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    Arrowhead Pharmaceuticals Inc (ARWR)

    Q2 2024 Earnings Summary

    Reported on Apr 1, 2025 (After Market Close)
    Pre-Earnings Price$24.72Last close (May 9, 2024)
    Post-Earnings Price$25.48Open (May 10, 2024)
    Price Change
    $0.76(+3.07%)

    What went well

    • Plozasiran shows strong efficacy and safety in treating Familial Chylomicronemia Syndrome (FCS), with the company expecting positive results from the Phase III PALISADE trial. Advantages over competitors include quarterly dosing versus monthly, potential better tolerability, and the possibility of a broader label that includes both genetic and phenotypic FCS patients, expanding the market opportunity.
    • Both plozasiran and zodasiran have the potential to address a large mixed hyperlipidemia market of approximately 20 million patients in the U.S., representing a significant commercial opportunity. These drugs are viewed as major improvements over existing treatments for patients with mixed hyperlipidemia.
    • The company's pulmonary program, particularly ARO-RAGE, has demonstrated good safety, tolerability, and target engagement, prompting advancement into Phase II trials in asthma without waiting for additional data. This reflects confidence in the drug's potential efficacy and positions the company in the substantial asthma treatment market.

    What went wrong

    • The company is advancing ARO-RAGE to Phase II trials without waiting for complete Phase I data due to slow enrollment in the high FeNO asthma patient cohort, which may increase the risk of unforeseen issues in later stages and affect trial success.
    • Uncertainty about the exact size of the FCS market for plozasiran, with executives estimating patient numbers only in the thousands and lacking a clear expectation for the drug's labeling, potentially limiting its commercial opportunity.
    • Competition from Ionis Pharmaceuticals, which is ahead in developing a similar treatment (olezarsen) for FCS, may limit Arrowhead's market share in a small patient population and make it challenging to compete effectively.

    Q&A Summary

    1. PALISADE Phase III Data Expectations
      Q: What should we expect from PALISADE Phase III results?
      A: Management is optimistic about plozasiran's efficacy in reducing triglycerides for FCS patients, stating it's a "very powerful drug" targeting APOC3. They emphasize that while they have no insights yet from the 75-patient trial, they have "no reason to believe" they won't "expect a good outcome". They are "excited to see the data" soon.

    2. Competition with Ionis’ Olezarsen
      Q: How will you compete with Ionis’ drug?
      A: They believe plozasiran may have advantages over Ionis' olezarsen, including quarterly dosing versus monthly dosing. They hope their drug will be "more powerful and better tolerated" if the data holds as seen previously.

    3. Label Expectations and Commercial Opportunity
      Q: What are your expectations for the drug's label?
      A: Management expects the label to reflect the patient population studied, which includes both genetic and phenotypic FCS patients. This broader label could differentiate them from competitors. A significant history of pancreatitis in patients may support the label's scope.

    4. ARO-RAGE Phase II Plans
      Q: What's the plan for the ARO-RAGE Phase II trial?
      A: Due to good safety, tolerability, and target engagement data, they are moving forward with a Phase II asthma study. They are waiting for regulatory feedback on the design but aim to start in the fourth quarter.

    5. Partnerships and Licensing Updates
      Q: Any updates on partnerships or licensing?
      A: They are in ongoing discussions but have no specific updates. Partnering is important to their business, and they expect to execute additional transactions.

    6. SHASTA-3 and SHASTA-4 Trial Enrollment
      Q: Can you explain the sample sizes for SHASTA-3 and -4?
      A: The different sizes—405 for SHASTA-3 and 300 for SHASTA-4—are due to practical considerations to meet regulatory requirements for efficacy and safety databases. Both studies are "overpowered for efficacy" based on previous results.

    7. Placebo Effect in SHASTA-2
      Q: How will you address the placebo effect seen in SHASTA-2?
      A: Management notes that placebo groups can behave unpredictably in trials. Despite efforts to minimize changes, it's "always difficult to really manage" placebo variability.

    8. Potential of Plozasiran and Zodasiran
      Q: How do you see plozasiran and zodasiran targeting patient populations?
      A: They view lipid disorders as a spectrum; plozasiran targets high triglycerides, while zodasiran affects LDL cholesterol. Both drugs could significantly improve treatments for patients with mixed hyperlipidemia, a population of about 20 million in the U.S..

    9. FeNO Data and ARO-RAGE
      Q: When will we see FeNO data for ARO-RAGE?
      A: Enrollment in high FeNO cohorts has been slow due to strict criteria, but they are proceeding to Phase II without waiting. They plan to start the Phase II trial in the fourth quarter.

    10. Complement Programs and ARO-CFB
      Q: What's the status of the complement programs like ARO-CFB?
      A: ARO-CFB just started dosing; it's focusing on reducing complement factor B to treat kidney diseases. Initial data may be available by year-end. They see dosing convenience as a significant advantage over other therapies.

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