DD: Arrowhead Therapeutics ($ARWR)

Pipeline Development

Arrowhead’s leading product candidate is plozasiran, formerly known as ARO-APOC3, an RNAi treatment that targets the Apolipoprotein C-III (ApoC3) gene. Plozasiran works by using the RNA interference (RNAi) process, a natural mechanism in cells used to control gene activity. This drug is a small interfering RNA (siRNA) designed to match the messenger RNA (mRNA) that provides instructions for making the ApoC3 protein. When the siRNA reaches the target liver cell, it binds with the RNA-Induced Silencing Complex (RISC), which cuts and degrades the ApoC3 mRNA. Since ApoC3 inhibits lipoprotein lipase (LPL), the enzyme responsible for clearing triglycerides, turning off the ApoC3 gene removes this blockage. This leads to a significant and lasting reduction in ApoC3 production, which lowers plasma triglyceride levels. The proprietary TRiM™ platform delivers the drug. It uses a GalNAc ligand to selectively attach to receptors on liver cells (hepatocytes), allowing for precise, low-dose, and infrequent (quarterly) subcutaneous injections. Plozasiran is currently in Phase 3 pivotal studies for two conditions: Familial Chylomicronemia Syndrome (FCS), a rare and severe genetic disorder, and the larger population of Severe Hypertriglyceridemia (sHTG). The company has filed a New Drug Application (NDA) for plozasiran in FCS, with a Prescription Drug User Fee Act (PDUFA) action date set for November 18, 2025. Other notable candidates include fazirsiran, partnered with Takeda, which targets Alpha-1 antitrypsin deficiency-related liver disease (AATD-LD) and is in Phase 3. There are also two new early-stage obesity candidates, ARO-INHBE and ARO-ALK7, which target fat storage pathways and are currently undergoing Phase 1/2 clinical studies, demonstrating the platform’s ability to deliver treatments beyond the liver.

Financial Position

Arrowhead has a strong balance sheet, largely thanks to successful partnerships. As of June 30, 2025, the company reported total cash resources, including cash, cash equivalents, and available-for-sale securities, of about $900.4 million. This gives them plenty of time for their internal development programs. Revenue for the third quarter of fiscal year 2025 was $27.8 million, mainly from collaboration agreements. The company has invested significantly in its clinical pipeline, with Research and Development (R&D) costs for the quarter amounting to $162.4 million. This led to an operating loss of $165.6 million and a net loss of $175.2 million for the quarter. While the spending rate is high due to multiple Phase 3 trials and expanding its platform, this is balanced by non-dilutive funding from partnerships, including a recent $130 million upfront payment from Sanofi for rights in Greater China for various cardiometabolic candidates and a $100 million milestone payment from Sarepta Therapeutics related to the ARO-DM1 program.

Market and Competition

Arrowhead’s main market opportunity lies in cardiometabolic diseases, particularly severe hypertriglyceridemia and other lipid imbalances that affect large patient groups. Plozasiran aims at a gene that drives disease, making it suitable for potential use in millions of patients if approved for sHTG. The company is also entering the obesity market with ARO-INHBE and ARO-ALK7. The competition includes other RNAi leaders like Alnylam Pharmaceuticals and Ionis Pharmaceuticals (which focuses on antisense technology), along with major pharmaceutical companies such as Amgen, which partners with Arrowhead on olpasiran, another product. Arrowhead differentiates itself with its TRiM™ platform, allowing for low-dose, infrequent (quarterly) subcutaneous dosing, effectively targeting various tissues. This delivery method, combined with its pioneering approach to RNAi compounds for unique targets like INHBE and ALK7, gives the company an early advantage and the potential to provide treatment options that stand out from existing standards of care and competing methods.

Key Upcoming Catalysts

The main upcoming events revolve around late-stage regulatory and clinical milestones for plozasiran. The first important event is the November 18, 2025 PDUFA action date for plozasiran in FCS. Other key events include completing enrollment in the registrational SHASTA-3, SHASTA-4, and MUIR-3 studies for sHTG, expected this year, which will lead to sNDA filings in 2026. The company also plans to reach the second enrollment target for the ARO-DM1 Phase 1/2 study by the end of 2025, leading to an additional $200 million milestone payment from Sarepta Therapeutics. Initial data from the early-stage obesity programs, ARO-INHBE and ARO-ALK7, may be available by the end of 2025. Finally, the development of the Central Nervous System (CNS) platform is significant, with expected Clinical Trial Application (CTA) filings for ARO-HTT and ARO-MAPT later this year, expanding their pipeline into valuable neurological disorders.

Author’s Take

I am bullish on Arrowhead Pharmaceuticals because the platform has demonstrated potential, with several candidates reaching Phase 3 trials and partnerships with significant pharmaceutical companies like Takeda and Amgen. The most compelling near-term opportunity is plozasiran, which is set to potentially receive its first approval for FCS on the PDUFA date of November 18, 2025. This change marks a significant transition from a clinical-stage to a commercial company and will establish a steady revenue stream. In addition to FCS, the drug targets the much larger Severe Hypertriglyceridemia (sHTG) market, representing a multi-billion dollar opportunity. Success in the ongoing Phase 3 sHTG trials will be the main factor influencing value over the next year. The company’s $900 million cash position protects Arrowhead from the high spending rate and eliminates the typical funding uncertainty faced by many clinical biotechs. This financial stability allows Arrowhead to continue developing its next generation of therapies, especially promising extra-hepatic programs in obesity (ARO-INHBE/ARO-ALK7) and CNS disorders.

Disclosure

This report is provided for informational and educational purposes only and is not intended to be investment advice, a solicitation, or a recommendation to buy, sell, or hold any securities. The information is based on publicly available data and professional analysis, which may not be complete or entirely accurate. Investing in clinical-stage biotechnology companies involves substantial risks, including the risk of capital loss, due to the uncertainties associated with clinical trials, regulatory approval processes, and commercial viability. Readers should conduct their own thorough investigation and consult with a qualified financial professional before making any investment decisions. The author has no personal financial interest in Arrowhead Pharmaceuticals ($ARWR) and has received no compensation for this report.