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ARROWHEAD PHARMACEUTICALS, INC.

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Business Summary

Arrowhead Pharmaceuticals, Inc. operates in the biotechnology industry, specifically focused on developing RNA interference (RNAi) therapeutics that silence disease-causing genes. The company's pipeline includes 18 Arrowhead-discovered drug candidates in clinical trials ranging from early stage (Phase 1) to late stage (Phase 3), and it has a robust discovery stage pipeline capable of generating multiple new clinical candidates each year. The company recently achieved a transformational milestone with its first commercial launch in 2025, when the U.S. Food and Drug Administration approved REDEMPLO (plozasiran) as an adjunct to diet to reduce triglycerides in adults with Familial Chylomicronemia Syndrome.

The company has entered into multiple license and collaboration agreements with leading biotech and pharmaceutical companies, including Sarepta Therapeutics, Inc., Amgen Inc., Takeda Pharmaceutical Company Limited, Glaxosmithkline Intellectual Property (No. 3) Limited and Novartis Pharma AG, for programs that the company does not intend to commercialize independently. The company controls approximately 643 issued patents (including 404 directed to RNAi trigger molecules and 159 directed to targeting groups or targeting compounds), including European validations, and approximately 833 currently pending patent applications worldwide from 103 different patent families.

The company's business model is to develop medicines that treat intractable diseases by silencing the genes that cause them using a broad portfolio of RNA chemistries and modes of delivery. The company generates revenue through licensing and collaboration agreements with partners, and has recently begun commercializing its first approved product, REDEMPLO. The company's approach aims to expand the reach of its technology and provides a source of non-dilutive capital to support REDEMPLO and other wholly-owned programs through commercial stage.

REDEMPLO (plozasiran) is approved by the U.S. Food and Drug Administration as an adjunct to diet to reduce triglycerides for adults with Familial Chylomicronemia Syndrome. REDEMPLO is an siRNA therapeutic designed to suppress the production of apolipoprotein C-III, a protein produced in the liver that raises triglyceride levels by slowing their breakdown and clearance. Additionally, phase 3 studies (SHASTA-3, SHASTA-4 and SHASTA-5) for severe hypertriglyceridemia have been fully enrolled and the company plans to file a supplemental NDA for this indication in 2026, pending successful completion of Phase 3 clinical studies. The company is also developing zodasiran for homozygous familial hypercholesterolemia, with one Phase 3 clinical trial (YOSEMITE) currently investigating it. ARO-DIMER-PA is a dual functional RNAi molecule designed to silence expression of the PCSK9 and APOC3 genes, representing the first clinical candidate to target two genes simultaneously in one molecule. Other pipeline candidates include ARO-PNPLA3 for MASH, ARO-INHBE and ARO-ALK7 for obesity, ARO-RAGE for inflammatory pulmonary disease, ARO-MAPT for Alzheimer's and tauopathies, ARO-C3 and ARO-CFB for complement mediated renal disease, and multiple partnered programs with Sarepta, GSK, Takeda, Amgen, and Novartis.

The company's partnered pipeline includes GSK-4532990 for MASH under the GSK-HSD License Agreement, daplusiran/tomligisiran for chronic hepatitis B under the GSK-HBV Agreement, fazirsiran for alpha-1 antitrypsin deficiency under the Takeda License Agreement, olpasiran for atherosclerotic cardiovascular disease under the Olpasiran Agreement with Amgen, and multiple programs under the Sarepta Collaboration Agreement including SRP-1001 for facioscapulohumeral muscular dystrophy, SRP-1003 for type 1 myotonic dystrophy, SRP-1002 for idiopathic pulmonary fibrosis, and SRP-1004 for spinocerebellar ataxia 2. Under the Novartis collaboration agreement, the company licensed ARO-SNCA, a preclinical stage siRNA therapy against alpha-synuclein for the treatment of synucleinopathies such as Parkinson's Disease.

During fiscal year 2025, the FDA approved the company's New Drug Application for REDEMPLO (plozasiran) injection for Familial Chylomicronemia Syndrome on November 18, 2025. The company entered into a global licensing and collaboration agreement with Sarepta on November 25, 2024, which closed on February 7, 2025, receiving $325.0 million through the purchase of 11,926,301 shares of company common stock by Sarepta at a price per share of $27.25 , and received $500.0 million as an upfront payment on February 24, 2025. The company also entered into a global licensing and collaboration agreement with Novartis on August 29, 2025, and upon closing in October 2025, received $200.0 million as an upfront payment. A $100.0 million milestone payment from Sarepta was triggered in the fourth quarter of fiscal 2025, with the company receiving $53.2 million worth of Arrowhead common stock and $50.0 million in cash. The company repurchased 2,660,989 shares of its common stock from Sarepta in August 2025 at an average price of $18.79 per share. On November 20, 2025, the company earned a $200.0 million milestone payment from Sarepta for achieving the second development milestone event in a Phase 1/2 clinical study of ARO-DM1.

Total revenue for the year ended September 30, 2025 increased by $825.9 million from the same period of 2024, driven primarily by increased revenue recognition associated with the Sarepta, Sanofi, and GSK license agreements. Operating income was $98.3 million for fiscal 2025 compared to an operating loss of $601.1 million in fiscal 2024. Net loss attributable to Arrowhead Pharmaceuticals, Inc. was $1.6 million for fiscal 2025 compared to a net loss of $599.5 million in fiscal 2024. Net loss per share (diluted) was $0.01 for fiscal 2025 compared to $5.00 in fiscal 2024.

Business Outlook

A major growth vector is the commercialization of REDEMPLO for Familial Chylomicronemia Syndrome following FDA approval in November 2025, with the company having built a commercial organization to support marketing in this rare disease. The company plans to progressively build its commercial capabilities to also support marketing in severe hypertriglyceridemia, a higher prevalence disease which will require a larger commercial footprint, and plans to file a supplemental NDA for this indication in 2026 pending successful completion of Phase 3 clinical studies. The company is also advancing multiple Phase 3 studies for plozasiran in sHTG including SHASTA-3, SHASTA-4, SHASTA-5, and MUIR-3, and has initiated the YOSEMITE Phase 3 clinical trial of zodasiran for homozygous familial hypercholesterolemia.

Another significant growth vector is the company's extensive partnership and collaboration strategy. The Sarepta Collaboration Agreement covers multiple clinical and preclinical programs in rare, genetic diseases of the muscle, central nervous system, and the lungs, and allows Sarepta to select up to six new targets for discovery and preclinical development. The company is eligible to receive up to approximately $10.0 billion in future potential milestone payments from Sarepta, plus royalties on commercial sales. The Novartis collaboration agreement covers ARO-SNCA for synucleinopathies and other additional collaboration targets, with the company eligible to receive up to $2.0 billion in potential milestone payments plus royalties on commercial sales. The company also has partnered programs with GSK, Takeda, and Amgen, and is eligible to receive up to an additional $485.0 million in remaining development, regulatory and sales milestone payments from Amgen and Royalty Pharma under the Olpasiran Agreement.The company has expanded its manufacturing capabilities with a new, state-of-the-art GMP manufacturing facility in Verona, Wisconsin, comprising approximately 300,000 total square feet, which was substantially completed during the first quarter of fiscal 2025. The company operates research laboratory facilities in San Diego, California and Madison, Wisconsin comprising more than 251,000 total square feet. As of September 30, 2025, the company employed 711 full-time employees based at four facilities in the United States. The company expects to spend an additional $0.1 million to complete the build out of the facilities.

The company's capital allocation strategy includes significant investment in research and development, with total research and development expenses of $607.2 million for fiscal 2025. Capital expenditures were $22.7 million in fiscal 2025. The company has a secured term loan facility of $500.0 million with Sixth Street Lending Partners, with $400.0 million funded on the closing date and an additional $100.0 million available at the company's option. The company expects to make $40.0 million of prepayments on the facility within the next 12 months in addition to the $66.7 million prepayment made in November 2025 relating to the receipt of the upfront payment under the Novartis Collaboration Agreement. The company has an open market sale agreement to sell up to $250.0 million in shares of common stock, though no shares have been issued under this agreement as of September 30, 2025.

The company faces headwinds related to the substantial risks inherent in commercializing new drugs, including the need to obtain regulatory approvals for product candidates beyond REDEMPLO. The company has a history of net losses and expects to continue to incur net losses for the foreseeable future as it continues drug development efforts and begins commercialization. The company's ability to generate milestone and royalty payments under licensing and collaboration agreements is substantially controlled by its partners, and the company will likely need other sources of financing to continue to develop internal product candidates.

The company faces constraints from the complex and evolving regulatory environment, including potential impacts from the Inflation Reduction Act, which authorizes the U.S. Department of Health and Human Services to negotiate prices of certain drugs, and an executive order directing the implementation of a Most Favored Nation drug pricing policy. The company also faces risks related to patent infringement claims, including a complaint filed by Ionis Pharmaceuticals, Inc. alleging patent infringement of United States Patent No. 9,593,333 which may impact the planned commercialization of REDEMPLO.

Risk Factors

The company's prospects substantially depend on the success of its clinical-stage product candidates, and if the company and its licensees are unable to obtain approval for and commercialize these product candidates, or successfully commercialize REDEMPLO, the business could be materially harmed. The company has a history of net losses and expects to continue to incur net losses and may not achieve or maintain profitability. The company faces potential product liability exposure from REDEMPLO or any other approved product candidate, and if successful claims are brought, the company may incur substantial liability. The company is subject to patent infringement claims, including a complaint filed by Ionis Pharmaceuticals, Inc. alleging patent infringement of United States Patent No. 9,593,333 which may impact the planned commercialization of REDEMPLO. The terms of the company's financing agreement with Sixth Street Lending Partners, which provides for a senior secured term loan facility of $500.0 million , could adversely affect operations and limit the company's ability to plan for or respond to changes in its business, and if the company is unable to comply with restrictions, the repayment of existing indebtedness could be accelerated.

Management Priorities

Management's message emphasizes the company's achievement of a transformational milestone with its first commercial launch in 2025 following FDA approval of REDEMPLO for Familial Chylomicronemia Syndrome. The company has built a commercial organization to support marketing in FCS and plans to progressively build its commercial capabilities to also support marketing in sHTG. Management highlights the company's extensive pipeline of 18 Arrowhead-discovered drug candidates in clinical trials and a robust discovery stage pipeline capable of generating multiple new clinical candidates each year. Key strategic priorities include advancing the plozasiran program for sHTG with plans to file a supplemental NDA in 2026, progressing the partnered pipeline through collaborations with Sarepta, GSK, Takeda, Amgen, and Novartis, and continuing to expand the TRiM platform to enable delivery of siRNA to multiple tissue types. The company is eligible to receive up to $13.4 billion in additional developmental, regulatory and sales milestones from its licensing and collaboration agreements.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 7, MD&A — 2025 Business Highlights
  2. [2] Item 7, MD&A — 2025 Business Highlights
  3. [3] Item 7, MD&A — 2025 Business Highlights
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  6. [6] Item 7, MD&A — 2025 Business Highlights
  7. [7] Item 7, MD&A — 2025 Business Highlights
  8. [8] Item 7, MD&A — 2025 Business Highlights
  9. [9] Item 5, Market for Registrant's Common Equity — Repurchases of Equity Securities
  10. [10] Item 5, Market for Registrant's Common Equity — Repurchases of Equity Securities
  11. [11] Item 7, MD&A — 2025 Business Highlights
  12. [12] Item 7, MD&A — Results of Operations
  13. [13] Item 7, MD&A — Results of Operations
  14. [14] Item 7, MD&A — Results of Operations
  15. [15] Item 7, MD&A — Results of Operations
  16. [16] Item 7, MD&A — Results of Operations
  17. [17] Item 7, MD&A — Results of Operations
  18. [18] Item 7, MD&A — Results of Operations
  19. [19] Item 7, MD&A — 2025 Business Highlights
  20. [20] Item 7, MD&A — 2025 Business Highlights
  21. [21] Item 1, Business — Amgen Inc.
  22. [22] Item 1, Business — GMP Manufacturing and Related Development Laboratory Facility
  23. [23] Item 1, Business — Research and Development Facilities
  24. [24] Item 1, Business — Human Capital Management
  25. [25] Item 7, MD&A — Contractual Obligations
  26. [26] Item 7, MD&A — Results of Operations
  27. [27] Item 7, MD&A — Liquidity and Capital Resources
  28. [28] Item 7, MD&A — Liquidity and Capital Resources
  29. [29] Item 7, MD&A — Liquidity and Capital Resources
  30. [30] Item 7, MD&A — Liquidity and Capital Resources
  31. [31] Item 7, MD&A — Contractual Obligations
  32. [32] Item 7, MD&A — Contractual Obligations
  33. [33] Item 7, MD&A — Liquidity and Capital Resources
  34. [34] Item 1A, Risk Factors — Risks Related to Our Financial Condition
  35. [35] Note 1, Organization and Significant Accounting Policies — Liquidity
  36. [36] Item 7, MD&A — Results of Operations
  37. [37] Item 7, MD&A — Results of Operations
  38. [38] Item 7, MD&A — Results of Operations
  39. [39] Item 7, MD&A — Results of Operations
  40. [40] Item 7, MD&A — Results of Operations
  41. [41] Item 7, MD&A — Results of Operations
  42. [42] Item 7, MD&A — Results of Operations
  43. [43] Item 7, MD&A — Results of Operations
  44. [44] Item 7, MD&A — Results of Operations
  45. [45] Item 7, MD&A — Results of Operations
  46. [46] Item 7, MD&A — Results of Operations
  47. [47] Item 7, MD&A — Results of Operations
  48. [48] Item 7, MD&A — Results of Operations
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  54. [54] Item 7, MD&A — Results of Operations
  55. [55] Item 7, MD&A — Results of Operations
  56. [56] Item 7, MD&A — Results of Operations
  57. [57] Item 7, MD&A — Liquidity and Capital Resources
  58. [58] Item 7, MD&A — Liquidity and Capital Resources
  59. [59] Item 7, MD&A — Liquidity and Capital Resources
  60. [60] Item 7, MD&A — Liquidity and Capital Resources
  61. [61] Note 13, Liability Related to the Sale of Future Royalties
  62. [62] Consolidated Balance Sheets

Analysis on 6/21/2026