The liver is also capable of secreting lipoprotein-bound triglycerides directly in the circulation in the form of VLDL. Chylomicrons, VLDL and the remnant particles constitute triglyceride-rich lipoproteins or TRLs. Once in circulation, cellular utilization of triglycerides on TRLs initially requires hydrolysis via the enzyme lipoprotein lipase or LPL. As LPL hydrolyzes triglycerides on chylomicrons and VLDL, smaller remnant particles are formed, which are removed from circulation through receptor-mediated clearance by the hepatocytes. In phenotypic and genetically defined FCS, TRL clearance pathways are impaired, leading to an accumulation of chylomicrons in the blood or chylomicronemia. This is classically due to a deficiency in LPL activity. Blood triglyceride levels of above 880 milligrams per deciliter are diagnostic of chylomicronemia. Next slide. The most dreaded consequence of this inability to clear chylomicrons is recurrent bouts of acute pancreatitis, which are debilitating, adversely affect quality of life and which can be life-threatening. In fact, the mortality rate of acute pancreatitis due to chylomicronemia is up to 6% and up to 30% in the setting of pancreatic necrosis. The lifetime risk of acute pancreatitis is around 80%, and these events involve frequent and prolonged hospitalizations often in the intensive care unit. About half of these patients will have recurrent pancreatitis and repeated bouts of acute pancreatitis can lead to diabetes due to pancreatic destruction as well as chronic pancreatitis and chronic abdominal pain, which further adversely impact quality of life. Next slide. To reduce the risk of developing acute pancreatitis, many medical societies recommend reducing triglycerides to below 500 milligrams per deciliter. However, this is often difficult to achieve with diet alone and even with the addition of commonly used medications such as fish oil, niacin or fibrates. Many of these drugs maximally reduce triglycerides only by about 30% and can be ineffective in FCS patients. Next slide. In contrast, REDEMPLO works through a novel mechanism that targets the underlying biological deficit in triglyceride clearance that is the key driver of hypertriglyceridemia in FCS. Specifically, REDEMPLO targets APOC3, which is a protein primarily synthesized by the liver that inhibits the activity of lipoprotein lipase at the peripheral tissue level and also slows the clearance of TRLs by the liver. By silencing the hepatic expression of APOC3, REDEMPLO upregulates LPL and non-LPL mediated metabolism of TRLs, which can dramatically lower circulating triglyceride levels, thus preventing chylomicronemia. Next slide. Bruce will review the data from our FCS PALISADE study. But first, I'd like to go over highlights of the REDEMPLO U.S. label. REDEMPLO was approved as an adjunct to diet to reduce triglycerides in adults with FCS. The recommended dose of REDEMPLO was 25 milligrams, self-administered or administered by a caregiver every 3 months by subcutaneous injection. Next slide. REDEMPLO has no warnings, contraindications or precautions and the most common adverse reaction in the Phase III PALISADE clinical trial include hyperglycemia, headache, nausea and injection site reactions. Next slide. In the same study, REDEMPLO 25 milligrams every 3 months reduced median triglycerides by 80% compared to 17% for placebo. Importantly, in this study, the median triglycerides were reduced to below 500 milligrams per deciliter, which is a key threshold level in FCS patients and reduction below this threshold was largely maintained throughout the study. I will now turn the call over to Bruce Given, who will review in more detail the previously presented PALISADE clinical data. Bruce?

Thank you, James. Good afternoon. I'm excited to be here to discuss this important approval for patients with FCS and their caregivers as well as, of course, Arrowhead's first approval. My role today is to talk about the study that formed the basis for the REDEMPLO approval in FCS. Next slide, please. PALISADE was the pivotal trial for plozasiran in FCS. Notably, we studied patients with both genetic FCS and those with the same clinical manifestations of disease, but without solely a genetic cause, referred to as clinical FCS or phenotypic FCS, for instance. All subjects enrolled in PALISADE had a history of persistent chylomicronemia and either inheritance of abnormal genes from both mother and father, reducing lipoprotein lipase activity, defined as genetic FCS or clinical FCS with clear evidence of severe lipoprotein lipase impairment indicated by recurrent history of acute pancreatitis or multiple bouts of severe abdominal pain requiring hospitalization or a family or a childhood history of pancreatitis. Many of these subjects had inherited at least one recognized disease gene affecting their lipoprotein lipase function. Next slide, please. A wide portion of the trial was designed to compare a year of therapy with plozasiran or placebo dosed every 3 months and tested 2 different doses of plozasiran versus placebo. The primary endpoint was change in median triglycerides at month 10. Also listed here are the multiplicity controlled secondary endpoints. The first 3 of these were only measured for significance if the preceding endpoint on the list was statistically significant at both doses of plozasiran compared to placebo. All of these key secondary endpoints were statistically significant, including notably occurrence of acute pancreatitis for which the 25- and 50-milligram doses were combined for comparison to placebo as called for in the analysis plan. As you'll see in a moment, the 25- and 50-milligram doses produced essentially the same reductions in triglycerides. And for this reason, we only sought approval for the 25-milligram dose, and this was a dose approved by FDA. Next slide. Shown here are the baseline characteristics in PALISADE. As you can see, FCS affects younger individuals than we tend to see in most cardiovascular disease trials. Notably, we see less obesity in FCS than in most cardiovascular trials as indicated by the normal mean body mass index, or BMI. Chylomicronemia is usually seen when triglycerides are greater than 880 milligrams per deciliter. And you can see the mean and median triglycerides were well above this threshold, which is typical for FCS. Genetic FCS made up over half of the subjects and importantly, around 90% of the subjects had a history of pancreatitis, which indicates the severity of this disease. Next slide. Shown here are the triglyceride results achieved in PALISADE. The left panel compares the effect of plozasiran at the approved 25-milligram dose in light blue as well as the 50-milligram dose and placebo on triglyceride levels during the trial. As you can see, plozasiran gave deep and durable reductions in median triglycerides as early as 1 month when the first measurement was taken. Overall, these reductions were around 80% from baseline. Note that the 50-milligram dose in dark blue showed no evidence of superiority to the 25-milligram dose, which is the basis for having chosen the 25-milligram dose for REDEMPLO approval. Shown on the right panel is change from baseline for genetic versus clinical FCS patients for the approved 25-milligram dose of REDEMPLO from our circulation paper published last year, showing similar reductions from baseline in the genetic and clinical FCS patients. We see the clinical FCS patients as having the same high unmet medical need as the genetic FCS patients. And as such, we think it is crucial to have shown that both patient populations showed similar large reductions from baseline in triglycerides. As James mentioned earlier, 500 milligrams per deciliter is the recognized threshold where the risk of pancreatitis increases relative to a normal population. For this reason, major societies seek to get chylomicronemic patients below this target. SCS treaters also recognize a threshold of 880 milligrams deciliter -- per deciliter as important because pancreatitis risk has been shown to increase more steeply when chylomicronemia is present. As is apparent on both panels, the median triglyceride levels are often below 500 milligrams per deciliter with REDEMPLO treatment, indicating that over 50% of patients were below the 500 milligrams per deciliter target at those time points. The percentage of subjects below the 880 milligrams per deciliter target was generally around 75%. Next slide, please. As discussed in last year's New England Journal of Medicine paper, plozasiran also reduced the rate of adjudicated pancreatitis events, 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. Next slide. For safety and tolerability, the most common adverse reactions listed in the package insert are hyperglycemia, headache, nausea and injection site reactions. Discontinuations due to adverse events occurred in 6% of plozasiran patients, which strikes us as a pretty low rate for a 1-year clinical trial. Severe and serious adverse events were more common with placebo, and there were no deaths. Lowering triglycerides can impact glycemia, and this is shown here with the modest increases in hemoglobin A1c, while platelet counts were not reduced. There are no precautions, warnings or contraindications listed in the REDEMPLO package insert. So to conclude, reduction of APOC3 levels with REDEMPLO has been shown to be a powerful mechanism for addressing chylomicronemia in genetic and clinical FCS patients and thereby reducing the risk of acute pancreatitis, the most feared complication of FCS. REDEMPLO reduced APOC3 levels by around 90% from baseline, resulting in reductions in triglycerides of around 80%, with many patients reaching guideline recommended levels below 500 milligrams per deciliter, a target more aspirational than real up till now. This has been accomplished with the same general tolerability and modest discontinuation rates that we've come to expect from the siRNA class of approved drugs. In REDEMPLO's case without any precautions warnings or contraindications listed in the package insert. All in all, quite a set of accomplishments for Arrowhead's first approved drug. Moving to the next slide. I will now turn the call over to Andy Davis. Andy?

Thank you, Bruce. Next slide, please. Severe hypertriglyceridemia defined as a triglyceride level of 500 milligrams per deciliter or higher affects approximately 3 million people and can have clinical consequences, including an increased risk of life-threatening acute pancreatitis. High-risk SHTG, defined as a triglyceride level of greater than or equal to 880 milligrams per deciliter or greater than 500 milligrams per deciliter with a prior history of acute pancreatitis affects approximately 1 million people and has markedly higher pancreatitis risk. And lastly, we believe there are more than 6,500 adults in the U.S. who have either genetically confirmed or clinical FCS, the most severe form of SHTG. This is the group that experiences the most severe and life-threatening consequences of uncontrolled triglycerides such as recurrent and necrotizing pancreatitis. Next slide, please. The prescriber base for FCS primarily 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 also include gastroenterologists, advanced practice providers and specialized dietitians. Our go-to-market strategy has been purpose-built for this audience. Many of our rare disease specialists bring extensive cardiometabolic expertise and established relationships within these specialty areas. At launch, we're targeting approximately 5,000 health care professionals through personal engagement and reaching nearly 10x that number through nonpersonal promotional efforts. Next slide, please. To support this population, I'm excited to introduce our REDEMPLO GO LO campaign. At Arrowhead, our philosophy is simple. For FCS patients with extremely elevated triglycerides, lower is better. This campaign plays on the LO in REDEMPLO, turning those last 2 letters into a creative vehicle for our messaging. For example, as seen here, on your mark, get set, LO captures the idea of starting the REDEMPLO journey with energy and optimism. In the PALISADE study, as Bruce mentioned, REDEMPLO delivered an 80% reduction in triglycerides from baseline, lowered the incidence of acute pancreatitis and did so with the convenience of just 1 dose every 3 months. Next slide, please. Here, we're showing data from PALISADE, and it's a really impactful chart. REDEMPLO achieved a significant and sustained reduction in triglycerides with median levels below 500 milligrams per deciliter. And as highlighted, what's particularly compelling is how early the effect appears. You can see a robust reduction as early as month 1, and this effect is largely maintained throughout the 12-month study period. We have worked hard to ensure the health care community understands the importance of achieving levels below 500 milligrams per deciliter to reduce the risk of acute pancreatitis. Next slide, please. We're not just launching a product. We're also launching a complete ecosystem of support. Our infrastructure is ready today built specifically for this rare disease community. It includes our rare disease specialists, REDEMPLO reimbursement navigators, REDEMPLO care coordinators, the Rely on REDEMPLO patient support program and clinical pharmacists, all working together to ensure a seamless experience from prescription to ongoing care. In fact, I can state that the first prescription of REDEMPLO has already been received. Next slide, please. Our Rely on REDEMPLO patient support program is designed to make every step of the journey easier. The program is designed to assist patients and physicians with insurance verification, financial assistance options, a first dose starter kit and supplemental injection training. And if patients ever have questions, our clinical pharmacists are available for one-on-one support. Ultimately, it's about ensuring that patients feel cared for, not just treated. Next slide, please. And finally, I want to share some feedback from the community of patients, caregivers, health care professionals and payers with whom we've spoken. Starting in the top left, an endocrinologist called out the impressive efficacy seen in PALISADE. And in the top center, a cardiologist highlighted how both genetically confirmed and clinically diagnosed patients achieved similar triglyceride reductions in PALISADE. In the top right, a lipidologist noted the proportion of patients whose triglycerides dropped below 500 milligrams per deciliter, a key clinical risk threshold we've highlighted previously today. And on the bottom, you'll see quotes from a payer, a patient and a caregiver, each expressing real optimism about what REDEMPLO represents. Together, these voices capture the excitement and the hope we're hearing across the community. I'll now turn the call back to Chris.

Thanks very much, Andy. Before I proceed, I misspoke when I was talking about Scott, the FCS patient. I said that he spent -- that 1 year, he spent 2 years in the ICU every 8 weeks. Of course, I meant in 1 year, he spent 2 weeks in the ICU every 8 weeks. I apologize that my tongue got twisted up there. In any event, next slide. We're really excited to bring REDEMPLO to the patients who desperately need it. We have been working toward this day for years, and it feels like we have a truly complete medicine for Scott, who we talked about earlier on the call and all the other FCS patients who have been waiting for relief. We have a medicine for them that showed unprecedented median TG reductions of 80% from baseline, reduced incidence of acute pancreatitis, was well tolerated and is administered as a convenient at-home subcutaneous injection once every 3 months. In addition, we are employing the One REDEMPLO pricing model that looks forward to the time we hope to bring REDEMPLO to high-risk SHTG patients pending Phase III completions, regulatory review and potential approval. It establishes a price commensurate with the value in that market on day 1, even while REDEMPLO is exclusively serving the FCS market. I was with our entire commercial field team last week, and they could not be more ready or motivated to bring REDEMPLO to patients. Next slide. Our goal at Arrowhead has always been to create an R&D engine that is capable of pushing 2 to 4 new drug candidates into the clinic every year, a set of platforms capable of addressing diseases across a diverse set of tissues, a scalable and reliable RNAi modality that would give us confidence that most candidates we bring to the clinic will work as designed in a well-tolerated fashion and an expectation that our clinical programs will be rapid and well designed. We have accomplished all of this, and we'll continue to refine and expand on what we have built. This is all limited value, however, unless we can bring the fruits of these labors to patients who need them. Today, we have taken the first concrete step to create that reality. We now have our first commercial launch, and this combines well with our broad pipeline, where we expect to have 20 individual drug candidates in clinical studies by the end of this year, approximately half of which are wholly owned and half partnered, our proprietary and scalable TRiM platform and a strong financial position that enables us to continue to build without being entirely dependent on the capital markets to create a truly integrated company. We believe we have everything we need to be in the next class of large biotech companies. Next slide. As we've discussed, while REDEMPLO is our first approved product, it will not be our last. We've spent years building the TRiM platform to enable us to bring RNAi where it is needed. We are now able to address 7 different cell types and have current clinical programs in 5 of these. In coming years, we expect to continue to create new medicines in these areas while we further expand our reach into even more cell types and disease states. Next slide. Our pipeline has a good mix of early, mid- and late-stage development programs as well as a balanced mix of wholly owned and partnered candidates. This should set up well for fairly regular commercial launches going forward. Next slide. Our pipeline also sets us up for a number of growth drivers in 2026. Of course, this is led by Arrowhead's first commercial sales of REDEMPLO and FCS. Following that, the SHASTA-3, SHASTA-4 and MUIR-3 Phase III studies should read out in Q3 2026. They are designed to support an sNDA in SHTG for REDEMPLO, and we expect that to be filed in Q4 2026. We also expect the zodasiran Phase III study supporting an NDA in HoFH will be fully enrolled in 2026. There are several earlier-stage programs that could also create value for Arrowhead in 2026. These include early clinical data from our first 2 obesity candidates, ARO-INHBE and ARO-ALK7. They also include the possibility of early clinical proof of concept in our burgeoning systemically delivered CNS platform with early data from ARO-MAPT, which is being developed for Alzheimer's disease and other tauopathies. In addition, we expect ARO-DIMER-PA targeting PCSK9 and APOC3 knockdown to have its first clinical readout in the second half of 2026. Next slide. As we discussed, Arrowhead is built to bring a variety of medicines to patients who need them across different disease states. Our work in the cardiometabolic space is at the center of that, and we hope to eventually treat a full spectrum of lipid disorders from severely elevated triglycerides to severely elevated LDL cholesterol to a mixture of the 2. We are starting with lowering TGs in FCS patients with the goal of decreasing the risk of acute pancreatitis and hope to expand REDEMPLO's reach into SHTG patients with a high risk of pancreatitis starting in 2027. We expect to build on that with zodasiran, which is being developed to lower LDL in patients with HoFH. We are hopeful that could be launched in 2028. And finally, we hope that ARO-DIMER-PA could ultimately be used by the very large population of patients with mixed hyperlipidemia to decrease both TGs and LDL in order to potentially decrease the risk of ASCVD. We expect initial clinical proof-of-concept data in the middle of 2026. Thank you for your time today, and I look forward to bringing REDEMPLO to FCS patients who have been waiting for this important treatment. I'd now like to open the call to your questions. Operator?

[Operator Instructions] Our first question comes from Ryan McElroy at Leerink.

Yes, you have Ryan on for Mani. Congrats on the approval. Maybe just one on the price. Can you guys talk about how the list price was influenced by any payer interactions and where you guys are on contracting discussions? And then similarly on price, as you guys kind of think about the expansion into SHTG, how do you think this price influences how you see the SHTG opportunity with regards to the most high-risk patients, those who have had prior pancreatitis events and those that are really just over the 550?

Sure. So of course, we have had extensive conversations with payers, but that's primarily in the FCS population. Here's the way we view this. REDEMPLO right now, is, of course, critical to FCS patients. We think it's a very important drug for this population. And it's also important for our commercial team to be in the field. But ultimately, the large economic opportunity here is in the SHTG population. And so it's critical that we get the right price for that. And if that means that we give up some short-term revenue in FCS, we view that as an investment in the future. So again, the real economic opportunity here and our focus, at least in terms of economics is making sure that, that is properly priced. And the way we look at it, the -- at least the initial population there is the high-risk SHTG patients. As Andy talked about those, those are the 1 million or so patients who have trigs above 800. And so this, to us, feels like the right price for that population given their high risk of pancreatitis and given what we've seen in the past with respect to our ability to lower triglycerides in the Phase II studies and then, of course, in the Phase III study in FCS patients.

Congrats again.

Thank you.

Our next question comes from Morgan Lamberti at Goldman Sachs.

This is Morgan on for Andrea Newkirk. Congrats on the approval. Given your label includes self-administration at home every 3 months and has a really clean safety profile, how do you anticipate these advantages over the competitor could encourage switching dynamics and support REDEMPLO's early launch cadence?

Andy, do you want to address that?

Yes, happy to take that. Thanks for the question, Morgan, and thank you for highlighting one of the key benefits of REDEMPLO, which is self-administration every 3 months. We've heard from patients and physicians that, that convenient dosing regimen is favorable. Moreover, the clean safety profile, as you mentioned, is exceptional. The fact that we have no contraindications, warnings or precautions in the label does speak, as Bruce had mentioned, to the profile of siRNA broadly, but REDEMPLO specifically. And I think when you combine the efficacy message, in particular, 80% reduction in triglycerides from baseline and the reduced incidence of acute pancreatitis, we really have an exceptional molecule here, which speaks to the convenience and the dosing regimen every 3 months, the tolerable and safe profile and lastly, the efficacy. And so as it relates to being in the competitive market, we anticipate that REDEMPLO will be an appropriate medicine for switch patients, but also for treatment-naive patients as well.

Our next question comes from Ted Tenthoff at Piper Sandler.

Congratulations on a very, very long process. You guys deserve a lot of credit here for bringing the first Arrowhead medicine to the market, really exciting. I had 2 questions, if I may. Firstly, how many patients remind me are currently on the OLE on plozasiran in the OLE trial? And what are the plans outside of the U.S. in Europe and other geographies?

Sure. I'll take the second of those questions, and then James, you can take the first part. Regarding ex U.S., look, we see this as an important medicine worldwide, and we are preparing for a European launch and we're happy to do it ourselves. We are certainly open to finding the right partnership for commercializing this outside the United States, but we're not dependent upon that. I think it's important that we prepare ourselves. And if the right deal comes around, we're happy to take it, but we're not dependent upon that. James, do you want to handle the first question?

Yes. Yes, sure. I don't have the exact number in front of me, Ted, but the majority of patients from the FCS study have rolled over on to the OLE.

That's my thought. And did you guys file the MAA yet? Have you filed or what are your filing plans in Europe?

Sure. Bruce, do you want to take that?

Sure. Yes, we did file. And in fact, we're well into that process. We're at the stage now where we reply to their questions. So they've fully reviewed it and they've given us their questions, and we'll be replying to those soon. So yes, we're well along in that process. And to go ahead and answer your first question on the number of patients in the OLE, it's probably in the mid-60s, Ted, like that number now, but you were wanting a sort of current number. And I would say we're probably in the mid-60s.

Our next question comes from Farzin Haque at Jefferies.

This is Farzin on for Maury. Congrats on the approval. A quick question. Your label is in line with Ionis' one on patient population and numerical benefits on AP reduction. But was there any back and forth with the FDA on getting the AP statistical benefit included?

Bruce, do you want to take that?

Sure. It's a technical issue in that the 50-milligram dose, we did not seek approval and the FDA agreed with our decision. And because we had designed the trial to combine both the 25 and 50 milligrams for the analysis, we actually don't have a 25-only analysis. And therefore, they left the statistics out. So it's for that technical reason that we went in this direction. But I would also add that the FCS indication from the standpoint of the FDA, they really don't draw the distinction between genetic and clinical FCS. And because we studied clinical FCS, they included that description in the package insert. So we are free to talk about the data in the clinical FCS patients. So in some ways, the FDA has expanded the definition of FCS to be both genetic and clinical. And for instance, in Europe, the approval for Tryngolza in Europe is only for genetic FCS. So they're not allowed to actually promote for clinical FCS. So it's an important distinction. And I thought maybe I would just go ahead and bring that out since you brought it up.

Yes. And on the pancreatitis front, look, the biology here is clear. And as Andy pointed out earlier, we think lower is better. Our job is to give physicians tools to get these triglycerides as low as they can. And if we can do that, I think the biology is fairly clear here that we will -- that we should lower the risk of acute pancreatitis.

Makes sense. A quick clarification. Can you say whether it is Part B drug or Part D?

Sure. Andy, do you want to talk about that?

Yes, this is Part D.

Our next question comes from Luca Issi at RBC.

Congrats on the big milestone. Maybe if I can circle back on pricing. I think your competitor has commented that they are potentially planning to price their drug between $10,000 and $20,000 once this is approved for severe hypertriglyceridemia. So how are you planning to compete with them given that your price, at least as of today, is much higher than that. So any thoughts there, much appreciated. And then maybe second, Bruce, I'm sure you saw data from [ Aviocs ] at the American Heart Association. I wonder if you could comment on whether you think that the increases in liver fat that they're seeing is a molecule-specific issue or a broader class effect? Any thoughts there, much appreciated.

Sure. So we have no control over what competitors do. All we can do is look at our drug, look at our data and work with payers, work with providers and try to understand the relative value that our medicine is going to provide. And when we look at the large population or the primary population that we'll be treating over time after SHASTA-3, SHASTA-4 and MUIR-3 readout and hopefully are approved to allow us to bring the drug into SHTG patients. When we look at that, we think that the $60,000 a year price tag is the right price here in the high-risk SHTG population. Again, these are patients generally with either history of pancreatitis or -- and/or triglycerides in the 800 or 880 and above range. Pancreatitis is an expensive and awful condition. And we know that we really need to prevent people from getting it the first time because future episodes lead to more severe episodes and more frequent episodes. And so again, given this relatively narrow population relative to the overall population of severe hypertriglyceridemia, this relatively narrow population of high-risk patients, this is the right price and provides, we think, a ton of value to patients and health care systems. So that's what we're focused on.

Do you want me to take the second question?

Yes, Bruce.

So Luca, the Ionis proposal for what caused their increase in liver fat was that it was physiologic from lowering triglycerides. So far, we haven't seen that. We don't have a large data set with plozasiran, but we do have a data set in a smaller number of patients that did not point to the likelihood for an increase in liver fat. Now in our Phase III program, we have a larger data set that we are looking at for liver fat in SHASTA-3. So we will get a good solid answer for plozasiran when that data set reads out. We're reminded that ASOs do have a track record of doing this. For instance, their ANGPTL3 drug produced increases in liver fat and liver toxicity and that drug was discontinued, while our ANGPTL3 drug shows a reduction in liver fat. So basically, we have a question now of what they saw, was that physiology? Was that actually drug toxicity? Or is it a combination of both? And we really can't answer that question yet, Luca, but we will know the answer when our Phase III ends. And so far, we don't have evidence that indicates that it's physiologic. But we'll have a definitive answer toward somewhere in the third quarter of next year.

Our next question comes from Prakhar Agrawal at Cantor Fitzgerald.

This is Prakhar from Cantor. Congratulations on the approval. So maybe a follow-up on pricing again. You seem to be implying that the pricing is for the high-risk SHTG patients. So is that going to be the focus for your SHTG launch and this will be more of a specialist launch versus your competitor Ionis implying a much more broader addressable population? So if you can clarify that. And secondly, you have said the SHTG price even before seeing some of the clinical data that's coming next year. So maybe what's driving this confidence, especially given the efficacy bar set by Ionis on pancreatitis reduction events? And then if you can clarify the definition of acute pancreatitis that you are using now in Phase III is similar to Ionis?

Sure. Boy, there are several questions in there. Let's see if we can hit them all. Let's see. So yes, we -- at least the initial focus within SHTG are those high-risk patients, those patients above 800 or 880 milligrams per deciliter and those patients with history of pancreatitis. We think that is the piece of the SHTG population that can benefit most from REDEMPLO. So that will be the initial focus. Is that the focus forever? Not necessarily, but we know most about that population. And so we'll certainly focus on that at least initially. It could be that over time, it looks like there is increasing value in treating those patients at 500 or 600 or 700 milligrams per deciliter as well because we know they are at heightened risk of pancreatitis. But the real -- we think the folks who really need this medicine are the high-risk folks. And so it is priced according to value for that population, and we expect our commercial team to scale according to that population at least initially. What was the other questions?

Yes. On the clinical data, your confidence on meeting the high efficacy bars set by Ionis on pancreatitis reduction and a clarification on that if the definition of pancreatitis events is similar to Ionis now in your Phase III trials?

Sure. Yes, I'll let James expand on how we are adjudicating pancreatitis. But regarding our confidence in the drug, look, we've been in an awful lot of hypertriglyceridemic patients now with REDEMPLO, and it just works. It seems to work in nearly everybody, and it seems to lead consistently to deep and durable reductions in triglycerides. We know the biology of severe hypertriglyceridemia and pancreatitis and bringing those triglycerides as low as possible is going to give you your best chance at limiting the risk of pancreatitis. And so we are confident that our drug does that well. And so we'll see if we can hit those pancreatitis differences when we pool SHASTA-3 and 4. But also remember that we have SHASTA-5 ongoing as well, and SHASTA-5 is designed to show an improvement in pancreatitis rates. And SHASTA-5 is really focusing only on those high-risk severe hypertriglyceridemia patients. So we sort of have belt and suspenders here. Let's see how SHASTA-3 and 4 fare together. But at the very least, we have SHASTA-5, I think, to show what we all expect that we're going to show in an improvement in pancreatitis. And so James, do you want to talk about the adjudication of AP?

Sure. Yes. So we use a similar process to what others have used with a blinded adjudication panel that classifies events as either definite, probable or possible pancreatitis. The categories are essentially the same as what other Phase III studies have used.

And keep in mind that in PALISADE, we hit statistical significance in decrease in the rates of pancreatitis when we combined the 25- and 50-milligram doses. And remember that, that was using a much narrower adjudication scheme. And so -- and that was a small study. And so going forward, we should see more events.

Our next question comes from Avi Novick at Morgan Stanley.

It's Avi on the line for Mike. Congratulations on the approval. So I guess just on the pricing, I guess, could you talk about what work you've done, say, with consultants or with payers directly, which indicates to you that payers would see the same sort of value for the SHTG population that you do and that you can receive favorable reimbursement?

Yes. We've done a lot of work with payers and consultants to understand this. But also, you need to keep in mind that this is a brand-new field. These SHTG patients have never had drugs that could look at lower triglycerides to the extent that we are lowering them in a well-tolerated fashion. And so the payers are not used to asking these questions. We think that we've got a very compelling value proposition at the $60,000 rate given the risk of pancreatitis that these patients have. And so we feel quite good that this is a good bargain, frankly, to payers and to health care systems given the increased risk in the high-risk patients and given the ability of REDEMPLO to drastically reduce triglyceride levels.

Our next question comes from Chi Fong at Bank of America.

This is Chi on for Jason Gerberry. I want to go back on the pricing, the WACC price for SHTG. So how much were you able to stress test the $60,000 WACC price with payers for the subsequent SHTG indications given we have just seen the core data at just a week or so ago. And what really were the key underlying assumptions that underpin the $60,000 WACC price? And secondarily, one debate that came out of the discussion session after the core data presentation is that whether the class is best used in patients with prior AP over those with TG above 880. Obviously, that's just input from one single doctor and that's just a scenario. But by pricing the price at $60,000, have you thought about you might potentially shut the door down on a [ deep ] value proposition in a scenario where the class is positioned more for patients with prior AP considering that it's generally easier to cut price and raise price in practice?

Look, I think REDEMPLO is going to be equally important to those patients with triglycerides above 880 and those patients who have had history of pancreatitis because our goal here is to reduce the possibility of that first event for the reasons we've been talking about. Subsequent events will be -- can be more severe and more likely. So we view those populations together, those who have had AP in the past and those patients with severely elevated triglyceride levels. Again, we've been -- we have worked a lot with payers and with consultants to try to understand the value of this drug to this patient population. And also look, we are approved in FCS now. And so we will be selling into the FCS market only. And so we will have some time between now and the time that SHASTA-3 and 4 are complete and are being reviewed by the FDA. We'll have plenty of time to work with payers and to help them to understand the real value here. So the value proposition at $60,000 for FCS is clear and strikingly compelling. And so -- and we've got additional time to show that value in the broader population of high-risk SHTG patients.

Our next question comes from Peyton Bohnsack at Cowen.

This is Peyton on for Joe. Congratulations on your first approval and on the label, I guess, with no counter addictions or worries. Given there were some hypoglycemia adverse events, do you anticipate any pushback by physicians or payers for patients that are diabetic and prediabetic?

Bruce, do you want to address that?

Sure. It's physiology. So it is the price for lowering triglycerides. It's been an underappreciated aspect of treating these patients even with statins and fibrates. Anything that lowers triglycerides does it. It was less apparent previously simply because those drugs don't lower triglycerides very much. The APOC3 inhibitors do. And the result is that if a patient already has impaired glucose tolerance or if they're really right on the edge, some of those patients wind up needing treatment. But they are treatable. And it's just a matter of their diabetes needs attention. It's not a huge influence. It's maybe 0.2% or 0.3% increase in hemoglobin A1c on average. But it is, you might say, the physiologic price, but again, totally treatable. So no pain. I don't think that's going to stop physicians at all. I think they'll do what's right for the patient. A little increase in antidiabetic medication is a fair price to pay to prevent pancreatitis, which is really potentially fatal.

Our next question comes from Madison El-Saadi at B. Riley.

Congratulations on the approval, and we commend you on your pricing strategy. I wanted to ask -- go back to the label. While neither label, your label or your peer includes, I guess, a formal AP prevention claim, your AP-related inclusion criteria is distinct from your peers. So just wondering if this AP messaging flexibility is meaningfully different in your view? And how does this practically expand what you can say about AP risk and outcomes with physicians and payers?

Bruce, James and Andy, who wants to handle that first?

I'm happy to at least make a comment here. I think the -- I don't think it's a distinction that necessarily has any impact in the market from the perspective that the payers have shown a ready willingness to accept that these drugs that lower these triglycerides to this extent do, in fact, impact pancreatitis. And I think that the uptake of the first entrant has indicated that payers are comfortable that what we're doing here is the right thing, lowering triglycerides and that is lowering the pancreatitis risk. And we've now seen it in both of the drugs that are approved in FCS. It's been reported at AHA that it was also shown in CORE and CORE2. And it was even shown in a meta-analysis that was done on volanesorsen, olezarsen's predecessor. So it feels pretty compelling now that lowering triglycerides lowers pancreatitis risk. So I don't think it's probably a differentiator. It's just a very solid, at this point, proof that lowering triglycerides does lower pancreatitis risk. All of the previous drugs that were approved for reducing triglycerides were on the basis of an expectation that they would lower pancreatitis risk, but it was never shown. APOC3 inhibitors are the first drugs to actually show reduction in pancreatitis. So it feels to me like that this is just a very powerful message to be taking out to physicians and obviously, to patients and other caregivers. See if James or Andy have anything they'd like to add to that?

I'm happy to add, Bruce, some comments just on broader differentiation. So Madison, yes, you raised the point of differentiation. So it's perhaps a good time to talk about the various attributes of REDEMPLO that are highly differentiated. I think one only needs to look first at APOC3, the principal target here, knockdown with 90% plus APOC3 knockdown translating into really significant and sustained TG reduction of greater than 80% from baseline. Moreover, we saw this consistent effect, whether REDEMPLO was used in genetically confirmed FCS patients or clinically diagnosed FCS patients, a very similar TG reduction. The dosing regimen, only 4 injections a year is really, really favorable from our market research for both patients and physicians who see this as a possible way to improve compliance and adherence. And then lastly, the label having no contraindications, no warnings and no precautions is extremely compelling and also differentiating. So one can look to acute pancreatitis, APOC3 knockdown, TG reduction, consistent effect, dosing frequency, safety, tolerability if one is looking for true differentiation. I hope that's helpful.

Our next question comes from Keane Kay at [ Jarden.]

Just wanted to ask a question about ARO-DIMER. I guess, first, will you be showing any additional preclinical data for ARO-DIMER beyond what you showed earlier this year back in May? And in the Phase I/II, we're looking at maybe baseline or threshold levels for these mixed patients, what types of screening are we looking at for either LDL-C or TG?

James?

Yes, I can take that one. No additional preclinical data. So the next data release will be some of the early clinical data. And from the very beginning, we're enrolling patients with mixed hyperlipidemia. We go up to 880, so they can have elevated triglycerides up to 880 or elevated LDL cholesterol. I believe we go above 100 in that study. So we'll get a good look at both the biomarkers in terms of PCSK9 and APOC3 reductions, but also have an early look at how that knockdown of the target reduces LDL and triglycerides as well.

Our next question comes from Bill Pickering at Bernstein.

Congrats on the approval and the clean label. Could you talk about how far along you are today in making an auto-injector? And will that be ready for the SHTG approval? And then just a quick housekeeping item on the milestone slide. Is it correct that the obesity data is now planned for early '26 as opposed to the end of this year?

Sure. So on the obesity, we're actually in the process of trying to find dates that work with travel and the holidays. And so stay tuned on that. We are looking to find those. We have said in the past that we want to get those out by the end of the year, and we are trying to make sure we can do that. On the auto-injector, James, do you want to handle that?

Yes, that is the plan to eventually head in that direction with an auto-injector for the larger indication.

Great. Our final question comes from Patrick Trucchio at H.C. Wainwright.

Congrats on the approval. From as far as SHASTA-3, 4 and 5, what specific triglyceride or pancreatitis outcomes would you consider to be commercially relevant for payers as well as prescribers beyond what's needed for regulatory success? And if I could, just on the manufacturing, can you discuss your level of confidence in your ability to scale up manufacturing as you launch in FCS globally as well as later on in the SHTG population?

Sure. James, do you want to handle the manufacturing? And Bruce, do you want to handle the other?

Yes, sure. I mean we have -- there's no reason to think that we will have an issue scaling from the FCS into the larger population from a manufacturing standpoint. So we're feeling pretty confident, particularly for FCS and have a little bit of time to get where we need to be for SHTG.

Yes. And let me just add on to that a little bit. I mean, we know the dose. So our SHTG program is 25 milligrams versus placebo. So there's really not much in the way of complication from the standpoint of scaling up and getting the auto-injector, for instance. So that piece of it is straightforward. And I think from my perspective, I think by the time we have our SHTG approval, I really think that the physicians and the payers are going to be pretty comfortable about the pancreatitis benefit from lowering triglycerides. So I'm not sure that there's going to be a lot of competition from that perspective. I think it's more of an opening up this big market. There'll be 2 competitors out there educating physicians, educating payers, educating other health care providers, educating the patient population. And I think it's going to be a matter of opening up that market. I don't really think there's going to be a lot of competition on the pancreatitis point per se. And I don't think there's going to necessarily be a lot of need for persuasion. It's more education. And it's likely the other factors that Andy went over about 5 or 6 minutes ago that are going to be the differentiators between the 2 drugs in the market. But mostly, this is going to be about expanding the percentage of patients under treatment. They're all at risk of pancreatitis, all those -- certainly all those over 880. They all need to be treated, and it's going to be a matter of how quickly the 2 of us can open this market. That would be my viewpoint. That's a clinician viewpoint, maybe not so much a marketing viewpoint, but I do think it's going to be important. It's going to be about education.

Great. So this concludes today's Q&A session. I'll now turn the call back over to Chris for closing remarks.

Look, thank you all for joining us today. This is an important day for us as a company, of course. It's a very important day for FCS patients as they now have a medicine that we think is truly special and can really give them some relief. And so it's a happy day for us all around, and we look forward to getting into market and getting this important medicine to the patients who need it. So thank you all.