Thank you very much, and welcome again to the Citi BioPharma Conference in Boston. Happy to have with me Arrowhead Pharmaceuticals. I guess if you could start out, introduce yourself and introduce the company, tell a little about the history, and bring us up to speed.
Thanks very much. And again, thanks for having us. I'm Chris Anzalone, President and CEO of Arrowhead Pharmaceuticals. We are an RNAi company. I've been around for some time and have developed a broad platform that enables us to deliver to a variety of tissues. At last count, we can deliver to five different tissue types. And by the end of this year, we will have 20 individual drug candidates in clinical studies or at market. And we are approaching our first PDUFA date on November 18th. And so we're hopeful to make that transition from an R&D only to an R&D plus commercial company this year.
So you have your first PDUFA date coming up. It's for Plozasiran APOC3. A lot of news about it recently. Could you first, I guess, talk about Plozasiran, its data set to date in FCS, and tell us a little bit more about what that molecule is shaping up to be?
Sure. So as you say, Plozasiran is designed to reduce expression of APOC3. We have progressed through a number of phase I and phase II studies, a phase III study in FCS. The data have been universally compelling. It's been a well-tolerated drug candidate. In the FCS phase III study, we saw a very good knockdown of APOC3, very good knockdown of triglycerides. In fact, we saw about an 80% reduction in triglycerides. We saw, I think, an 83% improvement in risk of acute pancreatitis, which was, we saw a statistically significant improvement in pancreatitis rates in that phase III. It's dosed quarterly via simple subcu injection, and again, this first PDUFA date is for the FCS population. We have ongoing phase IIIs in a broader severe hypertriglyceridemia or SHTG population. Those are fully enrolled.
We also have an outcome study, the outcome being acute pancreatitis, called SHASTA- 5, that is ongoing as well. So we are guns ablazing with Plozasiran. We have had productive and timely interactions with the FDA this year over our NDA, and so we've seen no signs that whatever's happening in the federal government has slowed any of this down.
So clearly, we're going to talk about severe hypertriglycerides in a moment, but let's not put the cart before the horse. Let's talk FCS. Tell me about the disease FCS, what the unique challenges it presents, and what Plozasiran does for these patients.
Sure. So these patients have severe hypertriglyceridemia. These patients have triglycerides generally in the thousands. They just are not able to metabolize triglycerides well. And consequently, they are at substantial risk of acute pancreatitis, which is certainly painful, requires hospitalization, and can sometimes be fatal. So it's a real problem for these patients. The only way to treat it right now really is through diet. And so these patients have very, very low-fat diets. Even so, they've got brain fog, certainly abdominal pain, and again, the risk of a number of bouts of pancreatitis. So that was an opportunity for us to really help all these folks. The best thing out there right now really is fish oils to lower triglycerides, and that lowers them in the 20% to maybe 30% range. And our phase III was frankly stunning. We saw triglycerides lowering to the tune of about 80%.
Interestingly, we brought most of these patients down to various goals. One goal is to get below 880. We know that the risk of pancreatitis really skyrockets at around 880 mg per dL. We got something like 75% of patients below 880, and we got about 50% below 500, which is, again, an important inflection point of increased risk of pancreatitis. So we are excited to hopefully get this approved in November and get this to the patients who need them. Now, there are probably two different populations we can talk about. One is the genetic FCS population. These are patients with these known genetic abnormalities that cause FCS. That's a fairly small number. We think there's maybe only a thousand of those patients in the United States.
There's a whole additional population that has the same phenotype but does not have those exact genetic mutations associated with known FCS. And we call those phenotypic FCS or clinically defined FCS patients. When we were designing our phase III, we were first going to focus only on genetic FCS patients. But the FDA suggested that we broaden that out and also look at the phenotypic FCS patients. And we said, "Sure." We did. And those patients responded in a very similar fashion to the genetic FCS patients. And these patients don't care what their genes are. What they care is what this disease is doing to them. And it appears to be the same between the genetic population and the phenotypic population. So we will see what we get on the label. Again, we studied both populations.
The population of phenotypic FCS or clinically defined FCS is a much, much larger population. That could be five or ten or more thousand patients in the United States alone, and so we are hopeful that we can also treat those.
How easy is it to diagnose the genetic versus the phenotypic? What process do you have to navigate to be able to get from point A to point B?
Right, so from our perspective, it would be easier if this does not require a genetic test. It's really just a triglycerides test. If somebody has triglycerides in the thousands, then who cares what genetic mutations they have, they need to be treated. That would be the easiest. Historically, patients are genotyped, which is not hard, but it's just an additional step.
How long does it typically take to find a patient from initial symptoms to when they actually get diagnosed?
Most of these patients are already in the healthcare system. These are very, very high triglyceride patients. They will have had pretty severe sequelae associated with disease. As I said, brain fog to abdominal pain to acute pancreatitis. They're known. These are findable patients. Certainly the genetic FCS patients, it's relatively easy to find them. Some of the phenotypic patients that are maybe low thousands, maybe more like a 1000 mg/ dL, they may be a bit harder to find in part because education is required here. As with any disease that does not have any real therapies, it is probably underdiagnosed. It's incumbent upon us to really educate physicians as to the importance of this disease.
So there's already a drug out there approved for FCS, an antisense, not the same mechanism, but conceptually similar. How would you compare and contrast the two? And probably, in a way, more importantly, what have you learned watching as they've launched their therapy?
Sure. So this is that odd situation where we are not first in this broad pipeline of ours that is a small minority. That's actually a really helpful thing here because we have for two reasons. One is that we have a company that's ahead of us, and we can learn a lot about regulatory interactions and the like because they go first. That's really helpful. But also, this is maybe to a somewhat limited extent in FCS, but in the broader SHTG population, this is really an education play. As I mentioned, diseases that don't have proper therapies are often underdiagnosed, and that is absolutely the case in severe hypertriglyceridemia. And so having two companies help to educate payers and providers and patients is better than having one company do that.
And so it's a good thing for the field and frankly the world and certainly patients to have two companies go after this. They are ahead of us. We feel good about how our drug stacks up against theirs. Plozasiran has historically shown better APOC3 reduction, better triglyceride reduction. In their phase three, I think they were showing around 40% reduction in triglycerides from baseline in patients. And we showed 80% reduction from baseline compared to placebo. That's helpful. We will be dosing once a quarter. They'll be dosing, or they are dosing once a month. That's also helpful. So it's a good situation for us that we will have two companies educating the market, but we think we have an objectively superior drug when we are head-to-head.
So this past weekend, they announced data from their severe hypertriglyceridemia trial, which obviously was surprising to people, given they were not powered to have an outcomes benefit on pancreatitis events. I guess, how does this change your perspective, if at all, on what the market potential of this drug could be?
Yeah. That was a good thing. Good for them, good for the field, good for patients. The data were good. They were showing good triglyceride reduction. As you mentioned, they showed an improvement in pancreatitis. We are all looking forward to seeing the full data set whenever that's available. So all we know is from the press release. But given what they said in the press release, it's very exciting. And the fact that, again, they did show an improvement in pancreatitis gives us confidence that , we will see it, but also I think it puts this class of drugs in a position that is, with payers and providers, that is helpful to us. Here's what I mean by that.
There is this dogma out there that cardiovascular drugs should be priced or can be priced no higher than the $10,000 or $12,000 or $15,000 range per year. And that may be true. But the way I view Plozasiran is this is not a cardiovascular drug. This is a pancreatitis drug. It is designed to decrease the chances of acute pancreatitis for a segment of the population that has increased risk of pancreatitis because of increased triglycerides. And I think that the fact that they appear to be showing an improvement in pancreatitis rates helps to crystallize that feature to payers and to providers and to patients. This, to me, feels like the pricing should be more analogous to a MASH drug than an LDL lowering drug. Yes, triglycerides come up on lipid panels, but again, I don't view this as a cardiovascular drug. This is a pancreatitis drug.
What do you think is going to go into educating payers in that regard? Naturally, they're keeping an eye on their P&Ls, and the population just got a lot larger from FCS, a couple thousand people, to severe hypertriglyceridemia, and theoretically, you get considerably larger depending on where the threshold is actually set, so how are the payers? Do you expect they're going to deal with potential premium pricing? What types of things might they consider doing to try to keep it in line so things don't get out of hand?
Yeah. Look, we are talking to payers as we speak, as you can imagine. I assume that I own this as well. Look, we have a compelling value proposition. Pancreatitis is a bad thing. It can sometimes be fatal. It is always painful. It is always expensive and requires hospitalization. It is a good thing if we can limit a patient's experience with pancreatitis. I think the payers and we are in line on that, and we just have to figure out what the right price is.
But I think, again, that's the way to look at this, particularly now that they have data showing that they can improve the risk of pancreatitis. That's the way to look at this. How expensive is pancreatitis in your patients? How much does pancreatitis or the risk of pancreatitis affect quality of life for these patients? And then I think we can all come to an agreement on what that price should be.
Is there a way to gauge the risk? I mean, obviously, higher triglycerides, higher chance of pancreatitis. Is there a threshold where the odds of an event start going up much more quickly, kind of an inflection?
Yep. Yep. That's a great question. So normal triglycerides, at least according to current guidelines, is below 150. And so there is essentially a linear increase in risk of pancreatitis as triglyceride levels go up. There is a bit of a change in that slope. Once you hit 500, that slope steepens. And say someone with 500 or 600 or 700 triglycerides has a much higher rate of risk of pancreatitis than someone at 300 or 400 or 500 . And then there's another inflection point at about 880. It's a funny number, but it's associated with 10 mmols, right? So 800 is also, or 880 is also another important inflection point. And so many physicians think in terms of goals to get their patients below 880, to get their patients below 500, to get patients below 150. I view those as the three sort of most important numbers.
But then on top of that, once you've had a bout of pancreatitis, you've got a greater chance of having it again. And once you have two, you've got a greater chance of having it a third time. And this is also part of education with respect to physicians and patients, but also payers. That to the extent that we can keep patients from having their first bout of pancreatitis, everyone is better off. It's going to be cheaper for the payers, and it's going to be a better quality of life for the patients.
Got it. But do you think it's unreasonable to expect that there will be some sort of threshold put in place by the payers?
Well, so the population that we're studying in severe hypertriglyceridemia is above 500. And so I would view that as a threshold. Now, would payers say that it depends, of course, depends on the price, but would payers say that it makes most sense treating patients above 800? It's possible. But my anticipation is that our label will say above 500 because that's the population that we're studying.
Got it. I guess, as you approach commercialization, how are you thinking about your launch? How are you preparing to enter the fray?
Yep. So we are now essentially fully staffed in advance of our November 18th PDUFA date. If we were approved two days from now, we have the staff to follow that. Now, some of these folks have just recently come in, and so they're still training, but we have achieved the critical mass that we believe we need to address the FCS market. I'll tell you, so Plozasiran is a very helpful first product for us, first commercial product for us. Here's what I mean by that. Like any company that makes the transition from an R&D organization to a commercial organization, it's going to have some growing pains. Even though all the folks who are in our commercial team have been doing this for quite some time, as an institution, as an organization, we have not commercialized a drug before.
And so there'll be some growing pains and some mistakes here and there. We like this following Plozasiran because it is a stepwise commercialization process. We will start with FCS. It's a very small population requiring a relatively small team. It's relatively easy to find patients, at least genetic FCS patients. So it allows us to kind of get our commercial feet under us with this more narrow market. But as I mentioned, we've got two phase III studies to support a label expansion into severe hypertriglyceridemia that's fully enrolled. And so my expectation is that that study will be complete the middle of next year, and then we'll file an sNDA towards the end of next year. That would be a step up. That's a much larger population.
Should we luck out and the data be good and regulators approve that drug in that broader population, we'll then ramp up our commercial footprint and address large populations. So this allows us to become commercial in a more systematic, stepwise process.
So in the last couple of days, it's been kind of an evolution in what the street is estimating as the market size for this. What do you view as the market size? And there's the cardio versus the pancreatitis outcomes aspect you mentioned with pricing. How does it change if the ultimate goal, if people end up targeting the cardio population larger, but with a lower price rate range versus targeting pancreatitis, smaller group, but larger price?
Sure. So here's the way we're approaching this. We view Plozasiran as our pure play triglyceride-related pancreatitis drug. That's what it does. We are bringing it to FCS patients shortly, I think, and then longer term bring it to broader severe hypertriglyceridemia patients in order to decrease the risk of pancreatitis. Full stop. Now, there's an awful lot of interesting data to suggest that high triglycerides are related to increased risk of major cardiovascular events. And there was a long period of time when we expected there to be a third step in the commercialization process of Plozasiran where we would do a cardiovascular outcomes trial and then ultimately lower the price and address that ASCVD market. That doesn't make sense to us right now. We like Plozasiran as a pure play pancreatitis drug.
The broadest market that appears to be at this point is the three to four million people in the United States that have triglycerides above 500. Then the question is, are you addressing all of those, or are you focusing primarily on those with very high triglycerides that have an increased risk and even enhanced risk of pancreatitis? And we don't know the answer to that yet. We're still trying to figure out what the right pricing is going to be, and that may narrow that market a bit as well. But at its broadest, it's the three million- four million, but it could be as narrow as the million or so with triglycerides above 880. We'll see on that.
Now, as I mentioned, there is a ton of relatively new data over the last couple of years, three years maybe, that suggests that high triglycerides are at least as atherogenic as LDL cholesterol. In fact, many of our KOLs think that it is more atherogenic and that there is a big opportunity to help with ASCVD by lowering triglycerides. We will be addressing that market, but not with Plozasiran. We have a dimer approach that will be in the clinic this year that is designed to reduce expression of PCSK9 as well as APOC3. And so in one fell swoop with this one drug, and it's not a combination approach. It is a single chemical entity. We expect that we can knock down both PCSK9 and APOC3 and therefore knock down both LDL and triglycerides.
I think that we will have those early data in the phase I sometime next year, and I think that we will know if we have a drug pretty soon during that timeframe because the field has a very good understanding about how much you lower LDL and how much of an effect that could have on these major cardiovascular events, and there is at least a theoretical approach to associate high triglycerides with major cardiovascular events, so we are positioning that as our broader ASCVD drug. We'll know better again next year how well it's working in both those targets, but my expectation is that it will reduce both of those substantially and could be a really, really powerful heart disease medicine at some point.
Let's jump over to Zodasiran here, another drug in the lipid area. Can you tell us about it? We haven't heard quite as much about it recently because obviously APOC3 has become much more dominant. What's going on with Zodasiran?
Yes. So Zodasiran is designed to reduce expression of ANGPTL3, and it does that. We've now been in a ton of patients and healthy volunteers showing that it lowers expression of ANGPTL3 and therefore lowers triglycerides as well as LDL. And so almost think of this as a baby dimer, right? The PCSK9, APOC3 dimer should lower LDL and triglycerides a lot. Zodasiran lowers both, but not quite to the extent that we are expecting the dimer to do. And so when we first were developing that, we viewed that as a pretty interesting ASCVD drug. We have changed our strategy there a bit with the new dimer that's coming on board. And so then the question is, okay, where do you take Zodasiran? And you could take it in severe hypertriglyceridemia, certainly, but with Plozasiran, we don't really need that.
And so therefore, you could take it to high LDL populations. And within that, we are focused on HoFH as opposed to HeFH. It's a very small population, of course, but we are in a phase three study now. It's a very small study. I think that should read out sometime, say, in 2027. And we view that as a nice addition to the bag of our commercial team that is commercializing Plozasiran. It's going to be the same physicians essentially that they'll be talking to for Zodasiran. And so the incremental commercial costs are quite small. And sure, HoFH is a small population, but there could be $200 million of possible revenue that could come of that for relatively small incremental investments.
Now, yesterday, you announced that you had entered a new partnership with Novartis. Could you tell us about that? And Novartis also seemingly diving a little bit more deeply into this space with Zodasiran as well by a deal with Argo. Could you tell us about how that's evolving?
Sure. Yeah, it's a great deal. It's in the CNS space. One of the places we can go with TRiM is in the CNS. While we do have one drug candidate in the clinic right now that is via intrathecal injection, everything going forward will be on our BBB platform that enables systemic delivery to get into the brain. The first drug candidate to get in the clinic will be MAPT against Tau for Alzheimer's. I expect us to file a CTA for that in the next month or so. After that, we expect to have a target against Huntington's, HTT. That has been licensed to Sarepta. I would expect that to be also at the CTA point by the end of this year.
And then early next year, say the first quarter of next year, I expect our third candidate to be in the clinic, and that's against alpha-synuclein. That was the basis, or that was the real root of the Novartis deal. And so we have licensed to them alpha-synuclein or ARO- alpha-synuclein, as well as three additional targets. And those targets, they will determine and send to us, but importantly, they can't come from our pipeline. And so we view that as found value. Those will be brand new targets that we're not going after. And so we look forward to working with them on all four of those areas. I think alpha-synuclein is a great target, and I think it's in great hands with Novartis. We are holding on to MAPT. We see that as a real potential value driver for us.
It's a well-validated target against Alzheimer's as well as other tauopathies. And I think we'll have target engagement data from that study sometime, maybe the middle of next year. And that could be an important value driver, not only insofar as ARO-MAPT could be a valuable drug, but also to unlock value in the entire CNS platform. There are a lot of great CNS targets that we can go after. And once we de-risk that platform, I think that we can create a ton of value.
Could you walk us through the terms? I mean, we know about the upfront. What do the terms look like for the milestones downstream and potential royalties?
Sure. Yep. Again, given the state of the technology, we think it's a great deal. It's preclinical, of course, but also it's based on a platform that has not yet been in humans, our CNS blood-brain barrier platform. So it's $200 million upfront. It's milestone payments up to over $2 billion, and those are commercial as well as development or regulatory-based milestones, and then royalties to low double digits.
Now, of course, a lot in the news lately has been what's going on with Sarepta, so the $200 million was well-timed with that. Could you kind of bring us up to speed? I know there's been a lot of moving parts about where things stand right there.
Sure. Look, my expectation is that they will continue to perform, and they have so far in the partnership. They have given us no reason to believe that they will not. The basis of that partnership, or the most advanced part of that partnership, are two skeletal muscle drugs, ARO-DM1 and ARO-DUX4. My expectation is that we'll have some data that jointly we can release at some point this year. It won't be a full data set from the phase one, but hopefully we'll have some data that is interpretable that we can talk about. I think we're on track with that. They continue to push forward in the other areas of the partnership, and from what they've said publicly, it does sound like they are viewing the products of this partnership as a real basis of that company going forward.
And so I think they will make sure that they can continue this. One component of the deal was that they bought 12 million shares of ours at a premium, I guess, back in February. And that was locked up until the end of or towards the end of August. It sounds like it made sense to them to get liquid on that in order to make sure that they could operate their business and also make sure they could continue to perform in this partnership. And we really didn't like the idea of that being an overhang on our stock. And so they, along with the bank and us, placed all those shares. So those are all gone. They got liquid. And presumably, that enables the stock to behave more normally.
So we have four minutes left here on the clock. What would you like to talk about that we have not talked about?
Boy, it's hard for us to talk about this company in 40 minutes because we have so many things going. As I mentioned, we're going to hit our 20 in 2025 goal of having 20 individual drug candidates at market or in clinical trials by the end of 2025. So there's a lot there. Now, our model is based on a combination of partnering and wholly owned assets, and so, of course, a huge chunk of those 20, we will not commercialize ourselves, but we'll commercialize in collaboration with partners. I think hitting that 20 in 2025 milestone is an important thing from a value standpoint for us, but we have a ton of things going on between now and, say, six or nine months from now, and basically chronological order, unless I forget something, I think it's as follows.
We will file the CTA for ARO-MAPT, our Alzheimer's CNS drug. I think that's important. We will file the CTA for our dimer, the PCSK9, APOC3 dimer, soon thereafter. I think that's important. We'll have our PDUFA date in November, which, of course, is critically important to change the tenor of this company and make us a commercial company. We will have some obesity data by the end of the year. We didn't talk about Inhibin E or ALK7. These are our first two obesity candidates. Inhibin E is hepatocyte-directed construct, and ALK7 is our first adipose-directed RNAi molecule. We will have not a complete data set by any stretch, but we will have, I think, some interpretable data set from both of those assets by the end of this year. I think that's important.
We'll probably have a bit more ALK7 data come out in the first half of next year just because that's about six months behind Inhibin E. I think that's important. I think we'll start to have initial MAPT data sometime, maybe the middle of next year, so we can see how well that's performing. And as I mentioned, that, I think, reads on the whole CNS platform. I think that can create value if we do see good translation from animals to humans. And then same thing with the dimer. I think we'll have LDL and triglyceride data sometime in the middle of next year, and I think that will tell us if we have something that really could go the distance. So just over the next six or nine months, I think we have an awful lot of things that will monitor our growth.
It looks like things are going to be very busy for you. Thanks much for coming to our conference, and of course, look forward to chatting again.
You're welcome. Thanks very much.
Cheers.