We're going to get going here with our next company presenter at the B of A Annual Healthcare Conference. Pleased to be introducing Arrowhead Pharmaceuticals and Chris Anzalone, Chief Executive Officer. Chris, thanks for joining us. Thank you for having us. It's great to be here. I did not introduce myself, but Jason Gerberry, I am one of the mid-cap biotech analysts. Arrowhead, maybe we can maybe start, you know, with overall, I guess the Sarepta deal to start the year was a pretty big deal, right, in terms of shoring up your access to capital at a time when in biotech that is really weighing on a lot of companies in the space. Maybe how strategically that changes the focus for the company and the prioritization strategy for you, and then we will get into more specific questions. Sure. Look, it dramatically changes our outlook or our plan strategically, right? You know, we had before the Sarepta deal, we had an extraordinarily large pipeline. We still have a large pipeline, but we had a very large pipeline. You know, we could imagine focusing in certain areas, but we needed to see what kind of deal we could get done. There are several ways we could go. Look, the core assets to the Sarepta deal are the two muscle assets, ARO-DM1, ARO-DUX4. We love those assets. We could have seen developing a commercial infrastructure around that. You know, at the end of the day, there was a good deal to be had that included those, and it made sense for us to do that. Also, Sarepta was the right company to have those assets. Look, I think we could do anything. I think Arrowhead's really good at stuff, but they've shown that they are extremely good in that area, you know, getting drugs approved quickly and bringing those to patients who need them. It was a great combination. Look, this was one of those funny deals where I would have been happy to take both sides of that. It was transformational for us because it made us independent of the capital markets for some period of time, at least at a time when that's a real benefit. It put some very good assets in the hands of some very good people that can bring those to patients. From our perspective, it was great. From their perspective, you know, they got a very large pipeline overnight that is composed of drugs that I think are largely going to work. Good for all of us. Yeah. There is a lot of focus in cardiometabolic in terms of the efforts you have, both with your ApoC-III targeting approach as well as the obesity work that you have ongoing. You still have, you know, it seems like wanting to address new modalities, new tissue types. How should we think about, you know, if things emerge, you know, be it on the pulmonary side or be it on the neuromuscular side that are encompassed within the Sarepta partnership or adipose, right? Like how could that, imagine you are somewhat nimble, right, still as it pertains to going in different directions? Oh, sure. Yeah. Look, so you know, we are, as you say, we've got a real presence in cardiometabolic with plozasiran, you know, ApoC-III inhibitor, with zodasiran, ANGPTL3 inhibitor, with our obesity play. First ones being ARO-INHBE against INHBE or Activin E, and ARO-ALK7 against ALK7, the receptor, the adipose receptor. We have a good presence there, certainly, and we'll grow there. You know, our now ability to address adipocytes is a big thing for us. And we see a ton of really important metabolic targets within adipocytes. And you'll start to see those in the clinic next year. And so, you know, our presence in obesity with these two assets is not the last you're going to see. You'll see more next year and beyond. We are clearly building that out. As you say, we've got the ability to address the long muscle, cardiomyocytes, CNS, you know, hepatocytes, of course, adipocytes, of course. We'll continue those development programs. You know, things are not very expensive, taking them for us, at least, taking them from idea to, you know, to end of phase one. Given our modality, I think you've got a pretty good idea if the drug's going to work by the end of phase one. We'll continue to do those. I would anticipate that you'll see us getting into other areas going forward, certainly. Okay. So you have an action date for plozasiran in FCS coming up in November. I think most of the street, you know, even your competitors would frame this as like a proof point that, you know, or a run-in into the SHTG opportunity, which will ultimately dwarf the epidemiology and change the pricing paradigm. Nonetheless, you know, it's a proving ground for companies like yourself that, hey, we can go out, we can launch a drug, we can kind of develop a lead-in opportunity to SHTG. Is that the right way to think about FCS in terms of what it offers? Or do you actually think that, hey, maybe there are certain geographies where this could be still a meaningful carve-out opportunity, or it's really all about SHTG? Look, I think the way you describe it is exactly the way I think about that. FCS is an important market. There are a number of patients that do not have options right now. You know, this is important to them. From a business standpoint, it is important to us to get into market, to start working with physicians, to start working with payers, to familiarize them with this drug. You know, we are essentially building a market here. You know, there has never really been a good way to lower triglycerides. Now, you know, given our FCS, you know, phase three data, you know, we showed that we can lower triglycerides by about 80% from baseline. That is shocking, shockingly good, right? While many people, you know, will see a lipid panel and they'll look at their LDL cholesterol levels and they'll focus on that, almost nobody looks at their triglyceride levels, including physicians. We think that's going to change. Both, you know, Ionis and Arrowhead, I think will be bringing that education to the marketplace, to patients, to physicians, to payers. Anyway, it's a long way of saying that yes, FCS is very important, but it is a gateway to SHTG, which we think, you know, there are three to four million people in the U.S. alone with triglycerides above 500. We think that is, that's an alarming number for many of those patients. FCS is a good way, you know, for us to hit the ground running once we, if we're lucky enough to get approved in SHTG. Do you think the physician overlap's pretty high with FCS and SHTG? I think it is pretty high. You know, we will be addressing cardiologists, lipid clinics, endocrinologists, and the like. We think that those are the physicians we'll be initially addressing with SHTG. Look, ultimately, as we think, as I think that market grows, it will eventually, you know, filter down to primary care. We are a long way from that. It is a really intriguing value proposition that there's this fairly large patient population, three to four million people that have been, you know, somewhere between unserved and underserved. It requires a relatively small commercial presence to address, you know, those physicians. It is attractive to us. Yeah. How do you feel, you know, Ionis is out there with olezarsen in FCS and sort of as we kind of think about this lead-in opportunity competitively, how the agents stack up and areas where maybe you think you could be differentiated? Sure. First, let me say that I think it's a good thing for patients and, frankly, a good thing for both companies that we are both addressing this market because, as I mentioned, this is largely an education market. You know, our Medifairs team is out talking to folks. I assume their Medifairs folks are doing that as well. Two companies do that better than one company. That's a good thing for us. At least from Arrowhead's standpoint, from my perspective, it's a really intriguing opportunity because we have two companies, but we have what I think is a relatively, you know, clear advantage over plozasiran. You know, if you look at the FCS phase three data. These are two separate studies, and it's always difficult to compare compounds over two separate studies. What they showed was about a 30% reduction of triglycerides from baseline in their phase three study. We showed about an 80% reduction from baseline. That's helpful. You know, we dose once a quarter, they dose once a month. That's helpful. I think there are clear, you know, places that we can differentiate. I think ultimately the biology here is clear. You know, the lower you can bring triglycerides for this patient population, for SHTG, for FCS, the lower you can bring triglycerides, the lower your risk of pancreatitis. That's what we're going after here, both Ionis and us. We like our value proposition that we can lower substantially. Yeah. I guess as we think about the larger SHTG opportunity, you offered some incremental details, initial thinking about SHASTA-5, right? Highlighting the importance of pancreatitis specifically with OUS markets. I guess the question that I have is, if you run SHASTA-5 and if you do end up with patients with trigs that are 2,000 milligrams or above that have had an AP event in the last year or so, right? Those would be some of the core kind of attributes of who you would enroll. Is there a risk that then payers maybe restrict you to that type of patient and that patient has a profile that may be more narrow than the broader SHTG market opportunity, which is pretty expansive? Yeah, it's a good question. I hope not. I don't think so. You know, we are in our two phase three, well, three phase three studies, I guess, to support, you know, an sNDA, an SHTG. You know, we are addressing patients from 500 and up. And so it'll be a broad swath of patients. Look, we will be looking for abdominal pain. We've been looking for pancreatitis. It could be that we can combine those and see, you know, an improvement in pancreatitis risk just with those. We thought this was belt and suspenders, though, to do the SHASTA-5 study where we are looking at these high-risk folks. There will be some patients with triglycerides above 2,000, but you know, many of them will be, you know, above 880, you know, 880-2,000 or so. It is not only going to be above 2,000. We think that we have a good chance of showing an improvement there. As you alluded, this is important to us, we think, for payers, but not for regulators. You know, the approval endpoint here for SHTG is simply lowering triglycerides. We will do that in spades. We are vastly overpowered, you know, in SHASTA-3, SHASTA-4, and MUIR.. Was it MUIR-2 or 3? To show that. I think we can get approved, you know, not only in the U.S., but in Europe and other geographies. We think, though, that showing, you know, a real difference in pancreatitis risk is going to be important for some payers, primarily in Europe, but we think it could be helpful in the U.S. I view those to be companion studies, not, you know, I do not think that payers will look only at SHASTA-5. Yeah. As you've somewhat articulated, SHASTA-5, is that a trial that will be challenging to enroll because, you know, the event rates are lower? Or is it that, hey, that's a very enriched population, we can do it in a small n, and thus it's not going to be this trial that takes multiple years to enroll? Yeah, look, we'll see. You know, we haven't started enrolling that yet. We'll start enrolling shortly. It's an event-driven study. I don't know how long it's going to take. It is, you know, this is not enrolling an ultra orphan. You know, there are a lot of these patients around. Yes, it's going to be harder to enroll than just finding, you know, a run-of-the-mill above, you know, 500 patients, sure. Yeah. Your competitor has the view that if they pull data from their phase three studies, if they could show a numerical trend, right, reduction in pancreatitis events, that that should be sufficient. If you see a drug that, you know, you think you can have a more profound impact on lowering trigs, able to do that, maybe do you share the view that that sort of data set might be enough to move markets to change prescribing patterns? Why even run SHASTA-5 in that scenario? It is more gravy than anything. Yeah, it's a good question. Look, I have heard that they believe they can show that. And I hope they do. I think that would be a great thing. If they do, it does not change our opinion that having SHASTA-5 is still a real help in its belt and spenders. You know, as I said, it could be that we see it, that we'll see a difference, you know, just with our other phase threes. But just to make sure, I think it makes sense for us to, you know, to study it separately. Yeah. Okay. I guess lastly, just from a timing perspective with SHTG, I imagine that looks and feels similar to other phase three trials in the space in terms of start to data and how long that'll take you to have a potential data submission. It seems like it's a pretty de-risked study, with the primary endpoint being triglyceride lowering. As you said, you're significantly overpowered. I think from our feedback with investors, it's less about trig lowering, right? Or I guess like the risk of not showing trig lowering, it's more, you know, will these data sets, you know, show pancreatitis benefit and. Yeah, yeah, yeah. You know, we have enough excitement in our industry that we can afford to have a bit less excitement. That is where we are here. You know, phase three studies are generally these binary events in companies like ours that are great or awful. Here, we do not really have that tension because this drug works, right? You know, in the FCS phase three, we lowered triglycerides in 100% of patients. There were no non-responders. I agree. I think people, there is general acceptance that that is going to be a positive outcome. Yeah, and then we will see how SHASTA-5 turns out. Now, with respect to timing, you know, we have just recently guided in our most recent conference call that we have been enrolling well in those studies and we should be fully enrolled this summer. It is a year-long study to primary endpoint. Take that out to, you know, to last patient, you know, done sometime in the summer of 2026. We'll move as quickly as we can to, you know, to lock the database and then to get that sNDA filed. My expectation is that we will be launching in SHTG in 2027. That is an important point, you know, because we have a number, I do not want to skip around here too much, but just quickly here, we have a number of launches that will be happening around that time. You know, I think SHTG around 2027, we have this drug against AAT liver disease partnered with Takeda that I think, you know, could be launching in the 2027-2028 timeframe as well. plozasiran with Amgen could be launching around the same time. That is a really important, you know, node for us. From a financing standpoint, we always wanted to, you know, we were looking for a bridge to get there. We have, you know, we've guided that we've got enough cash to get us into 2028. We kind of got that, you know, that covered until all those things happened around the 2027 timeframe. Yeah. So how does the CVOT plan play into the 2028 timing consideration? I imagine it's sort of dependent on some other things breaking for you as a company. Think about that 2028 turnover rate is exclusive of a CVOT in it. Yes, yes, yes, that's right. The CVOT question is a really good question. Now, you know, we and our advisors are pretty convinced that lowering triglycerides, at least for a certain patient population, is an important thing to lower cardiovascular risk. There's an awful lot of data suggesting that. We think plozasiran could be a really important drug, you know, for this, you know, broad mixed hyperlipidemia market, you know, that could be 20 or so million people in the United States. It is a real opportunity for us, it is a real opportunity for those patients. Full stop there. The question now is, how do we take advantage of that? There are a couple of gating items. Gate number one is, I'm not going to start that until we have, you know, we have clarity on more capital. Because that's a, you know, a cardiovascular outcomes trial is an expensive thing. You know, that's probably in the $600 million-$700 million range. We are not starting it right now. There are a number of ways that we can bring in capital to fund that. You know, certainly more business development, maybe doing some deals, ex-U.S. for plozasiran, et cetera. There are ways we can do that. Once we have better clarity on how we're going to pay for that, then we can think about starting it. The next gate then is, what agent do we use, right? The good news about plozasiran is it works well and we are ready to start a CVOT whenever we want. That's good. It could be that we choose that it makes more sense to keep plozasiran as a focused SHTG drug, you know, with all the pricing implications of that. You know, and then rely on this dimer that we've been developing that will be in the clinic by the end of this year that is a PCSK9 ApoC-III inhibitor all in one drug, which we're really excited about. You know, theoretically, that's a really cool idea, right? You know, lower PCSK9, so lower LDL substantially. Lower ApoC-III, so lower triglycerides substantially. You could have something that could really play in that space of the 20 or so million people in the U.S. We haven't decided, you know, how we play this. Those are the two gates. We'll see where this goes. Okay. Maybe shifting gears to obesity. You've got one trial underway, one soon to start with ARO-ALK7. Yep. You know, the messaging is generally we see sort of these approaches as potentially complementary to GLP-1, not truly the competing head-to-head and displacing GLP-1 and effectively a bake-off, right? We'll look at the data we get from both and then figure out what we can fund internally. Perhaps there's a partnership dynamic, you know, with the other alternative approach. Do I have that kind of right in terms of like the priority set and sort of how you'll kind of navigate the next year with these readouts? That's exactly right. You just said it in a more succinct way than I would have said it. That is exactly right. We are really intrigued by this Activin E-ALK7 pathway. The genetic data and the animal data suggest that if you can knock this down, either the ligand Activin E—and we're knocking down Activin E by knocking down one of the subunits, inhibin—if you knock that down or knock down the receptor ALK7, which is produced in adipose, you can change the way the body stores fat. What we've seen in the animal models with both drugs is that we see good weight loss with either. Importantly, it's high-quality weight loss, right? You know, we're seeing the loss of visceral fat, not lean muscle mass. That's important. Yeah, yeah. In addition, we are not seeing that weight loss being the result of caloric restriction. These animals are eating the same amount of food as the saline-treated animals. They're just metabolizing fat. That's a very intriguing potential product profile. We look forward to interrogating that. Now, we're bringing both INHBE and ALK7 into the clinic. If I had to choose only one of those, I probably would have chosen ALK7 because the animal data are a bit stronger there. Makes intuitive sense, right? Because that's the receptor anyway. We know there are other ligands that bind that receptor. Look, this is our first time in humans with this adipocyte-targeting platform. There's some risk associated with that. Whereas INHBE is hepatocyte-directed or hepatocyte-expressed. We know what that's going to look like. We're good at that. It made sense for us to bring both those in, let's see how they work. Then likely take one of those two into future studies. Yeah. Also, one more thing on that. What's cool is that, as I mentioned, there's a number of really interesting metabolic targets in adipocytes that we'll be bringing into the clinic next year. Some of those could end up being dimers between, you know, those targets and ALK7. This is not the last chapter in our exposure to obesity by any means. Yeah. So I get the safety unknowns with ALK7. What you're describing conceptually, though, seems like it could be disruptive. Now, all of a sudden, you can achieve weight loss without starvation, right, of your body and losing muscle mass and achieving perhaps weight loss in a more quality way. And thinking that, like, are payers ever really going to cover polypharmacy in the obesity space is a fair question, I think, given there's so much consternation about paying for single-agent therapy. So is that just being conservative until you have more data as it pertains potentially to a competitive disruptive threat to GLPs? I think you're going to have multiple treatment arms in these phase one twos, right, where you'll look at how this maybe compares to GLPs versus a sort of a GLP transition maintenance therapy as well. Yes, yes. Look, I think this is, I think should this translate from animals to humans, I think it is potentially transformational for all these reasons. Having said that, look, the GLP, GIP class of drugs lead to an awful lot of weight loss very quickly. You know, it's hard to compete with starvation, right? We want to be clear that at least in the short term, INHBE and ALK7 are not designed to enable a patient to lose weight that quickly. I think over time, you know, they could work great as monotherapies, but they are, you know, they will not enable that sort of weight loss, you know, in the first few months as, you know, as just appetite, for instance, or glucide. You know, to your point, there's an awful lot of white space there. You know, this could be, you know, both phase ones have a combination arm in the MAD part of the studies where these are used in combination with a lower dose of tirzepatide. It could be that in animals, we saw that using a subtherapeutic dose of tirzepatide plus INHBE or ALK7 led to the same amount of weight loss as a full dose of tirzepatide, but better quality, right? You know, only visceral fat, not muscle. And so it could be that this is used in combination to still give somebody that drastic rapid weight loss that you see with the GLP, GIP class, but it's higher quality weight loss. That's one possibility. Second possibility is that, you know, somebody could lose a lot of weight on one of those and then come off that and maintain that or continue to lose weight with one of our drugs. That's an interesting possibility. You know, there's a number of ways that we could skin this cat, and it's just too early to figure out where this fits in. Again, we want to be clear here that we're not, the goal here is not to displace those drugs. I think they're good drugs, and I think there's an awful lot of ways to win without having to do that. What are the safety AEs of interest for you with adipose targeting? That's a good question. You know, so, you know, there's nothing unique here that has our antennae up, you know, with either this or INHBE. You know, we'll be looking forward to seeing what the safety profile looks like. But there's not, you know, one or two AEs that we're kind of concerned about that we know about right now. Okay. I recall at JPMorgan, you know, I think there's maybe it's the limitations maybe with the phase one twos that you run are maybe the duration of treatment and the ability to formulate firm conclusions, you know, on which is the best approach to go to, right? How do you get around that and make a critical decision, right? Is ARO-ALK7 versus ARO-INHBE the better way to go? Yeah, the point is a good one. It may be difficult because these are small, small-ish studies, you know, obesity studies, particularly if they're not based on caloric restriction, can be a bit noisy. Yeah. Yeah, those are important. If it's kind of a tie-ish, right, and there's no safety red flags with either, then that's where it gets really tough. Yeah. And so then, you know, we have to make an adult decision and decide which way to go. Look, it could be that we want to, that we take both of them into another phase to see if we have a better idea. If they're looking equal, my sense is that ALK7 may, you know, tie might go to ALK7. The animal data suggest that that may be a less frequent dosing drug. You know, I think that INHBE, you know, we know how we knock down gene products in the liver. That's probably a once-a-quarter drug. ALK7 may be closer to once every six months or less frequent. That could be interesting. My hope is that we see a clear winner. If we don't, we'll just have to make that decision. If ARO-ALK7 gives you proof of safe delivery, right, and activity, what does that open the door for you in terms of indications and opportunities? Yeah, it's a great point. You know, the ALK7 data are important for us for two reasons. One, we think it's a great target, and we look forward to continue to develop that drug candidate. Second, it opens the door to additional adipose targets. You can imagine, you know, adipose, you know, is the largest endocrine organ in the body. There are a ton of interesting, some validated, some less validated adipose targets in cardiometabolic space. I think you will see a flood of new candidates from us. Some will be, you know, more traditional, you know, single gene product knockdown drugs. Some could be dimers, as I mentioned. You know, we love the idea of combining ALK7 with something else, you know, for metabolic disease and for obesity. Okay. Maybe shifting to neuromuscular in the last couple of minutes here. Just, I believe DM1 was a little bit further ahead than DUX4, if I had the ordering right. Yeah, I think they're about equal right now. Okay. So and you've said up to Sarepta, right, data disclosure, but you think they may have a data disclosure this year at some undefined time point. Is that sort of the way to think about? Yeah, yeah. I don't know how to say that without, I don't want to box them in, of course. I think that we will have, we and they together, I think we'll have a fair amount of data this year. You know, my hope is that it makes sense for them to disclose those data. Yep. Because I would expect those data to be pretty good. Is initial proof of concept tied to some economics, I imagine, or? No, no. So, we've got, we have $300 million of milestone payments that will be due based on dosing the DM1 study. And we said, you know, on our conference call a couple of days ago that we're still on, we're on track to trigger those in the next few quarters. And so that feels near-term to us. But efficacy data points and such are not, don't trigger any milestones. Yeah. You've talked a little bit about potency with your approaches relative to alternative approaches. Typically when you hear about potency, you think push dose, possibly efficacy play or safety play as well. Yep. As you think about kind of the competitive landscape and how your siRNAs could potentially differentiate in the space, I'm just kind of curious, how should we think about that? Sure. Yeah. I think about it in two primary ways. One is safety. You know, the smallest amount of drug you can give but still see an effect is, of course, it's axiomatic, is important. Because who knows, you know, when safety measures may poke their head out. You know, the more drug you push in, the greater likelihood you'll see something. I think given that, you know, that our targeting moiety here is a simple peptide, it's not an antibody, it's not an antibody fragment. We expect to use, you know, orders of magnitude less drug than the competitors. That's helpful. From a safety, that's potentially helpful from a safety standpoint. The other way that I think is, the other thing that could be interesting there is that we may be able to toggle, we with Sarepta may be able to toggle to a subQ administration. That could be really interesting. I think we'll know that this year. You know, we'll be looking at tissue concentration, we'll be looking at knockdown, and I think that can tell us if we can go to a subQ formulation. The good news here is that that formulation is no different. You know, it is, we don't have to do new GLP tox, et cetera, et cetera. We just go. Yeah. I'm cautiously optimistic that that could be the case. Again, I think that's disruptive in this field. Got it. All right, we are out of time. Thank you so much for joining us. Thank you. All right.