ARROWHEAD PHARMACEUTICALS, INC. (ARWR) Q2 2025 Earnings Summary

Executive Summary

• Q2 FY25 revenue surged to $542.7M, driven by upfront and related recognition from the Sarepta deal, yielding GAAP diluted EPS of $2.75; prior-year quarter had no revenue and a $1.02 loss per diluted share . Management reiterated funding runway into 2028 and advanced toward plozasiran’s first commercial launch pending approval .
• Regulatory momentum: FDA accepted the plozasiran NDA with a PDUFA date of November 18, 2025, and no advisory committee currently planned, positioning FCS as the initial launch indication; EU MAA validated and ex-U.S. plans progressing .
• Pipeline and clinical execution: SHTG Phase 3 (SHASTA-3/-4) last patient enrollment now anticipated “this summer,” enabling sNDA timing clarity by late summer; SHASTA-5 outcomes study underway to support payer discussions, especially in Europe .
• Commercial readiness building: U.S. commercial team hiring on track for a late-summer fully trained sales force; payer pre-approval exchanges indicate interest given triglyceride and pancreatitis risk reduction profile .
• Potential stock catalysts: plozasiran label dynamics on pancreatitis and triglyceride targets, SHTG Phase 3 enrollment completion, obesity programs’ initial clinical readouts by YE25, and potential near-term Sarepta milestones ($300M) .

What Went Well and What Went Wrong

• What Went Well

  • Massive revenue inflection from the Sarepta licensing and equity deal ($542.7M recognized; fixed contract revenue to be recognized over time thereafter), driving Q2 profitability and bolstering cash/investments to $1.10B .
  • Regulatory and clinical progress for plozasiran: FDA acceptance with 11/18/25 PDUFA, no AdCom planned; robust PALISADE data with ~80% median TG reduction at 25 mg and significant acute pancreatitis risk reduction .
  • Commercial buildout and payer engagement advancing; management cites strong resonance for deep, durable TG reduction and pancreatitis risk signals, with quarterly dosing convenience .

• What Went Wrong

  • Revenue quality is non-recurring: Q2 revenue was primarily deal-related accounting recognition, not product sales; future recognition will be lumpy and tied to performance obligations and milestones ($90–$125M expected over next 12 months from fixed contract revenue recognition) .
  • Operating expenses remain elevated as pipeline scales (R&D $133.1M vs. $101.1M prior year), reflecting late-stage studies and platform expansion .
  • Visibility on label differentiation for pancreatitis claims remains uncertain; management emphasized different adjudication approaches vs. competitor and noted label negotiations have not begun .

Financial Results

• Income statement (GAAP) – comparison vs prior year and prior quarter

Notes:

• Q2 FY25 revenue and profitability reflect accounting for the Sarepta agreement (allocation of upfront, equity premium, and multi-year payments to licenses and obligations). Management expects $90–$125M of the fixed contract revenue to be recognized over the next 12 months, with remaining fixed consideration recognized over ~5 years, front-half weighted; additional near-term milestones of $300M could be recognized if achieved .

• No S&P Global consensus estimates were available in our dataset for ARWR this quarter; therefore, a beat/miss determination vs. Street cannot be provided. Values would otherwise be sourced from S&P Global if available.

• Balance sheet and cash flow KPIs

Segment breakdown: Not applicable; ARWR does not report operating segments. Q2 FY25 revenue primarily reflects collaboration/licensing accounting related to Sarepta .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We are on schedule to launch plozasiran this year, pending regulatory approval, with what we think is a best-in-class profile… We are funded into 2028” — CEO Christopher Anzalone .
• “We recognized revenue of $542.7 million during the quarter... We expect $90–$125 million of revenue to be recognized over the next 12 months (fixed contract revenue)” — CFO Ken Myszkowski .
• “PALISADE… showed reductions in triglycerides of about 80% from baseline… 75% and 50% of patients went below 880 and 500 mg/dL, respectively” — CEO .
• “Last patient [SHTG Phase 3] to enroll sometime this summer… SHASTA-5 to assess ability to reduce risk of acute pancreatitis in high-risk SHTG patients” — Executive remarks .
• “No advisory committee meeting anticipated at this time” — Regulatory update .

Q&A Highlights

• Pancreatitis and label differentiation: Company used definite pancreatitis (ATLANTA/AtLAA criteria) vs. competitor’s broader possible/probable definitions; label negotiations not yet started, outcome uncertain .
• SHTG outcomes and payer evidence: SHASTA-5 is purpose-built to address payer needs (esp. Europe) and is not required for the initial SHTG filing; pancreatitis events will be adjudicated in Phase 3 as well .
• Commercialization strategy ex-U.S.: Priority on large EU markets and UK via centers of excellence; open to partnerships outside the U.S. .
• Obesity programs strategy: Advance both ARO-INHBE (hepatocyte/GalNAc) and ARO-ALK7 (adipocyte/novel platform) through Phase 1/2, then select a lead; explore combo with tirzepatide; initial data YE25 .
• Financial policy: Credit facility paydown tied to milestone cash inflows; runway guidance includes near-term Sarepta milestones; specifics not disclosed .

Estimates Context

• S&P Global consensus estimates for Q2 FY25 EPS and revenue were unavailable in our dataset, so we cannot quantify beat/miss vs. Street. Management results are GAAP and primarily reflect license/collaboration revenue recognition under the Sarepta agreement . If you want, we can refresh S&P Global estimates and add a beat/miss table once available.

Key Takeaways for Investors

• The quarter’s profitability was deal-driven, not from recurring product revenue; expect future recognition to moderate and be tied to progress and milestones ($90–$125M fixed revenue recognition in the next 12 months; potential $300M near-term milestones) .
• Regulatory path is clear for FCS with a defined PDUFA (11/18/25) and no AdCom planned, while SHTG Phase 3 enrollment completion this summer sets up sNDA timing clarity — both are key stock catalysts .
• Plozasiran’s clinical profile (deep TG reduction, pancreatitis risk reduction, quarterly dosing) underpins payer and prescriber interest; watch for label specifics around pancreatitis and TG thresholds .
• Commercial readiness is advancing on schedule (full sales force by late summer), positioning ARWR for rapid execution upon approval .
• Broader pipeline creates multiple shots on goal: obesity programs with potential YE25 data, CNS entries targeting MAPT (late 2025) and HTT/SNCA following, and Zodasiran for HoFH entering Phase 3, leveraging shared cardiometabolic infrastructure .
• Financing risk is reduced: over $1.09B in cash and investments, runway into 2028, and flexibility to manage credit facility with milestone receipts .
• Near-term trade: regulatory and enrollment milestones (FCS label contours, SHTG last patient in), and possible Sarepta milestones could drive volatility; medium-term thesis: multiple late-stage shots, differentiated RNAi platforms across hepatocyte, adipose, muscle, and CNS.

Sources:

• Q2 FY25 8-K (Item 2.02) and press release with detailed financials .
• Q2 FY25 earnings call transcript (prepared remarks and Q&A) .
• Q2 FY25 press release (duplicate content to 8-K exhibit) .
• Q1 FY25 press release (prior quarter results) ; FCS NDA acceptance update .
• NDA acceptance press release (PDUFA and no AdCom) .
• FY2024 year-end press release (context and runway extension) .