Press release

Arrowhead Pharmaceuticals Reports Fiscal 2019 Second Quarter Results

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Arrowhead Pharmaceuticals Inc. (NASDAQ: ARWR) today announced financial
results for its fiscal 2019 second quarter ended March 31, 2019. The
company is hosting a conference call at 4:30 p.m. EDT to discuss results.

Conference Call and Webcast Details

Investors may access a live audio webcast on the Company’s website at http://ir.arrowheadpharma.com/events.cfm.
For analysts that wish to participate in the conference call, please
dial 855-215-6159 or 315-625-6887 and provide Conference ID 5049067.

A replay of the webcast will be available on the company’s website
approximately two hours after the conclusion of the call and will remain
available for 90 days. An audio replay will also be available
approximately two hours after the conclusion of the call and will be
available for 3 days. To access the audio replay, dial 855-859-2056 or
404-537-3406 and provide Conference ID 5049067.

Selected Fiscal 2019 Second Quarter and Recent Events

  • Began dosing in a Phase 1 single and multiple dose study of ARO-ANG3,
    a subcutaneously administered RNAi therapeutic targeting angiopoietin
    like protein 3, being developed as a potential treatment for patients
    with dyslipidemias and metabolic diseases
  • Began dosing in a Phase 1 single and multiple dose study of ARO-APOC3,
    a subcutaneously administered RNAi therapeutic targeting
    apolipoprotein C-III, being developed as a potential treatment for
    patients with hypertriglyceridemia
  • Received FDA clearance to begin an adaptive design Phase 2/3 trial,
    now called SEQUOIA, with the potential to serve as a pivotal
    registrational study of ARO-AAT, Arrowhead’s second generation
    subcutaneously administered RNAi therapeutic being developed as a
    treatment for a rare genetic liver disease associated with alpha-1
    antitrypsin (AAT) deficiency
  • Presented data on both the AAT and hepatitis B programs at the EASL
    International Liver Congress™ 2019. Key findings included the
    following:

    • Sustained RNAi reduction of the mutant Z-AAT protein in PiZ mice,
      which harbor the human Z-AAT gene and recapitulate many features
      of human AAT deficiency liver disease, treated for 33 weeks
      substantially reversed the disease phenotype
    • JNJ-3989, formerly ARO-HBV, rapidly reduced hepatitis B surface
      antigen (HBsAg) in patients that had 24 weeks or more of HBsAg
      assay results (n=40) to thresholds possibly associated with
      improved chances of HBsAg seroclearance in many patients, after
      only 3 doses

      • 100% of patients (40 of 40) achieved ≥1.0 Log10 IU/mL HBsAg
        reduction
      • 88% of patients (35 of 40) achieved HBsAg <100 IU/mL
    • JNJ-3989 reduced all measurable viral products, including HBsAg in
      hepatitis B e-antigen (HBeAg) positive or HBeAg negative patients
    • JNJ-3989 administered subcutaneously was well tolerated at doses
      up to 400 mg in all chronic hepatitis B patients
  • Expanded the AROHBV1001 Phase 1/2 study to include a new triple
    combination cohort that includes JNJ-3989 and additional undisclosed
    agents selected by Arrowhead’s partner, Janssen Pharmaceuticals, Inc.

    • In connection with the start of dosing of this cohort, Arrowhead
      earned a $25 million milestone payment from Janssen

Selected Fiscal 2019 Second Quarter Financial Results

 
ARROWHEAD PHARMACEUTICALS, INC.
CONSOLIDATED CONDENSED FINANCIAL INFORMATION (unaudited)
 
  Three Months Ended   Six Months Ended
March 31, March 31,

OPERATING SUMMARY

2019   2018 2019   2018
 
REVENUE $ 48,148,275 $ 650,125 $ 82,806,171 $ 4,159,946
OPERATING EXPENSES
Research and development 20,798,628 12,002,354 38,370,671 24,921,972
General and administrative expenses   5,338,955   3,681,830     11,478,664   8,085,381  
TOTAL OPERATING EXPENSES   26,137,583   15,684,184     49,849,335   33,007,353  
OPERATING INCOME (LOSS) 22,010,692 (15,034,059 ) 32,956,836 (28,847,407 )
OTHER INCOME/(EXPENSE), PROVISION FOR INCOME TAXES   1,886,290   149,748     2,977,399   764,218  
NET INCOME (LOSS) $ 23,896,982 $ (14,884,311 ) $ 35,934,235 $ (28,083,189 )
 
NET INCOME (LOSS) PER SHARE (DILUTED) $ 0.24 $ (0.18 ) $ 0.37 $ (0.35 )
WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED)   98,082,644   84,083,937     97,214,546   79,406,838  
 

FINANCIAL POSITION SUMMARY

March 31, September 30,
2019 2018
CASH AND CASH EQUIVALENTS $ 161,639,208 $ 30,133,213
SHORT-TERM INVESTMENTS 56,560,674 46,400,176
LONG-TERM INVESTMENTS   67,536,054   –  
TOTAL CASH RESOURCES (CASH AND INVESTMENTS)   285,735,936   76,533,389  
OTHER ASSETS   48,204,497   35,076,562  
TOTAL ASSETS   333,940,433   111,609,951  
TOTAL CURRENT DEFERRED REVENUE 90,889,801 600
TOTAL LONG TERM DEFERRED REVENUE 29,732,938 –
OTHER LIABILITIES   12,677,458   16,368,350  
TOTAL LIABILITIES   133,300,197   16,368,950  
TOTAL STOCKHOLDERS’ EQUITY   200,640,236   95,241,001  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 333,940,433 $ 111,609,951  
 
SHARES OUTSTANDING 94,665,718 88,502,302
 

About Arrowhead Pharmaceuticals

Arrowhead Pharmaceuticals develops medicines that treat intractable
diseases by silencing the genes that cause them. Using a broad portfolio
of RNA chemistries and efficient modes of delivery, Arrowhead therapies
trigger the RNA interference mechanism to induce rapid, deep, and
durable knockdown of target genes. RNA interference, or RNAi, is a
mechanism present in living cells that inhibits the expression of a
specific gene, thereby affecting the production of a specific protein.
Arrowhead’s RNAi-based therapeutics leverage this natural pathway of
gene silencing.

For more information, please visit www.arrowheadpharma.com,
or follow us on Twitter @ArrowheadPharma.
To be added to the Company’s email list and receive news directly,
please visit http://ir.arrowheadpharma.com/email-alerts.

Safe Harbor Statement under the Private Securities Litigation Reform
Act:

This news release contains forward-looking statements within the
meaning of the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. These statements are based upon our
current expectations and speak only as of the date hereof. Our actual
results may differ materially and adversely from those expressed in any
forward-looking statements as a result of various factors and
uncertainties, including the safety and efficacy of our product
candidates, the duration and impact of regulatory delays in our clinical
programs, our ability to finance our operations, the likelihood and
timing of the receipt of future milestone and licensing fees, the future
success of our scientific studies, our ability to successfully develop
and commercialize drug candidates, the timing for starting and
completing clinical trials, rapid technological change in our markets,
and the enforcement of our intellectual property rights. Our most recent
Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q
discuss some of the important risk factors that may affect our business,
results of operations and financial condition. We assume no obligation
to update or revise forward-looking statements to reflect new events or
circumstances.

Source: Arrowhead Pharmaceuticals, Inc.