Arrowhead Pharmaceuticals, Inc. (ARWR) Q4 2026 Earnings Call Transcript

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 call over to Vince Anzalone, Senior Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

Good afternoon, and thank you for joining us today to discuss Arrowhead's results for its 2026 fiscal year, ended September 30, 2026. With us today from Management or President and CEO, Dr. Chris Anzalone, who will provide an overview.

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 her development programs. And Dan Appel, 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 meeting 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. Thanks, guys. Good afternoon, everyone. Thank you for joining us today. Aeroid has fundamentally changed over the past 12 months. Where there was once a company that relied solely on great scientific promise, there is now a company that is beginning to translate promise into real patient outcomes and the potential for durable shareholder value growth. We are building a commercial business around Redempla. We have delivered the pivotal data we believe is needed to pursue a much larger market in severe hyperglyceridemia, or SHTG. And we have demonstrated new capabilities that substantially expand what our RNAI platform can do. I believe we approach 2027 with the strongest combination of near-term commercial opportunity and scientific capability in our history. For the long term, we intend AeroEde to become a substantial pharmaceutical company that introduces important new medicines into the market virtually every year. We believe we have demonstrated that we have platforms and development capabilities to do this, and the result could be an engine that improves innumerable patient lives and creates substantial value. But first things first, we need to build a commercial presence that matches the excellence we've built in discovery and development, and we need to demonstrate that we are capable of building out a new market. Finding the patients who could benefit from our medicines, and growing a profitable business. Simply put, commercial progress with Regenplo is critical. We are focused on continued success serving the FCS market, planning a rapid launch into SHTG, and positioning AeroEd to maximize the SHTG market opportunity. Of course, revenue levels, growth, and profitability will ultimately be the only metrics that matter when assessing how we are doing with Regenplo. However, that will not tell the whole story until after the first several quarters of our planned SHCG launch, as payer policies are being worked out, coverage is being secured, and provider outreach is initiated. So during this period, we will regularly refer to three metrics that we believe capture the breadth and depth of early market penetration. They are, one, total number of new-to-brand patient prescriptions, Two, number of distinct prescribers writing prescriptions, and three, number of lives covered on payer formularies. We believe there are large pools of patients who can benefit from Mugemplo, and these three metrics are intended to reflect how well we are building pipes to reach them. We launched into the narrow FCS market about 11 months ago and are still in the pipe building phase. This work has progressed well. As of September 30, we had 950 new-to-brand patient prescriptions, representing a 63% increase over the prior quarter end. This growth rate continues to increase rapidly as we have added another 300 since then. At September 30, over 640 distinct individual prescribers wrote first-time prescriptions, and that number has grown to over 860 since then. There are now over 160 million lives covered in payer formularies in the U.S. We are seeing strong demand for Redempla and continue to work with payers to increase the rate at which prescriptions are converted to paid shipments. This is still a choke point, and there is substantial work to do, but we are off to a good start. The pipes we are laying are critical for the FCS market and, importantly, directly applicable to the next stage of our business in SHTG. We intend to enter SHCG with an organization that already understands the medicine its prescribers and the practical work needed to get patients on treatment. Let's now look forward. We are preparing aggressively for a potential U.S. launch in SHCG in the second quarter of 2027, subject to successful FDA review and approval. The FDA-granted plizzerain entry into the Split Real-Time Application Review, or STAR, pilot program. For our planned SHCG supplement, STAR provides a six-month priority review framework and the possibility of action earlier than the formal goal date. We submitted our SNDA on November 2nd, so we expect to receive our PDUFA date over the next 50 days or so. We are very optimistic about the potential for this launch. We believe the clinical profile, the unmet need, and the capabilities we are building position Redempolo to become the leading treatment in this market. That conviction begins with data. In July, we announced that CHASTA 3 and CHASTA 4 met their primary endpoint and every pre-specified secondary endpoint. The detailed results presented at the European Society of Cardiology Congress in August and at the American Heart Association just last weekend reinforced the consistency of plisisterine's activity. Median triglyceride reductions from baseline were 79% and 81% at month 12. In the pooled analysis, cumulative acute pancreatitis events were reduced by 78% versus placebo across the broad SHTG population study, with an impressive 100% reduction in patients at the highest risk of acute pancreatitis. These are results that we believe can change treatment expectations. Physicians see patients whose triglycerides remain dangerously elevated despite existing approaches. Our goal is to deliver those physicians a medicine that can produce deep, sustained reductions with a simple quarterly injection, supported by evidence of fewer acute pancreatitis events in the Shasta 3 and 4 studies. We believe that is a powerful proposition for patients and payers alike. We continue to describe the profile we are pursuing as safe, simple, and strong. SAFE reflects the favorable tolerability observed in all our studies, no increase in liver fat, no hypersensitivity, and no notable changes in liver values. SIMPLE reflects a fixed 25-milligram dose administered once every three months. We don't expect to need to monitor liver enzymes, and there will be no need to titrate the dose up. STRONG reflects the depth of triglyceride lowering and the pancreatitis results. The FDA will determine the final FHTG label, but we have a high degree of confidence in this medicine. We continue to see the potential for a DEMPLO to generate $3 billion to $4 billion in annual U.S. sales over time in FHTG. These are large numbers, but we see many ways to get there. While there are thought to be 3 to 3.5 million people in the U.S. with TGs greater than 500 milligrams per deciliter, we believe the early adopters will be the population at highest risk within this group. This is comprised of those patients with TGs greater than 880 without a history of pancreatitis, and those with TGs greater than 500 that have a history of acute pancreatitis. Together, we believe this population tolls almost 1 million people in the U.S., and their enhanced risk of acute pancreatitis would suggest that they are in real need of treatment. In SHASA 3 and 4, the number of patients needed to treat in order to prevent a single acute pancreatitis event was 9 in patients with TGs greater than 880 without a history of pancreatitis and those with TGs greater than 500 and a history of pancreatitis. Within that latter group alone, the NNT was only 3. These are very compelling numbers, and keep in mind that this is just after one year. We would expect those NMTs to decrease further over longer treatment periods. Our data suggests that this patient population could benefit from Regemplo, but a valid question is how long it will take to educate patients and providers about the need to treat. There is clearly already some appreciation for this. For instance, we believe that around 1 million people with TGs greater than 500 are on prescription fish oils. This suggests to us that providers already have an urgency to treat TG levels for at least these patients. Remember that these fish oils only reduce TGs by 20-30%, while Redempla reduced TGs by around 80% from baseline in Shasta 3 and 4. Outside the U.S., our business is advancing as well. Redempla became available for prescription, dispensing, and reimbursement in Germany in August, following the European Commission's June authorization. In addition, in October, the UK Medicines and Healthcare Products Regulatory Agency, or MHRA, authorized Redempolo in the United Kingdom for Adults with FCS, and the UK National Institute for Health and Care Excellence, or NICE, issued guidance recommending funding in England and Wales. These milestones expand the foundation of our global cardiometabolic business. Besides our commercial build-outs, our discovery engine has delivered two important clinical advances. In September, Aerodimer PA demonstrated that one RNAi molecule can silence both PCSK9 and ApoC3 in people with mixed hyperlipidemia. That opens an important new approach to ASCVD due to mixed hyperlipidemia and gives us a basis for developing additional medicines that address more than one disease driver at a time. Then in October, Aromat-T produced substantial and sustained reductions in tau measured in the cerebrospinal fluid after Stelke-James administration. We view this as early clinical validation of our ability to deliver RNAi across the blood-brain barrier. The opportunity to address CNS targets with an injection under the skin could dramatically expand the diseases we can pursue. I do not think this breakthrough can be overstated. We intend to move decisively to build on these results. This is the model we have been building for years to establish delivery to a cell type, learn how to do it reliably, and then apply that capability to additional targets. Our clinical work now spans the liver, lung, muscle, adipose tissue, and CNS, with additional tissue types being studied pre-clinically. Every successful expansion gives us the potential to create multiple medicines and additional opportunities for partnerships. Our cardi-metabolic franchise illustrates how that can translate into an efficient commercial business. Redempla, Zodaciran, Aerodimer PA, and our obesity and NASH programs could serve related physician audiences. We intend to build an organization that can support several products through much of the same infrastructure. That is an important part of how we think about growth and long-term returns on the capital we invest. We have also announced an agreement with 6th Street to retire our existing debt at a discount to the minimum multiple on invested capital provided for in the existing agreement and to establish a new facility at a lower cost of capital. The refinancing is designed to extend our debt maturity and provide financing terms more consistent with Arrowhead's current stage. We have a great deal to execute, and we are approaching it with urgency. The potential FHCG launch is our most important year-term commercial priority. We believe it can change the scale of Arrowhead's business, while the rest of our pipeline creates opportunities well beyond Redemplo. I am more optimistic than ever about the patients we can help and the value we can build. With that overview, I'd now like to turn the call over to Andy Davis. Andy?

Thank you, Chris, and good afternoon, everyone. We are approaching one year since Redemplo's initial FDA approval, and the FCS launch continues to progress. I'll cover three measures of this progress. Number one, growth in prescriptions. Number two, expansion of the prescriber base. And number three, advancements in market access. Then I'll connect them to our planned SHTG launch anticipated in the second calendar quarter of 2027. First, growth in prescriptions. Total new-to-brand prescriptions grew 63% in the fiscal fourth quarter. And that momentum has carried into this quarter, taking us well past 1,250 cumulative new-to-brand prescriptions. On prior calls, I cited a run rate of 20 to 30 new prescriptions per week. Recent trends support approximately 50 to 60 per week. We are encouraged by the sustained increase in demand. Since expanding our field team this summer, we are reaching substantially more healthcare professionals. And we are seeing strong interest in Redempla from prescribers across specialties. It's important to note, however, that these are written prescriptions, not paid claims. Moving from prescription to treatment requires patient engagement, benefit verification, physician office support, and prior authorization submission and approval. Our dedicated Redempla reimbursement navigator team is heavily focused on educating offices on the reimbursement process to convert this demand into treatment starts and durable access. Second, expansion of the prescriber base. Unique prescribers grew over 50% in the fiscal fourth quarter. Since then, in the last five weeks alone, we added as many prescribers as in the entire fourth quarter, bringing the total as of the first week of November to over 860. We view this as an important indicator of future growth and of productive field engagement with the right providers. The specialty mix is led by cardiology and endocrinology, with internal medicine a growing share. These are the same specialties we expect to engage for SHTG, should Redempla be approved for that use next year. Repeat prescribing is also building, with approximately 27% of prescribers having written for more than one patient. In recent market tracking research, prescribing physicians report strong satisfaction and high and increasing likelihood to recommend Redemplos since launch. Third, advancements in market access. Payers representing the vast majority of U.S.-covered lives have published utilization management policies for Redemplos and SCS. These policies describe the criteria by which a payer will evaluate the reimbursement request. Additionally, more than 160 million U.S. lives now have coverage for Redempla, with coverage defined as those eligible patients with a reimbursement pathway under the applicable policy criteria. Both of these metrics have grown steadily since launch. Our objective is to expand access for appropriate patients with genetically confirmed or clinically diagnosed FCS and to help practices navigate requirements efficiently. We are working with payers, specialty pharmacies, and physician offices to move prescriptions through the process and resolve points of friction. Broadening access and improving the patient journey are central priorities as we prepare for a much larger opportunity. Turning to SHTG, our enthusiasm is high. We are preparing for a potential launch in the second calendar quarter of 2027 subject to FDA approval. Our initial focus is on patients at high risk of acute pancreatitis, including those with triglycerides at or above 880 mg per deciliter or above 500 mg per deciliter with a prior history of pancreatitis. We have described this as approximately 1 million people in the U.S. within the broader SHTG market. We have identified more than 20,000 healthcare professionals across relevant specialties as likely SHTG treaters. And we are well advanced in building our HCP engagement, patient services, distribution, and market access capabilities. Our expanded sales team is now largely in place, building relationships and mapping priority accounts in preparation for a potential SHTG launch. What we are learning now will help us execute as the addressable population expands. Our one redemptible pricing approach supports this transition. The current U.S. wholesale acquisition cost is $45,000 per patient per year, and we intend to hold a consistent U.S. price across FCS and SHTG if the broader indication is approved. We believe that simplicity supports productive payer discussions and a clear value proposition. Outside the U.S., Germany and the U.K. are now active commercial markets. In the UK, the Reimbursement Authority recently issued final guidance recommending Redempla for genetically confirmed FCS, supporting reimbursement in England and Wales, and we are working to serve eligible patients there now. To recap, the FCS launch is showing increased prescription demand, a broadening prescriber base, and important advancements in access. This is the progress we intend to carry into SHTG. We believe the opportunity ahead is significant, and our team is preparing accordingly. With that, I'll turn the call over to James.

Thank you, Andy. The fourth quarter and subsequent period included important progress in our late-stage cardiometabolic programs and clinical validation of two new applications of Arrowhead's TRIM platform. I'll begin with plizaceran and then discuss zodaceran, aerodimer PA, Our CNS efforts, as well as obesity and MASH. For plizaceran, the SHASTA-3 and SHASTA-4 results give us a strong basis for the SHTG-SNDA, which, as Chris mentioned, has been submitted. Both trials evaluated 25 milligrams every three months and both met their primary and all pre-specified secondary endpoints. In addition to the triglyceride reductions Chris described, more than 90% of treated patients achieved triglycerides below 500 milligrams per deciliter at month 12, and more than half achieved triglycerides below 150 milligrams per deciliter. In the pooled acute pancreatitis analysis, the overall reduction in cumulative events was 78% versus placebo. Among patients with a prior history of acute pancreatitis, the event rate reduction was 91%, with an estimated number needed to treat of three over one year to prevent one event. In the highest risk group, with triglycerides above 880 and a prior history of pancreatitis, there were no events observed in the plizacirine group. These subgroup findings support our focus on patients with substantial ongoing risk. Safety remained favorable overall and consistent with our previous experience. Treatment-emergent adverse event rates were similar in the pooled placebo and pooled active groups. There were no cases of anaphylaxis or systemic hypersensitivity, no clinically meaningful platelet changes, and no meaningful liver enzyme elevations relative to placebo. The MRI sub-study showed no statistically significant change in hepatic fat fraction. Worsening glycemic control was reported more frequently with plazaciran at 14.3% versus 8.7% in placebo, with mean changes in hemoglobin A1C consistent with previous experience, and importantly, no progressive worsening of A1C over time. Our regulatory package draws on SHASTA-3, SHASTA-4, and the NIR-3 safety database. Working within STAR, which includes priority review, we continue to anticipate an efficient review process. Entry into STAR reflects the FDA's assessment that the application meets the program's criteria for potentially meaningful improvement over available therapy on clinically relevant endpoints. Approval, and the ultimate label remains subject to regulatory review. Now, turning to Zodaciran, in July, we completed enrollment in the Global Phase III Yosemite Study in homozygous familial hypercholesterolemia. We enrolled 70 patients above the original target of 60, reflecting strong interest in this population. The trial evaluates quarterly dosing and the change in LDL cholesterol at month 12 as the primary endpoint. We anticipate study completion in mid-2027 and data in the second half of next year, with a potential regulatory filing thereafter if the results are supportive. Our previously stated goal has been an NDA filing by year-end 2027. Next, Aerodimer PA. The interim single-dose results announced in September showed mean maximal reductions of 89% in PCSK9 and 95% in ApoC3. The corresponding mean maximal lipid reductions were 65% for LDL cholesterol, 78% for triglycerides, 73% for remnant cholesterol, and 66% for ApoB. These are early-dose escalation results, but the ability to affect both pathways with one molecule leading to large reductions in atherogenic lipoproteins is highly encouraging. No drug-related serious adverse events were reported in the interim analysis. Injection site events and headache were the most commonly reported treatment-emergent events. Multiple-dose assessment continues, and we expect additional clinical data around mid-2027. We are evaluating a development strategy that could first seek approval based on LDL cholesterol lowering subject to regulatory agreement. Turning to the CNS, our October 14 presentation included the first interim healthy volunteer results for subcutaneous AROMAT-T. At the 12.8 mg per kg regimen administered on day 1 and 15, mean CSF total tau fell 73% by day 105, with a maximum individual reduction of 85%. Day 105 was 90 days after the last dose, and these findings support the potential for maintenance dosing every three months or less frequently. Aeromepti was generally well tolerated in the interim analysis, and there were no serious treatment emergent adverse events or adverse events leading to discontinuation. No persistent anemia or neurobehavioral adverse events were reported. These results provide evidence of target engagement in healthy volunteers. Multi-dose healthy volunteer cohorts are fully enrolled, and enrollment in early Alzheimer's patient cohorts is ongoing. We expect additional healthy volunteer data and Alzheimer's patient data in 2027. We've also begun regulatory discussions around clinical studies in MAPT-associated frontotemporal dementia and progressive supranuclear palsy. We have multiple additional CNS programs in development. As discussed at our October webinar, we are targeting CTAs for two wholly owned candidates around the end of 2026 or early 2027, and additional CNS clinical entries by the end of 2027. The objective is to apply the CNS delivery capability across a broad set of diseases. Lastly, we remain on track to share updates from our obesity programs, specifically focused on ALK7 non-diabetic monotherapy cohorts, as well as the type 2 diabetic terzepatide combo cohorts before the end of the year. I will now turn the call over to Dan of Health.

Thank you, James, and good afternoon, everyone. I'll provide a brief outline of our financial results for the full fiscal year ended September 30. 2026, and then discuss our financial position following several recent developments. As we reported today, net loss attributed to Arrowhead for fiscal year 2026 was $724.2 million, or loss of $5.11 per share, based on $141.6 million fully valued weighted average shares outstanding in the year. This compares to a net loss of $1.6 million, or a loss of one cent per share, based on 133.8 million fully diluted weighted average shares in fiscal year 2025. Two factors drove much of the year-over-year change. First, fiscal year 2025 benefited from $829 million in collaboration revenue, largely from the initial recognition of the Sarepta and Sanofi arrangement. Second, fiscal year 2026 included a one-time $215 million expense with a priority review voucher we acquired in September. Excluding that expense, net loss would have been approximately $509 million. Turning to revenue. Revenue for fiscal year 2026 totaled $450.8 million compared to $829.4 million in fiscal 2025. Revenue in fiscal 2026 was driven by our license and collaboration agreements with Sarepta, Novartis, Madrigo, and Sanofi, together with our first year of commercial sales of Redempto. Of that total, $317 million related to our Sarepta collaboration. This includes the $181 million recognized for the second DM1 milestone. Ongoing recognition of initial surreptive consideration, reimbursement of incurred collaboration program costs, and revenue under the clinical supply agreement. The $317 million compares to $697 million from the prior year, with the year-over-year decrease related to the one-time recognition in 2025 of the transfer of the initial surreptive licenses. For our Novartis collaboration, we recognized $89 million during the year, nearly all of which relates to the $200 million upfront payment we received in October. As of September 30, 2026, we still carried approximately $113 million of deferred revenue, which will be recognized over time as we fulfill our research and development obligations. During the year, we also recognized the $25 million upfront payment from Madrigal for Aero PNPLA-3. Following completion of that license and technology transfer, and we recognized $13.3 million related to Sanofi and Greater China, compared to $130 million in the prior year, which related to the upfront consideration received when that agreement closed. Finally, fiscal year 2026 also marked our first year of commercial sales over DEMPLO, with net product revenue of approximately $6.6 million. As both Chris and Andy have mentioned, we are very pleased by the reception from patients, physicians, and payers, and how the underlying prescription volume and net sales are developing. While we have consistently stated that FCS revenue will have an immaterial impact to our 2026 financial statements, we continue to invest in supporting this FCS launch and preparing for the potential blockbuster opportunity in SHTG. Turning to expenses. Total operating expenses for fiscal 2026 were approximately $1.16 billion compared to $731 million in fiscal 2025. The $427 million increase includes the $215 million priority review voucher expense. Excluding the voucher, operating expenses were approximately $943 million. An increase of $212 million year-over-year, driven by $132 million of higher R&D and $78 million of higher SG&A expense. R&D for the expense for the year was $739 million, compared to $607 million in the prior year. Candidate costs accounted for $96 million, or the majority of that increase. Taken as a whole, these R&D investments supported the positive pivotal SHTG results reported this summer, the advancement of our broader pipeline, and our efforts toward commercial manufacturing readiness in Verona. As a reminder, the Verona plant provides us accelerated and enhanced ability to prioritize and make new clinical GMP oligonucleotide drug substance and will be used to support future commercial products. The first one planned being SIDASERAN. SG&A expense for the year was $202 million, compared to $124 million in the prior year. The increase was driven primarily by our investment in the commercialization of Redempla. As we have discussed, these capabilities more than support the current SDS launch, and were built with the intention of being fully leverageable for the potential SHTG launch, and ultimately for SIDASERAN and HOFH. As of today, our commercial organization is largely in place, and we expect only incremental addition as we approach a potential U.S. SHTG launch. Turning now to the balance sheet, cash and investments totaled nearly $1.2 billion as of September 30, 2026, compared to $0.9 billion a year earlier. Cash used in operating activities was approximately $272 million for the fiscal year. Importantly, that year-end balance is after funding both our operating activities and the 215 million purchase of the Priority Review Voucher. Common shares outstanding at year-end were approximately 141.3 miles. As to the voucher, following the FDA's acceptance of possession into the STAR pilot program in October, it is no longer needed for a planned SHCG supplemental application and is eligible to be sold to a third party. Publicly announced PRV transactions over the last 12 months have ranged from approximately $180 million to $220 million. Purely illustratively, if we were to sell our PRV at prevailing market rates, our cash and investments would be approximately $1.4 billion on a rounded pro forma basis. To be clear, though, we have not entered into a sale agreement, and no PRV sale proceeds are included in our reported statements. Finally, I'd like to highlight the refinancing. We recently completed the Sixth Street on November 2nd. We replaced the prior facility with a new $400 million senior secured term loan and three months sold for plus 5.5%, compared to the prior facility's 15% annual rate. We also negotiated significantly a $68 million discount to the minimum amount required to retire the old facility in 2028. The new loan matures on November 2, 2031, has no scheduled principal amortization before maturity, and importantly, eliminates any and all required cash streaks to six feet tied to product sales, royalty, milestones, or any existing or new licensing and partnership proceeds. To put our debt position in context, our funded debt now consists principally of the $400 million term loan. Due in November 2031, and 700 million of 0% convertible notes due in January 2032. In other words, no principal payments are required before late 2031. Compared with the retired structure, this materially lowers our borrowing costs, extends maturity, and improves our near-term liquidity and flexibility. Taken together, we believe our strong balance sheet with approximately $1.2 billion of reported cash-in investments, a transferable PRV with demonstrated market value, and a meaningfully lower-cost, longer-dated debt structure provides a substantial financial flexibility to support our current clinical and pre-clinical priorities, current and future commercialization activities, and our long-term strategic priorities. Lastly, and unrelated to our financial position, we announced today our decision to change our fiscal year end to December to align with the calendar year. The calendar quarter ranging from October to December of 2026 will be what is called a transitional quarter period, with fiscal quarter 1, 2027 now referring to January through March, 2027. We believe this change will ease a number of administrative burdens associated with a September year end. And ahead of a potential SHTG launch will improve company and investor communication. With that brief overview, I will now turn the call back to Chris.

I want to close with what we believe the next year can mean for AeroHead. Bridgendlo has given us our first commercial foundation. We view that as a launching pad that is intended to enable us to address the SHTG opportunity rapidly. We are targeting the second quarter of 2027 for a potential U.S. SHCG launch subject to FDA approval. We believe we have the data to support a highly differentiated medicine, a large population with substantial unmet need, and a growing commercial organization that understands how to serve physicians and patients and how to navigate the payer landscape. We intend to build the leading franchise around that combination. The coming period should also bring important opportunities beyond our envelope, including additional obesity data by the end of 2026, additional AeroDimer PA data in the first half of 2027, the 70 Phase III readout in HOFH in the second half of 2027, so the SRN NDA filing by the end of 2027, initial patient data from AeroMapT in the second half of 2027, New candidates emerging from our DIMR and CNS platforms throughout 2027, and the opportunity to receive milestone payments from existing partnerships and the possibility of new deals throughout 2027. We have worked for years to build a company that can repeatedly create important medicines and participate meaningfully in the value they generate. We now have much more evidence that this model can work. We are commercial. Our mid- and late-stage pipeline is advancing. And our ability to reach new tissues and targets continues to expand. That is why we are so optimistic. We believe that the next stage of AeroVid's growth can be substantially larger than the last, and we are working to make that happen. Thank you for joining us today, and I would now like to open the call to your questions. I'm ready.

Thank you. To ask a question, you will need to press star 11 on your telephone. To withdraw your question, press star 11 again. Due to time restraints, we ask that you please limit yourself to one question. You may then return to the queue. Please stand by while we compile the Q&A roster. And our first question will come from the line of Maury Raycroft with Jeffries. Your line is open.

Hi, thanks for taking my questions. Given that Ionis has set expectations for their early SHTG launch to be softer than expected, do you view that as

a company-specific execution issue or evidence that the SHTG market may take longer to develop than anticipated?

And how do you reconcile the Ionis comments on broad access and the 1 million people on prescription fish oils with the perception?

That there may be headwinds to the launch. And I guess, can you help us identify what those headwinds could be? Boy, you jammed several questions into one question. So broadly, look, what we learned from IONIS doesn't affect our expectations in SHTG at all. You know, I think what we've seen from them are some missteps in communication, some missteps in commercial execution, and we don't expect to have those missteps. And so we are full steam ahead towards a rapid launch in SHTG. That's a large market. We have a good differentiated medicine that can address that market. And we are building toward that as we speak. So, you know, we are as bullish as ever on our ability to help those patients. You know, you've seen the increase in demand as reflected by prescriptions. You know, we saw a good, what, 63 or so percent increase from quarter to quarter in number of prescriptions, but then an additional 30 percent increase just over the last four to five weeks. Same thing with an increase in prescribers. Another 30 or so percent increase just over the last four to five weeks. And so, you know, we see a lot of demand out there waiting for a demo to be available for SHTG individuals. And also, look, you know, we've got some structural advantages as it relates to an SHTG launch. Just because we are second, you know, we are able to see, you know, what has been done in the market and I think adjust accordingly. We are also having early discussions with payers to hopefully allow us to hit the ground running with respect to payers once we are approved in SHTG. I think we're doing a good job in preparation for that. As we talked about, you know, the – The slow piece of this has been what we call the middle of the funnel, you know, so once prescriptions are written, we have to go through a number of machinations with payers in order to get paid shipments. We're working through that, and I think that our expectation is that we should be able to work through that even quicker in FHTG because we're talking about it right now.

Thank you. One moment for our next question. And that will come from the line of Jason Gerberry with Bank of America. Your line is open.

Hey, guys. Thanks for taking my question. A follow-up, just kind of on the competitor launch. You guys have said twice, I think, on this call, rapid launch, but then also said it'll take several quarters. I wasn't sure if the several quarters was Into the Tringolda launch or several quarters into the Redemplo launch? And maybe because you guys, you know, highlighted communication and kind of expectation setting, is your definition of a rapid launch on sort of the metrics that you guys outlined, like NBRX, as opposed to revenues? So I just wanted to perhaps clarify that so everybody's level set.

Sure. Annie, you want to start with that? Yeah, thanks for the call, Jason. I'm happy to comment. As we had mentioned at the outset of this call, the three leading indicators that we will be tracking in looking to consistently report to you and others are the three metrics we mentioned at the outset of the call. That's new to brand prescriptions, which is largely synonymous with new patients. Breadth of prescribers. So, are we able to communicate to the prescribers who we're interested in educating? And number three, how are we navigating the payer space? That is through the metric of coverage. And we had mentioned that in FCS alone, we currently have 160 million lives covered for Redemplo and FCS. We think that is a very good number at this place in the launch. And so, these are the three leading indicators that we'll continue to report on as we define what would be a rapid launch for Redempt Road into SHTG as well.

Yeah, and look, you know, we're not walking away from revenue. Obviously, revenue is important. Our point here is that in the early stages of a launch, that may not tell the entire story. So, while we'll be talking about revenue and how we increase that, I think it's also important to look at these other three metrics to see how growth is going, to see how market penetration As you know, it just takes a little bit of time to get these policies in place and have coverage in place. Got it. Thank you, guys.

Welcome. One moment for our next question, and that will come from the line of Mike Olds with Morgan Stanley. Your line is open.

Good afternoon. Thanks for taking the question. Maybe just another follow-up on the Redemplo and the pending launch here. Just wanted to get your thoughts on potentially providing guidance. You know, what's the current thinking there? Is that something you might share next year at some point, or any thoughts there would be helpful? Thanks.

Yeah, thanks. Unfortunately, it's just too early to provide guidance. You know, we will be happy to do that when we can. We have just filed our SNDA. We don't even have a PDUPA date yet, much less a label, and so we need to see what that label looks like. You know, we need to have some experience working with payers. As I mentioned, we are starting to do that right now, even prior to, you know, to an SHTG label. So, I think that that can move relatively rapidly, but until we have better visibility on those key features, it's just too early to provide guidance.

Great. Thank you. You're welcome.

Thank you. And our next question, that will come from the line of Brian Chang with J.P. Morgan. Your line is open.

Hey, guys. Sorry. Thanks for taking our questions today. Just tripping away from SXTG here, on the obesity update in the coming weeks, what do you need to see to define success for the OX-7 monotherapy and the tersepotide combo? And, you know, when you talk about new deals, is this an area where you think that the new deal should happen? Thank you.

Do you want to go first? Yeah, sure. I can talk a little bit about, you know, I can't set sort of the hurdles that we plan to get over, but in terms of data that we'll be sharing by the end of the year, expect to see the changes in body composition based on MRI. Of course, we'll share safety and knockdown, and then probably some changes in body weight as well.

Yeah, and relating to deals, let's see. I can't give you too much guidance on this. You know, maybe it's easier to tell you, you know, what's off the table. You know, we are running towards an FHCG launch with Plisacera and with Redempo. We see that as a... As a cornerstone of our burgeoning commercial infrastructure, you know, in Cardi-Metabolic and beyond, and so... So, given that, at least in the United States, we have no appetite in partnering there. Within CNS, AeroMapT is really, really interesting. We have something of real scarcity. We have the ability to deliver all nucleotides to the brain that is initially clinically validated. We're very excited about that, and we are interrogating a drug that is targeting a gene target that is well-validated. It's somewhat validated in Alzheimer's, but very well validated in primary telopathies, and so it's hard for us to imagine doing a partnership around AeroMap-T at this point. Beyond that, there could be areas within obesity. There could be areas within MASH that make some sense to us. You know, certainly on the Koppelman side, you know, There could be something that makes sense to us. And then just on the discovery side, we have a number of things that are characterized by great scarcity. Again, our ability to deliver oligonucleotides to the brain via simple subcutaneous injection. We have a really interesting clinical proof concept there. There's a lot of good CNS targets that we will go after ourselves as wholly owned drug candidates, but there's room there to do partnerships with other folks, as we have with Novartis so far. Same thing with other delivery, say, into the adipose, into the lung, you know, those are also So there's a number of ways we can go. We'll just have to look at opportunities and decide how those opportunities could fit in with our strategy going forward with the cardiometabolic franchises that we're building and with CNS franchises that we're building.

Thank you. One moment for our next question. And that will come from the line of Jun Lee with UBS. Your line is open.

Hi. That's on progress, and thanks for taking your questions. Going back to the depth below, what's the depth of conversations with payers you can have prior to the FDA approval without a label? How are you taking advantage of this time between now and approval to ensure maximal access and conversion of script to reimbursement upon approval? Thank you.

Thanks, June. This is Andy. Good question. And so... We are able to interact with payers using a pre-approval information exchange deck, which essentially articulates the value proposition of Redempla, both clinically and economically. And so we are able to engage with both the clinical and negotiating teams of the large payers in a pre-approval context, and we're presently doing that now, and we'll continue to do that up until the approval of Redempla expected in the second quarter of next year.

We were confident we could do that, which is why we bought priority voucher. We're happy to report, but we don't need that any longer if we can sell it. But we saw a big opportunity to have those discussions early, particularly if we could have accelerated approval or the possibility for accelerated approval. But also, let's look at what this says about our data. You know, if our data were ambiguous, if there were clear warts, you know, on Redemplo, it would be much more difficult to have these early conversations with payers. We don't see that as the case, and so the fact that there are payers talking to us right now before we have a label, I think, is indicative of the power of this medicine and the unambiguous value proposition that we've got.

Okay.

Thank you. One moment for our next question. And that will come from the line of Edward Tentoff with Piper Sandler. Your line is open.

Great. Thank you very much. And I apologize if you asked this. I don't think anyone has. But the telecarseness and the data at AHA, any read-through or do you guys have any thoughts? On Amgen partnered, I'll pass it on with the Ocean trial, I think maybe next year. And again, I apologize if someone asked us, I'm trying to listen to everything you guys Hey, Ted, it's great to hear you.

So, as you know, we are largely out of Old Pastoran. We monetized those royalties. We still have mouse invades, of course, but we monetized those royalties. And we don't have good visibility on when Amgen may finish this or have data. We have no more visibility than anybody else on the planet. But from just my perspective, I don't know that the book is closed on LPLA. My recollection is that Novartis showed something like 77% reduction in LpA. Opasaran is much better than that. I think that Amgen was seeing better than 90-95% reduction in LpA. That could make a difference. Of course, the baseline characteristics also could make a difference. I believe that the The NGEN studies have a bit of a higher baseline LP . I appreciate that perspective.

Thank you. One moment for our next question. And that will come from the line of Eric Joseph with Citi. Your line is open.

Hey, this is Charles on for Eric. You know, congrats on the quarter in the year. Maybe one from us on Aerodimer PA sort of registration strategy.

Do you mind expanding on why you're seeking approval first on the LDLC lowering versus perhaps a composite-based endpoint?

More clarity would be great. Thanks.

Yeah, sure, Charles. I can take that. Of course, this is all subject to agreement with regulators, but the LDL cholesterol is probably one of the most validated surrogate endpoints out there, and that's our thought, is that if we could get approval and get on the market with an LDL endpoint in the mixed hyperlipidemia population. That would be great. The triglyceride component of mixed hyperlipidemia, that is more of a surrogate for the SHTG population, less so and less widely accepted for the less severe mixed hyperlipidemia population.

So that's why we're focusing on LDL, at least for now. And if we can, if we're able to do that, that's a relatively quick time to approval, you know, to a fairly large market. We look forward to continuing to see data with Airdown or PA and to start to have discussions with regulators. Thank you.

Thank you. One moment for our next question. And that will come from the line of Prakar Agrawal with Kanter. Your line is open.

Hi. Thank you so much for taking my questions. Maybe firstly on Red Amplio and SSTG, on the payer side, do you think you're at the right pricing range given some of the initial friction that's happening with the… During the launch, we obviously have the flexibility of seeing what's happening on the market and change accordingly. So just wanted to see the latest thoughts on pricing to get broad access. And secondly, if I can sneak in one more, on the aerodimer data at AHA, efficacy is obviously great. But if you can talk about some of the detailed safety data in the SAT portion, I think there were some injection reactions and pyrexia. So I wanted to understand how long these events lasted. Are these going to be single-dose effect and implications for the MAD dosing? Thank you so much.

Thanks, Pekar, for the question. This is Andy. We do believe we have the right pricing range here for Redemplo, and, you know, there are two kind of leading indicators that give us confidence. The first would be the currently... Currently published policies related to Tringles and SHTG, which do appear to have policy criteria consistent with label, we are optimistic that we will see in the future similar policy criteria to label for Redemplo. And then second, we are engaging with payers, as we mentioned, through the pre-approval information exchange process. And we haven't received pushback through those conversations with payers about the pricing range for SHTG, so we think we're in a great spot. And look, and you mentioned friction related to price.

I don't know that we have seen that. You know, there is always friction early between writing a prescription and working with payers to get that paid. It just takes a little bit of time to establish those processes. We're doing that now. I don't know that that is price related. James, do you want to talk about Airdyner? Yeah, I can cover the question on the dimer safety.

Like you said, what was presented in the SAD components of the study, some of the higher dose levels, particularly 200 and 400 milligrams, we saw some immune-related AEs, specifically pyrexia, some headaches, some ISRs. In terms of the ISRs, they're generally consistent with what we've seen and what others have reported with S-RNA therapeutics in terms of... of activity. I'd say when it comes to dose selection, we still don't have all the data. We need to get the PD and the safety data for all of the MAD cohorts through their second dose, and then pick what looks the cleanest and what gives us the best combination of knockdown and safety.

Yeah, I think that's critical that the data you've seen so far is just single-dose data we would expect. For at least some doses, a further step down upon second dosing. So we will see what the right doses are. I think there's a reasonable chance it could be less.

Thank you. Thank you. And one moment for our next question. And that will come from the line of Luca Issy with RBC. Your line is open.

Great. Thanks, Tim, and congrats on the quarter. Good afternoon. This is Cassie Feluca. And coming back to the April Seafood Lounge, Redempo, both you and Ionis have described having another competitor in the market as a tail wing. And recently, we learned that the Quick Start program that IONIS has adopted as essentially a bridge program before patients get covered. So I wanted to get your thoughts on if Redempo follows a similar playbook here for FCS, given that many of the patients may be first to therapy and not yet approved. And related to it, is there a version of the world where maybe you don't see as many of your patients having to go through such programs? Because, one, going back to the point of having a competitor in the market to be in a tailwind, providers are already pretty comfortable with the APOC3 class by the time Redemple arrives. And, two, for Redemple, perhaps you're getting some switch patients who already qualify for coverage. Any color on how you should think about your new class versus same-class switch patients, both in FCS and upcoming SSTG launch, would be super helpful. Thank you so much.

Yeah, thank you, Cassie. I can take the first part of that question. So, like any rare disease launch, we do have a quick start bridge program ourselves and a patient assistance program so patients can start therapy while coverage is being established. And so, we would expect a quick start program to be in place for SHTG as well, should we be. Should be indicated for that next year. What matters to us is that patients in the end convert to paid therapy as payer policies are put in place, and what matters is that persistence is high once Once these patients are on therapy, so we will be heavily focused on ensuring that appropriate patients can get on Redempla, whether that's through a paid claim or through a quick start program as their coverage is being determined, and helping support them with our patient access program so they can remain on therapy. Thanks.

Thank you. One moment for our next question, and that will come from the line of Andrea Newkirk with Goldman Sachs. Your line is open.

Thanks for taking the question. You know, at the recent liver meeting, Regeneron reported some proof-of-concept data for its side B-targeted sRNA in an all-comer-mossled population, and I'm just curious, in light of this, how you view the mechanistic positioning of Aero PNPL3, which you are partnered with Madrigal on, but recognizing that that may have efficacy only in a smaller subset of patients. And then in parallel to that, as others have stepped back from HSD to prioritize these other targets, I'm curious what your scientific conviction is in Aero-HSD to drive that clinically meaningful antifibrotic effect that may be independent of steatosis reduction. Thanks so much.

Yeah, I can take both of those. So the first question about PNPLA-3, you'd have to ask Madrigal what their plan is with that in terms of how they plan the development of populations to look at. I would highlight One other presentation that was interesting at ASLD that implied even on GLPs, the patients that were homozygous for the I-148M PNPLA-3 variant. Seem to have less of a reduction in liver fat. So there might be an opportunity there for combination therapy. But again, this is all up to Madrigal. And the same is true for HSD, really. That asset, of course, has been licensed to GSK. And so any development plans around, you know, where that one would go are up to GSK exclusively.

Thank you. One moment for our next question. And that will come from the line of James Condilis with Stiefel. Your line is open.

Hey, thanks for taking my question. Maybe one going back to Triggs here. Just curious what your latest thinking is around how many patients in the U.S. have had a prior pancreatitis event and just in general, I guess, kind of what you think the timeline and path is to really getting broad uptake outside those patients and kind of more of the primary prevention setting. Thanks so much.

Yeah, thanks, James. We estimate there are around 200,000 patients in the U.S. who have a prior history of AP due to high triglycerides. That range, there are various estimates on that, but we think that's a fairly good range for your modeling. Clearly, that is the population of highest unmet medical need. It was clearly determined through the data that was reported at AHA this past week, and that, you know, of the two variables of importance here, high TGs or prior history of AP, prior history of AP is a very, very key determinant of recurrent AP, and the number it needed to treat in those populations, that secondary prevention population, were incredibly high. And so clearly that will be a heavy focus for us as we head into the SHTG launch. It's also a high willingness to prescribe from providers and a high willingness to pay from payers. Clearly, it will take some more time over the years to continue to expand into the broader SHTG population. As you would be aware, that high-risk segment, we think, is about a third of the broader SHTG population, so about 1 million out of 3 to 3.5 million. So it will take a little bit more time to penetrate that broader SHTG population, and that will largely depend on, you know, favorable payer policies, and we do anticipate that those payer policies will allow for penetration of that statement over time. Thanks. And look, that primary prevention is critical.

We know that if you let patients have a bout of acute pancreatitis, it's more likely that that person will have another bout of pancreatitis and that it could be even more severe. So it is critical to get these patients on treatment. Before they're in trouble. Makes sense. Thanks.

Thank you. One moment for our next question. And that will come from the line of Joseph Stone with T.D. Cowan. Your line is open.

Hi there. Good evening, and thank you for taking my question. Maybe on the obesity ALC7 program,

I guess, how clear is the FDA guidance on what you would need to do next if the data are supportive? Is there a clear registrational path for a combination approach, and do you see a path forward to study the agent as a monotherapy or commercially? Do you not think, you know, that that's going to be the way to go here, that basically future of obesity treatments are going to be some form of combination? Thank you.

Well, you know, we've said all along that we think that either one of these, if we study them as a fat loss or a weight loss drug, would be a combination. It would be on top of GLP-1 or in combination with GLP-1, and that's still our strategy. In terms of what that development pathway looks like, I mean, the guidance. For obesity drugs is a little bit old, and I think the 5% weight loss may still be relevant, but of course there's a lot of combination products out there. So I would imagine we're not the only company that's having these combination type questions and discussions with FDA. I don't have a definitive answer for you in terms of what this would look like from a development and regulatory pathway for the combination product. But that's our plan, largely, is to continue to look at both of these in combination with GLPs.

Thank you. One moment for our next question. And that will come from the line of Madison L. Sadie with B. Riley. Your line is open.

Hi, guys. Thanks for taking our question. Maybe with focusing on aerodimer, on a patient-by-patient basis, did the biomarker knockdown move together? For example, did anyone achieve deep APOC3 lowering but weak PCSK9 lowering or the reverse? And then secondly, across the cohorts, is there a responder profile emerging based on triglyceride level? Thanks.

Yeah, I think, in general, they move together. Maybe you get a little slightly better A4C3 knockdown at lower doses, but we're able to get plenty of PCSK9 knockdowns, so they move pretty much in lots of stuff as we dose escalate. So far, the response, like we've seen with Plozaceran, has been pretty homogeneous. I mean, there's not really patients who we call non-responders or hyper-responders. So, yeah, I don't think we can pinpoint any population that's more likely to respond than others, at least not at this point.

Understood. Thanks.

One moment for our next question. And that will come from the line of Patrick Trucchio with A.C. Wainwright. Your line is open.

Thanks. Just a follow-up on ARROMAP-T, I'm wondering what the next patient data set is that can connect the CSF total tau lowering to an effect on disease biology, and what result would justify advancing toward a registrational program, and what will determine the sequencing of Alzheimer's disease, MAP-T-associated frontotemporal dementia, and progressive supranuclear palsy development?

So we're looking at the latter right now, meaning MAP-TFTD and PSP, and we've got study designs for phase twos or things that could be adaptive and progress potentially even into phase three and having some of those regulatory discussions now based on the knockdown data we have from healthy volunteers. Thank you. Showing the knockdown and the safety is sufficient to at least get Phase II studies up and running in those indications. Eventually, we'll look more at Phase IIs and Alzheimer's, but we have the Alzheimer's cohorts in the current study up and running. I'd like to get some data from those cohorts first. In terms of bridging data, I think the next data points from this program are still going to be in the Healthy Volunteers, probably the multi-dose Healthy Volunteers Safety and MAT-T reduction data will come out first. Then beyond that, we'll have Alzheimer's patient data. Of course, safety, and then total tau knockdown, but also starting to look at some of the phosphatau, the p-tau 181, p-tau 217. Those are probably somewhat bridging biomarkers, indicating that we're influencing sort of more disease-relevant biomarkers downstream. And then, of course, PET data, the PET tau data will have probably more towards the end. But those are the next few bridging biomarkers that we'd anticipate that, you know, to help us make a call if we want to take something forward into later stage Alzheimer's development.

And I think, qualitatively, I think it's fair to say that we are moving quickly in PSP and FTD and slowly, you know.

Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call over to Mr. Chris Anzalone for any closing remarks.

Thanks, everyone, for joining us today, and I wish you all a nice Thanksgiving holiday in the next couple weeks.

This concludes today's program. Thank you all for participating. You may now disconnect.