Summary of Arrowhead Pharmaceuticals, Inc. R&D Webinar on Obesity/Metabolic Company Overview - **Company**: Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) - **Focus**: RNAi therapeutics platform with a pipeline of 14 clinical-stage assets across various therapeutic areas, including obesity and metabolic diseases [7][8] Key Themes and Insights Industry Context - **Obesity as a Disease**: The understanding of obesity is evolving; it is now recognized as a complex disease rather than merely a result of overeating [11][12][23] - **Need for Diverse Treatments**: There is a call for a variety of treatment options, including nutritional, pharmacological, and surgical therapies, to effectively address obesity [12][23] Scientific Insights - **Obesity Mechanisms**: New insights suggest that obesity may not just be a single disease but rather multiple subtypes, each requiring tailored treatments [14][15] - **Pharmacotherapy Advances**: Recent pharmacotherapies have shown promise, but there remains a significant portion of patients who do not respond effectively to current treatments [13][18][19] Pipeline Developments - **ARO-INHBE Program**: A new clinical program targeting the INHBE gene, which is linked to energy homeostasis and fat storage. Preclinical studies show that silencing this gene can lead to reduced body weight gain and improved metabolic profiles [24][28][30] - **ARO-ALK7 Program**: Another program targeting the ALK7 receptor, which is involved in lipid metabolism. Preclinical data indicate that silencing ALK7 can also reduce body weight gain without affecting lean muscle mass [42][46][48] TRiM Platform - **Adipose Tissue Targeting**: Arrowhead's TRiM platform aims to deliver RNA therapies directly to adipose tissue, which is crucial for metabolic disease treatment. The platform has shown effective gene silencing in adipocytes [35][36][39] - **Efficacy and Safety**: The TRiM platform demonstrated significant knockdown of target proteins in both mouse and non-human primate models, with a favorable safety profile [41][40] Clinical Trial Plans - **Phase 1/2a Studies**: Plans for clinical trials of ARO-INHBE and ARO-ALK7 in healthy volunteers with obesity, focusing on gene target knockdown and metabolic outcomes [55][56] - **Combination Studies**: Both programs will explore the effects of combining their therapies with existing treatments like tirzepatide to enhance efficacy [57] Market Considerations - **Long-term Health Outcomes**: The focus is shifting from weight loss as a primary goal to improving long-term health outcomes, which is increasingly recognized by payers and the healthcare system [60][61] - **Genetic and Biological Support**: The underlying genetics and biology of the INHBE and ALK7 pathways support their exploration as therapeutic targets for obesity [62] Conclusion - Arrowhead Pharmaceuticals is positioned to leverage its innovative RNAi platform and emerging understanding of obesity to develop novel therapies that address the multifaceted nature of the disease, with a strong emphasis on improving patient outcomes and maintaining lean mass during treatment [59][62]

Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) Q3 2024 Earnings Conference Call August 8, 2024 4:30 PM ET Company Participants Vince Anzalone - VP, IR Chris Anzalone - President and CEO Bruce Given - Interim Chief Medical Scientist Andy Davis - Senior Vice President and Head of Global Cardiometabolic Franchise Ken Myszkowski - CFO James Hamilton - Chief Discovery and Translational Medicine Patrick O'Brien - COO and General Counsel Conference Call Participants Maury Raycroft - Jefferies Ellie Merle - UBS Luca ...

EXHIBIT 99.1 PRESS RELEASE August 8, 2024 Arrowhead Pharmaceuticals Reports Fiscal 2024 Third Quarter Results – Conference Call and Webcast Today, August 8, 2024 at 4:30 p.m. ET PASADENA, Calif., August 8, 2024 — Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR) today announced financial results for its fiscal 2024 third quarter ended June 30, 2024. The Company is hosting a conference call today, August 8, 2024, at 4:30 p.m. ET to discuss the results. "Arrowhead had a very productive quarter with several high- ...

[PART I — FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial information for Arrowhead Pharmaceuticals, Inc., including financial statements, notes, and management's discussion and analysis [ITEM 1. FINANCIAL STATEMENTS](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for June 30, 2024, with detailed notes on accounting policies, collaboration agreements, and key financial accounts [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The company's total assets increased to $883.8 million as of June 30, 2024, from $765.6 million at September 30, 2023, primarily driven by an increase in available-for-sale securities and property, plant, and equipment Consolidated Balance Sheet Highlights (June 30, 2024 vs. September 30, 2023) | Metric | June 30, 2024 (in thousands) | September 30, 2023 (in thousands) | Change (in thousands) | | :----------------------------------- | :--------------------------- | :---------------------------- | :-------------------- | | Total Assets | $883,759 | $765,552 | $118,207 | | Cash, cash equivalents and restricted cash | $69,399 | $110,891 | $(41,492) | | Available-for-sale securities | $367,272 | $292,735 | $74,537 | | Property, plant and equipment, net | $375,911 | $290,262 | $85,649 | | Total current liabilities | $96,714 | $105,456 | $(8,742) | | Liability related to sale of future royalties | $336,031 | $268,326 | $67,705 | | Total Stockholders' Equity | $330,547 | $271,343 | $59,204 | [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a significant increase in net loss attributable to Arrowhead Pharmaceuticals, Inc. for both the three and nine months ended June 30, 2024, primarily due to a substantial decrease in revenue from collaboration agreements and increased research and development expenses Consolidated Statements of Operations Highlights (Three and Nine Months Ended June 30) | Metric | 3 Months Ended June 30, 2024 (in thousands) | 3 Months Ended June 30, 2023 (in thousands) | Change (3 Months) | 9 Months Ended June 30, 2024 (in thousands) | 9 Months Ended June 30, 2023 (in thousands) | Change (9 Months) | | :------------------------------------------- | :-------------------------------------- | :-------------------------------------- | :---------------- | :-------------------------------------- | :-------------------------------------- | :---------------- | | Revenue | $0 | $15,825 | $(15,825) | $3,551 | $224,638 | $(221,087) | | Research and development expenses | $152,431 | $94,757 | $57,674 | $370,044 | $253,333 | $116,711 | | General and administrative expenses | $23,710 | $23,771 | $(61) | $72,384 | $67,977 | $4,407 | | Operating loss | $(176,141) | $(102,703) | $(73,438) | $(438,877) | $(96,672) | $(342,205) | | Net loss attributable to Arrowhead Pharma, Inc. | $(170,793) | $(102,946) | $(67,847) | $(428,957) | $(95,596) | $(333,361) | | Basic Net loss per share | $(1.38) | $(0.96) | $(0.42) | $(3.63) | $(0.90) | $(2.73) | | Diluted Net loss per share | $(1.38) | $(0.96) | $(0.42) | $(3.63) | $(0.90) | $(2.73) | [Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity increased to $338.97 million as of June 30, 2024, from $287.16 million at September 30, 2023, primarily driven by a significant common stock issuance in January 2024, offset by accumulated deficit from net losses Consolidated Stockholders' Equity Highlights (June 30, 2024 vs. September 30, 2023) | Metric | June 30, 2024 (in thousands) | September 30, 2023 (in thousands) | Change (in thousands) | | :------------------------------------------- | :--------------------------- | :---------------------------- | :-------------------- | | Common Stock (shares) | 124,227 | 107,312 | 16,915 | | Common Stock (amount) | $217 | $200 | $17 | | Additional Paid-In Capital | $1,786,304 | $1,300,395 | $485,909 | | Accumulated Deficit | $(1,454,987) | $(1,026,030) | $(428,957) | | Total Arrowhead Pharma, Inc. Stockholders' Equity | $330,547 | $271,343 | $59,204 | | Total Noncontrolling Interest and Stockholders' Equity | $338,974 | $287,162 | $51,812 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended June 30, 2024, the company experienced a net decrease in cash, cash equivalents, and restricted cash of $41.35 million, primarily due to significant cash used in operating and investing activities, partially offset by substantial proceeds from financing activities, including a common stock issuance Consolidated Cash Flow Summary (Nine Months Ended June 30) | Cash Flow Activity | 9 Months Ended June 30, 2024 (in thousands) | 9 Months Ended June 30, 2023 (in thousands) | Change (in thousands) | | :------------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------- | | Net cash used in operating activities | $(325,635) | $(127,964) | $(197,671) | | Net cash used in investing activities | $(197,149) | $(126,664) | $(70,485) | | Net cash provided by financing activities | $481,431 | $252,232 | $229,199 | | Net decrease in cash, cash equivalents and restricted cash | $(41,353) | $(2,396) | $(38,957) | | Cash, cash equivalents and restricted cash at end of period | $69,399 | $105,334 | $(35,935) | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations and disclosures for the financial statements, covering business, accounting policies, collaboration agreements, and key financial components [NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES](index=7&type=section&id=NOTE%201.%20ORGANIZATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Arrowhead Pharmaceuticals, Inc. is engaged in developing RNAi-based therapeutics for intractable diseases, with a pipeline spanning cardiometabolic, pulmonary, liver, muscle, and CNS therapeutic areas. The company reported several key clinical advancements and a significant equity offering in fiscal 2024 to bolster liquidity - The company is developing RNAi-based therapeutics to silence disease-causing genes, with a broad pipeline including plozasiran (Phase 3), zodasiran (Phase 2b), and olpasiran (Phase 3, partnered with Amgen)[18](index=18&type=chunk)[19](index=19&type=chunk) - Key recent developments include advancing plozasiran into a Phase 3 cardiovascular outcomes trial (CAPITAN), successful top-line results from the Phase 3 PALISADE study for plozasiran in FCS, and completion of enrollment in Amgen's Phase 3 OCEAN(a) trial for olpasiran, triggering a **$50.0 million** milestone payment[19](index=19&type=chunk)[21](index=21&type=chunk) - The company's cash, cash equivalents, and restricted cash decreased to **$69.4 million** as of June 30, 2024, from **$110.9 million** at September 30, 2023, while available-for-sale securities increased to **$367.3 million**[23](index=23&type=chunk) - In January 2024, the company completed an underwritten offering, issuing **15,790,000 shares** of common stock for net proceeds of **$429.3 million**[25](index=25&type=chunk) - The company recorded an income tax benefit of **$3.3 million** for the nine months ended June 30, 2024, primarily due to a discrete change in uncertain tax positions related to the statute of limitation expiration[27](index=27&type=chunk) - New accounting pronouncements (ASU 2023-09 on Income Taxes and ASU 2023-07 on Segment Reporting) are not expected to have a material impact on the company's financial statements[28](index=28&type=chunk) [NOTE 2. COLLABORATION AND LICENSE AGREEMENTS](index=9&type=section&id=NOTE%202.%20COLLABORATION%20AND%20LICENSE%20AGREEMENTS) Collaboration and license agreement revenue significantly decreased due to Takeda obligations completion and Horizon termination, with new GSK and ongoing collaborations continuing Revenue from Collaboration and License Agreements (Nine Months Ended June 30) | Partner | 9 Months Ended 2024 (in thousands) | 9 Months Ended 2023 (in thousands) | Change (in thousands) | | :------ | :--------------------------------- | :--------------------------------- | :-------------------- | | GSK | $2,685 | $29 | $2,656 | | Horizon | $0 | $23 | $(23) | | Takeda | $866 | $146 | $720 | | Janssen | $0 | $0 | $0 | | Amgen | $0 | $25 | $(25) | | Total | $3,551 | $224 | $3,327 | - The Takeda License Agreement's revenue recognition was substantially completed by December 31, 2023, as Phase 2 study visits concluded, leading to a significant decrease in recognized revenue from this partnership in fiscal 2024[35](index=35&type=chunk) - The Horizon License Agreement was terminated by Amgen (after acquiring Horizon) on December 21, 2023, resulting in no further revenue from this collaboration[33](index=33&type=chunk) - The company entered into an Amended and Restated License Agreement with GSK in December 2023 for daplusiran/tomligisiran, receiving **$2.7 million** upon signing and eligible for up to **$832.5 million** in future milestones[32](index=32&type=chunk) - Amgen completed enrollment in the Phase 3 OCEAN(a) trial for olpasiran, triggering a **$50.0 million** milestone payment to Arrowhead in Q3 fiscal 2024, though royalties are now directed to Royalty Pharma[21](index=21&type=chunk)[37](index=37&type=chunk) [NOTE 3. BALANCE SHEET ACCOUNTS](index=13&type=section&id=NOTE%203.%20BALANCE%20SHEET%20ACCOUNTS) Property, plant, and equipment, net, significantly increased to $375.9 million as of June 30, 2024, primarily due to the completion of a laboratory and office facility in Verona, Wisconsin, and ongoing construction Property, Plant and Equipment, Net (June 30, 2024 vs. September 30, 2023) | Asset Category | June 30, 2024 (in thousands) | September 30, 2023 (in thousands) | Change (in thousands) | | :--------------------------- | :--------------------------- | :---------------------------- | :-------------------- | | Building | $75,868 | $0 | $75,868 | | Construction in progress | $175,778 | $166,655 | $9,123 | | Property, plant and equipment, net | $375,911 | $290,262 | $85,649 | - During Q1 fiscal 2024, the company completed the build-out of a laboratory and office facility in Verona, Wisconsin, reclassifying **$75.9 million** from construction in progress to building and commencing depreciation[42](index=42&type=chunk) Accrued Expenses (June 30, 2024 vs. September 30, 2023) | Accrued Expense Category | June 30, 2024 (in thousands) | September 30, 2023 (in thousands) | Change (in thousands) | | :------------------------------- | :--------------------------- | :---------------------------- | :-------------------- | | Accrued R&D expenses; co-development | $21,280 | $5,895 | $15,385 | | Total accrued expenses | $47,899 | $39,763 | $8,136 | [NOTE 4. INVESTMENTS](index=14&type=section&id=NOTE%204.%20INVESTMENTS) The company's available-for-sale securities increased to $367.3 million as of June 30, 2024, from $292.7 million at September 30, 2023, with a shift in composition towards corporate debt securities and commercial notes Available-for-Sale Securities (June 30, 2024 vs. September 30, 2023) | Investment Type | June 30, 2024 (Fair Value, in thousands) | September 30, 2023 (Fair Value, in thousands) | Change (in thousands) | | :-------------------------- | :------------------------------------- | :-------------------------------------- | :-------------------- | | U.S. government bonds | $80,946 | $31,553 | $49,393 | | Commercial notes | $114,616 | $22,205 | $92,411 | | Corporate debt securities | $171,710 | $231,884 | $(60,174) | | Total available-for-sale securities | $367,272 | $292,735 | $74,537 | [NOTE 5. INTANGIBLE ASSETS](index=15&type=section&id=NOTE%205.%20INTANGIBLE%20ASSETS) Net intangible assets decreased to $8.99 million as of June 30, 2024, from $10.26 million at September 30, 2023, due to ongoing amortization Intangible Assets, Net (June 30, 2024 vs. September 30, 2023) | Asset Category | June 30, 2024 (Net Carrying Amount, in thousands) | September 30, 2023 (Net Carrying Amount, in thousands) | Change (in thousands) | | :------------- | :------------------------------------------ | :------------------------------------------- | :-------------------- | | Patents | $7,243 | $8,407 | $(1,164) | | License | $1,744 | $1,855 | $(111) | | Total intangible assets, net | $8,987 | $10,262 | $(1,275) | Estimated Future Amortization Expense (as of June 30, 2024) | Year Ending September 30, | Amortization Expense (in thousands) | | :------------------------ | :---------------------------------- | | 2024 (remainder) | $425 | | 2025 | $1,700 | | 2026 | $1,700 | | 2027 | $1,700 | | 2028 | $1,700 | | Thereafter | $1,762 | | Total | $8,987 | [NOTE 6. STOCKHOLDERS' EQUITY](index=16&type=section&id=NOTE%206.%20STOCKHOLDERS%27%20EQUITY) The number of common shares issued and outstanding significantly increased to 124.23 million as of June 30, 2024, from 107.31 million at September 30, 2023, primarily due to an underwritten public offering in January 2024 that generated $429.3 million in net proceeds Common Stock Issued and Outstanding (June 30, 2024 vs. September 30, 2023) | Metric | June 30, 2024 (in thousands) | September 30, 2023 (in thousands) | Change (in thousands) | | :--------------------------- | :--------------------------- | :---------------------------- | :-------------------- | | Common stock issued | 124,227 | 107,312 | 16,915 | | Common stock outstanding | 124,227 | 107,312 | 16,915 | - In January 2024, the company issued **15,790,000 shares** of common stock at **$28.50** per share, raising net proceeds of **$429.3 million** after deducting offering expenses[52](index=52&type=chunk) - As of June 30, 2024, no shares have been issued under the **$250.0 million** at-the-market (ATM) offering agreement established in December 2022[52](index=52&type=chunk) [NOTE 7. COMMITMENTS AND CONTINGENCIES](index=16&type=section&id=NOTE%207.%20COMMITMENTS%20AND%20CONTINGENCIES) The company has no contingent liabilities recorded as of June 30, 2024, but has significant commitments related to the development of its Verona, Wisconsin facilities, with $266.0 million incurred and an additional $18.0 million to $32.0 million planned for completion - No contingent liabilities were recorded as of June 30, 2024[53](index=53&type=chunk) - The company has incurred **$266.0 million** for its Verona, Wisconsin facilities (drug manufacturing and lab/office), with an additional **$18.0 million** to **$32.0 million** expected to complete the build-out[54](index=54&type=chunk) [NOTE 8. LEASES](index=16&type=section&id=NOTE%208.%20LEASES) Operating lease liabilities increased to **$112.04 million** as of June 30, 2024, partly due to additional tenant improvement allowances for the San Diego facility, remeasuring lease liabilities and right-of-use assets Lease Assets and Liabilities (June 30, 2024 vs. September 30, 2023) | Metric | June 30, 2024 (in thousands) | September 30, 2023 (in thousands) | Change (in thousands) | | :---------------------------------- | :--------------------------- | :---------------------------- | :-------------------- | | Right-of-use assets | $44,339 | $45,297 | $(958) | | Lease liabilities, net of current portion | $112,040 | $104,608 | $7,432 | - The company received **$30.8 million** in Additional Tenant Improvement Allowances (ATIAs) for its San Diego facility during Q1 fiscal 2024, leading to a remeasurement of lease liabilities and right-of-use assets[58](index=58&type=chunk) Total Lease Cost (Nine Months Ended June 30) | Lease Cost Category | 9 Months Ended 2024 (in thousands) | 9 Months Ended 2023 (in thousands) | Change (in thousands) | | :------------------ | :--------------------------------- | :--------------------------------- | :-------------------- | | Total Lease Cost | $12,513 | $9,904 | $2,609 | [NOTE 9. STOCK-BASED COMPENSATION](index=19&type=section&id=NOTE%209.%20STOCK-BASED%20COMPENSATION) Total stock-based compensation expense for the nine months ended June 30, 2024, was $48.98 million, a decrease from $59.95 million in the prior year, primarily due to decreased compensation costs related to performance awards and cancelled awards upon employee departures Stock-Based Compensation Expenses (Nine Months Ended June 30) | Expense Category | 9 Months Ended 2024 (in thousands) | 9 Months Ended 2023 (in thousands) | Change (in thousands) | | :--------------------------- | :--------------------------------- | :--------------------------------- | :-------------------- | | Research and development | $21,634 | $26,129 | $(4,495) | | General and administrative | $27,350 | $33,820 | $(6,470) | | Total | $48,984 | $59,949 | $(10,965) | - The decrease in stock compensation expense was primarily due to cancelled awards upon employee departures and decreased compensation costs related to performance awards[109](index=109&type=chunk)[113](index=113&type=chunk) - As of June 30, 2024, there was **$96.3 million** of total unrecognized compensation cost related to RSUs, expected to be recognized over a weighted-average period of **1.6 years**[76](index=76&type=chunk) [NOTE 10. FAIR VALUE MEASUREMENTS](index=22&type=section&id=NOTE%2010.%20FAIR%20VALUE%20MEASUREMENTS) As of June 30, 2024, the company's total financial assets measured at fair value were $401.75 million, primarily consisting of available-for-sale securities and cash equivalents, with the majority classified as Level 2 measurements Financial Assets Measured at Fair Value (June 30, 2024) | Asset Category | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | Total (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :------------------- | | Available-for-sale securities | $0 | $367,272 | $0 | $367,272 | | Cash equivalents | $29,495 | $4,986 | $0 | $34,481 | | Total financial assets | $29,495 | $372,258 | $0 | $401,753 | - The company did not have any financial assets or liabilities based on Level 3 measurements as of June 30, 2024, or September 30, 2023[78](index=78&type=chunk) [NOTE 11. LIABILITY RELATED TO THE SALE OF FUTURE ROYALTIES](index=22&type=section&id=NOTE%2011.%20LIABILITY%20RELATED%20TO%20THE%20SALE%20OF%20FUTURE%20ROYALTIES) The future royalties liability increased to **$336.03 million** from a **$50.0 million** milestone payment and **$17.71 million** non-cash interest expense, with a **6.3%** effective interest rate Liability Related to Sale of Future Royalties (June 30, 2024 vs. September 30, 2023) | Metric | Amount (in thousands) | | :------------------------------------------- | :-------------------- | | Carrying value as of September 30, 2023 | $268,326 | | Milestone payment received | $50,000 | | Non-cash interest expense recognized | $17,705 | | Carrying value as of June 30, 2024 | $336,031 | - A **$50.0 million** milestone payment was received in Q3 fiscal 2024 upon completion of enrollment in the OCEAN Phase 3 clinical trial for olpasiran, contributing to the increase in the liability[83](index=83&type=chunk) - The estimated effective interest rate for the liability related to the sale of future royalties was **6.3%** as of June 30, 2024[83](index=83&type=chunk) [NOTE 12. NET LOSS PER SHARE](index=23&type=section&id=NOTE%2012.%20NET%20LOSS%20PER%20SHARE) The basic and diluted net loss per share attributable to Arrowhead Pharmaceuticals, Inc. significantly increased to $(1.38) and $(3.63) for the three and nine months ended June 30, 2024, respectively, compared to the prior year, reflecting the increased net loss Net Loss Per Share (Three and Nine Months Ended June 30) | Metric | 3 Months Ended June 30, 2024 | 3 Months Ended June 30, 2023 | 9 Months Ended June 30, 2024 | 9 Months Ended June 30, 2023 | | :------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss attributable to Arrowhead Pharma, Inc. (in thousands) | $(170,793) | $(102,946) | $(428,957) | $(95,596) | | Weighted-average basic shares outstanding (in thousands) | 124,199 | 107,004 | 118,260 | 106,597 | | Basic net loss per share | $(1.38) | $(0.96) | $(3.63) | $(0.90) | | Diluted net loss per share | $(1.38) | $(0.96) | $(3.63) | $(0.90) | [NOTE 13. SUBSEQUENT EVENTS](index=24&type=section&id=NOTE%2013.%20SUBSEQUENT%20EVENTS) Subsequent to the quarter end, on August 7, 2024, the company entered into a senior secured term loan facility of up to $935.3 million with Sixth Street Lending Partners, including an initial $400.0 million draw, to be used for working capital, capital expenditures, and general corporate purposes - On August 7, 2024, the company secured a senior secured term loan facility of up to **$935.3 million**, with an initial draw of **$400.0 million**[89](index=89&type=chunk)[130](index=130&type=chunk) - The Credit Facility matures on August 7, 2031, bears an annual interest rate of **15.0%**, and does not require scheduled amortization payments during the term[89](index=89&type=chunk)[130](index=130&type=chunk) - Proceeds from the initial loan are designated for working capital, capital expenditures, and general corporate purposes[130](index=130&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=23&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial condition and results, highlighting increased net loss from decreased collaboration revenue and higher R&D expenses, along with liquidity, capital resources, and business developments [OVERVIEW](index=25&type=section&id=OVERVIEW) Arrowhead Pharmaceuticals is focused on developing RNAi-based therapeutics for intractable diseases across multiple therapeutic areas, including cardiometabolic, pulmonary, and liver conditions. The company's pipeline continues to advance, with several key clinical developments and a significant equity offering in fiscal 2024 - The company develops RNAi-based therapeutics leveraging the RNA interference mechanism to silence disease-causing genes, with a focus on its TRiM™ enabled therapeutics for various tissue types and administration routes[92](index=92&type=chunk) - The clinical pipeline includes candidates for hypertriglyceridemia (plozasiran), dyslipidemia (zodasiran), cardiovascular disease (olpasiran), pulmonary conditions (ARO-MUC5AC, ARO-RAGE, ARO-MMP7), liver diseases (GSK-4532990, fazirsiran, daplusiran/tomligisiran, ARO-PNPLA3, ARO-C3, ARO-CFB), and muscle disorders (ARO-DUX4, ARO-DM1)[93](index=93&type=chunk)[94](index=94&type=chunk) - Significant business highlights for the first three quarters of fiscal 2024 include advancing plozasiran into a Phase 3 cardiovascular outcomes trial, successful top-line results from the Phase 3 PALISADE study for plozasiran, and completing enrollment in Amgen's Phase 3 OCEAN(a) trial for olpasiran, triggering a **$50.0 million** milestone[96](index=96&type=chunk) - The company's net loss attributable to Arrowhead Pharmaceuticals, Inc. increased to **$429.0 million** for the nine months ended June 30, 2024, from **$95.6 million** in the prior year, primarily due to decreased revenue and increased R&D expenses[98](index=98&type=chunk) - As of June 30, 2024, the company had **$69.4 million** in cash, cash equivalents, and restricted cash, and **$367.3 million** in available-for-sale securities, expecting sufficient liquidity for at least the next twelve months[98](index=98&type=chunk) [RESULTS OF OPERATIONS](index=27&type=section&id=RESULTS%20OF%20OPERATIONS) Revenue substantially decreased due to completed collaboration obligations, while operating expenses, particularly R&D, significantly increased with pipeline advancement, leading to a higher operating and net loss Key Financial Results (Three and Nine Months Ended June 30) | Metric | 3 Months Ended June 30, 2024 (in thousands) | 3 Months Ended June 30, 2023 (in thousands) | 9 Months Ended June 30, 2024 (in thousands) | 9 Months Ended June 30, 2023 (in thousands) | | :------------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Revenue | $0 | $15,825 | $3,551 | $224,638 | | Operating loss | $(176,141) | $(102,703) | $(438,877) | $(96,672) | | Net loss attributable to Arrowhead Pharma, Inc. | $(170,793) | $(102,946) | $(428,957) | $(95,596) | | Net loss per share-diluted | $(1.38) | $(0.96) | $(3.63) | $(0.90) | [Revenue](index=27&type=section&id=Revenue) Total revenue for the nine months ended June 30, 2024, decreased by $221.1 million (98.4%) compared to the same period in 2023, primarily because performance obligations under the Takeda License Agreement were substantially completed by December 31, 2023, and the Horizon License Agreement was terminated - Total revenue for the nine months ended June 30, 2024, decreased by **$221.1 million**, or **98.4%**, compared to the same period in 2023[102](index=102&type=chunk) - The decrease was primarily due to the substantial completion of performance obligations under the Takeda License Agreement by December 31, 2023, and the termination of the Horizon License Agreement in December 2023[102](index=102&type=chunk)[104](index=104&type=chunk) - Revenue for the nine months ended June 30, 2023, included **$146.5 million** from Takeda (including a **$40.0 million** milestone), **$30.0 million** from GSK, and **$6.7 million** from Horizon, plus a **$15.0 million** milestone from Horizon and a **$25.0 million** milestone from Amgen[104](index=104&type=chunk) [Operating Expenses](index=28&type=section&id=Operating%20Expenses) Total operating expenses increased significantly for the nine months ended June 30, 2024, driven by a 46% increase in R&D expenses due to pipeline progression and discovery efforts, and a 6% increase in G&A expenses due to higher salaries and professional services Total Operating Expenses (Nine Months Ended June 30) | Expense Category | 9 Months Ended 2024 (in thousands) | 9 Months Ended 2023 (in thousands) | Change (in thousands) | % Change | | :--------------------------- | :--------------------------------- | :--------------------------------- | :-------------------- | :------- | | Research and development | $370,044 | $253,333 | $116,711 | 46% | | General and administrative | $72,384 | $67,977 | $4,407 | 6% | | Total operating expenses | $442,428 | $321,310 | $121,118 | 38% | [Research and Development (R&D) Expenses](index=28&type=section&id=Research%20and%20Development%20%28R%26D%29%20Expenses) R&D expenses increased by $116.7 million (46%) for the nine months ended June 30, 2024, primarily due to higher candidate costs from advancing clinical trials, increased R&D discovery costs, and a rise in salaries due to increased headcount and annual increases Research and Development Expenses (Nine Months Ended June 30) | R&D Expense Category | 9 Months Ended 2024 (in thousands) | 9 Months Ended 2023 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------- | :--------------------------------- | :--------------------------------- | :-------------------- | :------- | | Candidate costs | $157,546 | $110,079 | $47,467 | 43% | | R&D discovery costs | $84,898 | $50,377 | $34,521 | 69% | | Salaries | $72,048 | $47,725 | $24,323 | 51% | | Facilities related | $19,597 | $11,601 | $7,996 | 69% | | Stock compensation | $23,735 | $26,129 | $(2,394) | (9)% | | Depreciation/amortization | $12,220 | $7,422 | $4,798 | 65% | | Total research and development expense | $370,044 | $253,333 | $116,711 | 46% | - The increase in candidate costs was driven by the progression of the company's pipeline into and through clinical trials, leading to higher manufacturing, outsourced clinical trial, and toxicity study costs[109](index=109&type=chunk) - R&D discovery costs increased due to expanded discovery efforts, advancement into novel therapeutic areas, and rising costs associated with CNS studies and lab supplies[109](index=109&type=chunk) [General & Administrative Expenses](index=30&type=section&id=General%20%26%20Administrative%20Expenses) General and administrative expenses increased by $4.4 million (6%) for the nine months ended June 30, 2024, primarily due to higher salaries from increased headcount and annual raises, and increased professional services, partially offset by a decrease in stock compensation General & Administrative Expenses (Nine Months Ended June 30) | G&A Expense Category | 9 Months Ended 2024 (in thousands) | 9 Months Ended 2023 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------- | :--------------------------------- | :--------------------------------- | :-------------------- | :------- | | Salaries | $20,087 | $14,275 | $5,812 | 41% | | Professional, outside services, and other | $16,910 | $15,293 | $1,617 | 11% | | Stock compensation | $30,759 | $33,820 | $(3,061) | (9)% | | Total general & administrative expenses | $72,384 | $67,977 | $4,407 | 6% | - The increase in salaries was due to annual salary increases and increased headcount to support company growth[113](index=113&type=chunk) - Professional, outside services, and other expenses increased mainly due to legal services for patent applications and intellectual property matters[113](index=113&type=chunk) [Other Income (Expense)](index=30&type=section&id=Other%20Income%20%28Expense%29) Other income increased by $2.8 million for the three months ended June 30, 2024, compared to the same period in 2023, primarily due to higher yields on investments from increased interest rates, partially offset by non-cash interest expense on the future royalties liability - Other income increased by **$2.8 million** for the three months ended June 30, 2024, compared to the same period in 2023[114](index=114&type=chunk) - This increase was primarily driven by higher yields on investments due to higher interest rates, partially offset by non-cash interest expense on the liability related to the sale of future royalties[115](index=115&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=31&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Cash, cash equivalents, and restricted cash decreased to **$69.4 million** despite a **$429.3 million** stock offering, offset by significant cash usage in operating and investing activities, with sufficient liquidity expected for the next twelve months Cash, Cash Equivalents and Restricted Cash (June 30, 2024 vs. September 30, 2023) | Metric | June 30, 2024 (in thousands) | September 30, 2023 (in thousands) | Change (in thousands) | | :------------------------------------------- | :--------------------------- | :---------------------------- | :-------------------- | | Cash, cash equivalents and restricted cash | $69,399 | $110,891 | $(41,492) | | Available-for-sale securities | $367,272 | $292,735 | $74,537 | - Net proceeds of **$429.3 million** were received from an underwritten common stock offering in January 2024[116](index=116&type=chunk) Cash Flow Summary (Nine Months Ended June 30) | Cash Flow Activity | 9 Months Ended June 30, 2024 (in thousands) | 9 Months Ended June 30, 2023 (in thousands) | Change (in thousands) | | :------------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------- | | Operating activities | $(325,635) | $(127,964) | $(197,671) | | Investing activities | $(197,149) | $(126,664) | $(70,485) | | Financing activities | $481,431 | $252,232 | $229,199 | - The company expects to have sufficient liquidity to fund operations for at least the next twelve months[116](index=116&type=chunk) [Contractual Obligations](index=32&type=section&id=Contractual%20Obligations) There have been no material changes to the company's contractual obligations since the Annual Report on Form 10-K for the year ended September 30, 2023 - No material changes in contractual obligations from the prior annual report[120](index=120&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=32&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) There have been no material changes in the company's exposure to market risk since its Annual Report on Form 10-K for the year ended September 30, 2023 - No material changes in market risk exposure from the prior annual report[121](index=121&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=32&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section details the evaluation of disclosure controls and procedures, with the CEO and CFO concluding effectiveness and no material changes to internal controls during the quarter [Evaluation of Disclosure Controls and Procedures](index=32&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) As of June 30, 2024, the company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective at a reasonable assurance level - The CEO and CFO concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2024[122](index=122&type=chunk) [Changes in Internal Control Over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) No material changes occurred in internal control over financial reporting during the most recent fiscal quarter, as the company continuously evaluates and improves its controls - No material changes in internal control over financial reporting during the most recent fiscal quarter[123](index=123&type=chunk) [PART II — OTHER INFORMATION](index=31&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section provides additional information not covered in financial statements, including legal proceedings, risk factors, equity sales, defaults, and other disclosures [ITEM 1. LEGAL PROCEEDINGS](index=33&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is occasionally involved in routine legal proceedings, but there have been no material developments in legal proceedings since the Annual Report on Form 10-K for the year ended September 30, 2023 - No material developments in legal proceedings since the prior annual report[125](index=125&type=chunk) [ITEM 1A. RISK FACTORS](index=33&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors identified in the company's Annual Report on Form 10-K for the year ended September 30, 2023 - No material changes to risk factors from the prior annual report[126](index=126&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=33&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) There were no unregistered sales of equity securities or use of proceeds to report for the period - None to report[127](index=127&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=33&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) There were no defaults upon senior securities to report for the period - None to report[127](index=127&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=33&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not Applicable[128](index=128&type=chunk) [ITEM 5. OTHER INFORMATION](index=33&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section discloses additional information, including a Rule 10b5-1(c) trading plan adopted by a board member and a significant post-quarter end financing agreement [(c) Trading Plans](index=33&type=section&id=%28c%29%20Trading%20Plans) One board member, Victoria Vakiener, adopted a Rule 10b5-1(c) trading plan on May 15, 2024, for shares vesting and subject to sell-to-cover arrangements, with a plan start date of December 16, 2024, and end date of December 31, 2024 Rule 10b5-1(c) Trading Plans Adopted (Quarter Ended June 30, 2024) | Name | Title | Adoption Date | Plan Start Date | Plan End Date | Shares Vesting and Subject to Sell-To-Cover | Shares Being Sold (Subject to Certain Conditions) | | :---------------- | :---------- | :-------------- | :-------------- | :------------ | :------------------------------------------ | :------------------------------------------------ | | Victoria Vakiener | Board Member | 5/15/2024 | 12/16/2024 | 12/31/2024 | n/a | 8,994 | [Financing Agreement](index=33&type=section&id=Financing%20Agreement) On August 7, 2024, the company secured a senior secured term loan facility of up to **$935.3 million** with Sixth Street Lending Partners, including an initial **$400.0 million** draw, maturing August 7, 2031, at a **15.0%** annual interest rate, secured by company assets for working capital and capital expenditures - On August 7, 2024, the company entered into a senior secured term loan facility (Credit Facility) of up to **$935.3 million** with Sixth Street Lending Partners[130](index=130&type=chunk) - The Credit Facility includes an initial **$400.0 million** draw, a delayed draw term loan of up to **$435.3 million**, and an uncommitted incremental facility of up to **$100.0 million**[130](index=130&type=chunk) - The facility matures on August 7, 2031, bears an annual interest rate of **15.0%**, and is secured on a first-priority basis by substantially all assets of the company and its material subsidiaries[130](index=130&type=chunk)[131](index=131&type=chunk) - Proceeds from the initial loan are permitted for working capital, capital expenditures, and general corporate purposes, while delayed draw proceeds are solely for paying interest on the Credit Facility[130](index=130&type=chunk)[131](index=131&type=chunk) [ITEM 6. EXHIBITS](index=35&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including the cover page in Inline XBRL format and various certifications - The exhibits include the Inline XBRL formatted cover page and certifications from the Chief Executive Officer and Chief Financial Officer[133](index=133&type=chunk)[134](index=134&type=chunk) [SIGNATURE](index=36&type=section&id=SIGNATURE) This section contains the official signature for the Quarterly Report on Form 10-Q [SIGNATURE](index=36&type=section&id=SIGNATURE) The Quarterly Report on Form 10-Q was signed on August 8, 2024, by Kenneth A. Myszkowski, Chief Financial Officer of Arrowhead Pharmaceuticals, Inc - The report was signed by Kenneth A. Myszkowski, Chief Financial Officer, on August 8, 2024[136](index=136&type=chunk)

Investment Strategy - The average annual return of the S&P 500 is approximately 10%, suggesting that doubling capital typically takes around 7 years [1] - Achieving 100% returns by 2025 requires taking risks, with a recommendation to limit exposure to risky stocks to about 10% of capital [1] Arrowhead Pharmaceuticals (ARWR) - Arrowhead Pharmaceuticals is a well-established pharmaceutical company with a strong pipeline, currently priced at $24 [2] - The company has multiple drugs in phase 3 testing and is positioned to become a leader in the cardiometabolic niche [2] - Arrowhead has two treatments for non-alcoholic steatohepatitis (NASH), one licensed to GSK, with potential for insurance coverage due to weight loss efficacy [3] YETI (YETI) - YETI is known for outdoor products and has seen a 13% increase in sales in the first quarter, with international sales spiking by 32% [5] - Earnings rose by 50% to 18 cents, and the company initiated a $100 million share repurchase program [6] - YETI stock is currently priced under $40, with analysts predicting a rise to $85, and some forecasts suggesting a potential high of $600 [6] NovoCure Limited (NVCR) - NovoCure Limited focuses on oncology and reported revenues of $138.5 million, up 13%, with 3,845 patients receiving therapies [7] - The company is conducting multiple Phase 3 trials, indicating potential for increased revenue streams [7] - It is working on commercializing tumor treating fields, which could provide further investment upside [8] Joby Aviation (JOBY) - Joby Aviation is recognized as a leading player in the flying car sector, with recent earnings showing an EPS beat [10] - The company has published final airworthiness criteria for its electric air taxi service and plans to deliver two aircraft to MacDill Air Base in 2025 [10] - Joby has exclusive rights to operate air taxis in Dubai and is expanding its presence in the UAE, showing resilience compared to competitors [11] Viking Therapeutics (VKTX) - Viking Therapeutics has seen a 300% increase in value in 2024, with shares trading at $80 [12] - The company's VK2809 therapeutic is in Phase 2b trials for NASH, with potential for weight loss benefits [12] - Therapeutics with secondary indications are more likely to receive insurance coverage, enhancing revenue potential [13] Matthews International (MATW) - Matthews International is primarily involved in the memorialization segment, accounting for 85% of revenues, and is currently priced at $28 [15] - The company has paid down over $27 million in debt recently and is also involved in warehouse automation, providing growth opportunities [16] Navitas Semiconductor (NVTS) - Navitas Semiconductor, a small firm trading under $5, reported a 73% revenue increase in the first quarter [17] - The company specializes in gallium nitride power integrated circuits, which are gaining traction in mobile fast charging and AI data centers [17] - Navitas anticipates continued rapid adoption of its products, positioning it as a promising investment in the semiconductor sector [18]

Financial Data and Key Metrics Changes - The net loss for Q2 2024 was $125.3 million, or $1.02 per share, compared to a net income of $48.7 million, or $0.45 per share, in Q2 2023 [48] - No revenue was recorded in Q2 2024, while revenue of $146.3 million was reported in Q2 2023, primarily from license and collaboration agreements [49] - Total operating expenses increased to $126.2 million in Q2 2024 from $98.1 million in Q2 2023, driven by higher R&D costs [49] Business Line Data and Key Metrics Changes - The cardiometabolic pipeline is a primary focus, with two late-stage drug candidates, plozasiran and zodasiran, expected to create substantial value [7][8] - Plozasiran's Phase 3 study in patients with familial chylomicronemia syndrome (FCS) is complete, with top-line data expected in June [9][39] - The company is preparing for NDA submissions for plozasiran by the end of 2024, with a potential launch in 2025 [10] Market Data and Key Metrics Changes - The company is expanding its cardiometabolic reach into obesity and metabolic disease with two additional drug candidates expected to enter the clinic this year [9][16] - The SHASTA-3 and SHASTA-4 Phase 3 studies for plozasiran in severe hypertriglyceridemia (SHTG) have been initiated, with aggressive enrollment goals set for 2025 [11][33] Company Strategy and Development Direction - Arrowhead is focusing on building expertise in the cardiometabolic space and allocating resources accordingly [7] - The company plans to leverage its growing capabilities by expanding into obesity and metabolic disease, with new candidates targeting these areas [16] - The TRiMTM platform is being expanded to deliver therapeutics to CNS and adipose tissues, enhancing the company's pipeline [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of plozasiran and zodasiran, citing favorable safety and efficacy data [12][16] - The company is optimistic about the upcoming data readouts and the potential for regulatory approvals, which could transition Arrowhead into a commercial organization [51] - Management emphasized the importance of strategic partnerships and creative financing to support clinical development and commercialization efforts [24][25] Other Important Information - The company has strengthened its balance sheet with a $450 million equity financing and a $50 million milestone payment from Royalty Pharma [24] - Arrowhead plans to host a series of R&D webinars to highlight its pipeline and engage with investors [20][21] Q&A Session Summary Question: Enrollment challenges in the high FeNO cohort for RAGE - Management acknowledged slow enrollment due to high FeNO requirements but plans to move forward with a Phase 2 study regardless of the delays [55] Question: Comparison of cardiovascular outcome trials with competitors - Management does not believe the size of competitor trials affects the power of their own studies, emphasizing the importance of trial design and execution [56] Question: Expectations for upcoming PALISADE data - Management expressed optimism about plozasiran's efficacy based on previous data but refrained from making specific predictions [59] Question: Inclusion of patients with LPL activity in PALISADE - Management indicated that early data from FCS patients showed similar results to SHTG patients, suggesting a positive outlook for the larger study [62] Question: Details on upcoming data from MUC5AC and MMP7 - Management provided specifics on patient numbers and endpoints for upcoming presentations, indicating a focus on MUC5AC protein levels and MMP7 levels in IPF patients [67]

Financial Performance - Arrowhead Pharmaceuticals reported a revenue of $146.3 million for the three months ended March 31, 2024, compared to $0 for the same period in 2023[9]. - The net loss attributable to Arrowhead Pharmaceuticals was $125.3 million, compared to a net income of $48.7 million in the same quarter last year[9]. Operating Expenses - Operating expenses increased to $126.2 million in Q2 2024, up from $98.1 million in Q2 2023, with research and development expenses rising to $101.1 million[9]. Clinical Trials and Studies - In the Phase 2 SHASTA-2 study, plozasiran demonstrated placebo-adjusted triglyceride reductions of -49%, -53%, and -57% at week 24, with 90.6% of patients achieving triglyceride levels below 500 mg/dL[4]. - The company dosed the first subjects in two Phase 1/2a clinical trials for ARO-CFB and ARO-DM1, targeting complement factor B and dystrophia myotonica protein kinase, respectively[6]. - Arrowhead plans to begin the regulatory submission process and refine its commercial strategy as it approaches completion of the PALISADE Phase 3 study of plozasiran[2]. Milestone Payments and Funding - The company received a $50 million milestone payment from Royalty Pharma plc following the completion of enrollment in the Phase 3 OCEAN(a) trial of olpasiran[4]. - The company strengthened its balance sheet with a registered offering of common stock, raising approximately $450 million[7]. Cash Resources - Total cash resources (cash and investments) increased to $523.1 million as of March 31, 2024, compared to $403.6 million as of September 30, 2023[9]. Expanded Access Program - Arrowhead initiated an Expanded Access Program for plozasiran for patients with familial chylomicronemia syndrome[5].

Financial Performance - The company reported a net loss of $125.3 million for the three months ended March 31, 2024, compared to a net income of $48.7 million for the same period in 2023, marking a significant decline [88]. - Total revenue for the three months ended March 31, 2024, decreased by $146.3 million or 100.0% from the same period in 2023, primarily due to decreased revenue recognition from license and collaboration agreements [93]. - The company recorded a net loss per share – diluted of $1.02 for the three months ended March 31, 2024, compared to net income per share – diluted of $0.45 for the same period in 2023 [92]. Cash and Assets - The company had $127.7 million in cash, cash equivalents, and restricted cash as of March 31, 2024, an increase from $110.9 million as of September 30, 2023 [89]. - The company had total assets of $955.2 million as of March 31, 2024, compared to $765.6 million as of September 30, 2023 [89]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $127.7 million as of March 31, 2024, compared to $135.0 million at the end of March 31, 2023 [108]. - The net increase in cash, cash equivalents, and restricted cash for the six months ended March 31, 2024, was $16.7 million, down from $27.2 million in the prior year [108]. Research and Development - Research and development expenses increased as the company's pipeline of candidates expanded and progressed through clinical trial phases [88]. - Total research and development expense was $101.1 million for the three months ended March 31, 2024, up from $74.9 million for the same period in 2023, representing a 35% increase [102]. - Candidate costs increased by $7.3 million, or 28%, for the three months ended March 31, 2024, and $10.3 million, or 15%, for the six months ended March 31, 2024 compared to the same period of 2023 [98]. - R&D discovery costs rose by $7.4 million, or 42%, for the three months ended March 31, 2024, and $23.9 million, or 79%, for the six months ended March 31, 2024 compared to the same period of 2023 [99]. - The company continues to develop other clinical candidates for future trials, with candidate costs expected to increase as development progresses [88]. - The company initiated a Phase 1/2a clinical trial of ARO-DM1 for type 1 myotonic dystrophy and filed for clearance to initiate a Phase 1/2a trial of ARO-CFB for complement-mediated renal disease [88]. Expenses - General and administrative expenses totaled $25.1 million for the three months ended March 31, 2024, an increase of $1.8 million, or 8%, compared to $23.2 million for the same period in 2023 [101]. - Salaries increased by $8.5 million, or 52%, for the three months ended March 31, 2024, and $16.4 million, or 53%, for the six months ended March 31, 2024 compared to the same period in 2023 [99]. - Facilities-related expenses increased by $2.5 million, or 72%, for the three months ended March 31, 2024, compared to the same period of 2023 [99]. - Depreciation and amortization expense increased by $1.8 million, or 81%, for the three months ended March 31, 2024, compared to the same period of 2023 [99]. - Other expense increased by $0.3 million and $2.8 million for the three and six months ended March 31, 2024, respectively, compared to the same periods of 2023 [105]. Cash Flow - Cash flow used in operating activities for the six months ended March 31, 2024, was $210.2 million, compared to $107.2 million for the same period in 2023, reflecting increased ongoing expenses related to research and development and administrative costs [108]. - Cash used in investing activities amounted to $204.1 million for the six months ended March 31, 2024, primarily due to capital expenditures of $102.7 million and investment purchases of $310.0 million, offset by proceeds from sales and maturities of investments of $208.6 million [108]. - Cash provided by financing activities was $431.0 million for the six months ended March 31, 2024, mainly from the issuance of common stock and stock option exercises, compared to $251.1 million in the same period in 2023 [108]. Other Information - The company completed enrollment in Amgen's Phase 3 OCEAN trial of olpasiran, triggering a $50.0 million milestone payment, which was received in Q3 of fiscal 2024 [88]. - There has been no material change in the Company's contractual obligations from the previous reporting period [109]. - The Company's exposure to market risk has not materially changed from the previous reporting period [110].

Core Viewpoint - The technology sector may face a slowdown, prompting a potential shift towards biotech stocks, which have not received the same attention despite their innovation potential [1] Group 1: Crispr Therapeutics (CRSP) - Crispr Therapeutics is utilizing the CRISPR gene-editing platform to develop medicines, with expected revenue of $105.82 million in fiscal 2024, down 71.5% from $371.21 million in 2023, but projected to rise to $405.2 million by 2025, a 9.2% increase from 2023 [2] - The gene editing market is anticipated to reach $15.8 billion by 2031, up from a valuation of $1.89 billion in 2022 [2] Group 2: Halozyme (HALO) - Halozyme develops oncology therapies and has seen its stock gain over 12% since the start of the year, with expected revenue of $954.58 million for the current fiscal year, a 15.1% increase from $829.25 million last year [5] - Analysts project earnings per share (EPS) of $3.68 for this year, up from $2.77 in 2023, with a forecast of $4.58 for 2025 [5] Group 3: SpringWorks Therapeutics (SWTX) - SpringWorks focuses on targeted oncology and is expected to achieve revenue of $87.34 million this fiscal year, a 1,503.5% increase from $5.45 million last year, with projections of $256.3 million in 2025 [7] - Analysts rate shares a unanimous strong buy with an average price target of $66.33, implying a 33% increase [8] Group 4: Cytokinetics (CYTK) - Cytokinetics develops muscle activators and inhibitors, with projected sales of $6.57 million this year, a 12.7% decline from $7.53 million last year, but expected to rise to $146.24 million by 2025, a 2,126% increase from 2024 [9] - Analysts rate shares a strong buy with an average price target of $94.63, indicating nearly 47% growth potential [10] Group 5: Jazz Pharmaceuticals (JAZZ) - Jazz Pharmaceuticals, known for its product Xyrem, is expected to report revenue of $4.11 billion for the current fiscal year, a 7.2% increase from $3.83 billion last year, with projections of $4.4 billion in 2025 [11] - Analysts rate shares a strong buy with a forecast price of $183.82, suggesting almost 59% upside potential [12] Group 6: Viking Therapeutics (VKTX) - Viking Therapeutics has gained 267% in equity value since January, focusing on therapeutics for metabolic disorders, although no sales forecast is provided [13] - Analysts unanimously rate VKTX a strong buy with an average price target of $102.43, implying nearly 53% upside potential [14] Group 7: Arrowhead Pharmaceuticals (ARWR) - Arrowhead Pharmaceuticals specializes in RNA-based therapeutics, with expected sales of $139 million this fiscal year, a 42.2% decline from $240.74 million last year, but projected to reach $157.94 million in 2025 [15] - The consensus view for ARWR stock is a moderate buy, with an average price target of $53.70, indicating 88% upside potential [16]

Core Viewpoint - The Russell 2000 Index is expected to perform well in 2024, with a projected return of about 9% in the first half and 15% over the next 12 months, driven by low valuations and an improving economic outlook [1]. Group 1: Russell 2000 Performance - The Russell 2000 Index closed 2023 with a 15.1% gain and is up approximately 4% year to date as of January 2, 2024 [1]. - Small-cap stocks within the Russell 2000 are currently trading at low valuations compared to historical levels, which is expected to drive returns [1]. Group 2: Arrowhead Pharmaceuticals (ARWR) - Arrowhead Pharmaceuticals has seen its stock price increase from $28.53 to $33.45, with potential for further growth due to speculation of being an acquisition target and ongoing development of 14 investigational medicines [2][3]. - The global drug development market is projected to reach $181.4 billion by 2032, which could significantly benefit Arrowhead, currently valued at $4.14 billion [3]. Group 3: Murphy Oil (MUR) - Murphy Oil's stock price has risen from around $39 to $41.12, with expectations for it to reach $44 and potentially $48 [5][6]. - The company has generated substantial free cash flow, returning about $150 million to shareholders through buybacks and retiring $500 million of debt [5][6]. Group 4: Duolingo Inc. (DUOL) - Duolingo's stock price increased from $177 to a high of $241.86, with a recent pullback to $213.53, but is expected to push higher [7]. - The company reported a fourth-quarter EPS of 26 cents, beating estimates by 10 cents, and revenue increased by 45.4% year over year [8]. - Daily active subscriptions surged to 26.9 million, a 65% increase quarter over quarter, indicating strong growth potential [8].