Arrowhead Pharmaceuticals, Inc (ARWR) Q3 2025 Earnings Call Transcript

Arrowhead Pharmaceuticals, Inc (NASDAQ: ARWR) Q3 2025 Earnings Call dated Aug. 07, 2025

Corporate Participants:

Vincent Anzalone — Vice President and Head of Investor Relations

Christopher Anzalone — President, CEO and Chairman of the Board

Bruce Given — Interim Chief Medical Scientist, Chief Operating Officer

Andy Davis — SVP, Cardiovascular/Metabolic Franchise Head

James Hamilton — Chief Medical Officer, Head of R&D

Daniel Apel — Chief Financial Officer

Analysts:

Farzin Haque — Analyst

Jason Gerberry — Analyst

Mary Kate — Analyst

Patrick Trucchio — Analyst

Prakhar Agrawal — Analyst

Ted Tenthoff — Analyst

Shelby Hill — Analyst

Ryan Hayes — Analyst

Michael Ulz — Analyst

Joseph Thome — Analyst

William Pickering — Analyst

Madison El-Saadi — Analyst

Morgan Lamberti — Analyst

Presentation:

Operator

Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals Conference Call. Throughout today’s recorded presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions.

I will now hand the conference over to Vince Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

Vincent Anzalone — Vice President and Head of Investor Relations

Thank you. Good afternoon, everyone. Thank you for joining us today to discuss Arrowhead’s results for its fiscal 2025 third quarter ended June 30, 2025. With us today from management are President and CEO Dr. Chris Anzalone, who will provide an overview; Dr. Bruce Gibbon, Interim Chief Medical Scientist, who will provide an update on late clinical and regulatory; Andy Davis, Senior Vice President and Head of the Global Cardiometabolic Franchise, who will provide an update on commercialization activities; Dr. James Hamilton, Chief Medical Officer and Head of R&D, who will discuss our earlier stage development programs; and Dan Apel, Chief Financial Officer, who will give a review of the financials. Following management’s prepared remarks, we will open the call to questions.

Before we begin, I would like to remind you that comments made during today’s call contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are forward-looking statements and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements. For further details concerning these risks and uncertainties, please refer to our SEC filings, including our most recent annual report on Form 10-K and our quarterly reports on Form 10-Q.

I’d now like to turn the call over to Chris Anzalone, President and CEO of the Company. Chris?

Christopher Anzalone — President, CEO and Chairman of the Board

Thanks Vince. Good afternoon everyone and thank you for joining us today. Before discussing the progress we’ve made over the past quarter, I’d like to address questions surrounding our partnership with Sarepta Therapeutics. Sarepta has recently experienced high-profile setbacks in products and programs that are unrelated to those licensed from Arrowhead. Nevertheless, this situation has negatively affected our stock price, so I’d like to talk about what we think is important from an Arrowhead shareholder perspective.

Sarepta recently announced a strategic restructuring plan that includes cost cutting measures and a pipeline review that prioritizes funding, development and commercialization of the programs the company in-licensed from Arrowhead. Sarepta management has clearly stated that it believes this represents the future of the company and this gives us confidence that Sarepta will continue to meet its financial, development and commercial obligations under the agreement. The collaboration is continuing to operate as expected which is, of course, a good thing for Arrowhead. It represents a source of capital to fund internal programs, platforms, and commercial build-out while ensuring that assets licensed to Sarepta are developed and commercialized. Should Sarepta fail to meet its obligations, the agreement has clear termination provisions that in our view would cause potentially valuable assets and associated intellectual property to be returned to Arrowhead without Arrowhead having to repay any of the capital we have received from Sarepta. That would also be an acceptable outcome.

Let’s now move on to our progress in the recent period. The biotech market has been challenging over the past several years, but we have no control over the broader sentiments. What we can control is our drive to serve patients and create shareholder value. We view these broadly as three interrelated mandates; to create novel medicines capable of real impacts on human health; to generate the capital to fund development of them; and to build an engine to drive the growth of both. We made important progress in all these areas during the recent period.

Let’s begin with development. This is clearly led by Plozasiran. We continued to have productive interactions with regulators in the US and Europe about our market authorization applications for the treatment of FCS and we look forward to our November 18 U.S. PDUFA date. We are also on track with commercial buildout and our complete team is nearly assembled to support an FCS launch. Further, we achieved full enrollment in SHASTA-3, SHASTA-4, and MUIR-3, Arrowhead’s Phase 3 studies designed to support regulatory submissions for Plozasiran in the treatment of severe hypertriglyceridemia, or sHTG. These studies enrolled approximately 2,200 patients in 24 countries in a very short period of time. The primary endpoint is focused on triglyceride reduction at 12 months, so with full enrollment reached in June 2025, we are on track for study completion by mid 2026.

Zodasiran, Arrowhead’s candidate designed to reduce expression of ANGPTL3, is being developed as a potential treatment for homozygous familial hypercholesterolemia, or HoFH, a rare genetic condition that leads to severely elevated LDL-cholesterol and early onset cardiovascular disease. We initiated the YOSEMITE Phase 3 study and enrolled the first patient in July. Approximately 60 subjects over the age of 12 will be randomized to receive 4 quarterly doses of 200 mg Zodasiran or placebo. The primary endpoint of YOSEMITE is the percent change in fasting LDL-cholesterol from baseline to month 12. We think that given our P2 data, this feels like a relatively low risk P3, potentially enabling a commercial opportunity that overlays well with the team we are building for plozasiran. Therefore, with a relatively small investment in a one year 60-subject Phase 3 study, we see an opportunity to extract more value from the commercial infrastructure we are already building.

Beyond Plozasiran and Zodasiran, there are 2 additional investigational RNAi-based candidates developed by Arrowhead that are currently in late-stage pivotal studies. Fazirsiran, being developed for alpha-1 antitrypsin liver disease, is partnered with Takeda. Arrowhead retains 50-50 profit share in the U.S., 20% to 25% royalties outside the U.S., and up to $527.5 million of remaining regulatory and commercial milestones. Takeda has guided that it’s Phase 3 study could be fully enrolled this year and the study has a primary endpoint at two years.

Olpasiran, being developed for ASCVD, is licensed to Amgen, which announced that its Phase 3 cardiovascular outcomes trial was fully enrolled in the first half of 2024. We are eligible for up to $485 million of remaining milestones related to this program. I highlight these four late-stage drug candidates because we expect them to be substantial value drivers in the near- to mid-term. They also set up the possibility of multiple launches between November 2025 and the end of 2028. As we’ve discussed in the past, Plozasiran and our other late-stage drug candidates together form the basis of our near-term value proposition. But these are enhanced by several programs underneath them, all of which made good progress in the recent period.

Broadening out the cardiometabolic franchise are our first two obesity candidates; ARO-INHBE and ARO-ALK7. ARO-INHBE began a Phase 1/2 study early in the year and we recently announced that we dosed the first subjects in a Phase 1/2 clinical trial of ARO-ALK7, which we believe is the first investigational RNAi therapeutic to enter clinical studies targeting adipose tissue. We expect to have initial, early datasets for both candidates at the end of the year. Expanding the cardiometabolic franchise, we expect to reach the clinic this year for what we believe will be the first RNAi dimer in clinical studies. It is designed to reduce expression of both PCSK9 and APOC3, and could be a powerful agent in the treatment of ASCVD in patients with mixed hyperlipidemia.

There is substantial unmet medical need in this large patient population and we should have a good idea how well this drug candidate lowers LDL-c and triglycerides in 2026. We continue to make good progress in manufacturing, toxicology studies, and clinical trial planning, and we are on track to file a CTA in the coming months. Our burgeoning, systemically-delivered, CNS franchise is also a potential near to mid term value driver. Should this platform translate from primates to humans, we think it would represent a transformational leap forward in CNS therapies. Importantly, later this year we expect to file a CTA for ARO-MAPT, our wholly-owned candidate against Alzheimer’s disease and various Tauopathies. We are hopeful that we can achieve initial proof of concept with this platform and candidate as early as late 2026.

Beyond these, we have a wealth of other clinical-stage programs to drive longer-term value and serve as sources of capital through business development. In fact, we are on track to meet our 20 in ’25 initiative whereby we would have 20 individual drug candidates in clinical studies or at market by the end of 2025. Nine of these are partnered. The 11 wholly-owned clinical candidates serve as potential partnering targets and provide value redundancy for our other programs, and we expect several data readouts through the end of the year. Together, these give us a tremendous amount of ammunition to create value. This brings us to the second important component of building durable value: an adequate source of financing independent on the capital markets.

We currently have a strong balance sheet relative to our needs over the next few years. In addition, we have made important progress sourcing new capital in the recent period. We announced that our Visirna Therapeutics majority-owned subsidiary signed an asset purchase agreement whereby Sanofi will acquire rights to develop and commercialize plozasiran as a potential treatment for FCS and sHTG in Greater China. Visirna will receive an upfront payment of $130 million and be eligible to receive milestone payments of up to $265 million upon approval of plozasiran in FCS and SHTG in mainland China. Arrowhead is further eligible to receive royalties on net commercial product sales in Greater China as part of the Arrowhead-Visirna license which was assigned in part to Sanofi.

When we co-founded Visirna in 2022, we saw greater China as an important, but undervalued, potential future market for multiple programs in Arrowhead’s pipeline. We licensed Chinese rights for Plozasiran, Zodasiran, and ARO-HSD to Visirna, which received outside funding to support development. Sanofi has a strong presence in China and is well positioned to assume commercialization of Plozasiran, should it be approved by Chinese regulatory authorities. We did not use any Arrowhead funds to advance China-specific development or regulatory activities, and upon closing we will own approximately 56% of Visirna. There are tax considerations and other costs, but we ultimately expect to realize a sizable amount from this deal. We hope that over time we may monetize Chinese rights to Zodasiran and ARO-HSD in a similar fashion.

The next key capital-building event I want to mention is reaching the first of two prespecified enrollment targets in a Phase 1/2 clinical study of ARO-DM1 for the treatment of type 1 myotonic dystrophy, which is partnered with Sarepta. Reaching this milestone triggered a $100 million payment, which is due from Sarepta within 60 days of when it was earned. We believe we are on track to meet the second enrollment target at the end of the year, which would trigger an additional $200m payment. Our large pipeline and expectation that we have cash into fiscal 2028 suggest that we have the first 2 categories of value creation under control. This leads us to the third priority, creating an engine to drive the growth of both. I think it is rather clear that we have built this as well. We are now able to address gene targets in five different areas; hepatocytes, pulmonary, adipose, skeletal muscle, and CNS.

We also believe we are capable of silencing two genes with a single molecular entity using our dimer technology. This gives us broad reach to go where disease is, and, coupled with our expectation of introducing three to four new drug candidates into clinical studies every year, we expect to continue to grow our ability to impact human health very rapidly. This also reads on our ability to continue to access significant capital through business development before and after achieving substantial product revenue. Ultimately, we are doing all of this to bring important medicines to the patients who need them and this does not happen without careful preparation. We are building a right-sized commercial organization staffed with what we think are the top people in the field with extensive experience in cardiometabolic and rare disease. We’ve made strong progress in market access, analytics, operations, marketing, and building a commercial sales team. U.S. launch preparations are now if full swing for Plozasiran in FCS and we intend to be launch ready even before our PDUFA date on November 18.

With that overview, I’d now like to turn the call over to Bruce Given. Bruce?

Bruce Given — Interim Chief Medical Scientist, Chief Operating Officer

Thanks Chris and good afternoon everyone. Since we last spoke, we’ve continued the forward momentum in our development of Plozasiran to treat FCS and severe hypertriglyceridemia. Our US NDA to support FCS treatment was submitted last year and our PDUFA date is November 18, 2025. Filings in Europe, Australia, and Canada are all progressing, as well. We are reassured that the cadence of our interactions with US and global regulators has not changed, nor have our expectations of adhering to established timelines.

Two months ago, we completed enrollment in our SHASTA severe hypertriglyceridemia development program well ahead of expectations. The SHASTA program is comprised of SHASTA-3 and SHASTA-4, two adequate and well-controlled trials designed to meet the statutory requirement of substantial evidence requirement for effectiveness, along with the supportive MUIR-3 trial in mixed hyperlipidemia, which provides additional safety data in a relevant patient population to satisfy regulatory requirements for a complete file.

The sizing of the Phase 3 SHASTA-3 and 4 studies was informed by the needs of regulatory authorities to demonstrate safety, while confirming the efficacy suggested by the Phase 2 SHASTA-2 trial where the primary endpoint of difference in triglycerides at week 24 compared to baseline for the 25 mg dose was minus 53% with a p value less than 0.0001 which was accompanied by a numerical decrease in adjudicated events of acute pancreatitis. The 2 SHASTA phase 3 trials are similarly designed, totaling around 700 patients, and are very highly powered to demonstrate statistically significant improvement in triglycerides with 25 mg Plozasiran compared with placebo over 12 months of treatment.

After accounting for randomization allocation in the SHASTA studies, the placebo controlled double blind MUIR-3 study was designed to demonstrate statistically significant improvement in triglycerides with 25 mg Plozasiran compared with placebo over 12 months of treatment and is also expected to achieve a high level of significance while primarily serving to enhance the safety database for the sHTG filing. Assuming positive data, these three separate Phase 3 studies should support our planned sNDA filing for sHTG in the fourth quarter of 2026. Although SHASTA-3 and 4 were not prospectively designed to be outcomes studies, given the sizing of the combined studies and observed event rates in the SHASTA-2 study, we hope to observe at least a favorable trend in Plozasiran’s impact on documented acute pancreatitis within the studies.

However, the SHTG program also features a unique outcomes study named SHASTA-5 designed to directly assess the ability of Plozasiran to reduce the time to first event of positively adjudicated acute pancreatitis in high risk SHTG patients. While it is possible that this trial will be submitted to regulatory agencies for possible inclusion in labeling, the primary audience and impetus for this study is actually national health technology assessment organizations. On the basis of observational data demonstrating the causal link between elevated triglycerides and risk of pancreatitis and observed effects of Plozasiran in sHTG patients, it is expected that less than 150 patients will be recruited to accrue sufficient events in this outcomes study. We look forward to presenting more details on design and rationale of this study at an upcoming major medical meeting.

The broader cross-functional cardiometabolic clinical team has been present at key medical congresses this past quarter, including ENDO, National Lipid Association and the American Society of Preventive Cardiology. We continue to share new data to demonstrate the value of Plozasiran and the reception from the scientific and clinical communities has been engaged and enthusiastic. Turning our attention to Zodasiran, another genetically validated RNAi drug designed to reduce expression of Angiopoietin protein like 3 or AngPTL3 is now in development for the treatment of homozygous familial hypercholesterolemia, a rare genetic disorder characterized by exceptionally high LDL cholesterol levels due to very low or absent LDL receptor function.

The results of GATEWAY, our open-label Phase 2 study in this population, were presented this year at European Atherosclerosis Society and showed robust and durable reductions in LDL-C and other atherogenic lipoproteins. The efficacy results were similar to those of Evinacumab, a monoclonal antibody against ANGPTL3 requiring monthly infusions, but with Plozasiran the dosing is convenient, quarterly, subcutaneous dosing. We are pleased to report that YOSEMITE, the Phase 3 study of Zodasiran in HoFH, began earlier this year and the first patient was randomized last month. Assuming successful demonstration of safety and efficacy, data from YOSEMITE could support regulatory filings for Zodasiran as early as 2028 or 2029.

I will now turn the call over to Andy Davis. Andy?

Andy Davis — SVP, Cardiovascular/Metabolic Franchise Head

Thank you, Bruce. The FDA-PDUFA date for Plozasiran, set for November 18, is now less than four months away and I’m pleased to report that our commercialization preparations are fully on track. When I last updated you in May, we were in the midst of building out our commercial sales organization. I’m proud to share that as of this month, our National Sales Leader, full team of Regional Sales Leaders, and fit-for-purpose field force of Rare Disease Specialists are now onboard and undergoing training. By the end of this month, this team will begin engaging with key healthcare professionals, advancing FCS disease education in preparation for launch.

Our Market Access team continues to execute exceptionally well against our pre-approval information exchange strategy. To date, we’ve connected with payers representing over 85% of U.S. covered lives, delivering compelling data on the clinical value and anticipated profile of Plozasiran. We remain highly encouraged by payer interest, particularly in Plozasiran’s potential to deeply lower triglycerides, support achievement of guideline-directed goals, namely less than 500 milligrams per deciliter and significantly reduce the risk of acute pancreatitis.

We’re also seeing positive developments in the FCS landscape, which reinforce our confidence heading into launch. The significant unmet need in the FCS community is clear and acknowledged by both payers and providers. On the payer front, dynamics appear to be favorable, with access being granted to both genetically confirmed patients and those patients satisfying the diagnostic scoring tools designed to discriminate patients with SHTG from those whose signs, symptoms, and medical history mimic genetic FCS. This is especially motivating given that Plozasiran is currently the only APOC3 inhibitor to demonstrate clinical results in both genetic and clinical FCS in a Phase 3 registrational study.

And from a provider perspective, the specialty mix we’re observing preventative cardiologists, endocrinologists, and lipidologists is exactly what we anticipated and aligns well with our launch targeting strategy. In summary, we remain on schedule and energized by the opportunity to bring investigational Plozasiran to individuals living with FCS and their families. We are excited for what Plozasiran, a potential first-in-class siRNA therapy, could mean to those suffering from this difficult disease.

I will now turn the call over to James Hamilton.

James Hamilton — Chief Medical Officer, Head of R&D

Thank you, Andy. I’d like to provide an overview and updates on several of our earlier stage clinical and translational development programs. In obesity, our ARO-INHBE and ARO-ALK7 programs, both targeting the Activin pathway are currently being investigated as treatments for obesity in Phase 1 studies. The INHBE study is currently enrolling multi-dose cohorts using ARO-INHBE in combination with Tirzepatide. The ARO-ALK7 study is in the single dose escalation phase, with multi-dose and combination cohorts opening soon. We anticipate sharing data from both the ALK7 and INHBE studies at the end of the year.

Regarding our muscle clinical programs partnered with Sarepta, the ARO-DM1 Phase 1/2a study has completed the single dose cohorts and is now enrolling multi-dose cohorts of patients with myotonic dystrophy. Similarly, the ARO-DUX4 Phase 1/2a study has nearly completed enrollment of single dose cohorts and the first year long multi-dose cohort is open for enrollment. Consistent with previous guidance, we are on track for data availability by year end. However, final timing on data release is determined by Sarepta.

Our wholly-owned ARO-MAPT program is on track for submission of a CTA by year end. As a reminder, ARO-MAPT uses subcutaneous administration of a novel siRNA delivery platform designed to deliver a siRNA targeting CNS Tau protein expression across the blood brain barrier. Tau aggregated into neurofibrillary tangles is believed to be one of the causative factors of Alzheimer’s disease and is also causative of various other Tauopathies. Non-clinical evaluations in monkeys with subcutaneous administration of ARO-MAPT using clinically translatable doses have shown better than 75% knockdown of tissue level MAPT mRNA in the CNS. Importantly, monkey tissue level knockdown has translated into CSF tau protein reductions of better than 75%, with duration of effect supportive of either monthly or potentially quarterly subcutaneous dose regimens. The monkey CSF Tau protein knockdown data is an important translational step as we move this program towards the clinic. Full pre-clinical data will be presented at an upcoming scientific conference.

I will now turn the call over to Dan Apel.

Daniel Apel — Chief Financial Officer

Thank you, James, and good afternoon everyone. As we reported today, our net loss for the quarter ended June 30, 2025 was $175.2 million or $1.26 per share, based on 139 million fully diluted weighted average shares outstanding. This compares with a net loss of $170.8 million or $1.38 per share for the quarter ended June 30, 2024 based on 124.2 million fully-diluted weighted average shares outstanding in that prior year quarter. Revenue for the quarter ended June 30, 2025 was $27.8 million driven almost entirely by the recognition of revenue related to our license and collaboration agreement with Sarepta. Of the $27.8 million, roughly 20 million related to the ongoing recognition of initial Sarepta consideration and $7 million related to reimbursement of collaboration related costs.

After the end of our third fiscal quarter, we announced two important events each of which will have a positive impact on our financial position. First, there is the $100 million DM1 milestone payment from Sarepta which Chris mentioned earlier on the call. As this event occurred after June 30, revenue associated with this milestone will be recognized in our fiscal fourth quarter financial results. We anticipate achieving the second DM1 development milestone valued at $200 million by the end of the calendar year.

Second, on August 1, we announced that Sanofi signed an agreement to acquire exclusive rights to develop and commercialize investigational Plozasiran in Greater China from Visirna Therapeutics, Arrowhead’s majority-owned subsidiary. Visirna will receive $130 million upfront upon closing. Additionally, Visirna will receive up to $265 million in potential future regulatory milestone payments and potential royalties associated with sales of Plozasiran in Greater China. We expect to record revenue of $130 million in the fourth quarter associated with the upfront payment only.

Turning to expenses, total operating expenses for the quarter ended June 30, 2025 were $193.3 million, compared to $176.1 million in the prior year quarter, an increase of $17.2 million. The year-over-year increase was driven by, amongst other things, roughly $10 million of higher R&D costs, primarily as a result of our Phase 3 registrational trials for Plozasiran in sHTG, as well as higher costs related to active candidates in the preclinical stage. It’s worth bearing in mind that, year to date, approximately 70% of our clinical trial spend can be attributed to the Phase 3 registrational trials for Plozasiran in sHTG. As Bruce mentioned, these studies are now fully enrolled and we expect data to read out next year. Additionally, as planned, our SG&A costs have increased by $7 million year-over-year, driven primarily by our preparations for commercialization in advance of the FDA’s upcoming PDUFA action date later this year on November 18.

Turning to cash, net cash used in operating activities during the quarter ended June 30, 2025 was $154.7 million, compared with net cash used in operating activities of $115.4 million in the prior year quarter. The increase in cash used in operating activities is driven by several factors including the aforementioned higher operating expenses and timing of clinical trial payments. Turning to the balance sheet, our cash and investments totaled $900.4 million as of June 30, 2025. Our common shares outstanding as of the end of the quarter were 138.1 million.

With that, I will now turn the call back to Chris.

Christopher Anzalone — President, CEO and Chairman of the Board

Thanks, Dan. Arrowhead continues to achieve strong execution in discovery, clinical, regulatory, and business development. Our pipeline has become increasingly mature, with four Arrowhead discovered candidates currently in pivotal Phase 3 studies. In addition, our commercial buildout is designed to make us launch ready very quickly, should Plozasiran receive regulatory approval on the November 18, 2025, PDUFA date. And, lastly, we have a strong balance sheet that we think gives us the financial resources to continue to move multiple innovative new medicines through the clinical and regulatory process and ultimately get them to the patients who need them.

Thank you for joining us today and I would now like to open the call to your questions.

Questions and Answers:

Operator

Thank you. At this time we’ll conduct the question-and-answer session. [Operator Instructions] Our first question comes from Maury Raycroft of Jefferies. Your line is now open.

Farzin Haque

Good afternoon, This is Farzin on for Maury. So thank you for taking our question. When thinking about your own SHTG pivotals with ongoing SHASTA-3 and 4, how are you thinking about the prospects of competitor, Ionis’ programs reading out in September from the core studies, especially with respect to the triglyceride reduction as well as signals in the acute pancreatitis.

Christopher Anzalone

So, I’ll answer that and Bruce, you can add anything that you think is necessary. Look, we have no control over other people’s studies. It’s difficult to compare two drugs across two different studies or more, frankly, in this respect. And so we’re just focused on our own studies here. We’ve had very good data in our Phase 2 studies. We had very good data in our Phase 3 study in FCS. And we think we’ve got a best-in-class triglyceride reducer here. We look forward to seeing what the SHTG data look like, but that is our expectation we’ll go from there.

Bruce, do you have anything to add on that?

Bruce Given

Not really. As you said, it’s hard to compare across studies. I will say that what they have relayed about their patient population looks quite similar to our patient population at the time of enrollment. So, I think it will be interesting for us to see what their data actually shows when they report it out in September and then probably in more detail at a later academic presentation. So we’ll follow with interest, but how much bearing it has is always hard to tell.

Christopher Anzalone

And one of the key here in the studies and then once we are at market are two primary things, I think. One is how deeply can you reduce triglycerides from baseline, and second is how many patients can get to goal, whether that’s goal is defined as triglycerides below 880 or below 500. I think those are the key points here, and we would expect physicians to look at that. We expect patients to look at that.

Farzin Haque

Got it. Thank you.

Christopher Anzalone

You’re welcome.

Operator

Thank you. Our next question comes from Jason Gerberry of Bank of America. Your line is now open.

Jason Gerberry

Hey guys, thanks for taking my questions. So, another question on the SHTG program. If I heard you right, so it sounds like what you’re confirming is your baseline demographics of your two Phase 3 studies look similar to the published baseline demographics that Ionis had published for its core studies. I guess that would be in terms of the two key subgroups, which is ultra-high triglyceride levels and past history of AP. And I’m curious your thoughts. Ionis indicated that they are seeing events on a blinded basis, at least 13 with like a SKU of like 700 drug, 300 placebo, something like that. So, I’m just kind of curious, as you absorb that because like the event rate is the big unknown here. So, I’m just kind of curious, has your thoughts changed at all around probability of showing at least a strong numerical trend by pooling the SHASTA-4 and 5 studies? Thanks.

Christopher Anzalone

Bruce?

Bruce Given

I think that’s it’s difficult to answer that question, Jason. And the reason is because we count true adjudicated cases of pancreatitis. The Ionis approach is not just counting pancreatitis, but also abdominal pain. And of course, abdominal pain can be non-specific, although the effort is to determine that abdominal pain when it occurs is actually not related to other elements such as alcohol or gallstones, for instance. But it is a little bit of an apples and oranges comparison of actual pancreatitis to abdominal pain events. So it’s hard to know what they’re going to show in the end regarding pancreatitis, which I think is the most important measure. Abdominal pain matters in SHTG and high triglycerides.

It can be debilitating for patients and difficult, but it’s not a fatal thing where pancreatitis produces organ damage and can lead to fatality. So it’s a much different animal for physicians to manage and, of course, for payers to deal with as well. So, that part of it is harder to assess. And I’m not sure that we’ll get granularity on that even when they announce their results in September. So it’s a little bit difficult to say, Jason, at this time. We will track abdominal pain as well, but we’re really focused on acute pancreatitis given that that’s the real disease with severity.

Jason Gerberry

And will you guys be publishing your baseline demographics? I don’t know, in the next six to nine months or so?

Bruce Given

Yes, I think we will. We’ll be submitting that for a future medical conference for sure.

Jason Gerberry

Okay, thank you.

Bruce Given

You bet.

Operator

Thank you. Our next question comes from David Leibowitz of Citi. Your line is now open.

Mary Kate

Hi there. This is Mary Kate on for David today. Thanks so much for your overview of the anticipated FCS launch. I guess how does this treatment address the clinical unmet need in this space? And maybe what feedback are you receiving from physicians ahead of this potential launch?

Christopher Anzalone

Andy, you take that and Bruce, add anything that you think should be added.

Andy Davis

Yeah, happy to take that. So thank you for the question, Mary Kate, related to clinical unmet need. We know with respect to familial chylomicronemia syndrome patients that they suffer from physical symptoms, including abdominal pain and of course, as Bruce mentioned, acute pancreatitis, which can lead to recurrent pancreatitis, necrotizing pancreatitis and in some instances, fatality. And so one of the big things that we believe Plozasiran addresses as far as meeting the unmet need, first and foremost, is a deep reduction of triglycerides to a level that has never been seen before with existing therapies in this space. We’ve talked about an 80% reduction from baseline seen in the PALISADE study. Moreover, the outcome of interest, of course, is reduction in acute pancreatitis risk.

And Plozasiran is the only agent in a registrational Phase 3 study that has demonstrated a statistically significant reduction in acute pancreatitis risk in PALISADE. So, those are two of the primary unmet needs that we believe Plozasiran can address in FCS. I would say, moreover, just from a patient convenience and tolerability perspective, Plozasiran does continue to have a very desirable profile with only quarterly dosing, so four injections a year, which is very different than the current treatment regimens that are available for these patients presently. So hopefully, that addresses your question around why we believe Plozasiran fills some important unmet clinical needs.

Operator

Thank you. Our next question comes from Patrick Trucchio with H.C. Wainwright & Co. Your line is now open.

Patrick Trucchio

Thanks. Good afternoon and congrats on all the progress. I’m just wondering, as payer access appears favorable for both genetically confirmed and clinically defined FCS, is there any differentiation in the coverage path for high-risk severe high triglyceride patients, particularly those that don’t have a pancreatitis history? And I guess I’m just wondering if you can speak to your expectations for pricing between FCS and severe high triglyceride indications, particularly just given the different population size of medical cost burden.

Christopher Anzalone

So regarding pricing, we’re not prepared to opine too much on a potential SHTG price. We are still looking into that. We certainly would expect that to be a lower-priced drug than FCS. But beyond that, we’re still working on that question.

Operator

Thank you. [Operator Instructions] Our next question comes from Prakhar Agrawal from Cantor. Your line is now open.

Prakhar Agrawal

Hi. Congrats on the quarter and thank you for taking my questions. So maybe on the Sarepta situation, I think Sarepta also owns 10 million-plus shares of Arrowhead stock. So, what could be a practical solution here to solve for this if Sarepta intends to sell their shares? And secondly, on SHTG, maybe a question for Andy. What sort of commercial activities you are doing to educate the community about how SHTG is different from the lipid market? It seems that the Street has been anchored to lipid pricing and the uptake there for the drugs? Any color there would be helpful.

Christopher Anzalone

Sure. Yes, Sarepta does own some Arrowhead shares. Their lockup period is still in effect right now. I can’t tell you what their plan is for those shares. I can tell you that we have had inbound interest in acquiring shares. And so I’m not so worried that if they decide to sell those that they can buy a buyer, they certainly could. But I don’t know what the longer-term plans are in terms of holding on to those shares for how long.

Andy, do you want to address the…

Andy Davis

Yes. Thanks, Prakhar. As it relates to education, of course, we have active medical education in the form of our medical science liaisons who are conducting scientific exchange. Moreover, there is independent medical education, continuing medical education that’s ongoing related to individuals with extremely high triglycerides, the unmet medical need, burden of disease and education around clinical study results, certainly in the case of PALISADE.

I would say a lot of the education that’s happening now in the community is related to education around the disease burden, around goal attainment, namely an education around the guideline-directed risk threshold of 500 milligrams per deciliter and then, of course, a focus on the outcome of interest, which is acute pancreatitis events. And so that largely is the focus of our education. And as our commercial field team gets out into the field towards the end of this month, of course, they will be highly focused on a similar disease education as well. So, I think that answers your question.

Christopher Anzalone

And your question is an astute one. Yes, triglycerides can be found on the standard lipid panel. But when people think about lipid drugs, they generally think about them in the context of ASCVD. This is not what this drug is. Plozasiran is not an ASCVD drug. Plozasiran is a pancreatitis drug, and I think should be thought of as such and priced as such, to be honest. So yes, this is a lipid parameter, but this is not an ASCVD drug. This is a pancreatitis drug. And there are populations that are at substantial risk of pancreatitis, acute pancreatitis with the high levels of triglycerides. And so I think that’s the way you need to look at it.

Prakhar Agrawal

Thank you.

Operator

Thank you. Our next question comes from Eliana Merle of UBS. Your line is now open. Hi, this is Joseph on for Ellie. Thanks for taking my question and congrats on initiating the Yosemite trial for Zodasiran. I’m wondering if you can talk about your latest on your estimations of the size of the HOFH addressable patient population. Thank you.

Bruce Given

Andy, you’re probably one of the world experts on that. Why don’t you take that one?

Andy Davis

Yeah. So the literature would suggest that the prevalence for HOFH is anywhere from roughly one in 500,000 to one in a million persons. And so there’s been quite a lot of evidence produced in the HOFH space over the years as new therapies have become available. So we see the accessible population for HOFH being similar to those estimates.

Operator

Thank you. Our next question comes from Edward Tentoff of Piper Sandler. Your line is now open.

Ted Tenthoff

Great, thank you very much. Actually, a little housekeeping question if I may. Congrats on the Visirna deal. So does that cash go to Arrowhead and is it able for you guys to invest that?

Christopher Anzalone

So the cash goes into Visirna and a portion of that, a large portion of that will be distributed to shareholders of Visirna. And as I mentioned in prepared remarks, at close we’ll own about 56% of Visirna. Not all of it will go out. There will be some tax liabilities to. And also we need to leave some cash into the company because as I mentioned, they also have. They have ongoing studies with Zodasiran related to SHTG, although we will take that over. They also have studies for Zodasiran. They also have some Arrow HSD studies ongoing.

It’s not a huge. It’s not a huge cost, but there is some cost there. And ultimately again, as I mentioned in the prepared remarks, my — our goal here is to monetize the China rights for Zodasiran and the China rights for Arrow HSD in a similar manner that we did for. So anyway, long story short is we will bring home, I think a substantial amount of that capital, but not all of it.

Ted Tenthoff

Great, that’s helpful. And then when it comes to the R&D, the annual R&D from Sarepta, is that paid all at once on the annual anniversary?

Christopher Anzalone

Yeah, so they will pay us $50 million a year for five years and that payment is due in the first quarter of every year. So I believe it’s February. Is that right, Dan? It’s February. And so we have $100 million due now for the first DM1 milestone, $200 million that we think we’ll trigger at the end of the year and then a further $50 million due for the annual payment in February.

Ted Tenthoff

Great. Thanks guys.

Christopher Anzalone

You’re welcome.

Operator

Thank you. Our next question comes from Luca Issi of RBC Capital Markets. Your line is now open.

Shelby Hill

Oh, great. Thanks guys for taking the question. This is Shelby on for Luca. Can you just talk about the initial presentation for Plozasiran? Our understanding is that initial approval will be for pre-filled syringes. So is that correct and if so, what is the path to have this in the form of an auto injector? And how should we think about that timeline? Thanks.

Christopher Anzalone

Sure, Andy, we want to discuss that. And then Bruce, can you talk about more of the granularity of the auto injector.

Andy Davis

Yes, that’s right, Shelby. So our initial presentation for Plozasiran in the FCS space will be a prefilled syringe. And there is development underway for an auto-injector in the SHTG space. Bruce, if you want to comment any more on that?

Bruce Given

Yeah, I would just say that the auto injector will be either available at the time of launch for the SHTG indication or soon thereafter. That’s our current expectation.

Shelby Hill

Great. Thanks.

Operator

[Operator Instructions] Our next question comes from Mani Foroohar of Leerink. Your line is now open.

Ryan Hayes

Hi guys. You have Ryan on for Mani. Thanks for taking our question. And congrats on the quarter. Maybe shifting over to the INHBE readout later this year. Can you just share a little detail around which cohorts we should expect to see data from, whether that’s the SAD/MAD combo? And then internally, what are you guys really hoping to see here relative to the other data sets from muscle-sparing agents that we’ve seen so far? Thanks.

Christopher Anzalone

Yeah, sure. I can take that. We’ll have data from all of those cohorts that you mentioned, SAD/MAD as well as the combination cohorts. And we’ll be measuring a handful of different biomarkers, including PD biomarkers like measurable active in the blood. Of course, we can look at body composition based on MRI and weight loss changes in body weight. Then of course, we’ve got a whole host of lipid parameters and glycemic control parameters that we’ll look at.

Operator

Thank you. [Operator Instructions] Next question comes from Mike Ulz of Morgan Stanley. Your line is now open.

Michael Ulz

Good afternoon and thanks for taking the question. Maybe just a follow up on the last question related to the obesity updates later this year. Just curious if you see what you want to see there, what would be some of the scenarios around next steps for those programs. Thanks.

Christopher Anzalone

Yeah. So those are hard questions. I don’t think we go into most studies with an idea that if we see X, we will move forward in some manner. If we see Y, we will move forward in some other manner. If we see Z, we won’t move forward. We’re in the truth-seeking business. We will do the study and we’ll see what the data look like and then move on from there. But I don’t mean to evade your question. We just we don’t go into these studies with any sort of preconceived ideas about what might come next until we see some data.

Michael Ulz

Understood, thank you.

Bruce Given

Yeah. I would just sort of add to that, that we need to keep in mind that these are novel mechanisms. These are not just another GLP-1 agonist access sort of drug. We’re looking at different behaviors and really looking for white space opportunities here. And it’s very hard to predict those. It’s much easier to answer a question like that if you’re coming in with the 10th GLP-1 agonist. But it’s quite hard to answer that question when you’re dealing with a completely novel mechanism that has not been in humans before.

Michael Ulz

Makes sense. Thank you.

Operator

Thank you. Our next question comes from Joseph Tome of TD Cowen. Your line is now open.

Joseph Thome

Hi there. Good afternoon and thank you for taking my question. Maybe on the MUIR-3 study, I guess, given that these patients will likely have a lower mean fasting triglyceride level, is there an increased risk that potentially this patient subset would be more at risk to self-adherence of or self-levelization of diet or maybe a little bit less adherence to background with the bone therapy than what you might see in SHASTA-3, SHASTA-4? And I guess, could that create some variability in the AE profile or endpoints, I guess, why or why not? And then when you think about the readouts for these 3 trials, would these all come at the same time and it would be one top line release? Or would these be discrete events? Thank you.

Bruce Given

So yes, taking that first question. Look, in clinical trials, we do our best to try to encourage participants to follow the protocol. We give them frequent dieting advice and reminders. And it’s hard to estimate whether they’re going to behave all that differently than the SHTG population. I would say that we did two trials in mixed hyperlipidemia in the last few years, one with Plozasiran, one with Zodasiran. And I wouldn’t say that the behavior in those trials was all that different than we saw in SHASTA-2 or PALISADE with respect to adherence to the protocol. It was pretty good for both.

Now that may be partly we pay a lot of attention to the detail of execution of clinical trials, and we tend to have a low dropout rate and a pretty good adherence rate, probably in no small part because of that. But I’m not too concerned about that. And of course, we have placebos in these trials, and you expect the placebo behavior to sort of mimic the behavior that you get in the active treatment arm. So hopefully, whatever you see balances out anyway relative to placebo. But I don’t think we’re expecting anything particularly different.

Joseph Thome

Great, thank you. And then the last one was, are these going to read out at the same time in the top line? Or will these be three separate releases?

Bruce Given

I don’t think we’ve really come to a determination on that. In theory, we’ll have the data from these three trials fairly close together, but I don’t think they will all show up on the same day. So I’ll leave it to Chris if he wants to predict how we’ll make that decision a year from now.

Christopher Anzalone

My first thought on that is that, yes, they are three separate studies, but they’re part of one grander study. And so it would seem to make sense to release them all at once. But I’ll be honest with you, we haven’t really discussed that.

Joseph Thome

Perfect. Thank you very much again.

Operator

Thank you. Our next question comes from William Pickering of Bernstein. Your line is now open.

William Pickering

Hey guys, congrats on the progress and thank you for taking my question. Just about your DM1 program. At your muscle R&D Day last year, you indicated you were planning to dose up to 12 MPK in that initial study. My understanding is the highest dose under the current protocol is 6 MPK and that’s unchanged from when Sarepta licensed the product last November. Is my understanding correct? And if so, what was the rationale for reducing that max dose versus the prior plan for having a lower max dose than the FSHD study? Thank you.

Christopher Anzalone

Sure. So we still can go up to 12 mgs per kg in the current study, the DM1 study.

Operator

Thank you. [Operator Instructions] Our next question comes from Madison El-Saadi of B. Riley. Your line is now open.

Madison El-Saadi

Hey guys, congrats on the quarter and thanks for taking our question. I guess maybe going back to obesity, given that the end size, the sample size, I guess is it your assumption that any statistical conclusions are achievable or is that kind of precluded here? And just assuming a competitive muscle sparing weight loss is achieved, where do you think you need to land on frequency of dosing to be competitive, given there are other muscle sparing candidates being developed oncluding other siRNA candidates. Thanks.

Christopher Anzalone

Sure. So this Phase I study is really hypothesis generating. There’s not a powering necessarily that goes into cohort size. I think the effect size that we would see from this study would be used to power a subsequent study down the road. And then in terms of frequency, we’re looking at the most frequent, probably quarterly dose administration. So, I’m not sure if there’s anything out there that can match that frequency to date and certainly not the GLP-1s, at least not that I’ve seen and some of the muscle sparing molecules are probably more frequent than that. So, we’re looking at quarterly to every six months. Beyond that, I don’t really see any benefit to even less frequent dosing. So, I think we’re in a pretty good place in terms of frequency of dose administration at quarterly dosing.

Madison El-Saadi

Got it. That’s very helpful. Thanks.

Operator

Thank you. Our next question comes from Morgan Lamberti of Goldman Sachs. Your line is now open.

Morgan Lamberti

Hi, thank you for taking that question. This is Morgan on for Andrea Newkirk. Kind of going back to obesity and specifically ARO-ALK7, can you speak more to how you are delivering siRNA to adipocytes? And then recognizing that it has not been explored in humans, what gives you confidence in the safety profile? What potential risks could you see in this targeting? And is there a good loss of function data out there for us to see? Thank you.

Christopher Anzalone

Sure. Yes. See if we can hit all of those maybe in reverse order. So, there our data on loss of function ALK7 loss of function carriers, we know there are at least a few homozygous walking around that seem to not have any issues. Then of course, there’s a lot of heterozygous ALK7 loss of function carriers that seem otherwise phenotypically normal. They can be protected from things like type 2 diabetes and have an improved body composition, improved BMI-adjusted waist-to-hip ratio. The molecule itself does use a ligand targeted approach that’s selected for adipose tissues, adipocytes.

So, there is a ligand-driven approach that’s facilitating uptake of the siRNA into the cell. And then beyond the human genetic data, what gives us confidence from a safety standpoint to start the study is, of course, all the non-GLP and GLP-tox studies that we’ve done in non-human primates and in rodent species. And of course, in those, we go up to doses, many multiples of the doses we plan to use in the clinical trial. And those were all completed without any dose-limiting toxicity. So, I think we’re in a pretty good position as far as safety goes going into this Phase I study.

Morgan Lamberti

Awesome. Thank you so much.

Operator

Thank you. This concludes the question-and-answer session. I would now like to turn it to Chris Anzalone, CEO, for closing remarks.

Christopher Anzalone

Thank you all for joining us. Today. And I wish you all a good end of the summer and we will see you next quarter.

Operator

[Operator Closing Remarks]