Arrowhead Pharmaceuticals - Earnings Call - Q1 2025

Executive Summary

• Q1 FY2025 results: Revenue $2.50M; Diluted EPS $(1.39); Net loss $(173.1)M on higher R&D as programs advanced.
• FDA accepted plozasiran NDA for FCS with a PDUFA date of November 18, 2025, positioning a potential first commercial launch late 2025 pending approval.
• Closed a transformational Sarepta deal: $500M upfront cash, $325M equity, plus $250M over five years and potential $300M near‑term payments; pro forma cash/investments would be ~$1.4B; management guides runway into 2028; revenue recognition from Sarepta begins in the March quarter.
• Street consensus (S&P Global) for Q1 FY2025 EPS and revenue was unavailable due to access limits; therefore, beats/misses vs estimates cannot be assessed at this time.

What Went Well and What Went Wrong

What Went Well

• Sarepta collaboration closed, delivering immediate and staged non‑dilutive capital and reducing future R&D burden as partner assumes development on multiple muscle programs; company now “funded into 2028”.
• FDA accepted plozasiran NDA for FCS; PALISADE met primary and key secondary endpoints, including an 83% reduction in acute pancreatitis risk and ~80% median TG reduction at 25 mg.
• Commercial readiness accelerating: market access and medical affairs engaged; plan for late‑2025 U.S. launch (pending approval) and European commercialization with a partner.

What Went Wrong

• Operating expenses rose to $163.9M (R&D $137.0M), widening the net loss to $(173.1)M vs $(132.9)M YoY; cash used in ops rose to $146.3M, reflecting pipeline advancement.
• Revenue remained minimal ($2.5M), primarily from GSK collaborations; Sarepta revenue recognition will only begin next quarter, leaving Q1 top line light.
• Equity declined sharply on the balance sheet ($52.6M at 12/31/24 vs $185.4M at 9/30/24), with liabilities elevated (credit facility $409.4M; royalty liability $346.8M).

Transcript

Operator (participant)

Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals conference call. Throughout today's recorded presentation, all participants will be in a listen-only mode. After the presentation, there'll be an opportunity to ask questions. I will now hand the conference over to Vince Anzalone, Vice President of Investor Relations of Arrowhead. Please go ahead, Vince.

Vince Anzalone (VP of Investor Relations)

Good afternoon. Thank you for joining us today to discuss Arrowhead's results for its fiscal 2025 first quarter ended December 31st, 2024. With us today from management are President and CEO, Dr. Chris Anzalone, who will provide an overview of the quarter, Dr. Bruce Given, Interim Chief Medical Scientist, who will provide an update on our cardiometabolic pipeline, Andy Davis, Senior Vice President and Head of Global Cardiometabolic Franchise, who will provide an update on commercialization activities, Dr. James Hamilton, Chief of Discovery and Translational Medicine, who will discuss our earlier stage development programs, and Ken Myszkowski, our Chief Financial Officer, who will give a review of the financials. We will then open up the call to questions.

Before we begin, I would like to remind you that comments made during today's call contain certain forward-looking statements such as Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are forward-looking statements and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements. For further details concerning these risks and uncertainties, please refer to our SEC filings, including our most recent annual report on Form 10-K and our quarterly reports on Form 10-Q. I'd now like to turn the call over to Chris Anzalone, President and CEO. Chris.

Chris Anzalone (CEO)

Thanks, Vince. Good afternoon, everyone, and thank you for joining us today. Earlier today, we announced that the licensing collaboration agreement with Sarepta Therapeutics is closed. Arrowhead expects to receive a $500 million upfront payment in the next 10 days and has already received $325 million through the purchase by Sarepta of Arrowhead common stock priced at $27.25 per share. Arrowhead will also receive $250 million to be paid in annual installments of $50 million over five years and has the potential to receive an additional $300 million in near-term payments associated with the continued enrollment of a phase I-II study of ARO-DM1, which we are on track to achieve during the next 12 months. Taken together, this adds up to $1.375 billion in cash payments.

We are also eligible to receive development milestone payments of between $110 million and $410 million per program and sales milestone payments between $500 million and $700 million per program. The total potential value of this deal, including upfront payments, equity investments, and potential milestone payments, exceeds $11 billion. On top of that, we are also eligible to receive tiered royalties on commercial sales. This was clearly a big deal and a critical step for Arrowhead to bring balance back to our business model, which in part relies on partnering non-core assets to provide capital for us to develop and commercialize our own wholly owned assets. In addition to the substantial immediate capital infusion, the deal also accomplishes a few equally important goals. One, brings in a partner with extensive development, regulatory, and commercial expertise for development of drugs they have in-licensed. Two, increases Arrowhead's focus in the cardiometabolic space.

Three, reduces the forward growth in our R&D expenses as Sarepta assumes clinical development responsibilities for multiple programs. And four, provides the potential for substantial downstream non-dilutive capital as milestones and ultimately royalties are earned. We are now funded into 2028 and potentially through multiple commercial launches by Arrowhead and our partners. We believe we are now well-positioned for growth in 2025 and beyond. We see three primary value drivers fueling this growth from our internal development activities in the near term. These are Plozasiran, obesity, and CNS. Let's begin with Plozasiran. We expect our first commercial launch of Plozasiran to drive substantial growth. Pending positive FDA review and approval, launch could take place late this year. We see the value proposition of Plozasiran in FCS is quite clear and a substantial differentiation from any other available therapy.

We think the magnitude and consistency of triglyceride lowering, the potential ability to get patients to triglyceride goal, convenient quarterly dosing schedule, and well-tolerated safety profile simply make Plozasiran a very difficult drug candidate to compete against. But this is just the first step. We are also confident that our current phase III studies, SHASTA-3, 4, and 5, have the potential to show similar differentiation and value in the much larger severe hypertriglyceridemia, or SHTG, population, and we believe this represents an attractive and underappreciated commercial opportunity. We are now on pace to complete enrollment for the registrational SHASTA-3, SHASTA 4, and MUIR-3 studies this year, which would enable study completion in 2026 and a subsequent sNDA filing. That would substantially broaden the reach of Plozasiran and provide a large opportunity for growth.

As we have said in the past, we believe Plozasiran has the potential to be a $2-$3 billion per year drug in the SHTG market alone. Turning to obesity, we believe our two early-stage programs, ARO-INHBE and ARO-ALK7, represent high-value opportunities with near and midterm data readouts that could provide more clarity on where they may fit in the obesity and metabolic treatment paradigm. James will talk about the status of the programs in a moment, but we see the targets and pathways as very promising. Both programs are supported by published human genetic studies, and the preclinical data have demonstrated dramatic results with the potential to fill gaps in the current standard of care. The possibility of long-acting agents that spare muscle mass and enable visceral fat loss without dependence on caloric restriction is exciting indeed.

It appears that Arrowhead is the first company to start clinical studies against the INHBE target and may currently be the only company able to address the ALK7 target, which utilizes a new version of our TRiM platform capable of delivering to adipocytes. The third area that we see driving near-term growth is our emerging CNS pipeline, including the new TRiM platform, which in animal models appears capable of delivering siRNA across the blood-brain barrier, including deep brain distribution using subcutaneous injection. Near-term clinical proof of concept would truly be disruptive, and we think would open the door to treating many millions of patients without adequate options. Our initial efforts with this platform address Huntington's, Alzheimer's, and Parkinson's disease, all devastating conditions that lack good treatment options.

We believe that HTT, MAPT, and alpha-synuclein are the most validated targets in Huntington's, Alzheimer's, and Parkinson's, respectively, and these are the targets we are addressing with ARO-HTT, ARO-MAPT, and ARO-SNCA, respectively. Our preclinical data in non-human primates have been very compelling, and we are now focused on completing IND/CTA-enabling studies and GMP manufacturing to support early clinical trials. We anticipate having CTAs for ARO-HTT and ARO-MAPT toward the end of this year and for ARO-SNCA in early 2026. Sarepta has the right to take HTT forward, and we are currently focused on keeping MAPT wholly owned. We have not made a decision yet on partnering versus retaining ARO-SNCA. As I mentioned, we believe the triumvirate of Plozasiran, obesity, and CNS will be our primary near-term value drivers. It is also the way investors should think about our focus.

We are building a growing cardiometabolic pipeline, which includes obesity, and we will see where the new CNS platform takes us as clinical data come in. In addition to Plozasiran, ARO-ALK7, and ARO-INHBE, our cardiometabolic franchise includes Zodasiran, our ANGPTL3 targeting drug candidate. We expect to begin a phase 3 study in HoFH next quarter with Zodasiran. We have a large amount of clinical data with this candidate and feel confident that it could be an effective medicine with an attractive dosing schedule in this population. This would be a relatively simple addition to our FCS and SHTG sales representatives' bags, so the incremental commercial costs associated with this additional potential product are expected to be minimal. The phase 3 study will be small, and this is a good use of fairly modest resources for us. Where else can we go in cardiometabolic?

As I mentioned, ARO-ALK7 is important not only because of the compelling target to treat obesity, but also as a proof of concept that we can address adipocytes. Adipose is the largest endocrine organ in the body and, as such, is expected to be a rich environment for cardiometabolic and obesity targets. We expect to build this out. Similarly, we believe the initial candidates built on our new CNS platform are important because of the neurological targets they address, representing some of the most challenging, poorly treated public health crises remaining, and also because they offer the possibility of disruptive clinical proof of concept. We also see important opportunities to develop additional obesity candidates based on new CNS targets.

Remember that RNAi is a rifle shot, and as our understanding of obesity increases, we see a role for highly specific intervention that could only be practical with systemic delivery. We believe that this has the possibility to treat difficult diseases with reduced risk of safety and tolerability challenges that have led to so much disappointment in the CNS drug development space. This year, we also plan to expand our cardiometabolic presence with a CTA for our first dimer. It is designed to silence expression of both ApoC3 and PCSK9, and we hope it will combine the triglyceride-lowering qualities of Plozasiran with the LDL-C-lowering properties of other PCSK9 inhibitors. With this focus on cardiometabolic and a wait-and-see with CNS, we have a number of programs that are non-core. These are potential partnering opportunities and could bring additional immediate and long-term capital.

Janssen generated compelling clinical data with ARO-PNPLA3, and addressing a genetically defined MASH population that could number in the 10 million persons range in the major pharmaceutical markets could be attractive to the right company. This is a program for which we will seek a partner. We have learned much about our pulmonary platform through the various clinical programs. It appears to be well-tolerated and quite effective at delivering to the deep lung. It is our intention to find a good partner to help identify new deep lung targets and develop a suite of candidates. Similarly, we have been very impressed with knockdown data coming out of the ARO-RAGE clinical studies, but given the complexity and expense associated with developing this as an asthma and/or COPD drug, we will seek a partner for phase 2 and beyond.

Clinical data from both ARO-C3 and ARO-CFB have been quite good, and both candidates appear to do what they are designed to do. There are clear markets one or both could address, including C3 glomerulopathy, IgA nephropathy, and certain lupus populations. We would like to find the right partners to develop these candidates. This is where we are now and what we see as key growth drivers for the future. Let's review how we got here and a few key accomplishments from the quarter and since our last earnings call. First, and more importantly, the U.S. FDA accepted the new drug application for investigational Plozasiran for the treatment of familial chylomicronemia syndrome. This is our first NDA filing, which is a key milestone for Arrowhead, and we are pleased that it was accepted for filing.

The FDA provided a PDUFA action date of November 18, 2025, and indicated it is not currently planning to hold an advisory committee meeting. We now know the potential launch date, pending FDA review and approval, so we continue our work to be ready for an efficient launch on day one. Andy will talk about the work in a moment. Sticking with Plozasiran, in November, we announced new results from the phase 3 PALISADE study and the open-label extension from our phase 2 MUIR and SHASTA-2 studies. These data were presented in two oral presentations at the American Heart Association Scientific Sessions 2024, and PALISADE data were simultaneously published in the AHA Journal Circulation. The data continued to be promising across studies, across the spectrum of triglyceride disorders, and after short and long-term follow-up. In addition, Plozasiran has been overall generally well-tolerated to date.

During the quarter, we also initiated a phase 1-2 clinical trial of our first obesity candidate, ARO-INHBE, and recently received regulatory clearance in New Zealand to initiate a clinical study of our second obesity candidate, ARO-ALK7. As I mentioned, these programs represent potential drivers for growth for Arrowhead, so we are excited to get both moving into and through early clinical studies. Lastly, we presented interim healthy volunteer results from a phase 1-2 clinical study of ARO-CFB for the treatment of complement-mediated diseases. Data have been compelling so far, and we anticipate additional data readouts later this year. With that overview, I'd now like to turn the call over to Dr. Bruce Given. Bruce.

Bruce Given (Interim Chief Medical Scientist)

Thank you, Chris. Good afternoon, everyone. As Chris mentioned, the big highlight for the clinical and regulatory teams was the submission and subsequent acceptance of our first new drug application, or NDA, by the U.S. FDA for investigational Plozasiran for the treatment of familial chylomicronemia syndrome, or FCS. The FDA provided a PDUFA action date of November 18, 2025, and indicated it is not currently planning to hold an advisory committee meeting. We also expect to submit approval applications to additional global regulatory authorities in coming months for Plozasiran for the treatment of patients with FCS. FCS is a severe and rare disease that often is caused by various biallelic genetic mutations that lead to extremely high triglyceride levels. A normal level is triglycerides below 150 milligrams per deciliter, but patients with FCS typically have triglycerides in the thousands.

Such severe elevations can lead to various serious signs and symptoms, including acute and potentially fatal pancreatitis, chronic abdominal pain, which can be as frequently as daily, diabetes, and cognitive issues. The clinical basis of the NDA submission is comprised of the findings in the phase 3 PALISADE study, which were positive, with supportive confirmatory evidence from the phase 2 clinical studies of the SUMMER program. PALISADE successfully met its primary endpoint and all multiplicity-controlled secondary endpoints, including statistically significant reductions in triglycerides, ApoC3, and the incidence of acute pancreatitis. In PALISADE, Plozasiran achieved deep and durable reductions in triglycerides with median changes from baseline of approximately 80% in the Plozasiran 25 milligram group and a statistically significant 83% reduction in the risk of developing acute pancreatitis compared to placebo in the pooled Plozasiran 25 milligram and 50 milligram group. Overall, Plozasiran has been generally well-tolerated to date.

In the PALISADE study, the most frequently reported treatment emergent adverse events for the 25 milligram dose that is proposed for marketing approval were abdominal pain, COVID-19, nasopharyngitis, and nausea. In addition to FCS, we are making good progress on the other phase 3 studies in the summer program. These are SHASTA-3, SHASTA-4 in patients with severe hypertriglyceridemia, or SHTG, and MUIR-3 in patients with mixed hyperlipidemia. The SHASTA studies are designed to assess safety and efficacy, and the MUIR study is to provide additional safety data needed for the expected SHTG supplement to our Plozasiran NDA. The SHASTA studies are global, randomized, double-blind, placebo-controlled phase 3 studies to evaluate the efficacy and safety of Plozasiran in adult patients with SHTG and prior documented evidence of fasting triglyceride levels greater than 500 milligrams per deciliter.

Eligible subjects will be randomized to receive either Plozasiran at 25 milligrams or placebo. The double-blind treatment period duration will be one year where subjects receive a total of four quarterly doses. After month 12, eligible subjects will be offered an opportunity to continue in an optional open-label extension. SHASTA 3 and 4 and MUIR-3 are all enrolling well, and we are on schedule to reach full planned enrollment this year, which would enable study completion in 2026 and subsequent sNDA filing. We are also working towards initiating SHASTA 5, a phase 3 study in patients with SHTG that are at high risk of acute pancreatitis. We intend to initiate that study this year.

In addition to the phase 3 program for Plozasiran, we are actively working on a study design and preparations for a phase 3 study of Zodasiran, our investigational RNAi therapeutic candidate designed to reduce production of angiopoietin-like protein 3, or ANGPTL3, which is a liver-synthesized inhibitor of lipoprotein lipase and endothelial lipase in patients with homozygous familial hypercholesterolemia, or HOFH, following a successful phase II study called GATEWAY. We will provide more details on that study when it is initiated later this year. This is another program that makes sense as it is potentially complementary to the medical affairs and commercial organizations we are building to support a Plozasiran launch, and there is significant overlap in types of physicians who treat FCS and HOFH, both rare lipid disorders. I'll now turn the call over to Andy Davis. Andy?

Andy Davis (SVP and Head of Global Cardiometabolic Franchise)

Thank you, Bruce. The recent acceptance of our first NDA by the U.S. FDA for investigational Plozasiran is incredibly energizing for the FCS community. The frequent feedback we receive from both physicians and patient societies who have read about Plozasiran in last year's publications continues to be very encouraging. They cite several potential differentiating attributes of Plozasiran that I will discuss briefly. First, the reduction in triglycerides is both deep and durable. As Bruce mentioned in his remarks, in PALISADE, Plozasiran reduced triglycerides from baseline by an unprecedented approximately -80% as early as month one and maintained this reduction with minimal variation throughout the full 12-month treatment period. Second, people living with FCS for the first time have real hope of achieving triglyceride levels below guideline-directed risk thresholds associated with acute pancreatitis, such as 880 and even 500 milligrams per deciliter.

At least half of the patients at the 25 milligram dose in PALISADE saw TGs below 500 milligrams per deciliter, with approximately 75% achieving levels below 880 milligrams per deciliter. To support physician education on guideline-directed risk thresholds, we previously announced the launch of our disease awareness campaign. A key focus of our messaging is to educate the community about expert guidelines, which recommend maintaining triglyceride levels below 500 milligrams per deciliter to reduce the risk of acute pancreatitis. Third, the triglyceride reductions from baseline were consistent in patients with genetically confirmed and clinically diagnosed FCS. Results from PALISADE published in the journal Circulation showed that Plozasiran at the 25 milligram dose induced rapid, deep, and sustained reductions from baseline in ApoC3 of greater than minus 90% and in triglycerides of approximately minus 80%, independent of gene variants causing FCS.

We believe this supports the potential value of Plozasiran in patients with clinically diagnosed disease, regardless of genetic status. Fourth, Plozasiran is the first and only investigational medicine to achieve a statistically significant reduction in the risk of developing acute pancreatitis in patients with genetically confirmed and clinically diagnosed FCS. This is truly the outcome of most importance for physicians, patients, and payers. And lastly, Plozasiran demonstrated generally favorable safety and tolerability with low rates of discontinuation for adverse events and is conveniently dosed every three months, potentially reducing the treatment burden on both physicians and patients. As we prepare for the potential launch of Plozasiran at the end of this year, we have built highly experienced market access and marketing organizations, and our clinical development colleagues have established a fully operational medical affairs function. Medical science liaisons from medical affairs are in the field conducting scientific exchange.

Our market access colleagues are presently engaging with payers to communicate clinical and economic evidence, and our national sales director will be executing our final field force hiring plans in the coming months. We are on track, and we're incredibly excited about the possibility of bringing investigational Plozasiran to FCS patients and their families. I'll now turn the call over to Dr. James Hamilton.

James Hamilton (Chief of Discovery and Translational Medicine)

Thank you, Andy. First, I want to give a quick review and update on two of the programs that are part of the Sarepta collaboration, ARO-DUX4 and ARO-DM1. These are both muscle-targeted programs in phase 1-2 studies, which Arrowhead will continue to run until study completion, at which time Sarepta will assume responsibility for clinical development and ultimately commercialization.

We are currently conducting a phase 1-2A double-blinded placebo-controlled dose-escalating study to evaluate single and multiple ascending doses of ARO-DM1 in up to 48 subjects with myotonic dystrophy. We're in the dose-escalation stage of the study, and we are enrolling patients at a good pace. We expect to reach the enrollment targets in the Sarepta agreement, which would trigger an additional $300 million in payments and potentially have first data to report this year, pending discussions with Sarepta and agreement on disclosure timing. Moving on to the second Sarepta-partnered muscle-targeted program, ARO-DUX4. This is also in a phase 1-2A dose-escalating study to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of ARO-DUX4 in adult patients with FSHD type one. The study is designed to enroll up to 52 subjects.

Like ARO-DM1, we are in the dose-escalation stage and should have first data available to report this year, also pending discussion and agreement with Sarepta. These are both very interesting programs for muscle diseases with no adequate treatments available. Our preclinical data have been very compelling, and we believe the programs have the potential to be best in class. Our colleagues at Sarepta have extensive neuromuscular development, regulatory, and commercial expertise, so their input at this time is helpful, and their strategic direction and involvement in the future clinical development and commercialization will be critical. We have a high degree of confidence that the Sarepta team can help accelerate the programs and maximize the chances for clinical commercial success. I also wanted to give a quick update on our obesity programs, ARO-INHBE and ARO-ALK7.

These programs are both designed to intervene in a biological pathway regulating fat storage, which in an environment of nutrient excess can become dysfunctional and overactive. ARO-INHBE is designed to reduce expression of Activin E, which is a ligand for adipose ALK7, while ARO-ALK7 is designed to reduce expression of the ALK7 receptor itself. In preclinical models, both programs demonstrated substantial reductions in fat mass versus control while simultaneously preserving lean mass. In addition, both targets are supported by human genetics, where loss of function carriers have favorable body composition and metabolic characteristics compared to non-carriers. We always prefer genetically validated targets because we think they reduce biology risk and give important insight into predicted safety and tolerability.

For ARO-INHBE, in December, we began dosing in a phase 1-2A dose-escalating study to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of ARO-INHBE in up to 78 adult volunteers with obesity. In part one of the study is designed to assess single and multiple doses of ARO-INHBE monotherapy, and part two of the study is designed to assess ARO-INHBE in combination with tirzepatide, a subcutaneously administered GLP-1/GIP receptor co-agonist. We see the potential to have initial data from part one of the study later this year. For ARO-ALK7, we recently received regulatory clearance in New Zealand to initiate a phase 1-2A first in human dose-escalating study to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of ARO-ALK7 in up to 90 adult volunteers with obesity.

We are completing manufacturing of drug supply as we speak and anticipate dosing to initiate in the middle of the year. During the last quarter, we also presented interim clinical data from a phase 1-2A clinical study of ARO-CFB, which targets complement factor B and is being developed as a potential treatment for various complement-mediated diseases. The data were presented at the 8th Complement-Based Drug Development Summit. Complement factor B plays an important regulatory role in amplifying complement alternative pathway activation and has been identified as a promising therapeutic target for complement-mediated kidney disease, such as IgA nephropathy, which is the most common glomerular disease worldwide and carries a high lifetime risk of progression to end-stage renal disease. In the phase 1-2A study, circulating levels of CFB protein were reduced by a mean of up to 90% to date, with a duration of response greater than three months.

Additional data from the higher dose levels and multi-dose cohorts are pending and will be presented at an appropriate medical conference. ARO-CFB also demonstrated reductions in measures of alternative complement pathway activation, with mean reductions at or approaching 100% in AH50 and Wieslab AP at multiple dose levels. ARO-CFB has been generally well tolerated to date, with safety data supportive of further clinical development. Treatment-emergent adverse events have been mostly mild in severity, with none leading to study drug discontinuation. We look forward to completing part one of the study over the coming months and subsequently look ahead to part two of the study in patients with IgA nephropathy. I will now turn the call over to Ken Myszkowski.

Ken Myszkowski (CFO)

Thank you, James, and good afternoon, everyone. As we reported today, our net loss for the quarter ended December 31st, 2024, was $173.1 million, or $1.39 per share, based on 124.8 million fully diluted weighted average shares outstanding. This compares with a net loss of $132.9 million, or $1.24 per share, based on 107.4 million fully diluted weighted average shares outstanding for the quarter ended December 31st, 2023. Revenue for the quarter ended December 31st, 2024, was $2.5 million, compared to $3.6 million for the quarter ended December 31st, 2023. Revenue in the current period relates to our collaboration agreements with GSK. Revenue in the prior period primarily related to the recognition of revenue from our license and collaboration agreements with Takeda and GSK. Revenue recognition related to the Sarepta license and collaboration agreement will begin during the quarter ending March 31st, 2025.

Revenue will be recognized over a period during which we are providing key performance obligations. This is primarily related to our responsibilities to manage certain clinical trials for the clinical candidates to which we granted Sarepta an exclusive license agreement. Total operating expenses for the quarter ended December 31st, 2024, were $163.9 million, compared to $140.1 million for the quarter ended December 31st, 2023. The key drivers of this change were increased candidate costs and salaries, as the company's pipeline of clinical candidates has both increased and advanced into later stages of development. Net cash used by operating activities during the quarter ended December 31st, 2024, was $146.3 million, compared to $117.8 million for the quarter ended December 31st, 2023. The increase in cash used by operating activities is driven primarily by higher research and development expenses.

Turning to our balance sheet, our cash and investments totaled $552.9 million at December 31st, 2024. Including the $825 million in upfront payments from the Sarepta agreements, our pro forma cash and investments would be $1.4 billion at December 31st, 2024. Based on our expected cash inflows from the Sarepta agreement, debt repayments, as well as other cash burn, we expect our cash and investments balance to be approximately $1 billion at the end of calendar 2025, and we expect to have cash runway into 2028. Our common shares outstanding at December 31st, 2024, were 125.6 million. With that brief overview, I will now turn the call back to Chris.

Chris Anzalone (CEO)

Thanks, Ken. Not only do we see several growth drivers over the coming years, we have a robust potential catalyst calendar in 2025. Throughout the year, we expect multiple events that we believe are important.

For Plozasiran, we expect the following key events: initiate SHASTA-5 in patients at high risk of acute pancreatitis. Fully enroll SHASTA-3, SHASTA-4, and MUIR-3. Make additional global regulatory submissions. Commercial launch in FCS in the U.S. and potentially the EU, pending review and approval. For Zodasiran, initiate phase 3 HOFH study. For the obesity programs, we expect to initiate dosing in the phase 1-2 study of ARO-ALK7 and potentially have the first data for part one of the phase 1-2 study of ARO-INHBE. For Fazirsiran, our investigational RNAi candidate partnered with Takeda and being developed to treat the liver disease associated with alpha-1 antitrypsin deficiency, we have the potential to reach full enrollment of the phase 3 REDWOOD study.

For ARO-DUX4, ARO-DM1, and ARO-MMP7, we have the potential for initial data in the phase 1-2 studies and the potential to achieve $300 million milestone payments from Sarepta. For both complement programs, ARO-CFB and ARO-C3, we have potential data readouts. And lastly, for the emerging CNS pipeline, we anticipate filing CTAs for our first systemically delivered and subcutaneously administered programs. As always, there's a lot going on at Arrowhead to be excited about. Thank you for joining us today, and I would now like to open the call to your questions. Operator.

Operator (participant)

Thank you. If you would like to ask a question, please press star 11 on your telephone. You will then hear an automated message advising your hand is raised. If you would like to remove yourself from the queue, please press star 11 again. We also ask that you limit yourself to one question, and please wait for your name and company to be announced before you proceed with your question. One moment, please. Our first question will come from the line of Luca Issi of RBC Capital Markets. Your line is open.

Luca Issi (Senior Biotechnology Research Analyst)

Oh, great. Thanks so much for taking my question, and I'll just congrats on closing the deal with Sarepta. Maybe, James, on obesity, can you just talk a little bit more about INHBE? I know you're testing both, but is this fundamentally a monotherapy play in your head, or this is more like an add-on therapy to GLP-1 or whatever's next for this category? And maybe related, can you just talk about what will be a downside case for the data later this year and maybe an upside case for the data later this year? What's the bogey here?

So any call there, much appreciated. And then maybe Bruce, super quickly, we've obviously seen Novartis pushing out their data to next year for Lepodisiran. Just wondering what was your reaction to that news and what does this mean for the broader category, including Plozasiran. Again, any call there, much appreciated. Thanks so much.

James Hamilton (Chief of Discovery and Translational Medicine)

Sure. Thanks, Luca. I can take a shot at the first question. Like you said, we are studying ARO-INHBE in monotherapy as well as in combination with Tirzepatide. And we'll have to wait and see how the data look. We haven't really made a call on what the future development path looked like for that molecule. And similarly, I think we'll just have to wait and see. We don't have really a specific bogey to hit. I think we'll see how the data evolve on both the monotherapy side and in the combination arms.

Chris Anzalone (CEO)

And just to be clear, look, obesity is not a one-size-fits-all condition, and I don't think people who are in it are thinking of it that way. This is a huge number of patients with a variety of different needs, and so we are developing over time a suite of drug candidates against it that could be used in combination with each other, in combination with others, in combination with existing therapies, in combination with new therapies. We are really excited about these two pathways, and we think they're a great step forward, and it's just not clear how the world is going to use these or, frankly, any other obesity drugs that are coming online.

Bruce Given (Interim Chief Medical Scientist)

Yeah. And finally, your question about ARO-LPA. I don't have a lot of insight here. We're not on the inside, certainly, of the Novartis program. We're not on the inside of the Amgen program, so we really don't know. I mean, I think in general, I would say that I'm more excited about Lepodisiran just because I think it's a more effective agent with respect to knocking down Lp(a). It's certainly more convenient than an antisense approach and probably better tolerated as well. So I'm generally more excited about Lepodisiran from a cardiovascular disease perspective. But what's going on with Novartis' compound and, frankly, even what's going on with Amgen's compound, I don't have an inside track on that information.

Luca Issi (Senior Biotechnology Research Analyst)

Got it. Thanks so much, guys.

Operator (participant)

Thank you. One moment for the next question, please. Our next question will be coming from the line of David Lebowitz of Citi. Your line is open.

David Lebowitz (Senior Research Analyst of Biotechnology)

Thank you very much for taking my question. I'm curious, in the early days from what you've seen talking to your doctors regarding ApoC3 and current commercial launches, is there any feedback you're getting from doctors on what they're seeing?

Andy Davis (SVP and Head of Global Cardiometabolic Franchise)

Yeah. I'm just happy to comment on the feedback that we continue to receive with respect to Plozasiran, which, as I mentioned, they view as highly differentiating based on the attributes I spoke to on the call. So I would say, despite the fact that there is an option available, physicians and patient societies continue to remain really enthusiastic about Plozasiran.

David Lebowitz (Senior Research Analyst of Biotechnology)

Thanks for taking my question.

Operator (participant)

Thank you. And one moment, please, for the next question. Our next question will come from the line of Eli Merle of UBS. Your line is open.

Hi. This is Jasmine on for Eli. Thanks for taking our question, and congratulations on the announcements today. I just wanted to follow up on an earlier question. So for Activin E and ALK7, will we see weight loss data or anything on body composition from the phase 1-2A trials? And if at this early time point we won't see that yet, what are you looking for to see from the PKPD results to give you confidence to move forward?

James Hamilton (Chief of Discovery and Translational Medicine)

Thanks. Yeah. I think from the part one of the study, the monotherapy arms, we will be looking at body composition based on full-body MRI, as well as, of course, weight loss. And we'll look at the usual phase 1 metrics, of course, safety and plasma PK, which will likely look like the other GalNAc siRNAs. And then we can measure the biomarker Activin E in the blood. So that's the direct biomarker of gene target knockdown.

Operator (participant)

Great. Thank you. Thank you. One moment for the next question. Our next question will come from the line of Maury Raycroft of Jefferies. Your line is open.

Maury Raycroft (Equity Research Analyst of Biotechnology)

Hi. Congrats on the progress, and thanks for taking my question. I was going to ask about the SHASTA-5 study. I know you plan to start this study in second quarter, and you've mentioned it could include 140 patients, and the purpose is mostly for payers. For this study, do you have estimates on what the timeline to data could look like? And can you talk more about the strategy here? I guess, could the totality of acute pancreatitis data de-risk an outcomes study or potentially even replace the need to run a CVOT study?

Bruce Given (Interim Chief Medical Scientist)

So Maury, it's hard to predict. No one's ever attempted a trial like this before, that it'll be the first-ever outcome study focused on pancreatitis as the primary endpoint.

It'll be enrolling patients that are at clear risk for pancreatitis. So the enrollment timeline is a sort of to be determined, you might say. And in addition to that, as with a CVOT, for instance, it is an outcome study. So we will go until we get the required number of events. So it's not a fixed duration after enrollment is complete, but in fact, it'll keep going until the required number of events are seen. So a couple of levels of uncertainty there. We feel good about it. We think it'll be well received by clinicians, but in reality, it's hard to really predict exactly when it'll happen. We think it'll be a very important study, though, and we think it'll especially be a very important study to payers and to health assessment organizations, especially outside the U.S., where places like the U.K.

and Germany, these health assessment organizations are very, very important. Health technology assessment organizations are very important. They really determine whether or not patients are going to have access to a new drug. So we think this is going to be a revolutionary study, first of its kind, practice-changing. And it'll impact the U.S. as well, but we anticipate less so than it will in Europe. The second part of your question, I didn't quite understand if you were asking whether it would limit the need for CVOT. I don't really think so, just because I think that the question of atherosclerotic risk related to triglycerides is really separate from the question of pancreatitis risk.

So I think there are two very important risks, but they're really independent questions, and especially for patients with milder forms of hypertriglyceridemia where the pancreatitis risk is quite low, but the atherosclerosis risk is still very important. And we think, based on genetic data, represents an area of really unmet medical need and persistent residual risk of atherosclerotic cardiovascular disease. We think we're the first drug that's really in a position to truly assess that risk and assess the opportunity for a drug that quite effectively reduces triglycerides to impact that cardiovascular risk.

Operator (participant)

Got it. That's all helpful perspective. Thanks for taking my question. Thank you. One moment for the next question. And our next question will be coming from the line of Edward Tenthoff of Piper Sandler. Your line is open.

Edward Tenthoff (Senior Research Analyst)

Great. Thanks, guys. Thanks for all the updates and for everybody being well out there. Question with respect to Europe and overseas with Plozasiran. Now that we've gotten the U.S. situation sort of laid out, what are plans for Europe? And would you be partnering overseas? Are there certain thresholds we're waiting for? Would there have to be additional studies? Just maybe you can update us on sort of what thinking is overseas, both for FCS, but also longer term for severe hypertriglyceridemia?

Andy Davis (SVP and Head of Global Cardiometabolic Franchise)

Thanks. Yeah. Thanks for the call. This is Andy. So we're currently planning for commercialization in European markets along with a commercial partner. And so there'll be more details on that in the future. We're incredibly excited about the large European markets and bringing Plozasiran, investigational Plozasiran to those patients there as well.

Okay. Thank you.

Operator (participant)

Thank you. One moment for the next question, please. And our next question will be coming from the line of Patrick Trucchio of H.C. Wainwright. Please go ahead.

Patrick Trucchio (Managing Director of Equity Research)

Thanks. Good afternoon, and congrats on all the progress here. I have a couple of follow-ups. The first is just, can you review how you envision Plozasiran's competitive positioning relative to Olezarsen in both FCS, though also in the broader severe high triglyceride populations, and how these product profiles could compare in the real-world setting, particularly as we look towards the launch upcoming for Plozasiran, potential launch upcoming for Plozasiran FCS? And then just separately, just mention the adipose tissue targeting platform. I'm just curious, what targets or disease areas do you view as being attractive as you look to build out this program from this part of the pipeline? And when may you have an update for us on this build-out?

Andy Davis (SVP and Head of Global Cardiometabolic Franchise)

Thank you for the question. This is Andy. I'll address the first part of your question related to differentiation. I'll speak primarily to the Plozasiran data, but I would encourage you to do your own comparison between the BRIDGE and PALISADE studies to the extent you want to understand the key differences yourself. I think one of the primary differentiators that we see is around the reduction in triglycerides. As we've talked about from PALISADE, we see a triglyceride reduction from baseline, which is largely unprecedented, approximately -80% from baseline, and we see that as early as month one and then continued throughout that full 12-month treatment period. So I think that's the first point of differentiation one would focus on. I think the second point of differentiation is what that means for FCS patients as far as achieving guideline-directed risk thresholds.

Many of these society guidelines point to less than 500 milligrams per deciliter as the goal to which they want to get FCS patients below in order to reduce the risk of acute pancreatitis. Obviously, the larger the TG reduction from baseline, the greater the proportion of FCS patients who are likely to achieve that guideline-directed goal. We think that's a key area of differentiation as well. Third, in comparison to those studies, you'd have an appreciation for the fact that PALISADE studied both genetically confirmed and clinically diagnosed patients. What we saw was that Plozasiran was the first and only investigational medicine to achieve a statistically significant reduction in the risk of acute pancreatitis in that population. Again, an important point of differentiation. We spoke to acute pancreatitis as an important outcome for payers and patients and physicians.

Seeing a statistically significant difference in PALISADE is an important differentiator. And then lastly, the safety profile has been generally very tolerable with low rates of discontinuation for adverse events. And importantly, we see an every three-month dosing with Plozasiran. That's different from the alternative. That's only four injections a year. And what patients tell us is they prefer fewer injections. And what physicians tell us is that helps with compliance and adherence. And so they're quite excited about an every three-month dosing regimen. So that would be, I think, the final point of differentiation I might point you towards. So those are just a handful of differentiating attributes of Plozasiran that we recognize as a team.

Bruce Given (Interim Chief Medical Scientist)

So let me chime in too. This is Bruce Given again. I think it's a little easier to kind of put BALANCE and PALISADE side by side than it is to necessarily put SHASTA-2 and the currently available data for SHTG with Olezarsen side by side because the BRIDGE-TIMI study covered both mixed hyperlipidemia and a small number of patients that reached into SHTG. So it's a little harder to sort of understand what they're going to look like, what Olezarsen's going to look like in SHTG. I think we have a pretty good idea of what we would predict is going to be seen with Plozasiran because I think it's very likely that SHASTA-2 gives us a pretty good idea of what we're going to see there.

I do want to just say, generally speaking, I think both for FCS and for SHTG, this is one of these markets where the industry, both us and Ionis, it's going to be an education market. We're going to be opening up this market. These essentially have been almost untreatable diseases, very poorly treated diseases with currently available agents that have been around for decades, mostly generic, mostly not promoted. So I'm not sure. While the street tends to think about head-to-head, I think this is more going to be expansion. And in fact, having a couple of players in the market is going to help us expand. I mean, we obviously like that side-to-side comparison that Andy talked about.

But I actually think the thing that's going to benefit the patients most here is that there's going to be two sets of voices out there trying to be sure that physicians get well educated about these markets, understand that there are treatments now, that these treatments make a difference. And I think it's probably more a question of how much the two of us can expand the pie than necessarily competing for a fixed pie because at this point, I don't think there's—I don't think that's the case. So I would just add that from a medical perspective.

James Hamilton (Chief of Discovery and Translational Medicine)

And on the obesity question, the adipose question, Patrick, this is James. So the indications that we're looking at, of course, include things like obesity, type 2 diabetes. Lipodystrophy is also on the list. And we have a lot of targets that are of interest in the adipose site. Of course, we're not going to share these targets publicly at this time. I think we're evaluating those targets preclinically, and you'll learn about the individual targets as they reach the clinic.

Patrick Trucchio (Managing Director of Equity Research)

Great. Thank you so much.

Operator (participant)

Thank you. One moment for the next question. And our next question will be coming from the line of Mayank Mamtani of B. Riley Securities. Your line is open.

Mayank Mamtani (Senior Managing Director & Group Head of Healthcare)

Yes. Good afternoon. Thanks for taking our questions, and congrats on the Sarepta deal close. So on that Sarepta partnership, maybe a couple of quick questions on ARO-DM1. You have cohorts four and five exploring 12 mg per kg quarterly and semiannual dosing. Just to clarify, when you'd have day 180 biopsy data from both cohorts four and five, is that part of disclosure within this year, or is that sort of a follow-up to an initial sort of SAD early MAD update you have this year? And then similarly for ARO-DUX4, which is understandable for larger study, how further would you be along in the MAD when you and your partner, Sarepta, may look to put out an initial update this year?

Chris Anzalone (CEO)

Hey, Mike. Our job here is to continue these programs moving forward as quickly as we can. We think these are important drugs. We look forward to handing them over to Sarepta once we finish the current studies. We really can't give you any guidance on data readouts because that's entirely up to Sarepta. We'll be generating data all year. When they decide to present data, when data are interpretable and such, we'll be really up to them, so.

Mayank Mamtani (Senior Managing Director & Group Head of Healthcare)

Okay. Okay. Understood. And just a quick one on Zodasiran and HOFH. Maybe if you could contrast the phase 3 target patient population with that of Evkeeza and could patients theoretically get both antibody and siRNA to have optimal outcomes? Thanks again for taking the question.

Bruce Given (Interim Chief Medical Scientist)

Yeah. I don't think that they'll be used together. And I think the target population is basically very much the Evkeeza target population. Evkeeza, of course, is an intravenous infusion. It has the same liability as all the monoclonal antibodies have for patients that occasionally develop severe allergic reactions, which doesn't tend to characterize the siRNAs. And of course, we would be quarterly dosing as opposed to monthly dosing. But I think the patient population itself, which is essentially patients that still have high LDL cholesterols despite high-dose statins and PCSK9 inhibitors, that's basically the patient population. There's a nuance there that you also pick up some patients that are intolerant to statins. But essentially, the biggest part of the population are patients that despite high-dose statins and PCSK9s are still not at goal, which is basically the Evkeeza population as well.

Mayank Mamtani (Senior Managing Director & Group Head of Healthcare)

Got it. Thank you.

Chris Anzalone (CEO)

Thank you. Thank you. One moment for the next question. And our next question will be coming from the line of Andrea Newkirk of Goldman Sachs. Your line is open.

Andrea Newkirk (VP of Biotechnology Equity Research)

Good afternoon. Thanks so much for taking our question. Maybe a follow-up to the prior one. Could you just speak a little bit more on this decision to restart efforts with Zodasiran and maybe quantify for us the magnitude of the commercial opportunity that you do see in HOFH to justify the incremental investment that you expect to see on both the R&D as well as the commercial side? Thanks so much.

Chris Anzalone (CEO)

Sure. So the Sarepta deal, of course, gave us capital we could reconsider that opportunity. That, to us, felt like as close to a no-brainer as exists in this industry. The data so far have been good in the clinical programs, and it was just—it was sitting, frankly, waiting for us to have the capital that we can allocate to it. And now we do. It's not a very expensive phase three program. It's going to be a fairly small study. It's not a gigantic market, of course.

But the incremental commercial costs there are quite low because we are going to be addressing this market with Plozasiran anyway. And so, as I mentioned in the prepared remarks, we're almost just adding this to the bag of existing sales representatives. And so it doesn't cost very much more to do the phase 3. It costs almost nothing more to do the added commercial. So we just saw that as a market that we could take share. And so we plan to.

Operator (participant)

Thank you. One moment for the next question. And the next question is coming from the line of Mani Foroohar of Leerink Partners. Your line is open.

Mani Foroohar (Senior Research Analyst)

Hey, guys. Thanks for taking the question. A couple of quick ones to clarify. When you talked about your pro forma cash balance, etc., $1 billion, you said that was one of the things that took into account was debt service that you described as debt repayment. Are we to assume that you're going to be putting capital to paying down the 15% debt that you took out, or should we just assume that that is debt service in the form of interest? And then I have a follow-up.

Ken Myszkowski (CFO)

So we do need to make certain payments when we bring capital in from milestone payments and such. So that is included in the cash balance that I referred to earlier. And to the extent there are further milestones down the road, a certain percentage of those would be considered debt repayments. But we wouldn't be making anything beyond that.

Mani Foroohar (Senior Research Analyst)

Okay. That's helpful. And then apropos of your answer to the last question regarding having a little more capital on hand if you're only able to sort of reinvigorate the Zodasiran program for the outpacing opportunity in HOFH, I want to hop back to Plozasiran, how you should think about the CVOT, how to think about potential gating to restart that, timing to pursue a CVOT, and how to think about your own view on what are gating events to begin such a study and the capital that you put into place and how that might affect your willingness to partner other assets to continue to keep the balance sheet running given that that adds meaningful OpEx.

Chris Anzalone (CEO)

Yep. It's a great question. I don't have a firm answer for you other than the fact that we would like to do that CVOT.

The rationale for that is clear, and I'll let Bruce expand upon that in a second. We'd like to do that. What we're waiting on is additional capital. And so we're just not prepared to start that until we've got a better line of sight on additional capital to fund that. We do have a lot of capital now. That's good. But we're going to need an influx of additional capital, substantial additional capital before we would consider starting that. I sort of listed some of the current programs that we are interested in partnering at some point at least. ARO-RAGE is one. We'd like to do a discovery partnership in pulmonary. We'd like to do a partnership with C3, with Factor B, with PNPLA3. We've got a number of these that are not core to our business that we're happy to let go of.

We'll see what kind of capital can come in with those. Importantly, there are some programs that are just off-limits, at least for right now. ALK7 and INHBE, we think, have too much value in them, at least in the near to midterm, to think about partnering. So we're just not going to do that. MAPT is another one. We're going to hold on to that, at least for right now, and see where that goes. We would certainly consider doing a discovery partnership in CNS with some limited number of targets. Let's see if some capital comes in with that type of partnership. We could consider an alpha-synuclein partnership. It's not something that we're really focused on right now, but it's something that we would consider. It's not off-limits like MAPT, I guess, is what I'm saying. Adipocytes, there are a ton of new targets there.

We will absolutely go after some of those ourselves, and we will keep some wholly owned to expand our cardiometabolic franchise, but there's probably enough targets there for us to bring in partners as well to interrogate new targets. Cardiomyocytes, that's a new space. We are not in cardiomyocytes. We are not in the clinic with cardiomyocytes right now, but we have technology we think is pretty good and just about ready for prime time, and so that's another place that we think we can play ourselves, but also, there's probably room to do some partnering there, so there's an awful lot of potential there. And we'll just see what happens. We'll see when it happens. We'll see what kind of capital comes in before we can make a decision on if and when we start that CVOT. Bruce, do you want to add anything on?

Bruce Given (Interim Chief Medical Scientist)

No, just again, for those of you who may not be up to date on the case for doing a CVOT, there's just an increasing body of information from Mendelian randomization studies, especially indicating that some of this unmet need and some of this residual risk, despite our ability to take LDLs to very, very low levels, looks like from these Mendelian randomization studies and GWASs that a significant amount of that residual risk is explainable by elevations in triglyceride-rich lipoproteins. And again, Plozasiran's the strongest drug we think that's ever been seen in its ability to lower those. And if you use the Mendelian randomization data to sort of model what you expect, there's a pretty good expectation that this could be very effective in patients with mixed hyperlipidemia and patients whose severe hypertriglyceridemia kind of stays out of the chylomicronemia range.

Sort of from that 500 to 800 or so milligrams per deciliter, that range, we think that a CVOT would have a very good chance of demonstrating substantial reduction in residual risk despite LDL being well-controlled. We would like very much to do this. This is the drug to finally answer that question in our minds. Scientifically, this would be an extremely interesting study to cardiologists. Probably not that different from how they feel about Lp(a) at this point from the standpoint of just a very, very important question to answer scientifically. We'd love to do it. It's just a function of being able to feel confident that we can properly fund it.

Chris Anzalone (CEO)

Let's also be clear that the HoFH market alone, which, of course, would not require the CVOT, we have ongoing phase 3s now. We said we're going to be fully enrolled this year, we believe, and we think those studies will be finished in 2026. Those enable addressing a market that we think makes Plozasiran a $2-$3 billion per year drug alone. So yes, we do like the idea of continuing to expand the reach of Plozasiran. But even with what we're doing right now, we think that makes Plozasiran a large drug.

Mani Foroohar (Senior Research Analyst)

I'm sorry. I just want to clarify. So what I'm taking away from this is that you've given us some updated clarity on your cash position that net of sort of contractually agreed-upon payments for debt service, but not including additional voluntary paydown of principal beyond that, you expect to have cash pro forma near the end of this year of about $1 billion. Despite that, given your existing OpEx and CapEx you expect for your platform, you still need more capital to be able to feel comfortable moving forward into the CVOT. Is that a correct interpretation of what you just said?

Chris Anzalone (CEO)

That is a correct interpretation of what I said. Because again, remember that we've got other stuff going on that we think are going to drive value as well, and obesity and the CNS and the existing FHCG studies alone. So yes, those will absorb capital as well. That's why we would need additional capital to come in in order to start a CVOT. Okay. Thank you for clarifying that.

Mani Foroohar (Senior Research Analyst)

That was really helpful. Okay. Yep.

Operator (participant)

Thank you. One moment for the next question. And our next question will come from the line of Brendan Smith of TD Cowen. Your line is open.

Brendan Smith (Director of Life Science & Diagnostic Tools and Biotech Analyst)

Hi. Great. Thanks. Thanks for taking the questions. Actually, just a really quick one on Zodasiran. I know you referenced the phase 3 in HOFH that's going to start next quarter. But given the development cost synergies that you mentioned with Plozasiran and kind of the taking a look at the whole balance sheet and everything within the cardiometabolic pipeline, I'm just wondering if you have any plans to potentially pursue heterozygous FH with Zodasiran, maybe if it works in HOFH or potentially simultaneously. I'm guessing not that, though. Or have you kind of just decided to put the idea to bed at HOFH and just kind of pursue any other indications with other drugs? Thanks.

Bruce Given (Interim Chief Medical Scientist)

Yeah. So I mean, we've looked at that very carefully.

And we actually think that if you take the patients that receive appropriate doses of statins and you add on to that PCSK9 inhibition, there is a persistent unmet medical need in patients that cannot get to goal inside of that HEFH market. Unfortunately, there's no regulatory pathway to actually get at those patients other than just trying to do the full development program for HEFH, frankly, probably to include a commitment for a CVOT. And we simply don't think in that case the juice is worth the squeeze. If there were a way to do a tailored program that focused on where the unmet medical need still is after PCSK9 addition to statins, that would be worth going after. But we've explored that, and there does not appear to be a regulatory path to do that. So the answer is no. We're not looking at HEFH for that reason.

Brendan Smith (Director of Life Science & Diagnostic Tools and Biotech Analyst)

Gotcha. Okay. Thanks very much, guys.

Operator (participant)

Thank you. One moment for the next question. Our next question is coming from the line of Jason Gerberry of Bank of America. Your line is open.

Jason Gerberry (Managing Director and Equity Research Analyst)

Hey, guys. Thanks for squeezing me in. For me, I'm just kind of curious how you guys are thinking about this two to three-year window where you launch Plozasiran for FCS. And if you think that's enough time for revenues to be meaningful and as you think about the challenge really of taking this largely undiagnosed patient group and getting them into what sounds like, if you talk to clinicians who are already prescribing Tryngolza, a small number of specialist centers to prescribe the script, or if you look at it more as sort of an educational launch, and it's really all about FCS. Just kind of curious to get your perspective there.

Andy Davis (SVP and Head of Global Cardiometabolic Franchise)

Yeah. Thanks, Jason. This is Andy. So as I mentioned in my remarks, we're incredibly enthusiastic about Plozasiran, specifically for FCS patients. We do think there is a community of FCS patients who for a long time have not had great options for them with respect to pharmacotherapy. And so Plozasiran being available, we think will truly be a game changer for many of these FCS patients. That's what they've told us. And so we do believe in the return on investment over the next two to three years for Plozasiran and FCS specifically. And we're heavily focused on bringing those patients a treatment option that didn't exist previously.

I would just say, as it relates to any future markets, there is a high degree of overlap, as you would know, between those physicians that will be interested in treating for SHTG versus those that will be focused on patients who have familial chylomicronemia syndrome. So any medical and commercial-related activities conducted over the next two to three years focused on FCS, no doubt there'll be an overlap of those physicians that will be interested in understanding that therapy for patients who have SHTG as well.

Jason Gerberry (Managing Director and Equity Research Analyst)

Got it. Thanks.

Operator (participant)

Thank you. And that does conclude today's Q&A session. I would like to go ahead and turn the call back over to Chris for closing remarks. Please go ahead.

Chris Anzalone (CEO)

Thanks, everyone, for joining us today. And we look forward to seeing you next quarter.

Operator (participant)

This does conclude today's conference call. Thank you for joining. You may now disconnect.