Arrowhead Pharmaceuticals, Inc. (ARWR) Earnings

Management highlights

- Clinical Development Milestones * Positive top-line Phase III results were reported for the Shasta III and Shasta IV studies of plozasiren in severe hypertriglyceridemia (SHTG): both studies met all primary and pre-specified secondary endpoints, with a 78% reduction in cumulative acute pancreatitis events across the broad SHTG population versus placebo, and a 100% reduction in the highest-risk subgroup (triglycerides >880 mg/dL with prior pancreatitis). Detailed results will be presented at the August 2026 ESC Congress. * The Yosemite Phase III study of Zodaciran for homozygous familial hypercholesterolemia (HoFH) completed enrollment 10 patients above the target 60-patient design, with full enrollment of 70 patients. Data is expected in Q3 2027, with an NDA filing targeted by end-2027. * Interim Phase 1/2a data for Arrow INHBE in obesity and MASH showed a mean maximum APOB reduction of over 85% after a single 400 mg dose, with a 44% placebo-adjusted reduction in liver fat in the relevant subgroup. A Phase IIb protocol has been submitted to regulators for review. * The Phase I study of AromaMap-T, Arrowhead's first subcutaneous CNS delivery siRNA candidate targeting tau for Alzheimer's disease and other tauopathies, is reaching full enrollment in healthy volunteers, with top-line data expected in September 2026. The Aerodimer PA Phase 1/2a study for mixed hyperlipidemia is nearing full enrollment, with top-line data also expected in September 2026. - Commercial Launch Progress * Redempla prescription volume more than doubled quarter-over-quarter in Q3 FY2026, with run rate holding at 20-30 new prescriptions per week, supported by over 400 unique prescribers led by preventive cardiology and endocrinology. Volume has exceeded internal targets, with growing provider awareness and positive product perception. * Redempla has now received approval across 5 major geographies: the United States, Canada, China, Australia, and the European Union. The EU label uniquely covers both genetically confirmed and clinically diagnosed FCS patients, a meaningful competitive differentiator. Reimbursement processes are ongoing country-by-country, with the first launch in Germany expected in the coming weeks. * Payer coverage for Redempla in the U.S. is progressing rapidly, with favorable policies in place for all major payers and the remaining coverage gap expected to close over the coming months. Nearly all payer policies allow clinical diagnosis of FCS, consistent with the approved label. * The commercial sales force is being scaled sequentially to support both current FCS demand and the potential future SHTG launch: a new wave of field personnel was onboarded in July 2026 and will be active in August, with full field force optimization expected by end-2026 in preparation for a potential accelerated 2027 launch. - Corporate & Strategic Updates * Arrowhead acquired an FDA priority review voucher to accelerate review of the upcoming plozasiren SHTG supplemental NDA (sNDA), cutting review time from 10 months to 6 months. Management projects a greater than 3x return on the $215 million investment from the net present value of an earlier launch, plus additional value from reducing potential competitor first-mover advantage. * In May 2026, Arrowhead entered an exclusive worldwide license agreement with Madrigal for Aero PNPLA3 for MASH in genetically defined patient populations, receiving a $25 million upfront payment and remaining eligible for up to $975 million in development, regulatory and sales milestones plus tiered mid-teen royalties.

Guidance

- The sNDA for plozasiren in SHTG remains on track to be submitted to the FDA before the end of 2026, with accelerated review via the acquired priority review voucher potentially enabling a launch in the second quarter of 2027 if approved. - Top-line data readouts are expected in September 2026 for two high-priority programs: Aerodimer PA in mixed hyperlipidemia, and AromaMap-T in healthy volunteers for CNS tau targeting. - Additional data releases for Arrow INHBE and Arrow ALK7 in obesity are expected in the fourth quarter of 2026, with a new obesity candidate CTA filing targeted by end-2026. - Zodaciran Yosemite Phase III data is expected in Q3 2027, with an NDA filing targeted by the end of 2027. - Management projects peak annual sales of plozasiren (Redempla) in the range of $3 to $4 billion, with the overwhelming majority of this revenue coming from the U.S. market. - R&D costs associated with the completed Shasta III and Shasta IV studies are expected to moderate starting in fiscal 2027, though overall quarterly R&D expense will remain volatile based on clinical program timing and pipeline advancement.

Segment performance

Arrowhead operates across two core business segments: 1) Collaboration & Licensing: This segment generated $72.6 million in revenue for Q3 FY2026, accounting for 96.8% of total company revenue. Contributions include $26 million from the Sarepta collaboration, $20 million from the Novartis collaboration, $25 million full recognition of the Madrigal upfront payment, and $1.2 million from transitional services and commercial supply to Sanofi for Greater China rights. 2) Commercial Product (Redempla for FCS): This segment generated approximately $2.4 million in revenue for Q3 FY2026, accounting for 3.2% of total company revenue. This represents more than double the $1 million commercial revenue recorded in Q2 FY2026, reflecting strong early launch momentum.

Risks & headwinds

- All forward-looking statements around development timelines, regulatory approval, commercial launch, and revenue projections are subject to inherent risks and uncertainties that could cause actual results to differ materially from expectations, as detailed in Arrowhead's regular SEC filings (Form 10-K, Form 10-Q). - SHTG is a new, underpenetrated market that requires extensive physician and patient education around triglyceride-related risk, which may slow commercial ramp even with approved labeling. - International market access and revenue projections for SHTG remain uncertain due to ongoing policy changes (including MFN rules in the EU) that create ambiguity around pricing and reimbursement outcomes. - Early clinical data for pipeline candidates including AromaMap-T, Arrow INHBE, and Aerodimer PA does not guarantee positive results in later-stage trials or eventual regulatory approval. - The value of the priority review voucher investment depends on FDA approval of the SHTG indication; a negative regulatory outcome would eliminate the projected return on the $215 million investment.

Analyst Q&A

• Q: What gating factors affect the 2026 sNDA submission timeline for SHTG, and can management comment on debated questions around triglyceride reduction and safety parameters ahead of ESC? /

  A: Management is currently preparing sNDA modules, and a pre-NDA meeting with the FDA is scheduled before submission. No details on trial data can be shared ahead of ESC due to publication embargo, including no comment on median vs mean triglyceride reduction or safety imbalances in parameters like liver fat or ALP levels. All data will be presented fully at the ESC conference.

• Q: What data will be shared from the AromaMapT Phase I study in September, what level of tau knockdown is management targeting, and have those targets changed following recent Biogen data? /

  A: The September release will only include data from the healthy volunteer cohort, covering primarily safety outcomes and total tau knockdown. There are no other biomarkers available to measure in this cohort. Management is still targeting a 50% to 60% tau knockdown, the same benchmark that has been publicly cited previously and that is associated with potential clinical improvement in prior related studies. No changes have been made to this target.

• Q: How will the commercial sales force be scaled to address the SHTG opportunity, and when will the scaling be completed ahead of potential launch? /

  A: Management will not share exact final size details, but confirmed that the target HCP count will expand from ~5,000 for FCS to over 20,000 for SHTG, including relevant specialists and specialized primary care providers. Final onboarding and optimization of the expanded field force is expected to be completed before the end of 2026, in preparation for a potential accelerated SHTG launch in the second quarter of 2027.

• Q: How does Arrowhead view the commercial opportunity for SHTG, given the competitor Ionis has already launched its product, and how important will early launch quarters be for validating the overall market size? /

  A: There is high overlap between FCS prescribers and future SHTG prescribers, so the strong current FCS launch ramp bodes well for SHTG uptake. SHTG is a very large market with many patients that need effective triglyceride control, but the market is entirely new and requires widespread physician and patient education. This means the commercial ramp will be gradual, as the market is not accustomed to actively managing triglyceride risk with dedicated pharmacologic therapy.