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

Hello, everyone. Good morning, and welcome back to Henry's 20th Annual Global Investment Conference I'm Patrick Trucchio, Senior Healthcare Analyst Day Wainright. It's my pleasure to welcome our next speakers, CEO, Chris Anzalone; and CMO and Head of R&D; James Hamilton at Arrowhead Pharmaceuticals. Arrowhead is a commercial stage pharmaceutical company developing RNA and appearance or RNAi therapeutics with broad pipeline across cardiometabolic munitions and CNS. Arrowhead's REDEMPLO, plazasterine was approved by the U.S. FDA in 2025 as now join to die to treat triglycerides in adults with familial chylomicronemia syndrome or FCS. At the end of August, Arrowhead presented the full 12-month results of the pivotal Phase III CHASTA-3 and CHASTA-4 trials in severe hypertriglyceridemia or SHTG. In a hotline late-breaking sign session at the European Society of Cardiology Congress and plans to file a supplemental NDA by year-end and SHTG using a priority review of voucher. So it's a huge year for Arrowhead a pleasure to have you with us. Just first, it's been a transformational last few months, FCS launch, 2 positive pivotal trials, part of review voucher. For those who are new to the Arrowhead story, can you give us an overview of the RNAi platform, why subcutaneous RNAi to the liver became such a robust franchise.

Sure. First, thanks very much for having us. It's a pleasure to be here. So we have been banging our head against the RNAi wall now for over 15 years. And as you point out, the first tissue that we could address is liver hepatocytes. But we decided early on that in order to extract proper value from this technology and to treat as many patients as we could, we need to get that to liver. And so as early as 2010 or so, we started working on technologies to get us outside the liver. And where we are now is we've got a broad platform that enables us to get into several different cell types, 5 of which are represented in clinical candidates right now. We've said publicly that we think we can get into a new cell type every 18 to 24 months, and we believe we'll continue to do that. So while the first leg of our journey was in the liver. It was certainly not the last. And I think we'll talk about CNS today as well as probably some other cell types and so our goal all along was to build a very broad-based company, which is a new thing. It's a different thing for a small biotech company to do. We were not focused on 1 or 2 areas we're focused on a large number of them. and things were hard for quite some time. But it feels like over the last 18 or so months, we have finally broken out, we become a commercial company. And we've got to now have something like 21 or 22 individual drug candidates in clinical studies.

So REDEMPLO is launched in FCS. Maybe before we get into more specifics on that program. Maybe you can just talk about the launch, how is it going? Where is payer policy landing? How are things proceeding?

Sure. So first, just to be clear, so Plosaseraano, REDEMPLO is is an APOC3 inhibitor and it was developed to lower -- to silence APOC3 and therefore, lower triglycerides. We view this as a 2-step drug, if you will, from a commercial standpoint. Step 1 is to be approved in a narrow indication, FCS, familial calacrinemio syndrome. It's an ultra-orphan indication. However, there are there are a class of patients that we have discovered that we call clinical or clinically defined FCS that make this a bit of a larger population. And we've been focusing a lot on that population. Our goal then was to expand the label and treat severe hypertoglyceridemia, and that's about a 3.5 million person market in the United States. So we launched an FCS a bit ago. And the launch has been good. It's taken us a bit of time, a couple of quarters to get contracting worked out with payers, we're there now. We're able to serve both, as I mentioned, genetic FCS as well as clinical FCS, there could be as many as 15,000 or 20,000 or so clinical FCS patients. And so we have also been ramping up our sales force as we -- when we first launched, it was a very narrow sales force, about 20 or so sales reps. But as we were into the market, we realized that there really were more of these clinical FCS patients than we had first anticipated. And so we've begun to ramp this we ramped pretty aggressively over the summertime, we'll have another phase of growth in January or February time frame, and that will enable us to prepare ourselves for SHTG launch sometime in the second quarter, we believe, of 2027.

So recently presented full Chasta-3 and Chasta4-12-month data set -- can you summarize this data set and why it's meaningful?

Sure, James.

Sure. I can take that one. The top line data for Chasta-3. First and foremost, we were achieving about 80% reduction from baseline in triglycerides. And this was all in a severe hypertriglyceridemic population. So triglycerides greater than 500 at baseline. That reduction in triglycerides translated into a statistically significant improvement in the rates of acute pancreatitis, which is the major problem those patients have. There's -- there may be some other issues around cardiovascular disease, but the life-threatening pancreatitis that can be recurrent in that population, so the key clinical event that's driven by triglycerides. So the reduction in triglycerides correlated with a reduction in acute pancreatitis. Depending on the population, the risk reduction was 78% to greater than 80%. And all of this was matched with really a pretty clean safety profile. We didn't see any evidence of thrombocytopenia or hypersensitivity reactions are liver safety profile was really pretty quiet the transaminase elevations in the active arms look similar to those in the placebo arms. And then something that we've been asked about quite a bit over the last year or so was liver fat or hepatic steatosis and we measured liver fat with MRI in the study and saw no clinically meaningful or statistically significant increase in liver fat versus placebo. So all around, we were really pleased with the data on both the efficacy, the pharmacodynamic side and the safety side.

Severe hypertriglyceridemia is a far broader population than FCS. Can you talk about the data that you've generated so far and how we should think about the meaningfulness of pancreatitis risk reduction, triglyceride reduction and how this sort of translates across these different patient populations?

Sure, James?

Yes. In the SHTG population. I mean, again, I think that the -- it's a spectrum, right? SHTG, FCS is the worst form of SHTG, and there's some overlap in these clinical FCS patients with just SHTG patients. Of course, the rates of pancreatitis increase as the triglyceride rates or levels get higher. So we view those patients with triglycerides above 880 and a history of pancreatitis as for the highest risk population. And in fact, in that subset in the Shasta and Shasta Ford pool data, the risk reduction was 100%. There were no events on active in that population. So that's probably the population that is most amenable at least earliest, to treatment where the most medical need is. That being said, we also saw events in patients with triglycerides just greater than 500, but with a history of pancreatitis. So there's also need kind of further down the chain of triglyceride levels, if you will.

Yes. Look, the value proposition here is clear. The biology is clear. We know that as triglyceride levels increase the risk of pancreatitis increase. And we know that there is a sharp increase in that risk once people's triglycerides get above 500 milligrams per deciliter and then it becomes very steep above 880 milligrams per deciliter. So -- and we have a drug that lowers to this right, substantially. It's a clean drug. It's dosed once a quarter subcu at home. So the value position is clear. Even so, this is an education play. This has been an treated market forever because there's never been a good way to substantially lower triglycerides. And so while we see a huge opportunity here in the number of patients that need to be treated, it is also our job to help payers and providers and patients understand the need to lower triglycerides. And so this is not going to be one of those out of the gate, gangbusters launch, we don't think. It's going to be a little bit of a slow burn for the first couple of years. But we think our numbers suggest that we think this is a $3 billion to $4 billion per year drug in the United States alone at -- for us at peak.

So you acquired the priority review voucher for plozasterine sNDA, where is the pre-sNDA meeting stand? And what does the voucher due to timing?

Sure. So voucher will shave 4 months off timing. That's important for us. Importantly, we are not the first ones into this market. We have a competitor. We think we have a demonstrable better drug, but they're ahead of us. And so every month that we can shave off is important to not only shifting our curve, but also potentially changing the shape of that curve. We are a bit flat-footed, because they have a several month lead on us, and we just wanted to narrow that. So that was important. It was worth the money to buy the voucher. What was part of the question?

Just what does it do to timing and just -- and where does the SNDA stand?

Sure. And so we are -- like I say, we, I'm not doing anything. James' team is furiously writing the NDA and we anticipate to submit that by the end of the year.

Great. Great. And maybe you can talk about the differentiation compared to ASO? Is it in the efficacy? Is it in the safety and tolerability profile? Is it less frequent dosing? Is it -- where is the differentiation? How do you expect that to play out over time? Is this slow burn sort of launch progresses?

It's all of those things. At any -- look, ASOs can do some things that siRNA cannot do. ASOs can be involved in exon skipping because we gave to the nucleus. That's great. ASOs can be untargeted and get into various cell types. And so there are many cell types that we cannot yet get into. And so there is clearly a value for ASOs. But when you can do either -- it has been shown repeatedly now that siRNA that is engineered correctly, leads to better durability, it leads to a deeper knockdown and leads to a safer drug. And that's the case, I think, with our competitor here. Ionis has a drug that works their Phase III data were compelling, but we just think that we have an edge here. We are a demonstrably safer drug, as James mentioned, -- we don't have any issues with transaminasemia. We don't have any issues with liver fat, no hypersensitivity, no throocytopenia. We are a simpler drug. It's a simple quarterly subcu injection rather than monthly -- we don't require liver monitoring and titration up to a higher dose. Everyone gets the same dose level, and we're stronger. We continue to show deeper reductions in triglicerides -- so this just feels to us like a better platform. Having said that, as I mentioned, this is an education market. And so having 2 of us promoting drugs that work is a better thing for patients overall and for this market overall.

So just regarding the MER 3 program, is the plan still to leverage that data alongside Cheste 3 and 4 in the filing -- and if so, where does MER3 stand? When does this read out? What do you need to show there? And maybe you could just provide some background on your 3?

Sure. Yes. So that MRI is complete the database is locked, and that's part of our filing that will be submitted to FDA. That study was entirely based on a need to have a safety database of at least 1,500 patients on drug for a year. and the FDA allowed us to enroll since it's easier to enroll just HTG patients. They allowed us to enroll MIRAI with the HTG population. About 1,000 or so patients enrolled in that study. And then the other components, of course, are the SHASTA-3 and SHASTA-4 studies that those 3 make up the bulk of this sNDA.

Great. I just want to shift over to familial hypercholesterolemia. So suite program, complete enrollment. I think data is expected around the middle of next year. So what are your expectations around this data? And should we expect that so dastronis the next launch possibly as early as 2028?

Yes. So that study is fully enrolled. It's kind of on autopilot now. And I think the timing that you mentioned is correct in terms of when we'd see data -- this is -- it's an interesting circumstance because we have a company that was partially funded and owned by Arrowhead Visirna that is a Chinese company. that has the Chinese rights to zevasiran. And they recently at ESC presented their Phase III data that showed 44% greater than 40% reduction in LDL cholesterol in an HoFH population. That's about what we showed in our Phase II also. So those are 2 preconsistent data points. I don't think it's a stretch to say that we'd land somewhere in that range in our Phase III study, but we'll have to see down the road.

And that's a straightforward launch for us. And you believe that's our next launch after HTG -- and the sales force we're building for pluzaseran, demo is focused on endocrinologists, cardiologists, lipidologists, and so this is an easy lift for zodasiran. We'll just add this to the bag. We're already calling on these positions. And so for us, this feels like found value. And it does feel like like this could be a helpful drug for HoFH patients.