Here with our next company presenter at the BofA Annual Healthcare Conference. My name is Jason Gerberry. I'm one of the mid-cap biotech analysts, and pleased to be introducing Arrowhead and CEO, Chris Anzalone. So Chris, you know, thanks so much for joining us, and you had a lot of interesting updates on the recent Q. I guess most notably, I guess, some of the dynamics with sort of pulmonary enrollments, but you know, some of the catalyst timelines are still intact. You've got important phase III data for your FCS program, so that's clearly gonna be topical. So I think those are a couple of topics, you know, hopefully we can really drill in on. Yes, great. So, so thanks for having us. Yeah, we have a busy year this year. There's an awful lot going on. As you point out, the FCS data should be coming out soon. The last patient, last visit was a week or two ago, and so the database should be locked over the next week or so, I guess. And so we expect data in June. We have a cardiometabolic webinar day towards the end of June, where we'll be talking about both Zodasiran and Plozasiran. And included in that, we'll be talking about the FCS data, so we're looking to see that. Yeah. All right, before we jump into, like, specific programs, and you had some strategy updates in the quarter prior, right? And then so some management hires within sort of key verticals. Can you maybe just talk about where you are process-wise with with sort of rounding out the the leadership team? Sure. Yeah, so you know, historically, we have had the luxury of being able to do everything. You know, we have a platform that can be usable across multiple therapeutic areas, across multiple cell types now. And so, you know, these early-stage programs can be cheap, and because we are going after well-validated targets, we don't require, you know, deep biological expertise in these areas in the early stages. And so that was great. We've done a lot of that. We will continue to do that. But as we start to get into these later-stage assets- Mm-hmm. We need to really build out our infrastructure and our capabilities in certain therapeutic areas. We need to allocate more capital to these large and potentially complicated studies. And so we are having to, you know, to apply a bit more focus, you know, onto our business. And so the way we look at this is, as you mentioned, as is a series of verticals. Cardiometabolic vertical is our bread and butter. You know, that is our clear focus in the near to mid to long term, because we, you know, we think we have right now two assets, shortly, more assets. We can talk about obesity in a bit, but we'll have two obesity assets in the clinic by the end of the year. I think that's important. That's all part of cardiometabolic. Yeah. You know, that will, that will drive a ton of value, we think, over, over the coming years in a very regular basis. You know, I think I mentioned on the conference call, between Plozasiran and Zodasiran, I think that almost every year, starting next year, we will have, we will have, or starting this year, I guess, we'll have NDAs or supplements to expand labels- Yeah almost every year for the next six years. And that's just in those two assets. Then you layer obesity on top of that, and I think there's more. In any event, so we know we need to make sure that we are properly resourcing cardiometabolic. We look at other verticals. Pulmonary is an important one. Skeletal muscle, of course, complement. You know, these are all good verticals, and I think that we will be partnering within these other verticals, you know, in some fashion, in order to make sure that we can properly resource cardiometabolic. We're building out commercial for that right now. You know, we'll be bringing in, you know, a senior person to manage the clinical functions of that. Right now, we have Bruce Given, as you know, our former COO, who retired in 2020, I guess. And we twisted his arm to come back to, you know, to get the CVOT running and the SHTG phase III is running. And then we'll have, you know, eventually somebody who will, who will manage that whole, that- Yeah ... that vertical. So I know that maybe getting some additional non-dilutive partnership financing in the door is something that you've talked about. I guess the one thing I wonder about, you know, if I look at sort of Alnylam, Ionis as parallels, right? They're similar companies that can generate, as you say, a lot of RNA-targeted therapies. You can kind of do that in a cost-efficient way, and then, you know, there's a partnership model that's clearly in place for both of those companies. You know, I guess if I... I'd say one observation is when it comes to large CVOT trials, right, partnership comes into play, where you can get a mid-teens to maybe low 20% royalty and very good economics with some good milestones. So, I guess that's the one thing that I think kind of catches investors by attention, like for a company Arrowhead's size to take on a CVOT versus sort of a cost-risk sharing approach, where you can still enjoy, you know, the economics and the upside of that opportunity, but is it a logical target to maybe engage in sort of some cost-risk sharing? Yeah, it's a great question. You know, we just think there's so much value in these, in Zodasiran and Plozasiran. And these are really unique assets that we feel like we need to protect them. You know, there's a lot of value that we should be creating based on these. And so we wanna be judicious about our partnering there. Certainly, we can do geographic partnering. You know, I like the idea of us commercializing those drugs in the United States. In the near to mid-term, I don't think we're gonna have the ability to commercialize those in broader markets, Mm ... ex-US. And so I think, you know, I think we can do, you know, good deals at some point ex-US for those two assets, and I think that would go a long way to, you know, to financing the CVOT. Yeah. Um- ... Maybe just last question, just on sort of overall kind of strategy-related matters. You have talked about maybe royalty deals, maybe taking on even debt. You know, what are some of the guardrails to think about, you know, as you guys entertain different financing mediums or approaches and what the capital structure might look like? Sure. So there's a number of levers that we are looking to pull. You know, there's not one structure that we will rely on entirely to bring in the capital we need. We just need too much capital over the next- Mm Several years. You know, we talked about partnering. I think that's, I think that is a lever or, you know, probably a series of levers that we'll be pulling, you know, between the various verticals, you know, maybe even some discovery deals over time. You know, I think that there's a lot of capital we can bring in there. Second, you mentioned these, the royalty deals. We - I like those. You know, the longer you wait to do those, the better the terms are gonna be, of course, and so, you know, I guess that's the balance. You know, when do you pull the trigger on those? But I... But, but those are - You know, there are an increasing number of firms that can do those types of deals. You know, all of our assets, all of our wholly owned assets are entirely unencumbered, right? So- Yeah ... so we're not stacking royalties on royalties. And so, you know, I like the idea of finding the right deal, you know, with reasonable royalties that will be capped at something. I think that makes sense, you know, as a lever to pull. Mm-hmm. You mentioned debt. We are approaching, you know, a stage in our company where we can think about debt. But, you know, it's got to be the right kind of debt. You know, something that does have some risk-sharing feel to it. You know, maybe a long-dated debt, something like that is something that we would consider at this point. And then... You know, so anyways, so I think we can bring in a substantial amount of capital using all of those levers, and that's really our focus right now. Okay. Maybe let's shift gears to cardiometabolic and Plozasiran for FCS as the next clinical update. You have a little bit of a twist in terms of enrollment strategy relative to Ionis, which recently read out FCS data, and that you'll have sort of the non-genotypic FCS, so basically above 880 mg/dL triglyceride levels. Maybe just some of the pushes and pulls there, you know, does that pose a risk that you may have lower or fewer pancreatitis events? I imagine you've looked at this on a blinded basis, and you've looked at the event rates that Ionis has generated. And so I guess as we think ahead to data, wondering what you can share from that perspective. So look, we look forward to seeing what those data look like. I haven't seen anything yet, of course. Mm-hmm. You mentioned bifurcating that market a little bit, in terms of genotypic FCS, and what we think of as phenotypic FCS. And so again, as you've mentioned, you know, these are patients without the common mutation, but still have triglycerides over 80 in history of pancreatitis. The way we view it is that there are patients who need this drug. There are patients who are on very restrictive diets, and have, you know, bouts of acute pancreatitis. And, you know, we sort of don't care if they have a certain mutation or not. If they, you know, if they have a certain phenotype, then we, then they need our drug. And so we study both. Our phase III was about half and half, about half genotypic, half phenotypic. My hope is that that will be expressed on the label. You know, the FDA will tell us that, but that's, you know, this is the population that we studied. Mm-hmm. I think that is a potential differentiator between us and Olezarsen, at least right now. In terms of expectations of events of pancreatitis, you know, we'll just see. You know, we know, we have seen events of pancreatitis. I have no idea, you know, how many of those are on placebo and how many of those are on active drug, of course, but we have seen events and, you know, as with the triglyceride lowering and the ApoC3 lowering, we're looking forward to seeing those data in the next month or so. Was there an FDA interaction before that study was started? And were you steered one way or another to have genotype FCS versus non? Just curious. Yeah. Yeah. Yeah, no, that's an important question. We did have interactions with the FDA, and we did talk about studying these two populations, and so we went into this study, you know, with alignment with the FDA, that these are two populations that we are studying. Mm-hmm. So, yeah. Yeah, because, I mean, to your point about label, right? And kind of like the difference between a couple thousand patients versus, like, a million, right? You got 880 SHTG. You know, well, again, so let's slice that. Within... So I think of this triglyceride market as a series of slices, right? You know, the smallest would be genetic FCS. We think there's maybe 1,000 of those, thereabouts, in the United States. And then you look at- Mm-hmm ... at patients with trigs above 880 and history of pancreatitis. So, you know, those two things, there are thousands of those. We've come at that, you know, by a number of ways to try to figure out what that number is, and it sort of runs the gamut. But I think it's fair to say that there are thousands of those. And then you go up with, you know, to the patients with trigs above 880, maybe no history of pancreatitis, maybe pancreatitis, and there's about 1 million of those. And then you go to the number of patients with trigs above 500, and there's about 3-4 million of those. Mm-hmm. Yeah, that becomes a very large market. That's, you know, that is... You know, that's the broad market that we'll be addressing. With SHASTA program. with SHASTA-3, SHASTA-4, and SHASTA-5. That's exactly right. Yeah. Okay. So, you know, we've kind of done a lot of comparisons and looking at SHASTA-2, the Ionis data. These cross-study comparisons get a little tricky... so far, They are tricky. It seems like maybe the purest way, and correct me if I'm wrong, is placebo-adjusted reduction in ApoC3, right? Like, if you're presumably knocking that down 70-80%, then and there's kind of same ballpark, I guess I wonder why. Then Then it just comes down to dosing frequency, right? And then, I guess, AE profile. Is that, like, a fair way to... I don't want to oversimplify these comparisons that, you know, the street will be making. Yeah. your data readout. Yeah. Yeah, yeah. I think ApoC3 knockdown is, you know, something that we should all look at, and dosing frequency is something we should all look at. Within the dosing frequency, you know, I would look at durability as well. So, you know, do you-- You know, for us, we expect to dose quarterly. That is infrequent enough that we don't see ApoC3 coming back, really. Mm. I think it's important to look at those curves within the dosing frequency, right? You know, so whether you're dosing once a month or once every three months, you know, are you clamping ApoC3 down? And then, of course, you know, what everyone cares about is triglycerides. You know, how much, you know, how much- Yeah. And I guess, I don't know if you buy into this, right? But if those patients with non-genotyped FCS, they have functional LPL activity, so it seems like those patients tend to see a higher percentage reduction in triglycerides. So then it kind of creates this issue of demographics between the two studies and making apple-to-apples comparison. Is that... Am I off base? I don't have a feel for whether or not the phenotypic FCS patients versus genotypic FCS patients will have a different response in terms of triglyceride lowering. I just don't know the answer to that. Okay. Um- But, you know, what's fascinating is that if you look at our phase II data, you know, my expectation is that we can get, you know, the majority of patients, you know, down below 500—I'm sorry, yeah, down below 500, and that's sort of the threshold for. Normalization. Yeah, I mean, it's still elevated, but that's that threshold for triggering pancreatitis, right? Yeah. And so the majority of patients will be below that. And in fact, I would expect some patients to normalize. Mm. You know, that's the strength of, of Evolocuzumab, I think. It's, you know, it, it leads to such, you know, drastic ApoC3 and triglyceride lowering. Yeah. Okay. Obviously, a lot of this is all something that we talk about and look at, as I guess the street and sell-side thinking about SHTG, right? Because that's obviously the bigger, more commercially relevant, you know, market segment. You know, I'm struck by your decision to run a trial like SHASTA-5 or planning to run that trial versus, you know, Ionis's looking at a pooled phase III to look at pancreatitis trend or maybe stats. It seems like when I look at... There's two studies, maybe SHASTA-2 and Waylivra was studied in SHTG, and the event rates are kind of noisy, and they're very discordant. So, I guess I get the sense that, like, we're flying a little blind in exactly what these sort of event rates are, but I guess maybe you've already made the calculated decision that going a pooled phase III, you know, you just have concerns that maybe you won't accrue enough AP events. Is that? Yes. So, we know that the approvable endpoint there is lowering triglycerides, you know, full stop. And so we want to sprint to those data so we can, you know, have that supplement and expand the label into SHTG. We would like to have acute pancreatitis events data for the payers. We don't want to slow down our ability to, you know, to get this approval while we're waiting for that, and so it made sense for us to split that out. Mm-hmm. Look, you know, in a perfect world, we get that done about the same time as we get SHASTA Two and Three done. That would be great. But if not, you know, I really—we want to sprint to getting this approved. You know, our... So we're, you know, we're really excited about these markets because, A, you know, patients have never had anything that can move triglycerides like this. And so it is... You know, you look at fish oils, you look at fibrates and such, and you may be moving triglycerides 20%-30%, maybe 35%. And that's good, it's better than nothing, but it doesn't really move the bar, you know, for some of these patients with severe hypertriglyceridemia. All of a sudden, if you can think about lowering trigs by 80%-90%, it's a real game changer. So, you know, this is a market that has needed these kinds of drugs, and we're excited to bring them there. But also, this is a medical affairs business, right? You know, you know, this sort of feels like, like sort of where we were with LDL, you know, decades ago- Yeah ... you know, before statins. You know, we need, you know, to help people understand that triglycerides are a bad actor. You know, as we do that, I think we have a really interesting opportunity because of what Evolocuzumab is able to do- Yeah and Zodasiran, frankly. You know, and if you talk to, at least in our conversations with cardiologists and endocrinologists, they're acutely aware or biased by kind of managed care in this setting. So when they'll really emphasize the importance of showing pancreatitis benefit for this class. So I wonder, what's the sweet spot from a profile standpoint? Like, is AP trend plus getting a very high proportion of patients to below 150, say, in SHTG, do you feel like that's enough to really be a game change relative to, say, fish oils and, I guess, fibrates and the other options- Yep ... that are available? Yeah, yeah. So those are important. Education is also important. We have to keep in mind that pancreatitis is probably not a binary event. I don't think it's the case that these patients feel great, and then they have, or they have pancreatitis. Mm-hmm. I think there is a spectrum there, right? And so, you know, what we need to help physicians understand and patients understand it now, I think that these patients, you know, even, you know, when they are not, you know, seeing repeated acute pancreatitis events, they don't feel good. Yeah. So our drug is intended not just to, you know, to limit pancreatitis events, but also to make them feel better, right? And to the extent that we can show that, you know, with PROs, and to educate the community on that, I think, you know, all is all important for us. Yeah. Okay, and then your recent update regarding selection of a CVOT candidate and going the direction of ANGPTL3 didn't come as a big surprise, just given sort of some of the commentary that led up to this and the importance of remnant cholesterol. When you are doing these sort of investor outreach webinars here in the coming months, what will you plan to share about some of your internal assumptions, and how you're thinking about a statistical analysis plan for a CVOT so that investors can get a degree of confidence that this can be a trial that has a high degree of success? Sure. So just to be clear, we have not said definitively that Zodasiran is the drug that we're going to interrogate, you know, in the CVOT. We haven't stated that yet. Where we are is we have a proposal, we are in discussions with regulators. And I think we should have alignment relatively quickly, and then once we have that, we can then talk about the specifics of what that study looks like. Until we have that, it doesn't make much sense to us. So my hope, my expectation is that at the cardiometabolic day, at the... Towards the end of June, we can really talk about our plans about CVOT, you know, numbers, and that sort of thing. All right, great. Looking forward to that. Maybe shifting gears in the sake of time to pulmonary. This is a program of high interest for investors and, you know, as we think about the success that you've had, others in the RNA-targeted space have tried have run into issues. It seems like sort of the maybe the key here is not the what is it? alpha-v beta-6, but more so just the ability to have stable and potent potency, given that what we've learned early on is that overloading animal lungs can just be a showstopper, right? Yes ... for further advancement. So as we think about the secret sauce and what you guys have stumbled upon versus, you know, obviously, the obvious question would be, you may have unlocked the key to a lot of druggable, undruggable targets, and we're in a copycat league, so to speak. So, I'm wondering kind of what are barriers to entry for the competitive field? Yeah, so look, it's taken us a long time to get where we are in pulmonary. It's taken us, you know, years of focus in pulmonary, but also, you know, even more years of focus, developing strategies to optimize potency, you know, in these RNAi triggers, that you just can't, you just can't duplicate overnight. And so, you know, it feels to us like we are, like we'll be alone in pulmonary for some time. Now, science is a great thing and people will, you know, will bring other oligos into the clinic against pulmonary diseases. But we think we have a substantial head start there. You know, as you point out, potency is key here. You know, delivery is obviously, you know, part of that, but potency is key. You know, our first program, ARO-ENaC, we decided to terminate because we weren't as potent as I thought we needed to be. We had a NOAEL in the chronic tox, but it didn't give us enough leeway, I didn't think, to move forward. Now you look at ARO-RAGE, for instance, and we're using substantially less amount of drug there. For ARO-ENaC, we were dosing every day for three days, every two weeks. Mm-hmm. versus ARO-RAGE, I expect the phase II will be dosing every two months. And we're using lower doses on top of that. So I think we have cracked it, at least as it relates to RAGE, and then we'll see where we are with MMP7, and we'll see where we are with MUC5AC. But as you say, you know, we were interested in pulmonary because we think there's an awful lot of well-validated, undruggable targets- Mm-hmm ... that we can go after. Okay. And then on RAGE, the update, I guess there's an enrollment dynamic, but probably the more interesting thing was the comment about going directly to phase II before you have the high FeNO data. And I guess I thought the high FeNO data, and correct me if I'm wrong, was really going to serve as proof of mechanism in a way, right? Because the question that we hear a lot from KLs is like, all right, is RAGE ultimately this upstream master regulator, like Tezspire or the TSLP blockers, or is it a consequence of the disease? And so, yeah, if you knock it out, are you gonna have this biological effect? And the FeNO data, I thought, was gonna really tie all that together with the safety, with the target knockdown data. So I guess, is it just a decision that, hey, we're gonna start this trial? Maybe it's not too costly to start it up and then backfill with proof of mechanism or? Yeah, you're right. So, we always viewed the FeNO data as a nice to have, not a need to have. You know, the way we think RAGE works and what we found in animal models is that it is a broad anti-inflammatory, right? You know, it's tickling a number of pathways. IL-13 is one of those, but it's only one of them. And so, if, you know, we surmise, if the FeNO data look really good, that's interesting. If they don't look so good, it doesn't necessarily mean that we're not gonna have, you know, anti-inflammatory effects, right? Because, again, we're not only addressing IL-13. Now, in animal models, we crushed IL-13. But that's one of several pathways. Yeah. And so it was, you know, it was never intended to be a gating study. You know, we'll continue with that. You know, we look forward to having those data. As you mentioned, it's a bit slower than we expected. That's too bad, but we wanted to make sure that people understand that we believe in this drug, and so we're not slowing the program down- Mm-hmm ... just because that has not enrolled quite as quickly as we, as we anticipated. We have a phase II study designed. We'll be interacting with regulators, and we expect that to start in the fourth quarter. Yeah. As we just—you know—look to, I think you're using at the 35 ppb as a cutoff, right, for- That's right. Enrollment on the FeNO baseline measure, which is similar to what a lot of biologics have used. I don't know, I never looked at enrollment timelines for these biologics. Do you feel like you're in kind of a tight just kind of maybe it's a push, maybe it's a six-month push sort of thing, but? Yeah, yeah, yeah. I don't know. You know, we haven't given a more granular guidance on when we think that's going to be finished, just because it's a little bit too early to tell. Yeah. You know, you know, the way these things go, as you know, is, is, you know, studies enroll, start to enroll slowly, and then they, and then they, they start to ramp up. We haven't, we haven't seen that ramp-up phase yet. I'm hopeful that we'll, that we will get there soon, but we haven't seen it yet. And the reason is, I think, you know, A, we are, we are seeing fewer, fewer patients than we expected come in the door. You know, we are now looking at, at moderate to severe asthmatics rather than mild to moderate asthmatics. We expected, we expected, you know, a slightly larger number than we're getting in. And I think some of that has to do with competition, you know, with other... with phase IIs and a number of phase III studies as well, you know, that will have the good promise of some therapeutic benefit. So that's been a little bit smaller than expected. And then we've got these, you know, screen fails because we are - because the cutoff there is 35, as you mentioned. So it's not, you know, look, it's not catastrophic, it's just a little bit slow. Yeah. So if I could summarize, I guess you feel good about target knockdown, and you feel like that the animal data are very supportive of proof of mechanism for you, and that's sort of gives you the confidence to go to a, to a phase II there in asthma? Yes. Got it. Okay. Ultimately, for target knockdown, I guess one of the questions that we get from investors sometimes is, like, how do you measure it the best way? And I think you guys have said in the past that BALF might be the best measure to most accurately, but maybe it's also the totality of the different measurements and some concordance there. And then can you just remind us too, like, we're getting some data at ATS, but I don't think it's gonna be the high dose and the dose match and the asthmatic cohorts to the healthy volunteers to be able to, like, make sure that that approximates. Yeah, yeah. So I think the BALF is the best. But in circulating levels, you know, were pretty good. You know, we had several cohorts where we had data, we had both sets of data, and they matched pretty well. BALF would be higher, as you would expect, because there are extrapulmonary sources of RAGE. Yeah. But I think that the circulating levels is a pretty good proxy. Okay. As we think about the opportunity set for RAGE, it seems like the most logical is high FeNO T2-type asthma. It was one population with the TSLPs. Perhaps there are certain COPD subpopulations that maybe make sense. So how would you sort of rank order, like maybe the clinical applications where you see this having utility? Theoretically, you know, this should work across asthmatics, right? We'll see if that bears out. But at least, you know, at least what we think we know about these pathways, it should work for, you know, it should work across the board in asthmatics. And I do agree that, you know, this could also play a role in COPD. That's a little bit more complicated, but we will interrogate that as well. So remind me, with the non-T2s, I believe the biologics did not show clinical utility there, so why would RAGE, you know- Yeah, just where RAGE is on the inflammatory pathway, you know, we think it's proximal, and so at least theoretically, it should work with them. Okay. And then, you know, how important are the MMP and MUC5AC? As if I think about, you know, I guess MMP7, it's just target risk, right? You know, we know in IPF, there's so many different hypothesized, you know, drivers of disease, and we've seen a lot of attrition from a development standpoint. So, in the end, you know, is that really more of a phase II proof of concept becomes the big hurdle, right, to getting a high degree of confidence in an indication like that, versus maybe as MUC5AC have more early, you know, downstream de-risking? Yeah, yeah, that's a good question. I think that I think you're probably right there. So, the way I think of these two is MMP7, of course, it has target risk. You know, any experimental candidate against IPF is gonna have target risk. But we like the data. We, you know, we like that target. And that's a market that we could address ourselves. We, you know, that's a very interesting place to play. And, you know, IPF patients just don't have much right now, and so we are really excited to see what knockdown looks like in patients. We're dosing patients as we speak. And so my hope is that we can see that more- Yeah ... towards the end of the year. MUC5AC is from my perspective a little bit, you know, high risk, high reward. You know, it's if we can knock that down, that should be really interesting for asthma COPD. Yeah. It's difficult to measure, but if we can see knockdown, that's a really interesting target. Just on MMP7, I guess like asthma, you know, you had a functional measure like FEV1, super noisy with small data sets. Yeah. Right? In IPF, we've seen like, you know, companies look at FVC, super noisy early stage with small data sets, and- Yeah ... just I would think it'd be appropriate to caution investors on overinterpreting that and focus just on target knockdown. For right now, absolutely. We, we only focus on target knockdown. You know, we're not, we're not treating patients long enough to see any therapeutic benefit. We're only looking at target knockdown. Yeah, all right. And then we'll go into phase II, and hopefully we can design that in such a way where we can have some idea of therapeutic effect. All right, great. We're out of time.