All right, good day, everyone. Welcome to day one of Cantor's Global Healthcare Conference. For our next session, we have Arrowhead Pharmaceuticals, and representing Arrowhead, we have Vince Anzalone, VP, Finance and IR. Vince?
Thank you [crosstalk]
Thank you for joining us [crosstalk]
Thanks so much for having us.
Yeah, maybe we can start off at a high level. Earlier this year, Arrowhead did a very detailed portfolio review and R&D restructuring. So maybe start with, what are now the key pillars of the company internally? Where is the capital allocation being prioritized in terms of the different therapeutic areas?
Sure. Again, thanks, everybody, for having us today. That, that's a really important question today, and more important than it's been for the whole life cycle of the company. As everybody knows, we're an RNAi therapeutics platform company, and the platform part is important 'cause that's really the engine of discovery. So our proprietary platform is called targeted RNAi molecules or TRiM. It allows us to get efficient delivery to multiple different cell types, to enable that RNAi mechanism. And I think the important part of that platform is that multiple cell types. You know, early on in with RNAi, we could all get efficient delivery to liver. And since then, we have now expanded into lung and muscle and CNS, and then shortly, obese- or, adipose tissue.
The good thing is that we can now address many, many different disease areas. The bad part of that is that we have o ur discovery engine is so efficient that we have way more new candidates that we nominate every year than we will be able to develop ourselves. And so, you know, the capital allocation decision is more critical today than it was in the, in the past. Before, we would just run as fast as we could and do everything that we could, as quickly as possible. Now, we have to be a little more thoughtful, about that. So target selection is critical, but also investment decisions on individual programs is more critical.
We're starting to do a lot more detailed analysis of how much we want to invest in each program and what stage we want to take it through ourselves. And then, we also are ramping up our business development activities. We have tended to be historically more reactive with business development, where there would be a lot of inbound interest, and then we would allow diligence and then consider deals.
Now, we're being a little more, you know, proactive, if you will, where we wanna find homes for the assets that aren't gonna be commercialized by Arrowhead earlier than we typically have. Now, that BD environment, you know, this is, I know, one of your later questions, but I'd like to address it now. The BD environment has been a little more challenging over the last couple of years. There's been less deals available than we had expected, and so I think that also speaks to the need for us to really go out and shop assets at the right times and at earlier times.
Mm.
You know, capital allocation broadly is gonna be, from an R&D standpoint, predominantly on our lead program, so plozasiran, which we can talk about in a minute. But the plozasiran phase IIIs, and then the commercial build-out is probably gonna be around 75% of our R&D spend, because that's, you know, more proximal to commercial and to revenue. And these large phase IIIs are ramping up very rapidly, and we're enrolling really efficiently there.
We wanna make sure that our lead program is fully resourced both with on the R&D side, the SG&A side, and the commercial side. So that's really gonna be our main focus in the near term. In the long term, we still believe that our platform and all the new candidates that the platform can generate are gonna be real drivers of long-term value. But in the short term, we just wanna make sure that plozasiran is fully resourced.
Right. You touched on this. What specifically on the BD side is challenging these days?
It's hard to tell. I think that we've had more. We're having more discussions with potential pharma partners than we ever had, and there's more interest in many of our programs than there has ever been. But deals just haven't come to fruition. And I don't know if it's a function of capital is more costly for pharma, with a high interest rate environment or they're more risk-averse. I just don't know the answer to that. I would like to hear from some of the pharma CEOs on that, but it feels like it has been more challenging, again, over the last 18 to 24 months, to get deals over the finish line.
Now, you know, we all know this is a cyclical business across the board, and when there's less deals in a certain time point in the future, that means there likely will be more capital put to work by pharma in the future. That's our take on it, and that's our feeling, and so we really need to be as aggressive as possible, on getting people interested in the assets that, again, we don't think that we'll commercialize ourselves earlier. And I think that there's two benefits to that. Obviously, we are a development stage company now.
We don't have a commercial product yet, and so business development deals bring us new capital, and we think, you know, very low cost of capital sources. But secondly, it reduces our forward growth in R&D spend, which is, again, important. With a pipeline as large as we have, which will continue to grow because, again, our discovery engine is really productive, as that pipeline continues to grow, we need to make sure that our R&D spend is manageable. And so business development deals allow us to kind of temper the growth in R&D spend as well.
Got it. Moving on to the pipeline, on the cardiometabolic front. plozasiran had some FCS phase III data at ESC recently. Maybe walk us through some of the key highlights and contextualize the differentiation versus some of your competitors.
Sure. So the data that we presented at ESC, which was just a couple of weeks ago, it was phase III data on the PALISADE study. And the PALISADE study was in patients with familial chylomicronemia syndrome or FCS. And importantly, we enrolled about half and half of genetically confirmed FCS and clinically diagnosed FCS, and that's an important distinction 'cause we're the only-- that's the only study that has done that. And so that potentially, you know, I don't wanna speak for the FDA, but that potentially expands the addressable market for FCS. So, you know, to put it in context. So traditional genetically confirmed FCS is probably around a thousand patients in the U.S., you know, somewhere give or take. It's hard to know exactly.
You know, and so it's a rare disease. When you expand to the clinically confirmed, it's maybe five or 10-fold larger, you know, potentially more than that, but somewhere in that ballpark. And these are patients who have the exact same disease, who have the same syndrome. They just don't have one of those lists of genetic mutations that's called, you know, traditionally confirmed, genetically confirmed FCS. And our data that we presented at ESC showed that we're getting virtually the same knockdown of the APOC3 target, which is the gene target of plozasiran, and virtually the same reduction in triglycerides, as for genetically and non-genetically confirmed. So overall, the data were, you know, really a home run across the board.
We had, you know, 90+% reduction in the gene target, so we're getting very efficient delivery and target engagement. APOC3 was reduced, again, 95% or so across the board, which led to a reduction in triglycerides at that ten-month period of around 80%, which is dramatic. It's, you know, life-changing for a lot of these patients. You know, the FCS, genetic or non-genetic, is characterized by extremely high triglycerides, normally in the thousands. You know, I think the median triglyceride level for the patients in this study was around 2,000 or more than 2,000. A normal triglyceride level is 150 mg per deciliter. Then when you spin these patients' blood down, it looks like cream.
It's just they're not able to efficiently metabolize triglycerides, so it just builds up in the blood. And, you know, that leads to bouts of painful and recurrent pancreatitis, in the most extreme cases, obviously, death, severe abdominal pain, brain fog, and a really restricted lifestyle. These are people who are constantly looking at their fat intake. They can consume somewhere around, you know, 20 grams or so of fat per day, which is like the equivalent of less than a tablespoon of olive oil. And so their quality of life is very, very poor.
Something like plozasiran that can reduce triglycerides by 80%, really changes their risk threshold and changes their lives. The critical part, you know, points that physicians tell us all the time is that they want to get to these guideline-directed thresholds that are predictors of pancreatitis. So 880, anything above 880 for triglycerides is at high risk of pancreatitis. Anything above 500 is considered, again, high risk, and, you know, it's a spectrum. So the higher you go in triglycerides, the higher the risk for pancreatitis is. So we think the lower, the better. And in this study, we did show that we...
I'm gonna get the exact numbers wrong, but somewhere in the order of 80+% of patients got below that 880 threshold, and I think somewhere around 50% got below 500. Which is, again, this is life-changing for these patients. And we just don't see. There is no therapy out there that can match that level. And then the last thing is that we did show a statistically significant reduction in acute pancreatitis in the study. We reduced pancreatitis events by 83%, during that study period, which again, we are the only therapy to show that statistically significant reduction in the risk of acute pancreatitis. So we again feel like the data across the board were extremely strong and gives us a lot of confidence going into a potential launch in 2025.
Right. And the one thing that I always struggle is the data are great, but on the pricing front, you'll launch this indication, you'll have a few years, either you or your competitor will launch the same drug in the SHTG indication. So how do you navigate that, and is there any creative way to navigate the pricing scenario?
Sure. So you have pricing and reimbursement and access discussions with payers based on the population that you are going to get approved in and that you're gonna launch in. And so initially, it is, again, this FCS, this rare disease, and so our. You know, we will be launching, assuming that we get rare disease pricing. We do have phase III studies going on in SHTG, which is an extremely larger market, somewhere in between three and four million patients in the U.S. So ultra-rare to a very high prevalence disease, and then ultimately, you know, down the road, ASCVD, which is, you know, potentially 20,000,000 in the U.S. But again, the launch has to assume that we are addressing the population that we're getting approval for. Once-...
You know, once we launch, and we will, our competitor with olezarsen is probably two quarters ahead of us. We're planning on filing our NDA before the end of this year. And then, you know, we've announced recently that we have, you know, Breakthrough Therapy Designation. So assuming we get priority review, which, again, we have to discuss with FDA, that we will be launching sometime in the second quarter or third quarter of next year. And again, our competitor is somewhere maybe two quarters ahead of that.
Since somebody else will be launching in a similar population, you know, we'll have to see where they price, and be somewhat similar to that. And then two years down the road or so, when we have our phase III readout for SHTG, then we, you know, then the pricing has to come down to be consistent with the patient population that we get approval for two years from now with SHTG.
Now, I think we're, you know, a little too early to start predicting what that pricing level will be. But I think that, you know, what we've seen with a patient population that size in the cardiometabolic space, there's kind of a, you know, not too narrow band of acceptable pricing and reimbursement. And our goal with this is really to provide value, and for FCS or SHTG or ASCVD down the road. We wanna provide value to the healthcare system, and to patients, and to physicians. And so we wanna make sure that pricing allows us to show that value, but also it gives access to as broad of a population as possible. You know, we've seen other agents in the cardiometabolic space, you know, kind of overdo it with pricing, and, you know, and not get efficient access. You know, we don't wanna make that mistake.
Got it. And moving on to your broader SHTG indication, so remind us about the phase III trial differences that you have versus Ionis, and why did you decide to go that route?
We have two phase III programs. Or I'm sorry, we have three actually, for SHTG, SHASTA-3 and SHASTA-4, and then SHASTA-5. I'll talk about five separately, but SHASTA-3 and SHASTA-4 are essentially the mirror images of each other. So between the two, we're enrolling somewhere in the seven to eight hundred patient range. The endpoint, the approvable endpoint, primary endpoint from that study is just triglyceride lowering at a year. And the reason we have two studies instead of one is that, you know, FDA wanted two well-controlled or placebo-controlled studies that show a difference there. So we could have done one large study, but FDA wanted two separate ones, and that's similar to Ionis. They have that same design.
The difference between our strategy is that they're looking at acute pancreatitis in that study. So in their two studies, they're seeing if they can show a difference in the incidence of acute pancreatitis. We thought that in one year of treatment in a non-enriched population, it's unlikely to see that signal. So we have SHASTA-3 and SHASTA-4, which are similar to theirs, but then our SHASTA-5 study is kind of an enriched acute pancreatitis outcomes study. And so we're not limited to one year of treatment. It'll be event driven, and that I believe we're somewhere in the 140 patients or so range there, and these are higher-risk patients than the broad SHTG population, and we think that's important. Certainly, it's important for, you know, to show the value of the product.