Great. Good afternoon, everyone. My name is Ted Tenthoff. I'm a senior biotech analyst at Piper Sandler, and before I begin, I'm required to point out certain disclosures regarding the relationship between Piper and our next presenting company, Arrowhead, which are located both at the back of the room and also at the registration desk. So Arrowhead is a leading RNA interference company, developing subcutaneously delivered targeted RNA molecules, or TRiMs. Arrowhead is conducting late-stage trials of its wholly owned cardiovascular programs, plozasiran, which was or still is ARO-APOC3, and also zodasiran, which is ARO-ANG3. The company has a diverse, earlier-stage pipeline, in particular, starting to get to targets that are outside the liver, and we'll talk about that.
Arrowhead's also been highly successful at partnering many of its therapies, including ARO-AAT, which I think is fazirsiran, if I'm remembering correctly, with Takeda, ARO-HSD with NASH with GSK and others. So here with us today is VP of Investor Relations, Vince Anzalone. Vince, thank you for being with us today. I know it's a busy week. You guys just reported earnings last night, so we're really glad that you can be with us today to talk through the story.
Thank you, Ted.
So let's start out with the cardiovascular programs. APOC3 is a well-validated target for lowering trigs. Walk us through the Phase II data that you guys just reported at AHA, and I think there were two different data sets, so you can kind of walk them through however you want. SHASTA-2 is for high cholesterol or high, high trigs, super high or severely high trigs, and then MUIR is for mixed dyslipidemia. What did you guys see from these data sets at AHA?
Sure. Thanks, Ted, and thanks to the whole Piper team for having us today. We appreciate it. So the data at AHA, and we can talk about zodasiran, the ANGPTL3 program, after.
Sure.
But initially, for plozasiran, which was, again, formerly ARO-APOC3, the data in both of those distinct patient populations was really encouraging. Now, first of all, starting with safety, there are no new safety signals, and essentially, the treatment-emergent adverse events reflect the comorbidities of the underlying study population. So that was good.
Mm-hmm.
The activity, and we'll start with SHASTA-2 first.
Yeah.
SHASTA-2 is in patients with severe hypertriglyceridemia-
Mm-hmm
... characterized by triglycerides over 500 mg/dL. There's a big range there. You know, that's just kind of a line in the sand, that 500 threshold. But some of these patients can be in the thousands, and some can be close to 500. The important point here is that we brought the... Actually, before I do that, the goal of treatment in this population, in SHTG, is to get patients to low risk of pancreatitis. That's the goal of therapy here. And so that's the way that we were viewing the data from SHASTA-2. And we'll talk about, you know, the long-term role of triglycerides and triglyceride-rich lipoproteins and then other atherogenic lipoproteins in with respect to the mixed dyslipidemia population later.
But with SHTG, you're really trying to reduce the risk and recurrence of pancreatitis.
Mm-hmm.
And so that is really thought to be that 500 mg per deciliter threshold. So anything below that has a lower risk of acute pancreatitis. Anything above it, the risk goes up proportionately based on TG levels. So what we saw in the Phase II study is that over 90%, I think the number was 96%, of patients got down to that low-risk category for pancreatitis. And more importantly, over half actually normalized trigs. So these are severely elevated patients, and we're getting half of them down to background population goal levels, and we're getting all of them down to below the risk of pancreatitis. So I think we're, you know, really checking off all the boxes for that population.
So we were really encouraged by those data, which made us really confident in moving ahead with designing and now initiating Phase II studies, to look at that in larger patient numbers and longer term.
We can, we can transition to that right now because you guys are conducting the Phase III PALISADE study. And again, this is in familial chylomicronemia syndrome, or FCS, patients. This is fully enrolled now. So tell us about this first application for plozasiran.
Yeah. So these are patients that have a series of different, either monogenic or polygenic mutations, that cause them to be unable to metabolize and clear triglycerides. So their triglycerides in the blood can go up to, in the thousands. And really, the, you know, the phenotypic threshold is above 880-
Mm-hmm
... but they often have trigs in, you know, 1, 2, 3, or even more thousand level. And so there has been no—there's no approved therapy in the U.S. to treat FCS. And these patients have this lifelong struggle with their triglycerides, and they have a very restricted diet. I mean, it affects every part of their lives. They, they can eat the equivalent of, like, a tablespoon of olive oil and fat per day.
Yeah.
It's very restrictive. And so it leads to these recurrent bouts of acute pancreatitis. They also get chronic abdominal pain. There's this brain fog and other cognitive problems. And again, it's just a very restrictive life that they live, and nothing has really moved the needle for them. So the Phase III study that we're running is in 75 patients with FCS. And in negotiations with FDA a couple years back when we were originally starting the Phase III study, it's actually they have eased the requirement to be genetically defined FCS, because we're always identifying new mutations that cause FCS. So essentially, our Phase III study is phenotypic FCS, which I think is important because it potentially broadens the patient population that can be addressed.
The genetically defined FCS is believed to be somewhere around, you know, 1 per million, 1-2 per million. So we're looking at, in the U.S., 300-600 patients total. If you expand that to this phenotypic FCS, we don't have great numbers on that, but our feeling is, it's a multiple of that. So it's still a, an ultra-rare disease, but there's more patients that we think may be treated well with this. So going back to our Phase I data. The first data we had in actual FCS patients, we were getting, I think it was a 90+% reduction in triglycerides. And there's been no other therapy, excuse me, that can get that magnitude of effect.
That's a massive reduction.
It's a massive reduction, right?
Yeah.
That's why a Phase III study can be powered to show triglyceride reductions in only 75 patients-
Yeah
... because the magnitude of effect is so high. And as you mentioned, the study's fully enrolled, the Phase III study. The last patient, last visit, I think, is scheduled for April or May of 2024. And so after that, we lock the database, and we start to analyze data, and we should have an initial top-line readout for the Phase III, call it middle of the year-
Yeah
... just after that. And then we'll be aggressive in writing and filing the NDA, which we hope to get in before the end of 2024. And that's an important thing. First of all, the first Phase III readout is important for us-
Yeah
Because, you know, it confirms what we saw in the earlier, smaller patient studies. But more importantly, it gives us a potentially fileable data set, and that would be our first commercial product, as a historically development stage biotech company, which I think is a big event for us.
Yeah, absolutely. And that's a market size that you could probably launch on your own. And we started the conversation with severe hypertriglyceridemia. FCS, again, is sort of the peak of the iceberg, if you will, of that. Remind us, what are your plans to advance plozasiran in this, severe hypertriglyceridemia patient population that we were talking about the, data from AHA?
So we had an end-of-Phase II meeting with FDA in early October, I think it was, and we had proposed a certain design for two different Phase III studies. We were calling them SHASTA-3 and SHASTA-4. Originally, what we intended to do was have a SHASTA-3 be the typical garden variety SHTG patients, SHASTA-4 be an enriched population that's at high risk of pancreatitis. So higher trigs and a history of pancreatitis in the last X amount of time. I can't remember if it's two years or five years.
Sure.
But that was... That, that would have been designed to kind of elicit a more clear pancreatitis risk reduction signal. FDA's feedback is that they wanted us to run two adequately well-controlled Phase III studies. And so essentially, what our new plan is, and we talked about this at AHA, the webinar that we held. The new plan is to have two new studies that are essentially the same as the former SHASTA-3.
Yeah.
So it'll be about 700 patients total between the two studies. There will be a certain amount of patients that we prescreen that will have to have a history of pancreatitis-
Yeah
... in a certain amount of time, and trigs over a certain level, probably 880. So we hope if these data are pooled, then we can essentially get that same pancreatitis signal. But you know, it's a slightly different design than we originally intended.
Yeah.
You know, importantly, the number of patients across those two studies is very similar to what we-
Yeah
... we originally intended. If we wanted to do 600 or 650, and now it's gonna be 700 or so. So there's more-
Yeah
... slightly more patients. But the timelines in our current planning don't assume any change in accrual or readout between two separate studies and the original SHASTA-3 study. We think we're still on about the same schedule, which we'll talk about in 2024 when we start these studies. We've already done the adjustments to the design, where we already have a CRO in place, and we will start initiating this in early 2024.
Now, there are some nuance that came out on a call last night in terms of broader patient populations, or where you would develop, either, plozasiran or zodasiran for, in through a cardiovascular outcomes trial. So maybe let's start going back to AHA with the data from the two agents in the this mixed dyslipidemia market, and then what's kinda going into that decision for where you would run an outcomes trial?
Sure. So I wanna first point everybody, if you haven't seen it already, but to the webinar or the webcast we did-
Yeah
... at the tail end of AHA. It included three experts in the treatment of lipid lipoprotein disorders: Dr. Gaudet, Dr. Nordestgaard, and Dr. Nissen. And this is- I'm certainly biased here, but the, the- my takeaway here is that all three of them were extraordinarily optimistic and encouraging-
Yeah
... about the profile for plozasiran in all three of those distinct populations. And that's the feedback that we've been getting from external KOLs for some time.... Now, your question about the population for plozasiran versus zodasiran, for the large mixed dyslipidemia ASCVD population, so that thinking in the field is starting to evolve. And the reason I mentioned earlier, if you haven't seen that webcast, go back and take a listen, 'cause Dr. Nordestgaard, who's kind of leading, has been leading the charge for over a decade on this new way to view cardiovascular risk, with respect to remnant cholesterol being a risk factor and correlated with cardiovascular events, is really starting to gain more traction.
You know, I know this is a visual person, so the visual that he gave on one of his slides was really striking. It showed a graph of the amount of publications that mention, you know, remnant cholesterol over the last couple decades, and it was essentially none per year. And then in the last couple years, it's just spiked up to, like, 1,000 references per year. And one of the takeaways, and again, I won't do it justice because he's been doing this work for a long time, but one of the big takeaways is the correlation and the risk associated with different levels of remnant cholesterol. And when you look at it versus LDL cholesterol, there actually is arguably a stronger link with remnant cholesterol than LDL.
And so it almost feels like, you know, where statins were a couple decades ago, where the effect size when you reduced LDL cholesterol on cardiovascular events was, you know, was dramatic. And so the thinking in the field evolving toward that role of remnant cholesterol is something that we're starting to incorporate into our planning. So originally, we thought plozasiran made a lot of sense to look at in those three populations: FCS, SHTG, and then ASCVD for mixed dyslipidemia patients.
Mm-hmm.
Because it reduces triglycerides, it reduces LDL, it reduces remnant cholesterol, ApoB, and it increases HDL, which all sound good. Makes these lipid profiles seem great. Now, the emerging data from AHA with zodasiran, the ANGPTL3 program, indicate that it has a more pronounced reduction in remnant cholesterol than plozasiran. Not quite as deep of a reduction in triglycerides, a little bit better in LDL cholesterol, and a little bit better in ApoB, but it doesn't raise HDL. It actually lowers HDL.
Mm-hmm.
So it's a different profile, but I think that for a company our size, kind of contemplating making a real serious long-term investment-
Yeah
... in a big study like this with long-term opportunities, we need to make sure that we are looking at the most current information and bringing in the most current thinking on cardiovascular disease, and we gotta make the right decision here. And that doesn't necessarily mean, you know, we're choosing one over the other. It just means that we need to go into this with our eyes open and figure out where each of these assets is going to sit, and how we select the end patient population, and Phase III design, to really not only maximize value, but to bring it to the patients who would benefit most.
Mm-hmm.
They're slightly different. And so we're doing that kind of strategic review, if you will, over the next month or two, which is, you know, the timing that we were on anyway, to engage with regulators. So, you know, even if the decision becomes that we continue to move forward with the ApoC3 program, you know, we're still on schedule to engage with FDA, call it Q1 or so, with a plan, and then to have a study start sometime in 2024, mid-2024, Q3. Somewhere in that ballpark. And, you know, I think that you need to look at this and think about it in the context of finance and balance sheet.
You know, if we were Pfizer, you know, with unlimited cash and unlimited access to cash, then it's, you know, a slightly different calculus.
Yeah
... but we need to be, you know, very, deliberate, in, in the way that we commit investor capital, and in the way that we utilize our balance sheet and bring in more capital-
Mm-hmm
... to support the balance sheet, because that these money is fungible.
Yeah.
And we have 15 current clinical stage programs. Our 2025 program, we will, knock on wood, we're gonna meet that, because our early stage discovery is very, very productive now. We're gonna meet that goal of 20 clinical or marketed products by 2025. And so we need to be able to fund all of that.
So let's pick up on funding right now, because you guys ended fiscal fourth quarter, the September's year-end, with over $400 million in cash. How long does that last you guys? What are other sources, including partnerships and other things, that you're considering to finance this late-stage cardiovascular pipeline?
Sure. I wanna, I wanna first talk about how we've historically funded-
Mm-hmm.
... the company, and then we can talk about the, you know, plan moving forward. So, we've always viewed financing as it's not a— there's no one-size-
Mm-hmm.
...fits-all solution to that. Over the lifetime of a development stage biotech company and even a commercial, you know, you're going to use equity, you're gonna use debt, you're gonna use business development, and you're gonna find creative ways to finance. And we have filled all of those buckets over time. So, you know, over the last six years or so, we've brought in about $1 billion in cash through business development. That's-
Mm
... upfront payments and milestones. That, that doesn't include downstream biobucks. That's actually cash in the door. We, you know, since we haven't done an equity financing since 2019, which we brought in $275 million or so at that time point. We did a royalty monetization deal with Royalty Pharma last year, which brought in another $250 million or so dollars. And so we feel like, you know, spreading out our sources of capital across different structures makes sense over the long term. You know, nobody has a crystal ball, so you can never decide in any period of time what will be the lowest cost of capital source. So our goal is always to spread it out over time, you know, those different types of instruments.
So moving forward, our strategy is, is not different, I would say, but we have more opportunities to do the same type of things that we have done, and more opportunities because our platforms have expanded. Our business development in the past primarily was based on our liver-directed-
Right
TRiM. Now we can get to hepatocytes, we can get to lung, we can get to CNS, we can get to muscle. Ultimately, and you'll hear more about this next year, we can get to adipose tissue. So all of these individual delivery systems-
CNS.
CNS, exactly.
Yeah.
That actually will represent a large part of our growth over the coming two to three to five years.
You guys have been very successful at partnering, so we'll look for more of that to come, too. So probably the next big area that you've really devoted resources to and really are going after multiple targets, again, I think one of the benefits is, of this is the mechanism is the same in terms of knocking down or silencing disease-causing genes, and it's really about delivering to different tissue sets, is the whole pulmonary franchise. So walk us through the data that you guys reported at European Respiratory Society on ARO-RAGE. What kind of asthma readouts and other pulmonary readouts can we expect in 2024?
Sure. So, RAGE, we've actually had additional data since ERS that continues to show a dose response and continues to show a high level of knockdown of the target, which is great. So, we're essentially getting close to, if not the same, level of knockdown in lung that we've seen in liver, and with a very similar duration profile. So we can get approaching or even above 90% knockdown of the targets expressed in the lung, you know, using RAGE as a proxy in humans, in human studies. That duration also is somewhere around two months or so.
Mm-hmm.
And so we can do very infrequent long dosing interval therapies, which is an attractive, patient-friendly thing. And so I think that those data for RAGE do a couple things. First, they serve to somewhat de-risk the entire pulmonary platform, because as you mentioned, you know, the RNAi has been very consistent, and if you can knock down one gene, you should be able to knock down any other gene expressed in the same cell type. And so that's why we were very aggressive early on at expanding into multiple other targets. So we have RAGE, we have MUC5AC, we have MMP-7, and then, you know, at ERS, we talked about a preclinical program against TSLP, and then we have a couple other preclinical programs we're looking at.
The lung program, importantly, the clinical safety has been very encouraging. We've seen no patterns of adverse events, no dose-related or drug-related serious adverse events. It's been very well tolerated. We also mentioned on our conference call yesterday that we'd received the chronic tox results from both RAGE and MMP-7, and that's six-month rat, nine-month monkey. If you recall, from 2021, our first-generation pulmonary program for ENaC encountered a local lung inflammation signal, which caused us to pause the clinical program and then go back and kind of figure out how do we get better?
How do we provide lower exposure or less drug and less frequent administration, which means you've got to be better at potency, and you have to be better at stability, in order to get over that hump. The results that we announced last night appear that we've done that. So we are sufficiently better, not to encounter those lung inflammation signals at, you know, relevant doses. So we're. That was another point of de-risking that we were very excited to see. So next step, you asked about 24.
Yeah.
We will have, we, we've completed enrolling the second of three cohorts in our mild to moderate asthma patients. So there's a low, a mid, and a high dose. The mid dose is already enrolled and dosed. The high dose is enrolling now. We should have those data, you know, very soon. Actually, we get them on a somewhat regular basis. We'll have additional data before the end of this year in-house, and then we'll have the high dose data, call it Q1 or so. And so those will show us, do we continue to get, you know, dose response? Are we getting a better knockdown as we go up in dose in asthma patients, as we've already seen in healthy volunteers? And that's important to show that translation.
The next step, I think, and this is probably the most critical value-creating point, is FeNO.
Yeah.
So FeNO is a biomarker of anti-inflammatory activity. So if we can get a reduction in FeNO in either the mild to moderate asthma cohorts, which will have lower levels, or the high FeNO cohorts, which are enrolling now and will read out, you know, call it mid-next year. If we can get that signal, not only does it show that we can knock down the target, but if we do, that we have a similar biological effect that we would expect, based on, you know, dupilumab and tezepelumab, who are active in that same anti-inflammatory pathway.
Yeah. Awesome. Great, well, a lot going on. It's gonna be a really exciting another 12 months until we see you again, next year, this time. But, thanks for being with us, and looking forward to all the progress.
Thank you. Thanks, Ted.
Thanks, Vince.