We're going to get going here with our next company presenter at the BofA Annual Healthcare Conference. Pleased to be introducing Arrowhead Pharmaceuticals and Chris Anzalone, Chief Executive Officer. So Chris, thanks for joining us.
Thank you for having us. It's great to be here.
So I didn't introduce myself, but Jason Gerberry, I'm one of the midcap biotech analysts. And Arrowhead -- maybe we can maybe start with overall -- I guess the Sarepta deal to start of 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. And maybe -- how strategically that changes the focus for the company and the prioritization strategy for you? And then we'll get into more specific questions.
Sure. Well, look, it dramatically changes our outlook, or our plan strategically, right? 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 and we could imagine focusing in certain areas, but we needed to see what kind of deal we can get done. And so there are several ways we could go.
Look, we -- the core assets to the Sarepta deal are the two muscle assets, ARO-DM1, ARO-DUX4, and we love those assets. We could have seen developing commercial infrastructure around that. But look, 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. But also Sarepta was the right company to have those assets.
Look, I think we could do anything. I think Arrowhead is really good at stuff. But they've shown that they are extremely good in that area, getting drugs approved quickly and bringing those to patients who need them. So it's a great combination.
Look, and 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 puts some very good assets in the hands of some very good people if they can bring those patients. So from our perspective was great. From their perspective, they got a very large pipeline overnight that is composed of drugs that, I think, are largely going to work. So good for all of us.
Yes. So there's a lot of focus in cardiometabolic in terms of the efforts you have both with your APOC3 targeting approach as well as the obesity work that you have ongoing. But you still have -- it seems like wanting to address new modalities, new tissue types. And so how should we think about if things emerge, 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 -- I imagine you're somewhat nimble, right, still, as it pertains to going in different directions?
Oh, sure. Yes. Look, so we are -- as you say, we've got a real presence in the cardiometabolic with plozasiran, APOC3 inhibitor, with zodasiran, ANGPTL3 inhibitor with our obesity play. The first one is being ARO-INHBE against INHBE or Activin E and ARO-ALK7 against ALK70, the receptor -- the adipose receptor. We have a good presence there, certainly, and we'll grow there.
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 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. So we are clearly building that out.
But as you say, we've got the ability to address the lung muscle cardiomyocytes, CNS, hepatocytes, of course, adipocytes of course. And we'll continue those development programs. Things are not very expensive. Taking them -- for us, at least, taking them from idea to end of Phase I. And given our modality, I think you've got a pretty good idea if the drug is going to work by the end of Phase I. And so we'll continue to do those. And I would -- I would anticipate you'll see us getting into other areas going forward, certainly.
Okay. So you have an action date for [indiscernible] here in FCS coming up in November. I think most of the Street, even your competitors would frame this is like a proof point that -- or running into the SHTG opportunity, which will ultimately dwarf the epidemiology and change the pricing paradigm. But nonetheless, it's a proven ground for companies like yourself to, 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 don't have options right now. And so this is important to them from a business standpoint, it's important to us to get into market, to start working with physicians, start working with payers, to familiarize them with this drug. We're essentially building a market here.
There has never really been a good way to lower triglycerides. And now given our FCS Phase III data, we show that we can lower triglycerides by about 80% from baseline. That's shockingly good, right? And while many people will see a lipid panel and they look at their LDL cholesterol levels, and they'll focus on that. Almost nobody looks at the triglycerides levels, including physicians. We think that's going to change in both Ionis and Arrowhead. I think we'll be bringing that education to the marketplace to patients, to physicians, to payers.
And so anyway, it's a long way of saying that, yes, FCS is very important, but it is a gateway to SHTG, which we think there are 3 million to 4 million people in the U.S. alone with triglycerides above 500. We think that is that's an alarming number for us for many of those patients. And so FCS is a good way 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 is pretty high with FCS and SHTG?
I think it is pretty high. We will be addressing cardiologists. Lipid clinics, endocrinologists and the like. And we think that's a -- we think those are the physicians will be initially addressing with SHTG.
Look, ultimately, as we think -- as I think that market grows, it will eventually filter down to primary care, but we are a long way from that. And so it's a really intriguing value proposition that there's this fairly large patient population, 3 million or 4 million people, that have been somewhere between unserved and underserved, and it requires a relatively small commercial presence to address those physicians. And so it's attractive to us.
Yes. How do you feel -- Ionis is out there with Tryngolza and 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 could be differentiated?
Sure. So 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 -- this is largely in education market. And so our Med Affairs team is out talking to folks, I assume their Med Affairs are doing that as well. And so two companies do that better than one company. So that's a good thing for us. Now -- at least from Arrowhead standpoint.
From my perspective, it's a really intriguing opportunity because we have two companies, but we have what I think is relatively clear advantage over Tryngolza. If you look at the FCS Phase III data. Now these are two separate studies. And so it's always difficult to compare compounds over 2 -- or 2 separate studies. But what they showed was about a 30% reduction of triglycerides from baseline in their Phase III study, we showed about an 80% reduction from baseline. That's helpful. we dose once a quarter, they dose once a month. That's helpful.
So I think there are clear places that we can differentiate. And I think ultimately, the biology here is clear. 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. And that's what we're going after here. Both Ionis and us. And so we like our value proposition that we can lower substantially.
Yes. And then I guess, as we think about the larger SHTG opportunity, you offered some incremental details of initial thinking about SHASTA-5, right, and highlighting the importance of pancreatitis, specifically with OUS markets.
So I guess the question that I have is if you run SHASTA-5 and if you do end up with patients with trigs like that are 2,000 milligrams or above, they have had an AP event in the last year or so, right? I think those will be some of the core kind of attributes of who we would enroll.
Is there a risk that the payers may be restricted 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 expensive?
Yes, it's a good question. I don't think -- I hope not. I don't think so. We are -- in our two Phase III -- well, three Phase III studies, I guess, to support an sNDA in SHTG. We are addressing patients from 500 and up. And so it will be a broad swath of patients.
And look, and we will be looking for abdominal pain. We were looking for pancreatitis. And so it could be that we could combine those and see an improvement in pancreatitis risk just with those.
We thought this was belt spenders 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 many of them will be above 880 to 2,000 or so. And so it's not only going to be above 2,000. And we think that we will -- 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. The approval endpoint here for SHTG is simply lower triglycerides. We'll do that in spades. We are vastly overpowered in SHASTA-3, SHASTA-4 and MUIR-2 or MUIR-3 to show that. And so I think we get approved not only in the U.S. but Europe and other geographies.
We think though that's showing 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. So I view those to be companion studies, not I don't think that the payers will look only at SHASTA-5.
Yes. As you've somewhat articulated SHASTA-5, is that a trial that will be challenging to enroll because the event rates are lower? Or is it that, hey, that's a very enriched population. We can do it in a small end. And thus, it's not going to be this trial that takes multiple years to enroll?
Yes. Look, it's -- we'll see. We haven't started enrolling that yet. We'll start enrolling shortly. It's an event-driven study. And so I don't know how long it's going to take. It is -- this is not enrolling an ultra-orphan, there are a lot of these patients around. But yes, it's going to be harder to enroll than just finding a run of the mill above 500 patients.
Yes. So your competitor has the view that if they pull data from their Phase III studies, if they can show a numerical trend right, reduction in pancreatitis events that, that should be sufficient. And if you see a drug that 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? And then why even run SHASTA-5 in that scenario, it's more gravy than anything?
Yes, 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 -- it does not change our opinion that having SHASTA-5 is still a real help in development suspenders. As I said, it could be that we see it -- that we'll see a difference just with our other Phase IIIs, but just to make sure, I think it makes sense for us to study it separately.
Yes. Okay. And I guess lastly, just from a timing perspective, with SHTG, I imagine that looks and feels similar to other Phase III trials in the space in terms of start to data and how long it will take you to have a potential data submission?
Because it seems like it's a pretty derisked study, with primary endpoint being triglycerides 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, its more -- will these data sets show pancreatitis benefit? And...
Yes. Yes. We have enough excitement in our industry that we can afford to have a bit less excitement. And that's where we are here. Phase III studies are generally these binary events and companies like ours that are great or awful. And here, we don't really have that tension because this drug works, right?
In the FCS Phase III worked in -- we lowered triglycerides in 100% of patients. There were no nonresponders. And so I agree. I think people think there's general acceptance that that's going to be a positive outcome. But yes -- and then we'll see how SHASTA-5 turns out.
Now with respect to timing, we have just recently guided our most recent conference call, that we have been rolling well in those studies, and we should be fully enrolled this summer. It's a year-long study to primary endpoint. And so take that out to last patient done sometime in the summer of '26. We'll move as quickly as we can to lock the database and to get that sNDA filed. But my expectation is that we will be launching in SHTG in '27.
And that's an important point because we have a number -- I don't want to skip around here too much, but just quickly here. We have a number of launches that will be happening around that time. I think SHTG around '27, we have this drug against AAT liver disease, partnered with Takeda, that I think could be launching in the '27, '28 time frame as well. Olpasiran with Amgen could be launching around the same time. And so that's a really important node for us. And from a financing standpoint, we always wanted to -- we're looking for a bridge to get there, and we have -- we've guided that we've got enough cash to get into '28. And so we kind of got that covered until all those things happen around '27 time frame.
Yes. 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. And so think about that 2025 rate is exclusive of a CVOT in it?
Yes, yes, yes. That's right/so the CVOT question is a really good question. Now we and our advisers 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. And we think plozasiran could be a really important drug for this broad mixed hyperlipidemia market. There could be 20-or-so million people in the United States. So it's a real opportunity for us. It's 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 #1 is, I'm not going to start that until we have -- until we have clarity on more capital because that's -- it's a cardiovascular outcomes trial is an expensive thing. That's probably in the $600, $700 million range. So we are not starting right now.
Now there are a number of ways that we can bring in capital to fund that, certainly more business development. Maybe doing some deals, ex U.S. for disaster and, et cetera, there are ways we can do that. And so 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 well, what agent do we use, right? The good news about plozasiran is it works well and we are ready to start CVOT whenever we want. So that's good. But it could be that we that we choose that makes more sense to keep plozasiran as a focused SHTG drug with all the pricing implications of that, 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, APOC3 inhibitor all in one drug, which we're really excited about.
Theoretically, that's a really cool idea, right? Lower PCSK9, so lower LDL substantially. Lower APOC3, 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 how we play this. But those are the two games. 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 the messaging is generally we see sort of these approaches as potentially complementary to GLP-1, not true to 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 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. And you just said it in a more succinct way than I would have said it, but that is exactly right. We are really intrigued by this Activin E ALK7 pathway. The genetic data and the analyst data suggest that if you can knock this down either the ligand,Activin E, and we're knocking out Activin E by knocking down one of the subunits of INHBE. 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. And what we've seen in the animal models, in with both drugs, is that we see good weight loss with either. But importantly, its high-quality weight loss, right?
We're seeing the loss in visceral fat, not lean muscle mass. That's important. But in addition, we are not seeing that weight loss being the result of chloric 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. And so we look forward to interrogating that.
Now we're bringing both INHBE and ALK7 in 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. It makes intuitive sense, right? Because that's the receptor anyway. When we know there are other ligands binding that receptor.
But look, this is our first time in humans with adipocyte targeting platform. And so there's some risk associated with that, whereas INHBE is hepatocyte-directed or hepatocyte-expressed. And we know what that's going to look like. We're good at that. And so -- so it makes sense for us to bring both those in and see how they work, and then likely take one of those two into future studies.
But also, it's 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. And some of those could end up being dimers between those targets and ALK7. And so this is not the last the last chapter in our exposure to obesity by any means.
So I get the safety unknowns with ALK7. What you're describing conceptually though, seems like it could be disruptive. And now all of a sudden, you can issue 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 our payers are 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 to potentially a competitive disruptive threat to GLPs? I think you're going to have multiple treatment arms in these Phase I/IIs, right, where you'll look at how this maybe compares to GLPs versus 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. It's hard to compete with starvation, right? And 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, they can work great as monotherapies, but they are -- they will not enable that sort of weight loss in the first few months as tirzepatide for instance, or semaglutide.
But to your point, there's an awful lot of white space there. This could be the -- both Phase Is 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, only visceral fat and not muscle. 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 is that somebody could lose a lot of weight on one of those then come off that and maintain that or continue to lose weight with one of our drugs. That's an interesting possibility.
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. But 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.
And what are the safety AEs of interest for you without a post targeting?
That's a good question. So there's nothing -- there's nothing unique here that has our antenna up with either with this or INHBE. We'll be looking forward to seeing what the safety profile looks like. But there's not one or two AEs that we're kind of concerned about that we know about right now.
Okay. I recall at JPMorgan. I think there's -- maybe it's the -- the limitations maybe with the Phase I/IIs that you run are maybe the duration of treatment and the ability to formulate firm conclusions on which is the best approach to go to, right?
So how do you get around that and make a critical decision, right? Is ARO-ALK7 versus ARO-INHBE the better way to go?
Yes. The point is a good one. It could -- it may be difficult because these are small-ish studies, obesity studies, particularly if they're not based on cholo-restriction can be a bit noisy. Those are...
If it's kind of a tie-ish right, and there's no safety red flags with either then that's where it's really tough?
Yes. And so then we have to make an adult decision and decide which way to go. Look, it could be that we want -- that we take both of them into another phase to see if we have a better idea. But if they're looking equal, my sense is that ALK7 -- time might go to ALK7. The animal data suggests that, that may be a less frequent dosing drug.
I think that INHBE, we know how we knock down gene products in the liver. That's probably once a quarter drug. ALK7 may be closer to once every 6 months or less frequent, that could be interesting. So my hope is that we see a clear way, but if we don't, we'll just have to make decision.
And if ARO-ALK7 gives you proof of safe delivery, right, and activity, where does that open the door for you in terms of indications and opportunities?
Yes, it's a great point. 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. But second, it opens the door to additional adipose targets. You can imagine, adipose is the largest endocrine organ in the body. So there are a ton of interesting -- some validated some less validated adipose targets in cardiometabolic space. And so I think you will see a flood of new candidates from us.
Some will be more traditional single -- single gene product knockdown drugs and some could be dimers, as I mentioned. We love the idea of combining ALK7 with something else 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?
Yes, 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?
Yes. Yes, I don't have to say that, with that. I don't want to box them in, of course, but I think that we will have -- we and they together. I think I think we'll have a fair amount of data this year. And so -- my hope is that it makes sense for them to disclose those data. Because I would expect those data to be pretty good.
And initial proof of concept is tied to some economics, I imagine, or?
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 on our conference call a couple of days ago, that we're still -- we're on track to trigger those in the next few quarters. So that feels near term to us. But efficacy data points and such are not don't trigger any milestones.
Yes. So you've talked a little bit about potency with your approaches relative to alternative approaches. And so typically, when you hear about potency, you think push dose, possibly efficacy play or safety play as well.
So 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. Yes. So I think about it in two primary ways. One is safety. The smallest amount of drug you can give, but still see an effect is, of course, it's axiomatic is important. Because who knows when safety measures may book their head out. The more drug you push in, the greater likely that you'll see something. And so I think given that our targeting moiety here is a simple peptide, it's not an antibody. It's not an antibody fragment. And so we expect to use orders of magnitude, less drug than the competitors. That's helpful. And that's potentially helpful from a safety standpoint.
The other way that I think is -- the other thing that can be interesting there is that we may be able to toggle with Sarepta, may be able to toggle to a subcu administration. That could be really interesting. And I think we'll know that this year. We'll be looking at tissue concentration, we will look at a knockdown. And I think that can tell us if we can go to a subcu formulation.
And the good news here is that, that formulation is no different. It is -- we don't have to do new GLP talks, et cetera, et cetera. We just go and I'm cautiously optimistic that, that could be the case. And again, I think that's disruptive in this field.
Got it. All right, we're out of time. So thank you so much for joining us.
Thank you.
