Release Date: November 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Arrowhead Pharmaceuticals Inc (ARWR, Financial) entered into a transformational licensing and collaboration agreement with Sarepta, providing a $500 million upfront cash payment and a $325 million equity investment.
- The partnership with Sarepta is expected to return balance to Arrowhead Pharmaceuticals Inc (ARWR)'s business model and put the company on a path to profitability.
- Arrowhead Pharmaceuticals Inc (ARWR) has a focused pipeline in the cardiometabolic space, with several programs progressing towards commercial stages.
- The company has a strong discovery engine capable of rapidly creating new drug candidates, with plans to advance multiple preclinical assets.
- Arrowhead Pharmaceuticals Inc (ARWR) is well-funded into 2028, with potential for additional non-dilutive capital from existing and future partnerships.
Negative Points
- Arrowhead Pharmaceuticals Inc (ARWR) reported a net loss of $599.5 million for fiscal 2024, significantly higher than the previous year.
- Revenue for 2024 was only $3.6 million, a sharp decline from $240.7 million in 2023, due to no new partnership or license agreements executed during the year.
- The company has become out of balance recently, requiring the Sarepta partnership to restore equilibrium.
- There is uncertainty regarding the FDA's acceptance of the NDA for the lead program, with no guarantee of priority review.
- Arrowhead Pharmaceuticals Inc (ARWR) faces challenges in building out clinical and regulatory expertise across diverse therapeutic areas.
Q & A Highlights
Q: With the deal with Sarepta including a few SCA programs in Huntington's with the Sub Q delivery, how are you thinking about the future of Arrowhead's CNS franchise from here?
A: Christopher Anzalone, President and CEO: The sub Q CNS platform is exciting, and we have other programs like MAPT and ALUCAN that remain wholly owned. These are potentially partnerable, and we see potential CNS targets in the cardiometabolic space. We expect updates in 2025.
Q: What was your reaction to Lilly discontinuing their siRNA for APOC3?
A: Bruce Given, Chief Operating Officer & Head of R&D: It's hard to assess from a distance, but pos' is a strong drug and may have set a high bar. However, I can't determine why Lilly made that decision.
Q: How are you thinking about paying down the debt announced on the last earnings call?
A: Christopher Anzalone, President and CEO: We will pay down the debt through the Sarepta deal and other deals as cash comes in. There are formulas for that, and we expect it to contribute to paying down the debt over time.
Q: How important are the obesity programs, ARO-INHBE and ARO-ALC7, strategically to the company?
A: Christopher Anzalone, President and CEO: These are important targets, genetically validated, and we will be the first in the clinic with them. We like our positioning and the genetic data, making them strategically significant.
Q: Given the large partnership with Sarepta, what are your thoughts on additional partnerships going forward?
A: Christopher Anzalone, President and CEO: We are still on the lookout for smaller collaborations and license agreements. The Sarepta deal gives us breathing room, but we expect more deals over time, leveraging our discovery capacity and non-core assets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
