Core Insights - Arrowhead Pharmaceuticals focuses on developing medicines for intractable diseases by silencing the genes that cause them, operating in a competitive biopharmaceutical industry alongside peers like Alnylam Pharmaceuticals, Amicus Therapeutics, ACADIA Pharmaceuticals, and Axsome Therapeutics [1] Financial Metrics Comparison - Arrowhead Pharmaceuticals has a Return on Invested Capital (ROIC) of 20.84%, significantly higher than its Weighted Average Cost of Capital (WACC) of 9.86%, resulting in a ROIC to WACC ratio of 2.11, indicating efficient capital utilization and potential for growth [2] - Alnylam Pharmaceuticals shows a negative ROIC of -10.44% against a WACC of 5.30%, leading to a ROIC to WACC ratio of -1.97, highlighting inefficiencies in capital utilization [3] - Amicus Therapeutics also reports a negative ROIC of -13.65% with a WACC of 6.20%, resulting in a ROIC to WACC ratio of -2.20, indicating challenges in generating returns above its cost of capital [3] - ACADIA Pharmaceuticals stands out with a ROIC of 23.32% and a WACC of 6.74%, yielding a ROIC to WACC ratio of 3.46, suggesting strong capital efficiency and growth potential [4] - Axsome Therapeutics has a notably negative ROIC of -55.37%, far below its WACC of 5.53%, resulting in a ROIC to WACC ratio of -10.02, indicating significant challenges in capital utilization [5][6]

Summary of siRNA Industry Insights Industry Overview - The siRNA drug market is projected to reach $50.3 billion by 2040, indicating a significant growth opportunity in the nucleic acid therapy sector, which is gaining traction as a new drug development direction [1][1][1] Key Insights - siRNA drugs offer high efficiency, low toxicity, and long-lasting effects compared to traditional small molecules and biologics, making them a popular choice in new drug development [1][1][1] - The GalNAc liver delivery platform has matured, showing high delivery efficiency and specificity, becoming the standard for liver-targeted siRNA drugs. Notable targets include PCSK9, AGT, Lp(a), and ApoC3, which have demonstrated therapeutic potential [1][1][1] - There is potential for breakthroughs in extrahepatic delivery systems, with early-stage developments in areas such as muscle, CNS, and ocular applications. Alnylam's C16 delivery platform is showing promise in Alzheimer's disease, while Arrowhead and Wave Life Sciences are exploring fat tissue targets [1][1][1] Market Dynamics - Domestic siRNA companies are positioned to capitalize on the demand for new technologies as traditional chronic disease drugs approach the end of their sales lifecycle. Collaborations with multinational corporations (MNCs) are expected to increase, particularly in liver delivery systems [2][2][2] - The industry outlook is optimistic, with domestic siRNA drugs likely to secure partnerships in popular targets like PCSK9 and Lp(a). New demands in weight loss and CNS delivery are further opening up the market as international giants make breakthroughs [2][2][2] Relevant Companies - A-share listed companies: Yuyuan Pharmaceutical, Frontier Biotech, Fuyuan Pharmaceutical, Bibetech, Sunshine Nuohuo, Chengdu Xian Dao - Hong Kong listed companies: Reebio, and upcoming IPOs such as Jingyin Biotech and Bowe Pharmaceutical - Upstream industry chain participants include WuXi AppTec, Lianhua Technology, Aorite, Lanxiao Technology, Nawei Microbiology, and Jiuzhou Pharmaceutical [2][2][2]

Group 1 - Morgan Stanley has lowered the price target on Arrowhead (ARWR) to $78 from $81 while maintaining an Equal Weight rating on the shares [1] - The firm anticipates continued broad pipeline execution with multiple readouts expected later this year, including key Phase 3 SHTG data in Q3 [1] - Early trends in the launch of familial chylomicronemia syndrome are promising, but meaningful sales are not expected until 2026 [1]

Financial Data and Key Metrics Changes - For Q1 2026, the company reported a net income of $30.8 million, translating to an income of $0.22 per share, a significant improvement from a net loss of $173.1 million or a loss of $1.39 per share in Q1 2025 [31] - Revenue for the quarter totaled $264 million, primarily driven by licensing collaborations with Sarepta and Novartis, with approximately $229 million from the Sarepta collaboration [31][32] - Total operating expenses increased to approximately $223 million from $164 million in the prior year, driven by higher R&D and SG&A expenses [33] Business Line Data and Key Metrics Changes - The company launched its first commercial product, Redemplo, approved for reducing triglycerides in adults with familial chylomicronemia syndrome (FCS) [5][8] - Over 100 prescriptions for Redemplo have been received, with a balanced uptake across the U.S. [20] - The cardiometabolic pipeline includes ongoing studies for Zodasiran and new candidates ARO-INHBE and ARO-ALK7, with promising early results in weight loss and fat reduction [9][29] Market Data and Key Metrics Changes - The FDA approved Redemplo, marking a significant milestone for the company, with additional approvals from Health Canada and the Chinese National Medical Products Administration expected [8] - The company anticipates launching Redemplo in select EU countries and the U.K. later in 2026 [8] - The potential market for mixed hyperlipidemia, targeted by ARO-DimerPA, includes approximately 20 million people in the U.S. [11] Company Strategy and Development Direction - The company is focused on sustainable innovation and rational drug pricing, emphasizing the value offered to patients and healthcare systems [7] - Arrowhead aims to become cash flow positive and self-sustaining through multiple independent and partner launches, having completed transactions with gross proceeds of $1.33 billion [15][16] - The company is expanding its CNS portfolio with new delivery systems designed to penetrate the blood-brain barrier, targeting conditions like Alzheimer's disease [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to build on recent achievements and highlighted the potential for significant growth in 2026 and beyond [5][37] - The company expects key events in 2026, including commercial sales progress for Redemplo and readouts from phase III studies for plozasiran [37] - Management remains optimistic about the early feedback from payers and healthcare providers regarding Redemplo [21][57] Other Important Information - The company has strengthened its balance sheet significantly, with cash and investments totaling $917 million as of December 31, 2025 [34][35] - The company is not disclosing specific sales numbers for Redemplo until they become a meaningful driver of financials [32] Q&A Session Summary Question: Can you provide a breakdown of patient categories for Redemplo? - The majority of patients are from the APOC3 naive segment, with the remaining balance split roughly 50/50 between switch patients and those transitioning from the expanded access program [41][42] Question: What are the timelines for discussions with the FDA regarding obesity treatments? - Discussions with the FDA are expected around mid-year, and an IND filing is anticipated shortly thereafter [44] Question: What level of reduction in LDL-C and triglycerides are you looking for with ARO-DimerPA? - A reduction of around 40%-50% in both LDL and triglycerides would be encouraging for advancing the asset [46][47] Question: How are you thinking about potential pricing for ARO-INHBE and ARO-ALK7? - It is too early to speculate on pricing as the company is still assessing the biology and potential efficacy of these candidates [50][51] Question: Can you discuss the pancreatitis event rates in ongoing trials? - The company is not providing additional details on event rates but acknowledges that events are being observed [53][54] Question: Has the pricing for Redemplo been discussed in relation to the SHTG market? - The focus is on ensuring coverage and access for high-risk patients, with discussions reflecting the clinical and economic value of Redemplo [56][59]

Financial Data and Key Metrics Changes - The company reported a net income of $30.8 million for Q1 2026, translating to an income of $0.22 per share, a significant improvement from a net loss of $173.1 million or a loss of $1.39 per share in Q1 2025 [31] - Revenue for the quarter totaled $264 million, primarily driven by licensing collaborations with Sarepta and Novartis, with approximately $229 million from the Sarepta collaboration [31][32] - Total operating expenses increased to approximately $223 million from $164 million in the prior year, driven by higher R&D and SG&A expenses [33] Business Line Data and Key Metrics Changes - The company launched its first commercial product, REDEMPLO, which received FDA approval on November 18, 2025, and has seen over 100 prescriptions within the first 10 weeks of launch [5][7][20] - REDEMPLO is positioned as a treatment for familial chylomicronemia syndrome (FCS), with a median triglyceride reduction of 80% from baseline observed in clinical studies [6][22] - The cardiometabolic pipeline includes ongoing studies for zodasiran in homozygous familial hypercholesterolemia and several obesity treatment candidates, with promising early data reported for ARO-INHBE [8][9][29] Market Data and Key Metrics Changes - The company anticipates launching REDEMPLO in Canada and select EU countries later in 2026, with marketing in Greater China to be handled by Sanofi [8] - The U.S. market for mixed hyperlipidemia is estimated to include approximately 20 million people, with a focus on high-risk patients for REDEMPLO [11][12] Company Strategy and Development Direction - The company is committed to sustainable innovation and rational drug pricing, emphasizing the value of medicines to patients and healthcare systems [7] - Future strategic priorities include advancing the cardiometabolic and CNS pipelines, with a focus on addressing obesity, cardiovascular disease, and neurodegenerative conditions [15][13] - The company has strengthened its balance sheet with $1.33 billion in gross proceeds from various transactions, enabling multiple program advancements [17][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to build on recent achievements and highlighted the potential for significant growth in 2026 and beyond [5][37] - The company expects key events in 2026, including commercial sales progress for REDEMPLO and readouts from phase III studies for plozasiran, which could represent a $3 billion-$4 billion opportunity [37] Other Important Information - The company has received breakthrough therapy designation for plozasiran, expediting its development for severe hypertriglyceridemia [25] - The proprietary TRiM platform is being utilized to enhance delivery systems for CNS-targeted therapies, with ARO-MAPT and SRP-1005 as key programs [13][14] Q&A Session Summary Question: Can you provide a breakdown of patient categories for REDEMPLO? - The majority of patients are from the APOC3 naive segment, with the remainder split evenly between switch patients and those transitioning from the expanded access program [41][42] Question: What are the expectations for the obesity development path? - Discussions with the FDA are anticipated around mid-year, and not all data from cohorts are required before determining next steps [44] Question: What level of reduction in LDL-C and triglycerides is expected for ARO-DimerPA? - A reduction of around 40%-50% in both LDL and triglycerides would be encouraging for advancing the asset [47] Question: How is pricing being considered for ARO-INHBE and ARO-ALK7? - It is too early to speculate on pricing as the biology of the drug candidates is still being understood [50] Question: What are the expectations for pancreatitis event rates in ongoing trials? - Specific details on event rates are not being disclosed, but events are being observed [53] Question: How is payer feedback for REDEMPLO shaping up? - Positive feedback has been received, with discussions focused on ensuring coverage for high-risk patients [56][59]

Financial Data and Key Metrics Changes - The company reported a net income of $30.8 million for Q1 2026, translating to an income of $0.22 per share, a significant improvement from a net loss of $173.1 million or a loss of $1.39 per share in Q1 2025 [31] - Revenue for the quarter totaled $264 million, primarily driven by licensing collaborations with Sarepta and Novartis, with approximately $229 million from the Sarepta collaboration [31][32] - Total operating expenses increased to approximately $223 million from $164 million in the prior year, driven by higher R&D and SG&A expenses [33] Business Line Data and Key Metrics Changes - The company launched its first commercial product, Redemplo, which received FDA approval as an adjunct to diet for reducing triglycerides in adults with familial chylomicronemia syndrome (FCS) [4][5] - Over 100 prescriptions for Redemplo have been received, with a balanced uptake across the U.S. and a significant proportion of patients enrolling in the patient support program [6][19] - The cardiometabolic pipeline includes ongoing studies for Zodasiran and new candidates ARO-INHBE and ARO-ALK7, with promising early data reported [9][10] Market Data and Key Metrics Changes - The company anticipates launching Redemplo in Canada and select EU countries later in 2026, with Sanofi marketing it in Greater China [8] - The U.S. market for mixed hyperlipidemia is estimated to include approximately 20 million people, representing a significant opportunity for the ARO-DimerPA candidate [11] Company Strategy and Development Direction - The company is focused on sustainable innovation and rational drug pricing, emphasizing the value of medicines to patients and healthcare systems [6] - Arrowhead aims to become cash flow positive and self-sustaining from commercial sales, with a strong emphasis on expanding its cardiometabolic and CNS portfolios [15][12] - The company has strengthened its balance sheet with $1.33 billion in gross proceeds from various transactions, enabling further development and commercialization efforts [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position to build on recent achievements and highlighted the potential for significant revenue opportunities from upcoming product launches [4][17] - The company expects key events in 2026, including commercial sales progress for Redemplo and readouts from phase III studies for plozasiran, which could represent a $3-$4 billion opportunity [38] Other Important Information - The company has received breakthrough therapy designation for plozasiran, expediting its development for severe hypertriglyceridemia [25] - Arrowhead's proprietary TRiM platform is being utilized to enhance drug delivery across various tissues, including the CNS [12] Q&A Session Summary Question: Can you provide a breakdown of patient categories for Redemplo? - The majority of patients are from the APOC3 naive segment, with the remaining balance split roughly 50/50 between switch patients and those transitioning from the expanded access program [42][43] Question: What are the expectations for the obesity programs and FDA discussions? - Discussions with the FDA are expected around mid-year, and the company does not need all data from cohorts before determining the next steps [46] Question: What level of LDL-C and triglyceride reduction is expected for ARO-DimerPA? - A reduction of around 40%-50% in LDL and triglycerides would be encouraging for advancing the asset [48][49] Question: How is pricing being considered for ARO-INHBE and ARO-ALK7? - It is too early to speculate on pricing as the company is still assessing the biology and potential efficacy of these candidates [51] Question: What are the expectations for pancreatitis event rates in ongoing trials? - The company is not providing additional details on event rates but acknowledges that events are being observed [54] Question: How is payer feedback for Redemplo shaping discussions for SHTG? - Payer discussions are focused on ensuring coverage for high-risk patients, with a strong emphasis on the clinical and economic value of Redemplo [57][60]

Financial Performance - Total revenue for the three months ended December 31, 2025, increased by $261.5 million compared to the same period in 2024, primarily driven by revenue recognition from collaboration agreements with Sarepta, Novartis, and Sanofi [176]. - The Company reported an operating income of $40.8 million for the three months ended December 31, 2025, compared to an operating loss of $161.4 million in the same period of 2024 [175]. - Net income attributable to Arrowhead for the three months ended December 31, 2025, was $30.8 million, a significant improvement from a net loss of $173.1 million in the same period of 2024 [175]. - The Company recorded $229.5 million in revenue from the Sarepta Collaboration Agreement during the three months ended December 31, 2025 [179]. - Cash flow from operating activities was $13.5 million for the three months ended December 31, 2025, primarily due to cash received from the Novartis agreement [208]. - Cash, cash equivalents, and restricted cash were $201.6 million as of December 31, 2025, down from $226.5 million as of September 30, 2025 [203]. Research and Development - Research and development expenses totaled $177.2 million for the three months ended December 31, 2025, a 29% increase from $137.0 million in the same period of 2024 [200]. - Candidate costs increased by $28.1 million, or 37%, primarily due to higher outsourced clinical trial costs and manufacturing expenses [187]. - R&D discovery costs rose by $8.9 million, or 69%, reflecting increased activity in novel therapeutic areas [188]. - The Company has a diverse clinical pipeline targeting various conditions, including severe hypertriglyceridemia, cardiovascular disease, and neurodegenerative diseases [171]. Collaborations and Agreements - The Company entered into a licensing and collaboration agreement with Novartis, receiving $200.0 million as an upfront payment [206]. - The Company earned a $200.0 million milestone payment from Sarepta Therapeutics on November 20, 2025, related to the Phase 1/2 clinical study of ARO-DM1 [172]. Clinical Developments - The FDA granted Breakthrough Therapy designation to investigational plozasiran for reducing triglyceride levels in adults with severe hypertriglyceridemia, with TG levels greater than or equal to 500 mg/dL [172]. - ARO-INHBE, in combination with tirzepatide, nearly doubled weight loss at week 16 and tripled reductions in visceral fat compared to tirzepatide alone in obese patients with type 2 diabetes [178]. - ARO-ALK7 achieved a mean reduction of -88% in adipose ALK7 mRNA at the 200 mg dose at week 8, marking a significant milestone in RNAi therapeutics [178]. Expenses and Liquidity - Total general and administrative expenses were $46.0 million for the three months ended December 31, 2025, a 71% increase from $26.9 million in the same period of 2024 [194]. - Professional, outside services, and other expenses increased by $8.8 million, or 87%, due to costs associated with the commercialization of new products [195]. - The Company expects sufficient liquidity to fund operations for at least the next twelve months [208].

Financial Performance - Arrowhead Pharmaceuticals reported revenue of $264,033,000 for the first quarter of fiscal 2026, a significant increase from $2,500,000 in the same period last year[11] - The company achieved an operating income of $40,809,000 compared to an operating loss of $161,412,000 in the prior year[11] - Net income attributable to Arrowhead Pharmaceuticals was $30,811,000, a turnaround from a net loss of $173,085,000 in the previous year[11] - Arrowhead closed two public offerings with gross proceeds totaling $930,000,000, enhancing its financial position[8] Product Development and Approvals - The company received FDA approval for REDEMPLO (plozasiran) for treating familial chylomicronemia syndrome, marking its first FDA-approved medicine[5] - Over 100 prescriptions for REDEMPLO have been received from a diverse prescriber base, indicating strong initial uptake across the U.S.[5] - Interim clinical data for ARO-INHBE showed a weight loss of -9.4% at week 16 in obese patients with type 2 diabetes, demonstrating a two-fold improvement compared to tirzepatide alone[8] - ARO-ALK7 achieved a mean reduction of -88% in ALK7 mRNA, marking a significant advancement in RNAi therapeutics[8] Strategic Partnerships - The company triggered a $200 million milestone payment from Sarepta Therapeutics for reaching enrollment targets in a clinical study[8] - Arrowhead entered a global licensing agreement with Novartis, receiving a $200 million upfront payment and potential milestone payments of up to $2 billion[9]

Core Insights - Privium Fund Management sold 75,747 shares of Arrowhead Pharmaceuticals, valued at approximately $3.71 million, as per a February 2 SEC filing [1][2] - The fund's overall position in Arrowhead increased in value by $10.09 million due to significant price appreciation during the quarter [2] - Arrowhead's stock price reached $73.00, reflecting a remarkable 289.5% increase year-over-year, significantly outperforming the S&P 500's 15% gain in the same period [3] Company Overview - Arrowhead Pharmaceuticals specializes in RNAi-based therapeutics for serious and rare diseases, with a strong clinical-stage pipeline and strategic collaborations [5][6] - The company reported a total revenue of $829.45 million and a net income of -$1.6 million, with a market capitalization of $10.22 billion [4] - Arrowhead's revenue surged from $3.6 million to $829 million in fiscal 2025, primarily due to licensing and milestone payments, while operating income improved to a profit of $98 million from a loss of $612 million the previous year [8] Investment Implications - The FDA's approval of Arrowhead's first commercial drug, REDEMPLO, marks a significant milestone for the company, enhancing its financial outlook and operational flexibility with total cash resources of $782 million [8] - The recent stock performance, climbing nearly 60% since the earnings release, indicates strong market confidence, while the decision to trim holdings reflects a strategy of risk management and disciplined investment [9]

Core Insights - The small nucleic acid drug sector is experiencing a significant surge, marking the beginning of a golden era driven by technological breakthroughs and capital enthusiasm [2][11][22] Industry Developments - On January 5, 2026, Sanofi's APOC3 siRNA drug Plozasiran was approved for domestic market use to treat hyperlipidemia [1] - On January 9, 2026, Rebio Biotech, known as "China's first small nucleic acid stock," successfully listed on the Hong Kong Stock Exchange, with its stock price soaring by 40% on the first day, leading to a market capitalization exceeding 13 billion HKD [1] - China National Pharmaceutical Group announced a 1.2 billion CNY acquisition of Hegia Biotech, securing the world's first clinically validated liver-targeted delivery platform capable of annual dosing [1] Market Trends - The global small nucleic acid drug market has seen nearly 100 business development (BD) collaborations in the past three years, with transaction numbers and amounts increasing annually, reaching over 30 BD deals in 2025 totaling nearly 30 billion USD [4][9] - Notable transactions in 2025 included Novartis acquiring Avidity Biosciences for 12 billion USD and multiple other significant deals involving RNA therapies [7][9] Clinical Advancements - Ionis's APOC3 ASO drug Olezarsen showed promising results in reducing triglyceride levels by up to 72% in patients with severe hypertriglyceridemia, leading to an increase in peak annual sales forecast from 1.5 billion USD to 2.5 billion USD [12] - GSK's ASO therapy Bepirovirsen is expected to be the first drug to achieve functional cure for chronic hepatitis B, with a peak annual sales potential of 2 billion USD [12] Emerging Opportunities - The small nucleic acid drugs are expanding into various therapeutic areas, including obesity and kidney diseases, with promising results from clinical trials demonstrating significant weight loss and metabolic health improvements [13][15] - The number of small nucleic acid drugs in development globally has surpassed 1,200, with siRNA and ASO therapies being the most prominent [17] Strategic Collaborations - Domestic companies are increasingly recognized for their innovative value in small nucleic acid drugs, with active BD transactions, including significant collaborations by Rebio Biotech and other firms [18][21] - Companies like Saintin Biotech are forming strategic partnerships with major pharmaceutical firms to advance their small nucleic acid drug pipelines [19] Conclusion - The convergence of technological advancements, capital influx, and successful clinical outcomes is propelling small nucleic acid drugs into a pivotal position within the pharmaceutical industry, with China poised to become a global innovation hub [22]