All right, awesome. All righty. I think we'll go ahead and get started here today. Thank you all for joining us in the room and online for TD Cowen's 46th Annual Healthcare Conference. I'm Joe Thome, one of the senior biotech analysts here on the team at TD Cowen, and it is my pleasure to have with us today the team from Arrowhead Pharmaceuticals. We have CEO Chris Anzalone and CMO and Head of R&D James Hamilton. Thanks, guys, for joining us. Maybe, before we dive into the specific programs, obviously, a lot has happened at the company over the past even 9 months in particular. Maybe if you wanna just level set, what are kind of the highlights and what should we be looking out for for the rest of 2026?
We can kinda dive into the individual parts.
Sure. First, thanks very much for having us. It's always a great pleasure to come here. We have a big 2026 ahead of us. You know, as many of you will know, we are an RNAi company, of course, and we have a broad and deep pipeline. We've got something like 21 or 22 individual drug candidates in clinical studies right now. We are increasingly focused in cardiometabolic and we view that broadly to include obesity. You know, as we build out, we are spending more and more time in the cardiometabolic space. You know, we also have this new CNS platform that enables us to, we think, you know, address the CNS via simple subQ injection.
We have our first candidate in the clinic right now. We're dosing patients as we speak, called ARO-MAPT. That's against Alzheimer's and maybe some other tauopathies as well. Think of us primarily these days as a cardiometabolic company with a call option in CNS, and we'll see where that goes. We have important, I think, readouts throughout the year in all those areas. We will have a phase III program or set of programs readout in the third quarter. That's SHASTA-3 and 4. These are studies of plozasiran, our triglyceride-lowering drug in the SHTG population or severe hypertriglyceridemia. These are patients with trigs above 500.
Plozasiran is being developed as a pancreatitis drug, and we know that this population of patients have substantially increased risk of acute pancreatitis. APOC3 and PCSK9 levels, and of course, LDL and triglyceride levels. So that's I think that's an important early readout. We'll also have. That'll be in the third quarter as well. We'll also have our first data readout with ARO-MAPT, our CNS drug against MAPT or the protein tau. We're developing that for Alzheimer's as well as other tauopathies. We will have CSF knockdown data of tau, in the third, you know, late third quarter, maybe early fourth quarter, but sometime in that range.
We think that's an important event for us, not only as a potential, you know, clinical de-risking event for that drug candidate, but more broadly, as a clinical de-risking event for the whole platform. You know, if we can knock down MAPT, we can knock down, you know, other CNS targets, and there's a number that we're looking at that we think are quite interesting. Finally, we'll have additional data that we'll read out in our ARO-INHBE and ARO-ALK7 programs. Those are our first two obesity programs, not our last, but our first two. We had some early data, boy, a month and a half months ago or so that we disclosed. Those are ongoing studies.
We have expanded them. We'll have additional data, particularly with ARO-ALK7, which is we are the first ones to address adipose tissue with RNAi. That's an adipose-directed construct. We'll have some more data coming out of those programs also late this year. We have an awful lot going on. Of course, underneath all that, we continue to have, I think, the most productive discovery engine in the business, and we'll be pushing, you know, more candidates into the clinic going forward.
Perfect. Maybe we'll start with the new commercial engine here and then go into the pipeline. Obviously, Waylivra has been approved for FCS, and you indicated that, you know, about the first 10 weeks since launch, you've gotten 100 prescriptions. If you can kinda just talk a little bit on the progress of the launch, what you're seeing in terms of patient interest and reimbursement, and then we'll kinda get into the pricing strategy that you set up as well.
Sure. That's still very early. We are happy with the launch so far. It's been actually a bit faster than we expected. It's primarily patients that are naive to APOC3 therapies. We also do have some switch patients, you know, patients who are on Ionis' olezarsen, who switched to REDEMPLO. That's all good news. We've had good payer interactions. It's still very early, and we're still, you know, in the early phases of developing policies with the payers. That has gone well. You know, we've got a very compelling value proposition, I think, to the payers. You know, the data in the FCS phase III were clear.
We saw very deep reductions of triglycerides, around 80% reduction from baseline, and that was just, you know, virtually unprecedented, and that translated into a numerical improvement in pancreatitis risk. It was a small study and so we, you know, we're looking forward to seeing what the larger SHTG studies look like in a broader population. At least, you know, the first data with the FCS patients were quite compelling. The safety profile was, you know, very compelling. You know, we didn't, we've got a clean label, and so far, at least, we've had an awful lot of interest from prescribers, you know, that we have, you know, this really, I think, quite powerful drug candidate or drug that
Mm-hmm.
called Waylivra that's now in the market. We dose once a quarter. That's also helpful, you know, compared to our competitor.
Maybe just on the competition, 'cause obviously people are, you know, looking at both in terms of FCS and then obviously we'll see the data at SHTG. What are the particular differentiating features that you see and then maybe any that are ringing true with KOLs? Obviously, you mentioned the dosing frequency just now, I guess anything else from the clinical data package or the profile that you think is kind of ringing out for...
Sure. With FCS, I think the differences are quite clear. You know, we saw. Now, let me caveat. It is, of course, always difficult to interpret data across two different studies from two different drugs. To level set that, you know, we do the best we can, but that's difficult. Having said that, the comparisons are quite stark. You know, we saw about an 80% reduction from baseline of triglycerides in this population. Ionis saw a 30%-40% reduction from baseline of triglycerides. We haven't seen any hypersensitivity. They have hypersensitivity on the label. We haven't seen any thrombocytopenia. They have thrombocytopenia on the label. We don't see any anti-drug antibodies.
I think they had about 50% of patients with anti-drug antibodies. We had no non-responders. You know, literally 100% of our, of the patients responded, you know, to REDEMPLO, you know, and showed lower triglycerides. They had about 20% non-responders. We had, I don't know, I think, you know, 75% or so of our patients got below 880. And these patients, you know, start with trigs in the thousands and about, I think, 50% got below 500. And I think they had 14% or so below 880, and I don't think, I don't think anyone got below 500. Anyway, look, their drug works, and that's helpful.
I think at every turn, you know, our drug looks quite good and, you know, at least competitive. We'll see how much of that, you know, translates into the broader population of SHTG, as I said, which we expect to read out this coming third quarter.
When you did launch Waylivra for FCS, you did announce your pricing strategy of the $60,000 a year. I guess first in the context of FCS, how has that been received? I would guess probably pretty favorably versus competition. But maybe how did you arrive at that price when thinking about the whole value of the drug across indications?
We priced that not for the FCS population, but in anticipation of approval someday in SHTG. When we look at that population, you know, we see a very compelling value proposition for high-risk individuals. These are patients with triglycerides above 880 plus those patients with triglycerides above 500 and a history of pancreatitis. We think, you know, together, you know, that there are 750,000 or maybe one million of those patients, and the, you know, the data are quite clear on the biology here that if you can lower triglycerides in these patients, you can decrease the incidence of acute pancreatitis. You know, this is a pancreatitis drug, and I think, you know, it needs to be looked at in that manner.
You know, sure, triglycerides show up on regular lipid panels, but this is not an ASCVD drug and shouldn't be priced, you know, as a PCSK9 inhibitor. This should be priced more like a MASH drug, I think, at least for this high-risk population. You know, if you look at what are the direct costs of treating a single event of acute pancreatitis that is TG related, and it could be more than $60,000 in direct costs for that one episode alone. You add on top of that additional healthcare spend during that year. You add on top of that lost productivity and the like, and again, I think you can make a very compelling proposition that $60,000 is the right price for that population.
We came out, you know, I'm certain that we could have gotten reimbursed at a much higher rate in this narrower FCS population, but we didn't do that. The reason was because we wanted extra time to make sure we could educate the payers and frankly, pro-providers as well, about the value of this drug, and allow, you know, payers time to budget, you know, for upstream of when this gets approved in SHTG. From our perspective, there are two ways you can approach this market. One is this way, right? You know, it's a premium priced product, that is, that has real value, in this, in this high-risk population.
The other way is to go after the broader population, the three and a half million people with trigs above 500, at a lower price. We just thought that was, you know, less of a, of a compelling business to us.
Great. As you mentioned, we'll see the SHASTA- 3/4 data in the third quarter of this year. Maybe what are you setting expectations for in terms of maybe level of triglyceride reduction? Then obviously with Ionis, we did see the acute pancreatitis risk reduction. Should that be the expectation for SHASTA-3/4 here? I guess yes or no?
James?
Yeah, sure. I do think their triglyceride reductions looked really good. I think they were in the high 60s to low 70% reduction at their primary endpoint. Based on our SHASTA-2 data, so the phase II data in the same patient population, the SHTG population, I think we should at least be able to hit that. If you look at the extension study data from that same study from SHASTA-2, where patients continued to get drug, we were starting to get into the mid to high 70% reduction. I think we could do at least as well or maybe a little better than olezarsen in terms of TG reduction.
For pancreatitis, I mean, I think if you believe that TG reduction reduces AP rates, and if we're having similar TG reductions, you know, you would believe that that should translate into a reduction in the rate of acute pancreatitis. Our baseline population is pretty similar to what they enrolled, you know, I think we've got a pretty good setup here. Of course, you can always get unlucky with events in terms of which group they fall into, I think the study was designed sufficiently based on what Ionis has showed that if TG reductions do improve pancreatitis rates, we should be, you know, have a pretty well set up there.
Also, we have two bites of the apple. you know, SHASTA- 3 and 4 were not powered to show improvement in pancreatitis. We're actually, you know, we and the whole world has learned a bit over the last few years about how common TG-related pancreatitis rates might be, or, you know. They're a bit more common than we thought. As you know, as James says, we are cautiously optimistic that we can show it since Ionis has also showed it. We also have SHASTA- 5 that is designed to show improvement in pancreatitis. It's an event-driven study. It's enrolling patients as we speak. If we do get unlucky in SHASTA- 3 and 4, we still have SHASTA- 5 as a backup.
Maybe in SHASTA-3, SHASTA-4, how are you characterizing acute pancreatitis events as they pop up, and is that consistent with kind of your peers? Are you able to see any sort of blinded event rate to see if these events are happening in the studies?
Yeah, I'll take the first part of your question first about how we're characterizing acute pancreatitis. It's essentially the same scale that Ionis used, this modified Atlanta criteria, so patients can have definite pancreatitis, possible or probable pancreatitis, and there's certain criteria for each of those. It's identical to how pancreatitis was defined in the core two studies. Sorry, the other part of the... on the AP event rate.
Yeah.
We are seeing the blinded events as they come through. We're not given the blow-by-blow guidance on how many events we're seeing, but we are seeing events. We've estimated that with a study our size, and if we see a similar event rate in both treatment arms that Ionis saw, we should have about an 80% power to detect a statistically significant difference between groups with around nine events or so. If you can get into the low teens, you're looking at more like 90% power. We feel like we're in pretty good shape there.
Great. After the 3, 4, data come out, I guess anything that needs to happen before filing the SNDA for SHTG, and then maybe secondarily, how are you thinking about Ex-U.S. registration?
Right. On the filing question, it's kinda just execution nuts and bolts type stuff that we've got to lock the database, last patient in, then lock the database, then get the CSR ready, and then prepare the SNDA. That's all going as planned and on schedule.
Great. The last thing maybe between, on this program at AHA, there was this talk of, sort of hepatic fat changes with either of these mechanisms and how you could potentially have an edge there. Obviously, we'll have to see the full data, I guess, do you think that signal is real, and this could be sort of an ASO versus siRNA phenomenon, or how are you thinking about that?
We think so. I mean, I think we still need to see our own data. This question, is this on target or is this an ASO-specific phenomenon? I guess we don't know yet definitively. I will say that we have not seen this in our SHASTA-2 study, at least at the 25 milligram, the go-to-market dose. We didn't see any increase in liver fat in that study. It's also worth mentioning that this has been seen before with vupanorsen, the ASO that's targeting ANGPTL3, where that drug demonstrated an increase in ALT and an increase in liver fat. Whereas two different siRNAs, our siRNA and the Lilly siRNA targeting ANGPTL3 did not show any increase in liver fat. In fact, both of them showed a decrease in liver fat.
That to me, with that ANGPTL3 case, seems like it was pretty clearly an ASO-specific phenomenon. I guess we'll see if something similar plays out, with the ApoC-III target. Now, you know, that being said, I guess if we do see an increase in liver fat in our SHASTA-3, SHASTA-4 studies, we're sort of in the same boat as Ionis. But if we don't, we show no increase in liver fat, then I think that could be a substantial differentiator between the two.
Great. You mentioned earlier you did release the initial ARO-ALK7 data at the beginning of this year. What do you view as the kind of highlights of that data package? Obviously, you saw some really nice fat reduction in those patients. I guess what was the most compelling signal. Do you think this is gonna be a treatment kind of for all obese patients or are you looking at subset approaches? How are you thinking about that?
Sure. A few key signals and things that we took away from the data we have so far, I think first is the safety. Like other GalNAc siRNAs, knocking down INHBE seems to be safe in both the obese non-diabetic and the obese diabetic populations. We were achieving good knockdown, up to about 85% knockdown with good duration. We think we're dosing either quarterly, maybe you could push it out to every six m onths. We don't have a ton of data out that far, but there's the potential for every six month dosing with that molecule.
In the monotherapy groups, so the single and the multiple escalating dose cohorts with just ARO-INHBE, we were impressed by the liver fat improvement and the visceral fat improvements, that we were seeing a reduction in visceral fat and a consistent reduction in liver fat with the monotherapy. Particularly in the diabetic obese patients, that's where we were seeing kind of across-the-board reductions in fat, visceral fat, liver fat, total fat, and this apparent reduction in overall body weight, additive reduction in body weight when you add on ARO-INHBE on top of tirzepatide. That was interesting to us. Of course, that's in the diabetic subset, and that was a pretty small group. We have since increased the size of that cohort.
We doubled from 12 to 24 patients, the type 2 diabetics getting tirzepatide plus ARO-INHBE at 400 milligrams. We just wanted to increase the analytical and substantiate that signal.
Great. Our physicians have indicated that it would be great to have a therapy for sort of GLP-1 maintenance. This has come up a lot, especially when looking at new mechanisms to potentially add on top or post. I guess, do you see that this is a role for a GLP-1 maintenance therapy? I guess, do we know how best to run those studies and what kinds of patients to enroll, or is that something that you're kind of determining right now?
Yeah, I think we're still looking at that. I know that some other companies are looking that at that as well, maintenance therapy, and it's something we could build into a phase II study. It's not currently in the plans, we have not discounted maintenance therapy at all. It's still a possibility.
How do you think about ALK-7 versus INHBE? Obviously, the data will probably guide your decision here, but do you think ALK-7 will be more powerful on certain measures, different on others? Would you advance both of these forward, or would you kind of pick a favorite child?
Sure. If we had this conversation a year ago, I would have told you that it's a bake-off and whichever candidate looks better in a phase I, we'll take into phase II. We've softened on that a little bit. We still need to see a lot more ALK-7 data, but we are certainly open to bringing them both forward. And interestingly, as you know, as James says, you know, we are seeing this pretty compelling liver fat signal, at least with INHBE, and we'll see where that goes with ALK-7. And that could also be another way that we could develop both these simultaneously, right? It could be that INHBE is more of a MASH drug, and ALK-7 is more of a weight loss drug.
We're happy to follow the science on this and take both forward if they both make sense.
In terms of next data updates, when should we expect the next data update? Obviously, the INHBE program was a little bit further ahead. Would you do a more ALK-7 specific update before kind of the additional expansions that you were thinking of, or are we gonna get a whole buffet of data maybe when INHBE is ready again?
Right. Yeah. Right now we're thinking since we didn't have much ALK-7 data at our last release, we'll probably release more data on ALK-7 in the second half. As it becomes available, we'll look for opportunities to release some of the additional INHBE data. We don't really know the timing on that yet.
Great. Last part on this, maybe you did see that striking liver fat signal and then on the slides indicated that maybe you would be going into some other liver diseases. I guess, can you talk about the pipeline after this initial obesity update? What other candidates are you considering and maybe when those could advance?
Are you asking about additional?
Additional targets.
Oh, additional targets.
Yeah.
Right.
Yeah.
Well, one of the things we're thinking of or combining GalNAc siRNAs, so like the dimer that we're doing for ASCVD, there are opportunities to do that in NAFLD or in MASH and use something like INHBE combined with another siRNA against a different target. We haven't talked a lot about those potential dimers, but something to look out for. As you mentioned, there's additional obesity molecules that we've been working on that target adipose liver, separately, adipose, potentially liver targets, and CNS targets as well. We haven't disclosed what the targets are yet, but that's something that the studies that'll probably get started late this year or early next year.
Great. Kind of alluding to the dimer, maybe we'll pop back to the ApoC-III, PCSK9 dimer. Maybe can you give us a little bit more intel into what led to the decision to pursue this strategy? Are there a lot of patients that are on PCSK9s that also have elevated levels of triglycerides, kind of, the background of them, maybe we'll get into what you wanna see from the data?
Sure. There's this large population of mixed hyperlipidemia patients that are not particularly well addressed that have both persistently high LDL as well as elevated triglycerides. Of course, most of them are on statins and some of the other common stuff, but a lot of those patients still have that residual risk with their elevated LDL and elevated triglyceride in the cholesterols in those TRL particles. That was the thought that there's still this unmet need in the mixed hyperlipidemia population. We had siRNAs that we thought could address each component, right? The LDL component and then the triglyceride component as well. We'd spent maybe six plus years working on dimers, trying to get it to work. It was a lot more complicated than just sticking two siRNAs together.
There's a lot that went into it. That's where the idea came from. We thought there's an area of unmet need, and that we had the technology to address that need potentially.
Maybe what would you like to see on either trigs or LDL or both to kind of advance this to the next stage? Would a outcome study be sort of the next jump here, or how are you thinking about development?
Yeah. I think, we had released some monkey data in dyslipidemic cynos, maybe within the last year. With the dimer, the same molecule that we've now put into phase I, we were seeing about 40%-50% reduction in both LDL cholesterol and in triglycerides. I think if we could achieve that, you know, that'd be substantial. I think that's a, maybe a bar to get over. I think we're really gonna be paying a lot of attention to the ApoB reductions in this study, that, as sort of a global measure of atherogenic lipoproteins. Hitting both of those targets, ApoC-III and LDL cholesterol via PCSK9, we should be able to see some really large reductions in ApoB.
I think that's a key measure for us to follow.
Great. Then maybe jumping over to zodasiran for HoFH. Can you just give us an update on that program and whether the single study is gonna be sufficient for approval? How large of a market do you think this is? The benefit is, seems relatively straightforward versus kind of standard of care, but how are you thinking about how much you can take here?
Sure. Yeah. That phase III program is up and running. It's enrolling patients now. I do think that, based on the discussions and the conversations we've had with FDA, that that single study should be sufficient. You know, we're not anticipating that this is gonna be sort of blockbuster-type revenue, but based on, comparatively speaking, this should be a good contender, right? It targets the same target, ANGPTL3, as evinacumab, although we can dose subQ every three months, whereas they're IV monthly. I think we have some clear advantages over that established incumbent.
Yeah. When we first started development of ARO-ANG3, now called zodasiran, we had, you know, two ideas. Idea one was to get into market quickly via HoFH, very similar to what we're thinking of or what we've done with plozasiran and FCS, and then expand into HeFH or expand into a broader mixed hyperlipidemia market, you know, the 20 million people with elevated LDL and triglycerides, which would require, of course, an outcome study. Ultimately, you know, during that process, we got good at the dimer and it felt to us like a PCSK9 ApoC-III dimer is a more powerful agent in mixed hyperlipidemia than ANGPTL3, and so we just focused on HoFH.
The incremental commercial cost of that are very low because it's the same commercial team that is selling plozasiran, and now they'll just, you know, put zodasiran in the bag. That just felt to us like found value. Again, it's not, it's not a massive market, but we think we should, you know, take substantial market share given the dosing schedule, and similar, I think, you know, an expectation of similar LDL reduction.
Great. Then maybe in the last couple minutes, jumping over to ARO-MAPT, you indicated looking at some CSF signals later this year. I guess, what would you like to see in that data set? Is there anything from an AE profile that you are watching out for, I guess, with this target?
Yeah. We should have around third quarter data from the healthy volunteer components of this study. In the healthies, from a PD biomarker standpoint, all we can measure is CSF total tau, which I think is a pretty good indicator. I mean, if we're getting good knockdown in the CSF tau, I think that's a great news for us. Based on what Ionis has shown, Ionis Biogen showed in their phase I, they were getting about 50%-60% reduction in CSF tau, in Alzheimer's patients, so a little different population. We'd be looking to achieve about the same in this healthy volunteer population.
We showed data, I think it was fall of last year, that, with some of the same doses we're studying in the clinical study in monkeys, we could get about that 60%, 65% knockdown in the monkeys in CSF tau. We typically translate well from monkeys into humans. I think that's a good kind of prognosticator of what we might see.
Mm-hmm. Great. Maybe last question just on BD. Obviously, you did the Sarepta deal, which has gone well and kind of driven in some nice non-dilutive capital. What's your appetite to do kind of similar transactions like that? Obviously, the company is in a good financial position to pursue a lot of the targets out there, how are you thinking about balancing that?
Yeah. We are in a good position. We don't need any additional partnerships in the near term. ARO-MAPT is off the table for partnering at least right now. The first two obesity assets, ARO-INHBE and ARO-ALK7, are off the table at least for right now. The dimer, same thing, off the table at least for right now. Of course, plozasiran and zodasiran are off the table, at least now. I don't see what does that leave? Yeah, you know, ARO-PNPLA3, that's an interesting candidate. We developed that for J&J, and then they got out of the MASH business, and gave it back to us.
We saw something like 40% reduction in liver fat after a single dose with that in the PNPLA3 homozygous population. We're not gonna be in that business, even though, you know, we may pursue that with INHBE. You know, the PNPLA3 doesn't make sense to us, and so we'd like to find a home for that. Similar for C3 and factor B. Those two drug candidates do exactly what they're designed to do, but we're not gonna be in that business, and so I'd like to find homes for those. For additional collaborations, I don't have much of an appetite in the near term because we did this deal with Novartis on alpha-synuclein as well as a couple other targets.
We're kind of full there, and we're also working with Sarepta on additional targets. I wanna make sure that we got plenty of bandwidth to support ourselves as well. Probably no new collaborations this year. You know, maybe 2027, 2028, we'll see something.
Great. Awesome. Well, thanks for the great discussion, and have a good rest of the conference.
Thanks so much.
Thank you.