Arrowhead Pharmaceuticals(ARWR) - 2026 Q1 - Quarterly Report

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].