Arrowhead Pharmaceuticals(ARWR) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The net income for Q2 2023 was $48.7 million, or $0.45 per share, compared to $44.4 million, or $0.41 per share, in Q2 2022 [36] - Revenue for Q2 2023 was $146.3 million, down from $151.8 million in Q2 2022, primarily due to collaboration agreements with Takeda and GSK [36][37] - Total operating expenses decreased to $98.1 million in Q2 2023 from $110.3 million in Q2 2022, driven by reduced candidate costs and lower stock compensation expenses [38] Business Line Data and Key Metrics Changes - The company has 12 drug candidates in clinical studies, with expectations to increase to at least 14 by the end of 2023, targeting liver, lung, and CNS [5][6] - ARO-RAGE showed up to 90% knockdown in serum after two inhaled doses, indicating strong performance in the pulmonary pipeline [7][29] - ARO-APOC3 is in a Phase 3 study with expected completion in Q2 2024, and has received Fast Track designation from the FDA [14][23] Market Data and Key Metrics Changes - The company is expanding its TRiM platform to include new organ systems, including adipose tissue, with demonstrated gene silencing of over 90% in non-human primates [12] - The CNS platform is advancing with ARO-SOD1, targeting ALS caused by SOD1 mutations, with a CTA filing expected in Q3 2023 [10][35] Company Strategy and Development Direction - The company aims to grow its pipeline of RNAi therapeutics to 20 clinical stage or marketed products by 2025, focusing on multiple organ systems [6][41] - The strategy includes a healthy mix of wholly-owned and partnered programs, with recent milestone payments from partners indicating progress [16][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of RNAi therapeutics to address unmet medical needs across various organ systems [12][41] - The company anticipates a busy second half of 2023 with numerous opportunities to demonstrate the value of its pipeline [41] Other Important Information - The company received a $40 million milestone payment from Takeda and a $30 million milestone payment from GSK during the quarter [16][37] - Cash and investments totaled $559.8 million as of March 31, 2023, an increase from $482.3 million in September 2022 [39] Q&A Session Summary Question: Additional details on new data at the R&D day - The company will overview pulmonary programs and provide early data from MUC5AC and ARO-RAGE, along with updates on ARO-ANG3 and ARO-APOC3 [44][45] Question: Reporting on patient baseline characteristics for the PALISADE study - Management indicated that key inclusion criteria will be reviewed, but detailed baseline characteristics will not be reported until the end of the study [48] Question: Endpoints for pulmonary data reporting - Key biomarkers such as Feno and FeV1 will be measured, but the small cohorts are not powered for FeV1 [50][51] Question: Comparison of ARO-SOD1 with Tofersen - ARO-SOD1 is expected to provide better depth of gene target knockdown and longer duration of effect compared to Tofersen [56] Question: Financial impact of recent updates - The company plans to maintain its growth trajectory and is focused on finding good partners for its expanding pipeline [60]