Arrowhead Pharmaceuticals Inc (ARWR) Q1 2025 Earnings Call Highlights: Strategic Collaborations ...

GuruFocus.com
11 Feb
  • Net Loss: $173.1 million or $1.39 per share for the quarter ended December 31, 2024.
  • Revenue: $2.5 million for the quarter ended December 31, 2024.
  • Total Operating Expenses: $163.9 million for the quarter ended December 31, 2024.
  • Cash and Investments: $552.9 million at December 31, 2024; pro forma cash and investments would be $1.4 billion including Sarepta payments.
  • Cash Used by Operating Activities: $146.3 million for the quarter ended December 31, 2024.
  • Common Shares Outstanding: 125.6 million at December 31, 2024.
  • Warning! GuruFocus has detected 5 Warning Signs with ARWR.

Release Date: February 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR) closed a significant license and collaboration agreement with Sarepta Therapeutics, expected to bring in $1.375 billion in cash payments.
  • The company is now funded into 2028, with potential for multiple commercial launches by Arrowhead and its partners.
  • Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR) anticipates its first commercial launch of plozasiran, which could drive substantial growth pending FDA approval.
  • The company is focusing on three primary value drivers: plozasiran, obesity, and CNS, which are expected to fuel growth in the near term.
  • Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR) has a robust potential catalyst calendar for 2025, with multiple key events expected throughout the year.

Negative Points

  • Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR) reported a net loss of $173.1 million for the quarter ended December 31, 2024, compared to a net loss of $132.9 million in the previous year.
  • Revenue for the quarter was $2.5 million, down from $3.6 million in the same quarter of the previous year.
  • The company experienced increased operating expenses, primarily due to higher candidate costs and salaries as its pipeline of clinical candidates advanced.
  • Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR) needs additional capital to start a cardiovascular outcomes trial (CVOT) for plozasiran, despite having a significant cash balance.
  • The company faces challenges in expanding the market for its products, as the industry requires education and awareness to address largely untreated diseases.

Q & A Highlights

Q: Can you discuss the potential of ARO-INHBE in obesity treatment and its role as a standalone or combination therapy? A: James Hamilton, Chief of Discovery and Translational Medicine, explained that ARO-INHBE is being studied both as a monotherapy and in combination with tirzepatide. The development path will depend on the data outcomes, and there is no specific target to hit at this stage. The obesity market is diverse, and Arrowhead is developing a suite of drug candidates to address various needs.

Q: What feedback have you received from doctors regarding APOC3 and current commercial launches? A: Christopher Anzalone, President and CEO, noted that feedback on plozasiran has been positive, with physicians and patient societies expressing enthusiasm due to its differentiating attributes, despite other available options.

Q: Will the Phase I/IIa trial for ARO-INHBE and ARO-ALK7 provide weight loss or body composition data? A: James Hamilton confirmed that the trial will assess body composition using full-body MRI and weight loss, alongside safety, plasma PK, and biomarker activity in the blood.

Q: Can you provide more details on the SHASTA-5 study and its potential impact on pancreatitis outcomes? A: The SHASTA-5 study is the first of its kind focusing on pancreatitis as the primary endpoint. Enrollment timelines are uncertain, and the study will continue until the required number of events are observed. It is expected to be significant for payers and health technology assessment organizations, particularly outside the US.

Q: What are Arrowhead's plans for plozasiran's commercialization in Europe? A: Andy Davis, Senior Vice President, Cardiovascular/Metabolic Franchise Head, stated that Arrowhead plans to commercialize plozasiran in European markets with a commercial partner, with more details to be provided in the future.

Q: How does Arrowhead view plozasiran's competitive positioning relative to olozarsen in FCS and severe hypertriglyceridemia? A: Andy Davis highlighted plozasiran's unprecedented triglyceride reduction, ability to achieve guideline-directed risk thresholds, and statistically significant reduction in acute pancreatitis risk as key differentiators. Bruce Given added that the market is more about expansion and education rather than direct competition.

Q: What is the strategy for the CVOT study for plozasiran, and what are the gating factors for its initiation? A: Christopher Anzalone stated that the CVOT study is contingent on securing additional capital. The study is scientifically important to assess residual cardiovascular risk related to triglycerides, and Arrowhead is exploring partnerships to fund it.

Q: What are the plans for zodasiran in HoFH, and how does it compare to existing treatments? A: Bruce Given explained that zodasiran targets the same patient population as existing treatments but offers quarterly dosing and potentially fewer allergic reactions. The focus is on patients with high LDL cholesterol despite high-dose statins and PCSK9 inhibitors.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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