Arrowhead Pharmaceuticals (ARWR) 10-Q 3 May 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2017	May 02, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2
Trading Symbol	ARWR
Entity Registrant Name	ARROWHEAD PHARMACEUTICALS, INC.
Entity Central Index Key	879,407
Current Fiscal Year End Date	--09-30
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		74,772,103

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Mar. 31, 2017	Sep. 30, 2016
CURRENT ASSETS
Cash and cash equivalents	$ 61,718,971	$ 85,366,448
Accounts receivable	580,825	75,000
Prepaid expenses	731,834	1,289,923
Other current assets	1,747,801	3,771,172
Short term investments	24,910,492
TOTAL CURRENT ASSETS	89,689,923	90,502,543
Property and equipment, net	15,714,948	15,386,761
Intangible assets, net	21,314,653	22,164,868
Other assets	152,119	122,333
TOTAL ASSETS	126,871,643	128,176,505
CURRENT LIABILITIES
Accounts payable	2,597,889	12,232,906
Accrued expenses	2,184,844	4,587,467
Accrued payroll and benefits	765,292	3,969,706
Deferred rent	440,580	440,580
Deferred revenue	21,169,191	2,569,792
Derivative liabilities	146,178	1,602,626
Note Payable	201,247	194,310
Other current liabilities	46,407	46,407
TOTAL CURRENT LIABILITIES	27,551,628	25,643,794
LONG-TERM LIABILITIES
Deferred rent, net of current portion	2,102,408	2,274,997
Deferred revenue, net of current portion	1,250,000	2,500,000
Note Payable, net of current portion	2,431,118	2,533,455
Other non-current liabilities	200,000	200,000
TOTAL LONG-TERM LIABILITIES	5,983,526	7,508,452
Commitments and contingencies (Note 7)
Arrowhead Pharmaceuticals, Inc. stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 and 15,652 shares issued and outstanding as of March 31, 2017 and September 30, 2016		16
Common stock, $0.001 par value; 145,000,000 shares authorized; 74,772,103 and 69,746,685 shares issued and outstanding as of March 31, 2017 and September 30, 2016, respectively	167,142	162,116
Additional paid-in capital	510,318,940	493,844,909
Accumulated other comprehensive income (loss)	(30,695)	7,449
Accumulated deficit	(416,563,710)	(398,435,043)
Total Arrowhead Pharmaceuticals, Inc. stockholders' equity	93,891,677	95,579,447
Noncontrolling interest	(555,188)	(555,188)
TOTAL STOCKHOLDERS’ EQUITY	93,336,489	95,024,259
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 126,871,643	$ 128,176,505

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2017	Sep. 30, 2016
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	15,652
Preferred stock, shares outstanding	0	15,652
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	145,000,000	145,000,000
Common stock, shares issued	74,772,103	69,746,685
Common stock, shares outstanding	74,772,103	69,746,685

Consolidated Statements of Oper

Consolidated Statements of Operations (unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
REVENUE	$ 8,985,930	$ 43,750	$ 13,351,426	$ 87,500
OPERATING EXPENSES
Research and development	6,976,825	10,020,826	16,503,876	20,359,659
Salaries and payroll-related costs	3,583,999	4,248,693	7,860,105	8,168,579
General and administrative expenses	1,622,873	3,818,335	3,477,048	5,769,944
Stock-based compensation	1,744,231	2,416,839	4,168,673	4,797,182
Depreciation and amortization	1,187,644	803,912	2,373,255	1,598,261
TOTAL OPERATING EXPENSES	15,115,572	21,308,605	34,382,957	40,693,625
OPERATING LOSS	(6,129,642)	(21,264,855)	(21,031,531)	(40,606,125)
OTHER INCOME (EXPENSE)
Interest income (expense), net	108,744	79,060	133,892	179,440
Change in value of derivatives	(27,383)	369,935	1,456,448	346,411
Other income (expense)	5,724		1,312,524
TOTAL OTHER INCOME (EXPENSE)	87,085	448,995	2,902,864	525,851
LOSS BEFORE INCOME TAXES	(6,042,557)	(20,815,860)	(18,128,667)	(40,080,274)
NET LOSS	$ (6,042,557)	$ (20,815,860)	$ (18,128,667)	$ (40,080,274)
NET LOSS PER SHARE - BASIC & DILUTED	$ (0.08)	$ (0.35)	$ (0.25)	$ (0.67)
Weighted average shares outstanding - basic and diluted	74,629,855	59,779,128	73,019,726	59,663,270
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign Currency Translation Adjustments	$ 154,464	$ 150,520	$ (38,144)	$ 196,338
COMPREHENSIVE LOSS	$ (5,888,093)	$ (20,665,340)	$ (18,166,811)	$ (39,883,936)

Consolidated Statement of Stock

Consolidated Statement of Stockholders' Equity (unaudited) - 6 months ended Mar. 31, 2017 - USD ($)	Total	Amgen	Preferred Stock	Common Stock	Common StockAmgen	Additional Paid-In Capital	Additional Paid-In CapitalAmgen	Accumulated Other Comprehensive Income (loss)	Accumulated Deficit	Non-controlling Interest
Beginning Balance, Amount at Sep. 30, 2016	$ 95,024,259		$ 16	$ 162,116		$ 493,844,909		$ 7,449	$ (398,435,043)	$ (555,188)
Beginning Balance, Shares at Sep. 30, 2016			15,652	69,746,685
Stock-based compensation	4,168,673					4,168,673
Exercise of stock options, Amount	$ 271,931			$ 136		271,795
Exercise of stock options, Shares	135,730			135,730
Common stock- Restricted Stock Units vesting, Amount	$ (381,563)			$ 473		(382,036)
Common stock- Restricted Stock Units vesting, Shares				472,889
Stock issuances		$ 12,420,000			$ 1,746		$ 12,418,254
Stock issuances, Shares					1,745,810
Preferred stock converted to common stock, Amount			$ (16)	$ 2,671		(2,655)
Preferred stock converted to common stock, Shares			(15,652)	2,670,989
Foreign currency translation adjustments	(38,144)							(38,144)
Net loss	(18,128,667)								(18,128,667)
Ending Balance, Amount at Mar. 31, 2017	$ 93,336,489			$ 167,142		$ 510,318,940		$ (30,695)	$ (416,563,710)	$ (555,188)
Ending Balance, Shares at Mar. 31, 2017				74,772,103

Consolidated Statement of Stoc6

Consolidated Statement of Stockholders' Equity (unaudited) (Parenthetical)	Mar. 31, 2017$ / shares
Amgen
Stock issued, price per share	$ 7.16

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (unaudited) - USD ($)	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (18,128,667)	$ (40,080,274)
Change in value of derivatives	(1,456,448)	(346,411)
Stock-based compensation	4,168,673	4,797,182
Depreciation and amortization	2,373,255	1,598,261
Amortization/(accretion) of note premiums	(64,387)	179,460
Changes in operating assets and liabilities:
Accounts receivable	(505,825)	(25,163)
Prepaid expenses and Other Current Assets	2,524,107	(616,677)
Deferred revenue	17,307,431	(37,500)
Accounts payable	(4,988,620)	2,510,792
Accrued expenses	(5,415,933)	(4,065,854)
Other	(139,452)	190,280
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(4,325,866)	(35,895,904)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(6,653,158)	(500,634)
Purchases of marketable securities	(24,846,105)
Proceeds from sale of marketable securities		6,200,000
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(31,499,263)	5,699,366
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital leases and notes payable	(97,145)	(108,326)
Payments of taxes for net share settled restricted stock unit issuances	(417,140)	(634,187)
Proceeds from the issuance of common stock	12,691,937	25,544
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	12,177,652	(716,969)
NET INCREASE (DECREASE) IN CASH	(23,647,477)	(30,913,507)
CASH AT BEGINNING OF PERIOD	85,366,448	81,214,354
CASH AT END OF PERIOD	61,718,971	50,300,847
Supplementary disclosures:
Interest Paid	(95,544)	(5,797)
Income Tax Credits Refunded	3,635,016	1,365,288
Income Tax Paid	$ (2,400)	$ (2,400)

Organization and Significant Ac

Organization and Significant Accounting Policies	6 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Organization and Significant Accounting Policies	NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Nature of Business and Recent Developments Arrowhead develops novel drugs to 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 (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. The company's pipeline includes ARO-HBV for chronic hepatitis B virus, ARO-AAT for liver disease associated with alpha-1 antitrypsin deficiency (AATD), ARO-F12 for hereditary angioedema and thromboembolic disorders, ARO-HIF2 for renal cell carcinoma, and ARO-AMG1 for an undisclosed genetically validated cardiovascular target under a license and collaboration agreement with Amgen, Inc., a Delaware corporation (“Amgen”). ARO-LPA for cardiovascular disease was recently out-licensed to Amgen. During a portion of the first quarter of fiscal 2017, the Company continued to develop its clinical candidates, ARC-520 and ARC-521, for the treatment of chronic hepatitis B infection as well as ARC-AAT, an RNAi therapeutic designed to treat liver disease associated with AATD. However, in November 2016, the Company announced that it would be discontinuing these clinical programs, and redeploying its resources and focus toward utilizing the Company’s new proprietary subcutaneous and extra-hepatic delivery systems. Each of these clinical candidates utilized the intravenously administered DPC iv Liquidity The Consolidated Financial Statements have been prepared in conformity with the accounting principles generally accepted in the United States of America, which contemplate the continuation of the Company as a going concern. Historically, the Company’s primary source of financing has been through the sale of its securities. Research and development activities have required significant capital investment since the Company’s inception. The Company expects its operations to continue to require cash investment to pursue its research and development goals, including clinical trials and related drug manufacturing. At March 31, 2017, the Company had $61.7 million in cash to fund operations. In addition to its cash resources, the Company has invested excess cash in investment grade commercial bonds maturing in less than 12 months. At March 31, 2017, the Company had invested $24.9 million in bonds. During the six months ended March 31, 2017, the Company’s cash position decreased by $ 23.6 On November 18, 2016, the Company and Amgen received Hart-Scott-Rodino clearance with regard to the ARO-LPA Agreement discussed in Note 2 below. Based on the terms of the ARO-LPA Agreement, and the Common Stock Purchase Agreement discussed in Note 2 below, on November 18, 2016, the Company issued 1,745,810 shares of Common Stock to Amgen, and received proceeds of approximately $12.5 million. Additionally, the Company received a $30 million upfront payment due under the ARO-LPA Agreement discussed below. Summary of Significant Accounting Policies Principles of Consolidation—The consolidated financial statements include the accounts of Arrowhead and its Subsidiaries. Arrowhead’s primary operating subsidiary is Arrowhead Madison, which is located in Madison, Wisconsin, where the Company’s research and development facility is located. All significant intercompany accounts and transactions are eliminated in consolidation. Basis of Presentation and Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Actual results could materially differ from those estimates. Additionally, certain reclassifications have been made to prior period financial statements to conform to the current period presentation. Cash and Cash Equivalents—The Company considers all liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had no restricted cash at March 31, 2017 and September 30, 2016. Concentration of Credit Risk—The Company maintains several bank accounts at two financial institutions for its operations. These accounts are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per institution. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held. Investments—The Company may invest excess cash balances in short-term and long-term marketable debt securities. Investments may consist of certificates of deposits, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its investment in marketable securities in accordance with FASB ASC 320, Investments – Debt and Equity Securities. This statement requires certain securities to be classified into three categories: Held-to-maturity—Debt securities that the entity has the positive intent and ability to hold to maturity are reported at amortized cost. Trading Securities—Debt and equity securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings. Available-for-Sale—Debt and equity securities not classified as either securities held-to-maturity or trading securities are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity. The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. Held-to-maturity investments are measured and recorded at amortized cost on the Company’s Consolidated Balance Sheet. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary. As of March 31, 2017, all short-term investments were comprised of corporate bonds with maturity dates of less than one year. As of March 31, 2017, the amortized cost of such bonds was $24,910,492. As of March 31, 2017, gross unrealized losses were $130,319; there were no gross unrealized gains. The total fair value of the investments at March 31, 2017 Property and Equipment—Property and equipment are recorded at cost, which may equal fair market value in the case of property and equipment acquired in conjunction with a business acquisition. Depreciation of property and equipment is recorded using the straight-line method over the respective useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized over the lesser of the expected useful life or the remaining lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Intangible Assets Subject to Amortization—Intangible assets subject to amortization include certain patents and license agreements. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Contingent Consideration - The consideration for the Company’s acquisitions often includes future payments that are contingent upon the occurrence of a particular event. For example, milestone payments might be based on the achievement of various regulatory approvals or future sales milestones, and royalty payments might be based on drug product sales levels. The Company records a contingent consideration obligation for such contingent payments at fair value on the acquisition date. The Company estimates the fair value of contingent consideration obligations through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at an estimated fair value at the balance sheet date. Changes in the fair value of the contingent consideration obligations are recognized within the Company’s Consolidated Statements of Operations and Comprehensive Loss. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flows from products upon commercialization, changes in the assumed achievement or timing of any development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. These fair value measurements are based on significant inputs not observable in the market. Substantial judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense the Company records in any given period. The Company determined the fair value of its contingent consideration obligation to be $0 at March 31, 2017 and September 30, 2016, given the discontinuation of its clinical trials. Revenue Recognition— Revenue from product sales is recorded when persuasive evidence of an arrangement exists, title has passed and delivery has occurred, a price is fixed and determinable, and collection is reasonably assured. The Company may generate revenue from technology licenses, collaborative research and development arrangements, research grants and product sales. Revenue under technology licenses and collaborative agreements typically consists of nonrefundable and/or guaranteed technology license fees, collaborative research funding, manufacturing and development services and various milestone and future product royalty or profit-sharing payments. These agreements are generally referred to as multiple element arrangements. The Company applies the accounting standard on revenue recognition for multiple element arrangements. The fair value of deliverables under the arrangement may be derived using a best estimate of selling price if vendor specific objective evidence and third-party evidence is not available. Deliverables under the arrangement will be separate units of accounting if a delivered item has value to the customer on a standalone basis, if the arrangement includes a general right of return for the delivered item, and if delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. The Company recognizes upfront license payments as revenue upon delivery of the license only if the license has standalone value from any undelivered performance obligations and that value can be determined. The undelivered performance obligations typically include manufacturing or development services or research and/or steering committee services. If the fair value of the undelivered performance obligations can be determined, then these obligations would be accounted for separately. If the license is not considered to have standalone value, then the license and other undelivered performance obligations would be accounted for as a single unit of accounting. In this case, the license payments and payments for performance obligations are recognized as revenue over the estimated period of when the performance obligations are performed or deferred indefinitely until the undelivered performance obligation is determined. Whenever the Company determines that an arrangement should be accounted for as a single unit of accounting, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. Revenue is recognized using a proportional performance or straight-line method. The proportional performance method is used when the level of effort required to complete performance obligations under an arrangement can be reasonably estimated. The amount of revenue recognized under the proportional performance method is determined by multiplying the total payments under the contract, excluding royalties and payments contingent upon achievement of milestones, by the ratio of the level of effort performed to date to the estimated total level of effort required to complete performance obligations under the arrangement. If the Company cannot reasonably estimate the level of effort to complete performance obligations under an arrangement, the Company recognizes revenue under the arrangement on a straight-line basis over the period the Company is expected to complete its performance obligations. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under an arrangement. Many of the Company’s collaboration agreements entitle the Company to additional payments upon the achievement of development, regulatory and sales performance-based milestones. If the achievement of a milestone is considered probable at the inception of the collaboration, the related milestone payment is included with other collaboration consideration, such as upfront fees and research funding, in the Company’s revenue calculation. Typically these milestones are not considered probable at the inception of the collaboration. As such, milestones will typically be recognized in one of two ways depending on the timing of when the milestone is achieved. If the milestone is achieved during the performance period, the Company will only recognize revenue to the extent of the proportional performance achieved at that date, or the proportion of the straight-line basis achieved at that date, and the remainder will be recorded as deferred revenue to be amortized over the remaining performance period. If the milestone is achieved after the performance period has completed and all performance obligations have been delivered, the Company will recognize the milestone payment as revenue in its entirety in the period the milestone was achieved. Deferred revenue will be classified as part of Current or Long-Term Liabilities in the accompanying Consolidated Balance Sheets based on the Company’s estimate of the portion of the performance obligations regarding that revenue will be completed within the next 12 months divided by the total performance period estimate. This estimate is based on the Company’s current operating plan and, if the Company’s operating plan should change in the future, the Company may recognize a different amount of deferred revenue over the next 12-month period. Allowance for Doubtful Accounts—The Company accrues an allowance for doubtful accounts based on estimates of uncollectible revenues by analyzing historical collections, accounts receivable aging and other factors. Accounts receivable are written off when all collection attempts have failed. Research and Development—Costs and expenses that can be clearly identified as research and development are charged to expense as incurred in accordance with FASB ASC 730-10. Included in research and development costs are operating costs, facilities, supplies, external services, clinical trial and manufacturing costs, overhead directly related to the Company’s research and development operations, and costs to acquire technology licenses. Earnings (Loss) per Share—Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares primarily consist of stock options and restricted stock units issued to employees and warrants to purchase Common Stock of the Company. All outstanding stock options, restricted stock units and warrants for the three and six months ended March 31, 2017 and 2016 have been excluded from the calculation of Diluted earnings (loss) per share due to their anti-dilutive effect. Stock-Based Compensation—The Company accounts for share-based compensation arrangements in accordance with FASB ASC 718, which requires the measurement and recognition of compensation expense for all share-based payment awards to be based on estimated fair values. The Company uses the Black-Scholes option valuation model to estimate the fair value of its stock options at the date of grant. The Black-Scholes option valuation model requires the input of subjective assumptions to calculate the value of stock options. For restricted stock units, the value of the award is based on the Company’s stock price at the grant date. For performance-based restricted stock unit awards, the value of the award is based on the Company’s stock price at the grant date, with consideration given to the probability of the performance condition being achieved. The Company uses historical data and other information to estimate the expected price volatility for stock option awards and the expected forfeiture rate for all awards. Expense is recognized over the vesting period for all awards, and commences at the grant date for time-based awards and upon the Company’s determination that the achievement of such performance conditions is probable for performance-based awards. This determination requires significant judgment by management. Derivative Assets and Liabilities – The Company accounts for warrants and other derivative financial instruments as either equity or assets/liabilities based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded as Additional Paid-In Capital on the Company’s Consolidated Balance Sheet. Some of the Company’s warrants were determined to be ineligible for equity classification due to provisions that may result in an adjustment to their exercise price. Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as assets or liabilities are recorded on the Company’s Consolidated Balance Sheet at their fair value on the date of issuance and are revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as Other Income or Expense. The Company estimates the fair value of these assets/liabilities using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate. Income Taxes—The Company accounts for income taxes under the liability method, which requires the recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. The provision for income taxes, if any, represents the tax payable for the period and the change in deferred income tax assets and liabilities during the period. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606), which will supersede nearly all existing revenue recognition guidance under GAAP. ASU No. 2014-09 provides that an entity recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption and will become effective for the Company in the first quarter of 2018. In April 2016, the FASB issued an amendment to ASU No. 2014-09 with update ASU 2016-10 which provided more specific guidance around the identification of performance obligations and licensing arrangements. The Company is evaluating the potential effects of the adoption of this update on its financial statements. In March 2016, the FASB issued ASU No. 2016-02, Leases. Under ASU 2016-02, lessees will be required to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). ASU 2016-02 becomes effective for the Company in the first quarter of fiscal 2020. The Company expects the adoption of this update to have a material effect on the classification and disclosure of its leased facilities in Madison, Wisconsin.

Collaboration and License Agree

Collaboration and License Agreements – Amgen, Inc	6 Months Ended
	Mar. 31, 2017
Collaboration And License Agreements [Abstract]
Collaboration and License Agreements – Amgen, Inc	NOTE 2. COLLABORATION AND LICENSE AGREEMENTS – AMGEN, INC. On September 28, 2016, the Company entered into two Collaboration and License agreements, and a Common Stock Purchase Agreement with Amgen. Under one of the license agreements (the “Second Collaboration and License Agreement” or “ARO-LPA Agreement”), Amgen has received a worldwide, exclusive license to Arrowhead’s novel, RNAi ARO-LPA program. These RNAi molecules are designed to reduce elevated lipoprotein(a), which is a genetically validated, independent risk factor for atherosclerotic cardiovascular disease. Under the other license agreement (the “First Collaboration and License Agreement” or “ARO-AMG1 Agreement”), Amgen received an option to a worldwide, exclusive license for ARO-AMG1, an RNAi therapy for an undisclosed genetically validated cardiovascular target. In both agreements, Amgen will be wholly responsible for clinical development and commercialization. Under the Common Stock Purchase Agreement, the Company has sold 3,002,793 shares of Common Stock to Amgen at a price of $7.16 per share, which represents the 30-day volume-weighted average price of the Common Stock on the NASDAQ stock market over the 30 trading days preceding execution. Subject to Amgen’s exercise of the Option, as defined in the ARO-AMG1 Agreement, Amgen has agreed to purchase, and the Company has agreed to sell, an additional $5 million worth of shares of Common Stock based on a 30 trading day formula surrounding the date of the Option exercise. Under the terms of the agreements taken together, the Company has received $35 million in upfront payments, $21.5 million in the form of an equity investment by Amgen in the Company’s Common Stock, and could receive up to $617 million in option payments, and development, regulatory and sales milestone payments. The Company is further eligible to receive single-digit royalties for sales of products under the ARO-AMG1 Agreement and up to low double-digit royalties for sales of products under the ARO-LPA Agreement. Under the terms of the First Collaboration and License Agreement, the Company has granted a worldwide, exclusive license to ARO-AMG1, an undisclosed genetically validated cardiovascular target. The collaboration between the Company and Amgen is governed by a joint steering committee comprised of an equal number of representatives from each party. The Company is also responsible for developing, optimizing and manufacturing the candidate through certain preclinical efficacy and toxicology studies to determine whether the candidate the Company has developed meets the required criteria as defined in the agreement (the “Arrowhead Deliverable”). If this is achieved, Amgen will then have the option to an exclusive license for the intellectual property generated through the Company’s development efforts, and will likely assume all development, regulatory and commercialization efforts for the candidate upon the option exercise. The Company has determined that the significant deliverables under the First Collaboration and License Agreement include the license, the joint research committee and the development and manufacturing activities toward achieving the Arrowhead Deliverable. The Company also determined that, pursuant to the accounting guidance governing revenue recognition on multiple element arrangements, the license and collective undelivered activities and services do not have standalone value due to the specialized nature of the activities and services to be provided by the Company. Therefore, the deliverables are not separable and, accordingly, the license and undelivered services are being treated as a single unit of accounting. The Company will recognize revenue on a straight-line basis from October 1, 2016, through September 30, 2018. The due date for achieving the Arrowhead Deliverable is September 28, 2018. The Company received the upfront payment of $5 million due under this agreement in September 2016. The initial $5 million payment was recorded as Deferred Revenue, and $0.6 million and $1.3 million of this was amortized into Revenue during the three and six months ended March 31, 2017, respectively. Under the terms of the Second Collaboration and License Agreement, the Company has granted a worldwide, exclusive license to ARO-LPA. The collaboration between the Company and Amgen is governed by a joint research committee comprised of an equal number of representatives from each party, however Amgen has the final decision making authority regarding ARO-LPA in this committee. The Company is also responsible for assisting Amgen in the oversight of certain development and manufacturing activities, most of which are to be covered at Amgen’s cost. The Company has determined that the significant deliverables under the Second Collaboration and License Agreement include the license and the oversight of certain of the development and manufacturing activities. The Company also determined that, pursuant to the accounting guidance governing revenue recognition on multiple element arrangements, the license and collective undelivered activities and services do not have standalone value due to the specialized nature of the activities and services to be provided by the Company. Therefore, the deliverables are not separable and, accordingly, the license and undelivered services are being treated as a single unit of accounting. The Company will recognize revenue on a straight-line basis from November 18, 2016 (the Hart-Scott-Rodino clearance date), through October 31, 2017, which is the date where the significant development and manufacturing related deliverables are anticipated to be completed. The Company received the upfront payment of $30 million due under this agreement in November 2016. The initial $30 million payment was recorded as Deferred Revenue, and $7.8 million and $11.5 million of this was amortized into Revenue during the three and six months ended March 31, 2017, respectively. In January 2017, the Company also entered into a separate services agreement with Amgen to provide certain services related to process development, manufacturing, materials supply, discovery studies, and other consulting services related to ARO-LPA. During the three and six months ended March 31, 2017, work orders under this services agreement generated approximately $0.6 million of Revenue.

Investments

Investments	6 Months Ended
	Mar. 31, 2017
Investments All Other Investments [Abstract]
Investments	NOTE 3. INVESTMENTS The Company invests a portion of its excess cash balances in short-term debt securities and may, from time to time, also invest in long-term debt securities. Investments at March 31, 2017 consisted of corporate bonds with maturities remaining of less than one year. The Company may also invest excess cash balances in certificates of deposit, money market accounts, U.S. Treasuries, U.S. government agency obligations, corporate debt securities, and/or commercial paper. The Company accounts for its investments in accordance with FASB ASC 320, Investments – Debt and Equity Securities. At March 31, 2017, all investments were classified as held-to-maturity securities. The following tables summarize the Company’s short- and long-term investments as of March 31, 2017, and September 30, 2016. As of March 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial notes (due within one year) $ 24,910,492 $ — $ (130,319 ) $ 24,780,173 Total $ 24,910,492 $ — $ (130,319 ) $ 24,780,173 As of September 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial notes (due within one year) $ — — $ — $ — Total $ — — $ — $ —

Property and Equipment

Property and Equipment	6 Months Ended
	Mar. 31, 2017
Property Plant And Equipment [Abstract]
Property and Equipment	NOTE 4. PROPERTY AND EQUIPMENT The following table summarizes the Company’s major classes of property and equipment: March 31, 2017 September 30, 2016 Computers, office equipment and furniture $ 546,254 $ 442,915 Research equipment 8,655,069 7,490,400 Software 132,078 80,841 Leasehold improvements 12,003,310 11,885,365 Total gross fixed assets 21,336,711 19,899,521 Less: Accumulated depreciation and amortization (5,621,763 ) (4,512,760 ) Property and equipment, net $ 15,714,948 $ 15,386,761 During the six months ended March 31, 2017, the Company’s Research equipment increased as the Company continues to build out its new research facility in Madison, Wisconsin.

Intangible Assets

Intangible Assets	6 Months Ended
	Mar. 31, 2017
Goodwill And Intangible Assets Disclosure [Abstract]
Intangible Assets	NOTE 5. INTANGIBLE ASSETS Intangible assets subject to amortization include patents and a license agreement capitalized as part of the Novartis RNAi asset acquisition in March 2015. The license agreement associated with the Novartis RNAi asset acquisition is being amortized over the estimated life remaining at the time of acquisition, which was 21 years, and the accumulated amortization of the asset is approximately $309,178. The patents associated with the Novartis RNAi asset acquisition are being amortized over the estimated life remaining at the time of acquisition, which was 14 years, and the accumulated amortization of the assets is approximately $3,233,833. Amortization expense for the three and six months ended March 31, 2017 was $425,107 and $850,215, respectively. Amortization expense is expected to be approximately $850,214 for the remainder of fiscal year 7 The following table provides details on the Company’s intangible asset balances: Intangible assets Balance at September 30, 2016 $ 22,164,868 Impairment - Amortization (850,215 ) Balance at March 31, 2017 $ 21,314,653

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Stockholders' Equity	NOTE 6. STOCKHOLDERS’ EQUITY At March 31, 2017, the Company had a total of 150,000,000 shares of capital stock authorized for issuance, consisting of 145,000,000 shares of Common Stock, par value $0.001 per share, and 5,000,000 shares of Preferred Stock, par value $0.001 per share. At March 31, 2017, 74,772,103 During the six months ended March 31, 2017, 15,652 shares of Series C Preferred Stock were converted into 2,670,990 shares of Common Stock. No preferred stock was outstanding as of March 31, 2017. On March 21, 2017, the Board of Directors (the “Board”) of the Company authorized and declared a dividend distribution of one right (a “Right”) for each outstanding share of Common Stock of the Company to stockholders of record at the close of business on March 22, 2017 (the “Record Date”). Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series D Junior Participating Preferred Stock $0.001 purchase price of $20 per one one-thousandth of a Preferred Share (the “Purchase Price”). This portion of a share of Preferred Stock would give the holder thereof approximately the same dividend, voting and liquidation rights as would one share of Common Stock, with any variations set forth in the Certificate of Designation, Preferences, and Rights of Series D Junior Participating Preferred Stock attached hereto as Exhibit 3.1. The Rights become exercisable on the earlier of (i) 10 business days following a public announcement that a person has become an “Acquiring Person” by acquiring beneficial ownership of 15% or more of the Common Stock then outstanding, other than as a result of repurchases of Common Stock by the Company or certain inadvertent acquisitions; or (ii) 10 business days (or such later date as the Board shall determine prior to the time a person becomes an Acquiring Person) after the commencement of a tender offer or an exchange offer by or on behalf of any person (other than the Company and certain related entities) that, if completed, would result in such person becoming an Acquiring Person. In the event that a person becomes an Acquiring Person, each holder of a Right shall thereafter have the right to receive, upon exercise, Common Stock (or, in certain circumstances, other securities, cash, or other assets of the Company) having a value equal to two times the Purchase Price. On November 18, 2016, a tranche of 1,745,810 shares was sold to Amgen at a price of $7.16 per share as part of the ARO-LPA Agreement discussed in Note 2 above. The Company received proceeds of $12.5 million in November 2016. The following table summarizes information about warrants outstanding at March 31, 2017: Exercise prices Number of Remaining $ 70.60 94,897 0.1 $ 2.12 75,000 0.9 $ 1.83 277,284 0.7 $ 7.14 80,000 1.2 Total warrants outstanding 527,181

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Mar. 31, 2017
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 7. COMMITMENTS AND CONTINGENCIES Leases The Company leases approximately 8,500 square feet of office space for its corporate headquarters in Pasadena, California. The lease will expire in September 2019. Monthly rental payments are approximately $27,000 per month, increasing approximately 3% annually. The Company also leases approximately 60,000 square feet of office and laboratory space for its research facility in Madison, Wisconsin. The lease will expire in September 2026. As part of this lease, the Company was provided a primary tenant improvement allowance of $2.1 million which is accounted for as Deferred Rent and a secondary tenant improvement allowance of $2.7 million which is accounted for as a Note Payable on the Company’s Consolidated Balance Sheet. Monthly rental payments, including common area maintenance, real estate taxes and payments of principal and interest on the Note Payable are approximately $180,200 per month. The Company previously leased additional research facility space in Middleton, Wisconsin, however, this lease expired in December 2016. Monthly rental expense for the Middleton space was approximately $14,000. Other monthly rental expenses included common area maintenance and real estate taxes totaling approximately $4,000 per month. Facility rent expense for the three and six months ended March 31, 2017 was $416,800 and $797,900, respectively, and facility rent expense for the three and six months ended March 31, 2016 was $228,400 and $427,000, respectively. As of March 31, 2017, future minimum lease payments due in fiscal years under operating leases are as follows: 2017 $ 746,022 201 8 1,531,765 201 9 1,435,409 2020 1,044,431 2021 1,070,496 2022 5,766,495 Total $ 11,594,618 Note Payable As part of the Company’s lease for its research facility in Madison, Wisconsin discussed above, the Company entered into a $2.7 million promissory note payable with its landlord to finance certain tenant improvements made to the new facility. The note will be amortized over the 10-year term of the lease, commencing on October 1, 2016. The note bears interest at a rate of 7.1% and is payable in equal monthly installments of principal and interest. As of March 31, 2017, future principal payments due in fiscal years under the note payable are as follows: 2017 $ 98,840 201 8 208,506 201 9 223,820 2020 240,258 2021 257,903 2022 1,603,038 Total $ 2,632,365 Litigation The Company and certain of its officers and directors were named as defendants in a putative consolidated class action in the United States District Court for the Central District of California regarding certain public statements in connection with the Company’s hepatitis B drug research. The consolidated class action, initially filed as Wang v. Arrowhead Research Corp., et al. Eskinazi v. Arrowhead Research Corp., et al. Weisman v. Anzalone et al Bernstein (Backus) v. Anzalone, et al. Johnson v. Anzalone, et al. Bacchus v. Anzalone, et al. Jackson v. Anzalone, et al. The Company and certain executive officers were named as defendants in a putative consolidated class action in the United States District Court for the Central District of California regarding certain public statements in connection with the Company’s drug research programs. The consolidated class action, initially filed as Meller v. Arrowhead Pharmaceuticals, Inc., et al. Siegel v. Arrowhead Pharmaceuticals, Inc., et al Unz v. Arrowhead Pharmaceuticals, Inc., et al Johnson v. Anzalone, et al Purchase Commitments In the normal course of business, we enter into various purchase commitments for the manufacture of drug components, for toxicology studies, and for clinical studies. As of March 31, 2017, these future commitments were estimated at approximately $11.4 million, of which approximately $7.1 million is expected to be incurred in fiscal 2017, and $4.4 million is expected to be incurred beyond fiscal 2017. Technology License Commitments The Company has licensed from third parties the rights to use certain technologies for its research and development activities, as well as in any products the Company may develop using these licensed technologies. These agreements and other similar agreements often require milestone and royalty payments. Milestone payments, for example, may be required as the research and development process progresses through various stages of development, such as when clinical candidates enter or progress through clinical trials, upon NDA and upon certain sales level milestones. These milestone payments could amount to the mid to upper double-digit millions of dollars. During the three and six months ended March 31, 2017 and 2016, the Company did not reach any milestones requiring milestone payments. In certain agreements, the Company may be required to make mid to high single-digit percentage royalty payments based on a percentage of the sales of the relevant products.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Mar. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-Based Compensation	NOTE 8. STOCK-BASED COMPENSATION Arrowhead has two plans that provide for equity-based compensation. Under the 2004 Equity Incentive Plan and 2013 Incentive Plan, as of March 31, 2017, 2,133,286 and 6,329,079 shares, respectively, of Arrowhead’s Common Stock are reserved for the grant of stock options, stock appreciation rights, restricted stock awards and performance unit/share awards to employees, consultants and others. No further grants may be made under the 2004 Equity Incentive Plan. As of March 31, 2017, there were options granted and outstanding to purchase 2,133,286 and 3,232,498 shares of Common Stock under the 2004 Equity Incentive Plan and the 2013 Incentive Plan, respectively, and there were 2,205,001 restricted stock units granted and outstanding under the 2013 Incentive Plan. Also, as of March 31, 2017, there were 453,812 shares reserved for options and 23,333 restricted stock units issued as inducement grants to new employees outside of equity compensation plans. During the three and six months ended March 31, 2017, no options or restricted stock units were granted under the 2004 Equity Incentive Plan, 525,000 options and 573,000 options were granted under the 2013 Incentive Plan, respectively, 1,645,000 restricted stock units were granted under the 2013 Incentive Plan in each period, and no options or restricted stock units were granted as inducement awards to new employees outside of equity incentive plans. The following table summarizes information about stock options: Number of Weighted- Weighted- Aggregate Balance At September 30, 201 6 6,691,200 $ 6.56 Granted 573,000 2.00 Cancelled (1,308,874) 7.38 Exercised (135,730) 2.01 Balance At March, 31, 2017 5,819,596 $ 6.03 6.1 years $ 150,000 Exercisable At March 31, 2017 3,868,016 $ 6.31 6.0 years $ 0 Stock-based compensation expense related to stock options for the three and six months ended March 31, 2017 was $1,097,970 and $2,536,429, respectively, and stock-based compensation expense related to stock options for the three and six months ended March 31, 2016 was $1,511,812 and $2,729,029, respectively. The Company does not recognize an income tax benefit as the Company is currently operating at a loss and an actual income tax benefit may not be realized. For non-qualified stock options, the loss creates a timing difference, resulting in a deferred tax asset, which is fully reserved by a valuation allowance. The grant date fair value of the options granted by the Company for the three and six months ended March 31, 2017 was $ 563,340 and 5,963,356 and The intrinsic value of the options exercised during the three and six months ended March 31, 2017 was $35,512 and $35,512, respectively, and the intrinsic value of the options exercised during the three and six months ended March 31, 2016 was $0 and $3,515, respectively. As of March 31, 2017, the pre-tax compensation expense for all outstanding unvested stock options in the amount of approximately $7,059,350 will be recognized in the Company’s results of operations over a weighted average period of 2.1 The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which do not have vesting restrictions and are fully transferable. The determination of the fair value of each stock option is affected by the Company’s stock price on the date of grant, as well as assumptions regarding a number of highly complex and subjective variables. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. The assumptions used to value stock options are as follows: Six Months Ended March 31, 201 7 2016 Dividend yield — — Risk-free interest rate 1.34 – 2.06% 1.44 – 1.89% Volatility 79% 89% Expected life (in years) 5.75 - 6.25 6.25 Weighted average grant date fair value per share of options granted $1.36 $4.59 The dividend yield is zero as the Company currently does not pay a dividend. The risk-free interest rate is based on that of the U.S. Treasury bond. Volatility is estimated based on volatility average of the Company’s Common Stock price. Restricted Stock Units Restricted stock units (RSUs), including time-based and performance-based awards, were granted under the Company’s 2013 Incentive Plan and as inducement grants granted outside of the Plan. During the three months ended March 31, 2017, the Company awarded 1,645,000 restricted stock units to certain members of management. At vesting, each existing RSU will be exchanged for one share of the Company’s Common Stock. RSU recipients may elect to net share settle upon vesting, in which case the Company pays the employee’s income taxes withheld upon vesting and withholds a number of shares of equal value. RSU awards generally vest subject to the satisfaction of service requirements or the satisfaction of both service requirements and achievement of certain performance targets. The following table summarizes the activity of the Company’s RSUs: Number of Weighted- Unvested at September 30, 2016 1,356,667 $ 6.72 Granted 1,645,000 1.55 Vested (773,333 ) 6.89 Forfeited — — Unvested at March 31, 2017 2,228,334 $ 2.84 During the three and six months ended March 31, 2017, the Company recorded $646,261 and $1,632,244 of expense related to RSUs, respectively, and during the three and six months ended March 31, 2016, the Company recorded $905,027 and $2,068,153 of expense related to RSUs, respectively. Such expense is included in stock-based compensation expense in the Company’s Consolidated Statement of Operations and Comprehensive Loss. For RSUs, the grant date fair value of the award is based on the Company’s closing stock price at the grant date, with consideration given to the probability of achieving performance conditions for performance based awards. As of March 31, 2017, the pre-tax compensation expense for all unvested RSUs in the amount of approximately $3,507,866 will be recognized in the Company’s results of operations over a weighted average period of 1.5 years.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurements	NOTE 9. FAIR VALUE MEASUREMENTS The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, the Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The fair value hierarchy is defined as follows: Level 1—Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly. Level 3—Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date. The following table summarizes fair value measurements at March 31, 2017 and September 30, 2016 for assets and liabilities measured at fair value on a recurring basis: March 31, 2017: Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 61,718,971 $ — $ — $ 61,718,971 Short-term investments $ 24,910,492 $ — $ — $ 24,910,492 Derivative liabilities $ — $ — $ 146,178 $ 146,178 September 30, 2016 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 85,366,448 $ — $ — $ 85,366,448 Short-term investments $ — $ — $ — $ — Derivative liabilities $ — $ — $ 1,602,626 $ 1,602,626 As part of a financing in December 2012, Arrowhead issued warrants to purchase up to 912,543 shares of Common Stock (the “2012 Warrants”) of which 265,161 warrants were outstanding at March 31, 2017. Further, as part of a financing in January 2013, Arrowhead issued warrants to purchase up to 833,530 shares of Common Stock (the “2013 Warrants” and, together with the 2012 Warrants, the “Warrants”) of which 12,123 warrants were outstanding at March 31, 2017. Each of the Warrants contains a mechanism to adjust the strike price upon the issuance of certain dilutive equity securities. If during the terms of the Warrants, the Company issues Common Stock at a price lower than the exercise price for the Warrants, the exercise price would be reduced to the amount equal to the issuance price of the Common Stock. As a result of these features, the Warrants are subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the Warrants on the date of issuance was estimated using an option pricing model and recorded on the Company’s Consolidated Balance Sheet as a derivative liability. The fair value of the Warrants is estimated at the end of each reporting period and the change in the fair value of the Warrants is recorded as a non-operating gain or loss as change in value of derivatives in the Company’s Consolidated Statement of Operations and Comprehensive Loss. During the three and six months ended March 31, 2017, the Company recorded a non-cash gain/(loss) from the change in fair value of the derivative liability of $(25,883) and $1,428,948, respectively, and during the three and six months ended March 31, 2016, the Company recorded a non-cash gain/(loss) from the change in fair value of the derivative liability of $363,285 and $341,711, respectively. The assumptions used in valuing the derivative liability were as follows: 2012 Warrants March 31, 2017 September 30, 2016 Risk-free interest rate 1.03% 0.68% Expected life 0.7 Years 1.2 Years Dividend yield — — Volatility 79% 89% 2013 Warrants March 31, 2017 September 30, 2016 Risk-free interest rate 1.03% 0.68% Expected life 0.8 Years 1.3 Years Dividend yield — — Volatility 79% 89% The following is a reconciliation of the derivative liability related to these warrants: Value at September 30, 2016 $ 1,565,874 Issuance of instruments — Change in value (1,428,948 ) Net settlements — Value at March 31, 2017 $ 136,926 In conjunction with the financing of Ablaris in fiscal 2011, Arrowhead sold exchange rights to certain investors whereby the investors have the right to exchange their shares of Ablaris for a prescribed number of Arrowhead shares of Common Stock based upon a predefined ratio. The exchange rights have a seven-year term and a current exchange ratio of 0.01. Exchange rights for 675,000 Ablaris shares were sold in fiscal 2011, and 500,000 remain outstanding at March 31, 2017. The exchange rights are subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the exchange rights on the date of issuance was estimated using an option pricing model and recorded on the Company’s Consolidated Balance Sheet as a derivative liability. The fair value of the exchange rights is estimated at the end of each reporting period and the change in the fair value of the exchange rights is recorded as a non-operating gain or loss in the Company’s Consolidated Statement of Operations and Comprehensive Loss. During the three and six months ended March 31, 2017, the Company recorded a non-cash gain/(loss) from the change in fair value of the derivative liability of $(1,500) and $27,500, respectively, and during the three and six months ended March 31, 2016, the Company recorded a non-cash gain/(loss) from the change in fair value of the derivative liability of $6,650 and $4,700, respectively. The assumptions used in valuing the derivative liability were as follows: March 31, 2017 September 30, 2016 Risk-free interest rate 1.03% 0.68% Expected life 0.9 Years 1.5 Years Dividend yield — — Volatility 79% 89% The following is a reconciliation of the derivative liability related to these exchange rights: Value at September 30, 2016 $ 36,752 Issuance of instruments — Change in value (27,500 ) Net settlements — Value at March 31, 2017 $ 9,252 The derivative assets/liabilities are estimated using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate. Changes in the assumptions used could have a material impact on the resulting fair value. The primary input affecting the value of the Company’s derivatives liabilities is the Company’s stock price. Other inputs have a comparatively insignificant effect. The Company’s investments at March 31, 2017 consisted of corporate bonds with maturities remaining of less than one year. The total fair value of the investments at March 31, 2017 The carrying amounts of the Company’s other financial instruments, which include accounts receivable, accounts payable, and accrued expenses approximate their respective fair values due to the relatively short-term nature of these instruments. The carrying value of the Company’s other long-term liabilities approximates fair value based on market interest rates.

Organization and Significant 17

Organization and Significant Accounting Policies (Policies)	6 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation—The consolidated financial statements include the accounts of Arrowhead and its Subsidiaries. Arrowhead’s primary operating subsidiary is Arrowhead Madison, which is located in Madison, Wisconsin, where the Company’s research and development facility is located. All significant intercompany accounts and transactions are eliminated in consolidation.
Basis of Presentation and Use of Estimates	Basis of Presentation and Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Actual results could materially differ from those estimates. Additionally, certain reclassifications have been made to prior period financial statements to conform to the current period presentation.
Cash and Cash Equivalents	Cash and Cash Equivalents—The Company considers all liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had no restricted cash at March 31, 2017 and September 30, 2016.
Concentration of Credit Risk	Concentration of Credit Risk—The Company maintains several bank accounts at two financial institutions for its operations. These accounts are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per institution. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held.
Investments	Investments—The Company may invest excess cash balances in short-term and long-term marketable debt securities. Investments may consist of certificates of deposits, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its investment in marketable securities in accordance with FASB ASC 320, Investments – Debt and Equity Securities. This statement requires certain securities to be classified into three categories: Held-to-maturity—Debt securities that the entity has the positive intent and ability to hold to maturity are reported at amortized cost. Trading Securities—Debt and equity securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings. Available-for-Sale—Debt and equity securities not classified as either securities held-to-maturity or trading securities are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity. The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. Held-to-maturity investments are measured and recorded at amortized cost on the Company’s Consolidated Balance Sheet. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary. As of March 31, 2017, all short-term investments were comprised of corporate bonds with maturity dates of less than one year. As of March 31, 2017, the amortized cost of such bonds was $24,910,492. As of March 31, 2017, gross unrealized losses were $130,319; there were no gross unrealized gains. The total fair value of the investments at March 31, 2017
Property and Equipment	Property and Equipment—Property and equipment are recorded at cost, which may equal fair market value in the case of property and equipment acquired in conjunction with a business acquisition. Depreciation of property and equipment is recorded using the straight-line method over the respective useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized over the lesser of the expected useful life or the remaining lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.
Intangible Assets subject to amortization	Intangible Assets Subject to Amortization—Intangible assets subject to amortization include certain patents and license agreements. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.
Contingent Consideration	Contingent Consideration - The consideration for the Company’s acquisitions often includes future payments that are contingent upon the occurrence of a particular event. For example, milestone payments might be based on the achievement of various regulatory approvals or future sales milestones, and royalty payments might be based on drug product sales levels. The Company records a contingent consideration obligation for such contingent payments at fair value on the acquisition date. The Company estimates the fair value of contingent consideration obligations through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at an estimated fair value at the balance sheet date. Changes in the fair value of the contingent consideration obligations are recognized within the Company’s Consolidated Statements of Operations and Comprehensive Loss. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flows from products upon commercialization, changes in the assumed achievement or timing of any development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. These fair value measurements are based on significant inputs not observable in the market. Substantial judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense the Company records in any given period. The Company determined the fair value of its contingent consideration obligation to be $0 at March 31, 2017 and September 30, 2016, given the discontinuation of its clinical trials.
Revenue Recognition	Revenue Recognition— Revenue from product sales is recorded when persuasive evidence of an arrangement exists, title has passed and delivery has occurred, a price is fixed and determinable, and collection is reasonably assured. The Company may generate revenue from technology licenses, collaborative research and development arrangements, research grants and product sales. Revenue under technology licenses and collaborative agreements typically consists of nonrefundable and/or guaranteed technology license fees, collaborative research funding, manufacturing and development services and various milestone and future product royalty or profit-sharing payments. These agreements are generally referred to as multiple element arrangements. The Company applies the accounting standard on revenue recognition for multiple element arrangements. The fair value of deliverables under the arrangement may be derived using a best estimate of selling price if vendor specific objective evidence and third-party evidence is not available. Deliverables under the arrangement will be separate units of accounting if a delivered item has value to the customer on a standalone basis, if the arrangement includes a general right of return for the delivered item, and if delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. The Company recognizes upfront license payments as revenue upon delivery of the license only if the license has standalone value from any undelivered performance obligations and that value can be determined. The undelivered performance obligations typically include manufacturing or development services or research and/or steering committee services. If the fair value of the undelivered performance obligations can be determined, then these obligations would be accounted for separately. If the license is not considered to have standalone value, then the license and other undelivered performance obligations would be accounted for as a single unit of accounting. In this case, the license payments and payments for performance obligations are recognized as revenue over the estimated period of when the performance obligations are performed or deferred indefinitely until the undelivered performance obligation is determined. Whenever the Company determines that an arrangement should be accounted for as a single unit of accounting, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. Revenue is recognized using a proportional performance or straight-line method. The proportional performance method is used when the level of effort required to complete performance obligations under an arrangement can be reasonably estimated. The amount of revenue recognized under the proportional performance method is determined by multiplying the total payments under the contract, excluding royalties and payments contingent upon achievement of milestones, by the ratio of the level of effort performed to date to the estimated total level of effort required to complete performance obligations under the arrangement. If the Company cannot reasonably estimate the level of effort to complete performance obligations under an arrangement, the Company recognizes revenue under the arrangement on a straight-line basis over the period the Company is expected to complete its performance obligations. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under an arrangement. Many of the Company’s collaboration agreements entitle the Company to additional payments upon the achievement of development, regulatory and sales performance-based milestones. If the achievement of a milestone is considered probable at the inception of the collaboration, the related milestone payment is included with other collaboration consideration, such as upfront fees and research funding, in the Company’s revenue calculation. Typically these milestones are not considered probable at the inception of the collaboration. As such, milestones will typically be recognized in one of two ways depending on the timing of when the milestone is achieved. If the milestone is achieved during the performance period, the Company will only recognize revenue to the extent of the proportional performance achieved at that date, or the proportion of the straight-line basis achieved at that date, and the remainder will be recorded as deferred revenue to be amortized over the remaining performance period. If the milestone is achieved after the performance period has completed and all performance obligations have been delivered, the Company will recognize the milestone payment as revenue in its entirety in the period the milestone was achieved. Deferred revenue will be classified as part of Current or Long-Term Liabilities in the accompanying Consolidated Balance Sheets based on the Company’s estimate of the portion of the performance obligations regarding that revenue will be completed within the next 12 months divided by the total performance period estimate. This estimate is based on the Company’s current operating plan and, if the Company’s operating plan should change in the future, the Company may recognize a different amount of deferred revenue over the next 12-month period.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts—The Company accrues an allowance for doubtful accounts based on estimates of uncollectible revenues by analyzing historical collections, accounts receivable aging and other factors. Accounts receivable are written off when all collection attempts have failed.
Research and Development	Research and Development—Costs and expenses that can be clearly identified as research and development are charged to expense as incurred in accordance with FASB ASC 730-10. Included in research and development costs are operating costs, facilities, supplies, external services, clinical trial and manufacturing costs, overhead directly related to the Company’s research and development operations, and costs to acquire technology licenses.
Earnings (Loss) per Share	Earnings (Loss) per Share—Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares primarily consist of stock options and restricted stock units issued to employees and warrants to purchase Common Stock of the Company. All outstanding stock options, restricted stock units and warrants for the three and six months ended March 31, 2017 and 2016 have been excluded from the calculation of Diluted earnings (loss) per share due to their anti-dilutive effect.
Stock-Based Compensation	Stock-Based Compensation—The Company accounts for share-based compensation arrangements in accordance with FASB ASC 718, which requires the measurement and recognition of compensation expense for all share-based payment awards to be based on estimated fair values. The Company uses the Black-Scholes option valuation model to estimate the fair value of its stock options at the date of grant. The Black-Scholes option valuation model requires the input of subjective assumptions to calculate the value of stock options. For restricted stock units, the value of the award is based on the Company’s stock price at the grant date. For performance-based restricted stock unit awards, the value of the award is based on the Company’s stock price at the grant date, with consideration given to the probability of the performance condition being achieved. The Company uses historical data and other information to estimate the expected price volatility for stock option awards and the expected forfeiture rate for all awards. Expense is recognized over the vesting period for all awards, and commences at the grant date for time-based awards and upon the Company’s determination that the achievement of such performance conditions is probable for performance-based awards. This determination requires significant judgment by management.
Derivative Assets and Liabilities	Derivative Assets and Liabilities – The Company accounts for warrants and other derivative financial instruments as either equity or assets/liabilities based upon the characteristics and provisions of each instrument. Warrants classified as equity are recorded as Additional Paid-In Capital on the Company’s Consolidated Balance Sheet. Some of the Company’s warrants were determined to be ineligible for equity classification due to provisions that may result in an adjustment to their exercise price. Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as assets or liabilities are recorded on the Company’s Consolidated Balance Sheet at their fair value on the date of issuance and are revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as Other Income or Expense. The Company estimates the fair value of these assets/liabilities using option pricing models that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life and risk-free interest rate.
Income Taxes	Income Taxes—The Company accounts for income taxes under the liability method, which requires the recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. The provision for income taxes, if any, represents the tax payable for the period and the change in deferred income tax assets and liabilities during the period.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606), which will supersede nearly all existing revenue recognition guidance under GAAP. ASU No. 2014-09 provides that an entity recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption and will become effective for the Company in the first quarter of 2018. In April 2016, the FASB issued an amendment to ASU No. 2014-09 with update ASU 2016-10 which provided more specific guidance around the identification of performance obligations and licensing arrangements. The Company is evaluating the potential effects of the adoption of this update on its financial statements. In March 2016, the FASB issued ASU No. 2016-02, Leases. Under ASU 2016-02, lessees will be required to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). ASU 2016-02 becomes effective for the Company in the first quarter of fiscal 2020. The Company expects the adoption of this update to have a material effect on the classification and disclosure of its leased facilities in Madison, Wisconsin.

Investments (Tables)

Investments (Tables)	6 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Summary of Short and Long-term Investments	The following tables summarize the Company’s short- and long-term investments as of March 31, 2017, and September 30, 2016. As of March 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial notes (due within one year) $ 24,910,492 $ — $ (130,319 ) $ 24,780,173 Total $ 24,910,492 $ — $ (130,319 ) $ 24,780,173 As of September 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial notes (due within one year) $ — — $ — $ — Total $ — — $ — $ —

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Mar. 31, 2017
Property Plant And Equipment [Abstract]
Summary of Property and Equipment	The following table summarizes the Company’s major classes of property and equipment: March 31, 2017 September 30, 2016 Computers, office equipment and furniture $ 546,254 $ 442,915 Research equipment 8,655,069 7,490,400 Software 132,078 80,841 Leasehold improvements 12,003,310 11,885,365 Total gross fixed assets 21,336,711 19,899,521 Less: Accumulated depreciation and amortization (5,621,763 ) (4,512,760 ) Property and equipment, net $ 15,714,948 $ 15,386,761

Intangible Assets (Tables)

Intangible Assets (Tables)	6 Months Ended
	Mar. 31, 2017
Goodwill And Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets	The following table provides details on the Company’s intangible asset balances: Intangible assets Balance at September 30, 2016 $ 22,164,868 Impairment - Amortization (850,215 ) Balance at March 31, 2017 $ 21,314,653

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	6 Months Ended
	Mar. 31, 2017
Equity [Abstract]
Summary of Information About Warrants	The following table summarizes information about warrants outstanding at March 31, 2017: Exercise prices Number of Remaining $ 70.60 94,897 0.1 $ 2.12 75,000 0.9 $ 1.83 277,284 0.7 $ 7.14 80,000 1.2 Total warrants outstanding 527,181

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Mar. 31, 2017
Commitments And Contingencies Disclosure [Abstract]
Future Minimum Lease Payments Under Operating Leases	As of March 31, 2017, future minimum lease payments due in fiscal years under operating leases are as follows: 2017 $ 746,022 201 8 1,531,765 201 9 1,435,409 2020 1,044,431 2021 1,070,496 2022 5,766,495 Total $ 11,594,618
Future Principal Payments Under Note Payable	As of March 31, 2017, future principal payments due in fiscal years under the note payable are as follows: 2017 $ 98,840 201 8 208,506 201 9 223,820 2020 240,258 2021 257,903 2022 1,603,038 Total $ 2,632,365

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Mar. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summarized Information about Stock Options	The following table summarizes information about stock options: Number of Weighted- Weighted- Aggregate Balance At September 30, 201 6 6,691,200 $ 6.56 Granted 573,000 2.00 Cancelled (1,308,874) 7.38 Exercised (135,730) 2.01 Balance At March, 31, 2017 5,819,596 $ 6.03 6.1 years $ 150,000 Exercisable At March 31, 2017 3,868,016 $ 6.31 6.0 years $ 0
Assumptions Used to Value Stock Options	The assumptions used to value stock options are as follows: Six Months Ended March 31, 201 7 2016 Dividend yield — — Risk-free interest rate 1.34 – 2.06% 1.44 – 1.89% Volatility 79% 89% Expected life (in years) 5.75 - 6.25 6.25 Weighted average grant date fair value per share of options granted $1.36 $4.59
Summary of Share Activity Related to RSUs	The following table summarizes the activity of the Company’s RSUs: Number of Weighted- Unvested at September 30, 2016 1,356,667 $ 6.72 Granted 1,645,000 1.55 Vested (773,333 ) 6.89 Forfeited — — Unvested at March 31, 2017 2,228,334 $ 2.84

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Mar. 31, 2017
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Fair Value Measurements for Assets and Liabilities Measured at Fair Value on Recurring Basis	The following table summarizes fair value measurements at March 31, 2017 and September 30, 2016 for assets and liabilities measured at fair value on a recurring basis: March 31, 2017: Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 61,718,971 $ — $ — $ 61,718,971 Short-term investments $ 24,910,492 $ — $ — $ 24,910,492 Derivative liabilities $ — $ — $ 146,178 $ 146,178 September 30, 2016 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 85,366,448 $ — $ — $ 85,366,448 Short-term investments $ — $ — $ — $ — Derivative liabilities $ — $ — $ 1,602,626 $ 1,602,626
Exchange rights
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Assumptions Used in Valuing Derivative Liabilities	The assumptions used in valuing the derivative liability were as follows: March 31, 2017 September 30, 2016 Risk-free interest rate 1.03% 0.68% Expected life 0.9 Years 1.5 Years Dividend yield — — Volatility 79% 89%
Reconciliation of Derivative Liability	The following is a reconciliation of the derivative liability related to these exchange rights: Value at September 30, 2016 $ 36,752 Issuance of instruments — Change in value (27,500 ) Net settlements — Value at March 31, 2017 $ 9,252
Warrant
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Assumptions Used in Valuing Derivative Liabilities	The assumptions used in valuing the derivative liability were as follows: 2012 Warrants March 31, 2017 September 30, 2016 Risk-free interest rate 1.03% 0.68% Expected life 0.7 Years 1.2 Years Dividend yield — — Volatility 79% 89% 2013 Warrants March 31, 2017 September 30, 2016 Risk-free interest rate 1.03% 0.68% Expected life 0.8 Years 1.3 Years Dividend yield — — Volatility 79% 89%
Reconciliation of Derivative Liability	The following is a reconciliation of the derivative liability related to these warrants: Value at September 30, 2016 $ 1,565,874 Issuance of instruments — Change in value (1,428,948 ) Net settlements — Value at March 31, 2017 $ 136,926

Organization and Significant 25

Organization and Significant Accounting Policies - Additional Information (Detail) - USD ($)	Nov. 18, 2016	Mar. 31, 2017	Mar. 31, 2016	Nov. 29, 2016	Sep. 30, 2016	Sep. 30, 2015
Schedule Of Investments [Line Items]
Percentage of workforce reduced due to discontinued clinical program				30.00%
Cash and cash equivalents		$ 61,718,971	$ 50,300,847		$ 85,366,448	$ 81,214,354
Short term investments		24,910,492
Net increase (decrease) in cash		(23,647,477)	(30,913,507)
Cash outflows related to operating activities excluding upfront payment from Amgen		(34,300,000)
Cash outflow from investments in commercial bonds		24,846,105
Capital expenditures		6,653,158	500,634
Proceeds from the issuance of common stock		12,691,937	$ 25,544
Restricted Cash		0			0
Short-term investment, gross unrealized losses		130,319
Fair value		24,780,173
Investments					0
Fair value of contingent consideration obligation due to discontinuation of clinical trials		0			$ 0
Corporate Bonds
Schedule Of Investments [Line Items]
Short term investments		24,910,492
Short-term investment, gross unrealized losses		130,319
Short-term investment, gross unrealized gain		0
Maximum
Schedule Of Investments [Line Items]
Amount insured in FDIC per account		$ 250,000
Property, Plant and Equipment, Useful Life		7 years
Minimum
Schedule Of Investments [Line Items]
Property, Plant and Equipment, Useful Life		3 years
Amgen
Schedule Of Investments [Line Items]
Proceeds from upfront payments and equity investments		$ 42,500,000
Amgen | Common Stock Purchase Agreement
Schedule Of Investments [Line Items]
Proceeds from the issuance of common stock	$ 12,500,000
Amgen | ARO-LPA Agreement
Schedule Of Investments [Line Items]
Common stock issued	1,745,810
Upfront payment	$ 30,000,000
Amgen | ARO-LPA Agreement | Common Stock Purchase Agreement
Schedule Of Investments [Line Items]
Common stock issued	1,745,810

Collaboration and License Agr26

Collaboration and License Agreements - Amgen, Inc - Additional Information (Detail)	Mar. 31, 2017$ / sharesshares	Nov. 18, 2016USD ($)	Sep. 28, 2016USD ($)Agreement	Nov. 30, 2016USD ($)	Sep. 30, 2016USD ($)	Mar. 31, 2017USD ($)$ / sharesshares	Mar. 31, 2017USD ($)$ / sharesshares	Mar. 31, 2016USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Proceeds from the issuance of common stock							$ 12,691,937	$ 25,544
Amgen
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Stock issued, price per share | $ / shares	$ 7.16					$ 7.16	$ 7.16
Collaboration and License agreements | Amgen
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Agreement date	Sep. 28, 2016
Number of agreements | Agreement			2
ARO-AMG1 Agreement | Amgen
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Additional amount of common stock shares agreed to sell upon exercise of option			$ 5,000,000
Number of trading days, used to calculate share price of Common Stock, surrounding option exercise date			30 days
Cash received as due under collaboration agreement					$ 5,000,000
Deferred revenue					$ 5,000,000
Deferred revenue amortized into revenue						$ 600,000	$ 1,300,000
Collaboration and License agreements
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Cash received as due under collaboration agreement			$ 35,000,000
Collaboration and License agreements | Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Option payments, and development, regulatory and sales milestone payments.			617,000,000
Collaboration and License agreements | Amgen
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Proceeds from the issuance of common stock			$ 21,500,000
ARO-LPA Agreement | Amgen
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Cash received as due under collaboration agreement				$ 30,000,000
Deferred revenue				$ 30,000,000
Deferred revenue amortized into revenue						7,800,000	11,500,000
Revenue generated from work orders under services agreement						$ 600,000	$ 600,000
Common Stock Purchase Agreement | Amgen
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Agreement date	Sep. 28, 2016
Shares issued | shares	3,002,793					3,002,793	3,002,793
Stock issued, price per share | $ / shares	$ 7.16					$ 7.16	$ 7.16
Proceeds from the issuance of common stock		$ 12,500,000
Common Stock Purchase Agreement | Amgen | NASDAQ
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Number of trading days, used to calculate weighted average price of Common Stock, listed in stock market	30 days

Investments - Summary of Short

Investments - Summary of Short and Long-term Investments (Detail)	Mar. 31, 2017USD ($)
Schedule Of Held To Maturity Securities [Line Items]
Amortized Cost	$ 24,910,492
Gross Unrealized Losses	(130,319)
Fair value	24,780,173
Commercial Notes Due Within One Year
Schedule Of Held To Maturity Securities [Line Items]
Amortized Cost	24,910,492
Gross Unrealized Losses	(130,319)
Fair value	$ 24,780,173

Property and Equipment - Summar

Property and Equipment - Summary of Property and Equipment (Detail) - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Property Plant And Equipment [Abstract]
Computers, office equipment and furniture	$ 546,254	$ 442,915
Research equipment	8,655,069	7,490,400
Software	132,078	80,841
Leasehold improvements	12,003,310	11,885,365
Total gross fixed assets	21,336,711	19,899,521
Less: Accumulated depreciation and amortization	(5,621,763)	(4,512,760)
Property and equipment, net	$ 15,714,948	$ 15,386,761

Intangible Assets - Additional

Intangible Assets - Additional Information (Detail)	3 Months Ended	6 Months Ended
	Mar. 31, 2017USD ($)	Mar. 31, 2017USD ($)
Finite Lived Intangible Assets [Line Items]
Amortization expense	$ 425,107	$ 850,215
Amortization of license agreements remainder of fiscal year 2017	850,214	850,214
Amortization of license agreements in 2018	1,700,429	1,700,429
Amortization of license agreements in 2019	1,700,429	1,700,429
Amortization of license agreements in 2020	1,700,429	1,700,429
Amortization of license agreements in 2021	1,700,429	1,700,429
Amortization of license agreements in 2022	1,700,429	1,700,429
Amortization of license agreements, thereafter	11,962,294	$ 11,962,294
Novartis | Licensing Agreements
Finite Lived Intangible Assets [Line Items]
Amortization period of intangible assets		21 years
Finite-lived intangible assets, accumulated amortization	309,178	$ 309,178
Novartis | Patents
Finite Lived Intangible Assets [Line Items]
Amortization period of intangible assets		14 years
Finite-lived intangible assets, accumulated amortization	$ 3,233,833	$ 3,233,833

Intangible Assets - Schedule of

Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2017
Intangible Assets Net Excluding Goodwill [Abstract]
Intangible assets subject to amortization, beginning balance		$ 22,164,868
Intangible assets subject to amortization, Amortization	$ (425,107)	(850,215)
Intangible assets subject to amortization, ending balance	$ 21,314,653	$ 21,314,653

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	Nov. 18, 2016	Nov. 30, 2016	Mar. 31, 2017	Mar. 21, 2017	Sep. 30, 2016
Class Of Stock [Line Items]
Capital stock authorized for issuance			150,000,000
Common stock, shares authorized			145,000,000		145,000,000
Common stock, par value			$ 0.001		$ 0.001
Preferred stock, shares authorized			5,000,000		5,000,000
Preferred stock, par value			$ 0.001		$ 0.001
Common stock, shares outstanding			74,772,103		69,746,685
Preferred stock, shares outstanding			0		15,652
Dividend distribution, declared date			Mar. 21, 2017
Number of rights distributed for each outstanding share of common stock				1
Dividend distribution, record date			Mar. 22, 2017
Rights expiration date			Mar. 21, 2018
ARO-LPA Agreement | Amgen
Class Of Stock [Line Items]
Common stock shares sold	1,745,810
Common stock shares sold, price per share	$ 7.16
Net proceeds received		$ 12.5
Series C Preferred Stock
Class Of Stock [Line Items]
Preferred stock, shares converted			15,652
Common stock, issued upon conversion of preferred stock			2,670,990
Preferred stock, shares outstanding			0
Series D Junior Participating Preferred
Class Of Stock [Line Items]
Preferred stock, par value				$ 0.001
Preferred stock conversion of purchase price per one one thousandth of share				$ 0.020
Beneficial ownership percentage of common stock upon right exercisable				15.00%
Number of rights distributed for each outstanding share of common stock			1
2004 Equity Incentive Plan, 2013 Equity Incentive Plan, and Inducement Grants
Class Of Stock [Line Items]
Common Stock, Share reserve for issuance			8,939,510

Stockholders' Equity - Summary

Stockholders' Equity - Summary of Information About Warrants (Detail)	6 Months Ended
	Mar. 31, 2017$ / sharesshares
Class Of Warrant Or Right [Line Items]
Warrants outstanding	527,181
Warrant 1
Class Of Warrant Or Right [Line Items]
Exercise prices | $ / shares	$ 70.60
Warrants outstanding	94,897
Remaining Life in Years	1 month 6 days
Warrant 2
Class Of Warrant Or Right [Line Items]
Exercise prices | $ / shares	$ 2.12
Warrants outstanding	75,000
Remaining Life in Years	10 months 24 days
Warrant 3
Class Of Warrant Or Right [Line Items]
Exercise prices | $ / shares	$ 1.83
Warrants outstanding	277,284
Remaining Life in Years	8 months 12 days
Warrant 4
Class Of Warrant Or Right [Line Items]
Exercise prices | $ / shares	$ 7.14
Warrants outstanding	80,000
Remaining Life in Years	1 year 2 months 12 days

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Mar. 31, 2017USD ($)ft²	Mar. 31, 2016USD ($)	Mar. 31, 2017USD ($)ft²	Mar. 31, 2016USD ($)
Other Commitments [Line Items]
Facility rent expense	$ 416,800	$ 228,400	$ 797,900	$ 427,000
Provision for recorded liabilities	0		0
Future commitments	11,400,000		11,400,000
Commitments expected to be incurred in fiscal 2017	7,100,000		7,100,000
Commitments expected to be incurred beyond fiscal 2017	4,400,000		4,400,000
Technology License Commitments
Other Commitments [Line Items]
Milestone payments	$ 0	$ 0	$ 0	$ 0
Corporate Headquarters In Pasadena
Other Commitments [Line Items]
Office space leases, in square feet | ft²	8,500		8,500
Operating lease expiration month and year			2019-09
Rental expense			$ 27,000
Percentage of increase in annual rental cost			3.00%
Research Facility in Madison
Other Commitments [Line Items]
Office space leases, in square feet | ft²	60,000		60,000
Operating lease expiration month and year			2026-09
Primary tenant improvement allowance accounted for as deferred rent	$ 2,100,000		$ 2,100,000
Secondary tenant improvement allowance accounted for as note payable	2,700,000		2,700,000
Rental expense including common area maintenance and real estate taxes and payments of principal and interest on the note payable			180,200
Promissory note payable	$ 2,700,000		$ 2,700,000
Promissory notes payable amortized term			10 years
Promissory note commencement date			Oct. 1, 2016
Promissory note interest rate			7.10%
Research Facility in Middleton
Other Commitments [Line Items]
Operating lease expiration month and year			2016-12
Rental expense			$ 14,000
Other rental expenses including common area maintenance and real estate taxes			$ 4,000

Commitments and Contingencies34

Commitments and Contingencies - Future Minimum Lease Payments Under Operating Leases (Detail)	Mar. 31, 2017USD ($)
Leases [Abstract]
2,017	$ 746,022
2,018	1,531,765
2,019	1,435,409
2,020	1,044,431
2,021	1,070,496
2022 and thereafter	5,766,495
Total	$ 11,594,618

Commitments and Contingencies35

Commitments and Contingencies - Future Principal Payments Under Note Payable (Detail)	Mar. 31, 2017USD ($)
Long Term Notes Payable [Abstract]
2,017	$ 98,840
2,018	208,506
2,019	223,820
2,020	240,258
2,021	257,903
2022 and thereafter	1,603,038
Total	$ 2,632,365

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Options Outstanding	5,819,596		5,819,596		6,691,200
Number of Options Outstanding, Granted			573,000
Stock-based compensation expense	$ 1,744,231	$ 2,416,839	$ 4,168,673	$ 4,797,182
RSU awards vesting, description			At vesting, each existing RSU will be exchanged for one share of the Company’s Common Stock. RSU recipients may elect to net share settle upon vesting, in which case the Company pays the employee’s income taxes withheld upon vesting and withholds a number of shares of equal value.
Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	1,097,970	1,511,812	$ 2,536,429	2,729,029
Grant date fair value of the options granted	563,340	5,963,356	778,879	6,329,232
Intrinsic value of options exercised	35,512	0	35,512	3,515
Unrecognized pre-tax compensation expense	$ 7,059,350		$ 7,059,350
Weighted average period to recognize pre-tax compensation expense			2 years 1 month 6 days
Dividend yield			0.00%
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of restricted stock units outstanding, granted	1,645,000		1,645,000
Stock-based compensation expense	$ 646,261	$ 905,027	$ 1,632,244	$ 2,068,153
Weighted average period to recognize pre-tax compensation expense			1 year 6 months
Unrecognized pre-tax compensation expense	$ 3,507,866		$ 3,507,866
2004 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserve for issuance	2,133,286		2,133,286
2004 Equity Incentive Plan | Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Options Outstanding	2,133,286		2,133,286
Number of Options Outstanding, Granted	0
2004 Equity Incentive Plan | Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of restricted stock units outstanding, granted			0
2013 Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserve for issuance	6,329,079		6,329,079
2013 Incentive Plan | Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Options Outstanding	3,232,498		3,232,498
Number of Options Outstanding, Granted	525,000		573,000
2013 Incentive Plan | Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of restricted stock units outstanding	2,205,001		2,205,001
Number of restricted stock units outstanding, granted	1,645,000		1,645,000
Outside Of Equity Compensation Plans
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserve for issuance	453,812		453,812
Outside Of Equity Compensation Plans | Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Options Outstanding, Granted			0
Outside Of Equity Compensation Plans | Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of restricted stock units outstanding	23,333		23,333
Number of restricted stock units outstanding, granted			0

Stock-Based Compensation - Summ

Stock-Based Compensation - Summarize Information about Stock Options (Detail) - USD ($)	6 Months Ended
	Mar. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Options Outstanding, beginning balance	6,691,200
Number of Options Outstanding, Granted	573,000
Number of Options Outstanding, Cancelled	(1,308,874)
Number of Options Outstanding, Exercised	(135,730)
Number of Options Outstanding, ending balance	5,819,596
Number of Options Outstanding, Exercisable	3,868,016
Weighted-Average Exercise Price Per Share, beginning balance	$ 6.56
Weighted-Average Exercise Price Per Share, Granted	2
Weighted-Average Exercise Price Per Share, Cancelled	7.38
Weighted-Average Exercise Price Per Share, Exercised	2.01
Weighted-Average Exercise Price Per Share, ending balance	6.03
Weighted-Average Exercise Price Per Share, Exercisable	$ 6.31
Weighted-Average Remaining Contractual Term	6 years 1 month 6 days
Weighted-Average Remaining Contractual Term, Exercisable	6 years
Aggregate Intrinsic Value	$ 150,000
Aggregate Intrinsic Value, Exercisable	$ 0

Stock-Based Compensation - Assu

Stock-Based Compensation - Assumptions Used to Value Stock Options (Detail) - $ / shares	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk-free interest rate, minimum	1.34%	1.44%
Risk-free interest rate, maximum	2.06%	1.89%
Volatility	79.00%	89.00%
Expected life (in years)		6 years 3 months
Weighted average grant date fair value per share of options granted	$ 1.36	$ 4.59
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected life (in years)	5 years 9 months
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected life (in years)	6 years 3 months

Stock-Based Compensation - Su39

Stock-Based Compensation - Summary of RSUs Activity (Detail) - Restricted Stock Units (RSUs) - $ / shares	3 Months Ended	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2017
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of RSUs, Unvested, beginning of period		1,356,667
Number of RSUs, Granted	1,645,000	1,645,000
Number of RSUs, Vested		(773,333)
Number of RSUs, Unvested, End of period	2,228,334	2,228,334
Weighted-Average Grant Date Fair Value, beginning balance		$ 6.72
Weighted-Average Grant Date Fair Value, Granted		1.55
Weighted-Average Grant Date Fair Value, Vested		6.89
Weighted-Average Grant Date Fair Value, ending balance	$ 2.84	$ 2.84

Fair Value Measurements - Fair

Fair Value Measurements - Fair Value Measurements for Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($)	Mar. 31, 2017	Sep. 30, 2016
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Short-term investments	$ 24,780,173
Derivative liabilities	146,178	$ 1,602,626
Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash and cash equivalents	61,718,971	85,366,448
Short-term investments	24,910,492
Derivative liabilities	146,178	1,602,626
Fair Value, Measurements, Recurring | Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash and cash equivalents	61,718,971	85,366,448
Short-term investments	24,910,492
Fair Value, Measurements, Recurring | Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative liabilities	$ 146,178	$ 1,602,626

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Detail)	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2017USD ($)shares	Mar. 31, 2016USD ($)	Mar. 31, 2017USD ($)shares	Mar. 31, 2016USD ($)	Sep. 30, 2011shares	Jan. 31, 2013shares	Dec. 31, 2012shares
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Warrants outstanding	527,181		527,181
Fair value | $	$ 24,780,173		$ 24,780,173
Level 1 | Corporate Bonds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value | $	$ 24,780,173		$ 24,780,173
Ablaris Therapeutics
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Warrants outstanding	500,000		500,000
Duration of exchange rights			7 years
Exchange right convertible conversion ratio			0.01
Number of exchange right sold					675,000
Exchange rights
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Non-cash gain (loss) from change in fair value of the derivative liability | $			$ 27,500
Exchange rights | Ablaris Therapeutics
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Non-cash gain (loss) from change in fair value of the derivative liability | $	$ (1,500)	$ 6,650	$ 27,500	$ 4,700
2012 Warrants
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Warrants issued to acquire Common Stock							912,543
Warrants outstanding	265,161		265,161
2013 Warrants
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Warrants issued to acquire Common Stock						833,530
Warrants outstanding	12,123		12,123
Warrant
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Non-cash gain (loss) from change in fair value of the derivative liability | $	$ (25,883)	$ 363,285	$ 1,428,948	$ 341,711

Fair Value Measurements - Assum

Fair Value Measurements - Assumptions Used in Valuing Derivative Liabilities (Detail)	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
2012 Warrants
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Risk-free interest rate	1.03%	0.68%
Expected life	8 months 12 days	1 year 2 months 12 days
Volatility	79.00%	89.00%
2013 Warrants
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Risk-free interest rate	1.03%	0.68%
Expected life	9 months 18 days	1 year 3 months 18 days
Volatility	79.00%	89.00%
Exchange rights
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Risk-free interest rate	1.03%	0.68%
Expected life	10 months 24 days	1 year 6 months
Volatility	79.00%	89.00%

Fair Value Measurements - Recon

Fair Value Measurements - Reconciliation of Derivative Liability (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Exchange rights
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Value, Beginning balance			$ 36,752
Change in value			(27,500)
Value, Ending balance	$ 9,252		9,252
Warrant
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Value, Beginning balance			1,565,874
Change in value	25,883	$ (363,285)	(1,428,948)	$ (341,711)
Value, Ending balance	$ 136,926		$ 136,926