Cover
Cover - shares | 9 Months Ended | |
Jun. 30, 2024 | Aug. 01, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38042 | |
Entity Registrant Name | ARROWHEAD PHARMACEUTICALS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-0408024 | |
Entity Address, Address Line One | 177 E. Colorado Blvd | |
Entity Address, Address Line Two | Suite 700 | |
Entity Address, City or Town | Pasadena | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91105 | |
City Area Code | 626 | |
Local Phone Number | 304-3400 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | ARWR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 124,315,274 | |
Entity Central Index Key | 0000879407 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Sep. 30, 2023 |
Current assets: | ||
Cash, cash equivalents and restricted cash | $ 69,399 | $ 110,891 |
Available-for-sale securities, at fair value | 367,272 | 292,735 |
Prepaid expenses | 9,207 | 8,813 |
Other current assets | 4,184 | 4,033 |
Total current assets | 450,062 | 416,472 |
Property, plant and equipment, net | 375,911 | 290,262 |
Intangible assets, net | 8,987 | 10,262 |
Right-of-use assets | 44,339 | 45,297 |
Other assets | 4,460 | 3,259 |
Total Assets | 883,759 | 765,552 |
Current liabilities: | ||
Accounts payable | 26,550 | 35,866 |
Accrued expenses | 47,899 | 39,763 |
Accrued payroll and benefits | 15,795 | 17,963 |
Lease liabilities | 6,053 | 10,563 |
Deferred revenue | 0 | 866 |
Other liabilities | 417 | 435 |
Total current liabilities | 96,714 | 105,456 |
Long-term liabilities: | ||
Lease liabilities, net of current portion | 112,040 | 104,608 |
Liability related to the sale of future royalties | 336,031 | 268,326 |
Total long-term liabilities | 448,071 | 372,934 |
Commitments and contingencies (Note 7) | ||
Noncontrolling interest and stockholders’ equity: | ||
Common stock, $0.001 par value: Authorized 290,000 shares; issued and outstanding 124,227 and 107,312 shares | 217 | 200 |
Additional paid-in capital | 1,786,304 | 1,300,395 |
Accumulated other comprehensive loss | (987) | (3,222) |
Accumulated deficit | (1,454,987) | (1,026,030) |
Total Arrowhead Pharmaceuticals, Inc. stockholders’ equity | 330,547 | 271,343 |
Noncontrolling interest | 8,427 | 15,819 |
Total noncontrolling interest and stockholders’ equity | 338,974 | 287,162 |
Total Liabilities, Noncontrolling Interest and Stockholders’ Equity | $ 883,759 | $ 765,552 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2024 | Sep. 30, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 290,000,000 | 290,000,000 |
Common stock, shares issued (in shares) | 124,227,000 | 107,312,000 |
Common stock, shares outstanding (in shares) | 124,227,000 | 107,312,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Revenue | $ 0 | $ 15,825 | $ 3,551 | $ 224,638 |
Operating expenses: | ||||
Research and development | 152,431 | 94,757 | 370,044 | 253,333 |
General and administrative | 23,710 | 23,771 | 72,384 | 67,977 |
Total operating expenses | 176,141 | 118,528 | 442,428 | 321,310 |
Operating loss | (176,141) | (102,703) | (438,877) | (96,672) |
Other income (expense): | ||||
Interest income | 6,498 | 4,172 | 15,550 | 11,414 |
Interest expense | (5,094) | (5,158) | (17,705) | (13,064) |
Other, net | 760 | 306 | 1,370 | 821 |
Total other income (expense) | 2,164 | (680) | (785) | (829) |
Loss before income tax expense (benefit) and noncontrolling interest | (173,977) | (103,383) | (439,662) | (97,501) |
Income tax expense (benefit) | 0 | 742 | (3,313) | 759 |
Net loss including noncontrolling interest | (173,977) | (104,125) | (436,349) | (98,260) |
Net loss attributable to noncontrolling interest, net of tax | (3,184) | (1,179) | (7,392) | (2,664) |
Net loss attributable to Arrowhead Pharmaceuticals, Inc. | $ (170,793) | $ (102,946) | $ (428,957) | $ (95,596) |
Net loss per share attributable to Arrowhead Pharmaceuticals, Inc.: | ||||
Basic (in dollars per share) | $ (1.38) | $ (0.96) | $ (3.63) | $ (0.90) |
Diluted (in dollars per share) | $ (1.38) | $ (0.96) | $ (3.63) | $ (0.90) |
Weighted-average shares used in calculating | ||||
Basic (in shares) | 124,199 | 107,004 | 118,260 | 106,597 |
Diluted (in shares) | 124,199 | 107,004 | 118,260 | 106,597 |
Other comprehensive loss, net of tax: | ||||
Change in unrealized losses on available-for-sale securities | $ 249 | $ 0 | $ 2,374 | $ 0 |
Foreign currency translation adjustments | (141) | (79) | (139) | (275) |
Comprehensive loss | $ (173,869) | $ (104,204) | $ (434,114) | $ (98,535) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Non- controlling Interest |
Beginning balance at Sep. 30, 2022 | $ 418,339 | $ 198 | $ 1,219,213 | $ (136) | $ (820,755) | $ 19,819 |
Beginning balance (in shares) at Sep. 30, 2022 | 105,960,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 19,390 | 19,390 | ||||
Exercise of stock options | 576 | 576 | ||||
Exercise of stock options (in shares) | 82,000 | |||||
Common stock - restricted stock units vesting | 0 | $ 1 | (1) | |||
Common stock - restricted stock units vesting (in shares) | 98,000 | |||||
Foreign currency translation adjustments | (122) | (122) | ||||
Net income (loss) | (41,811) | (41,325) | (486) | |||
Ending balance at Dec. 31, 2022 | 396,372 | $ 199 | 1,239,178 | (258) | (862,080) | 19,333 |
Ending balance (in shares) at Dec. 31, 2022 | 106,140,000 | |||||
Beginning balance at Sep. 30, 2022 | 418,339 | $ 198 | 1,219,213 | (136) | (820,755) | 19,819 |
Beginning balance (in shares) at Sep. 30, 2022 | 105,960,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Foreign currency translation adjustments | (275) | |||||
Change in unrealized losses on available-for-sale securities | 0 | |||||
Net income (loss) | (98,260) | |||||
Ending balance at Jun. 30, 2023 | 381,985 | $ 199 | 1,281,393 | (411) | (916,351) | 17,155 |
Ending balance (in shares) at Jun. 30, 2023 | 107,102,000 | |||||
Beginning balance at Dec. 31, 2022 | 396,372 | $ 199 | 1,239,178 | (258) | (862,080) | 19,333 |
Beginning balance (in shares) at Dec. 31, 2022 | 106,140,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 20,612 | 20,612 | ||||
Exercise of stock options | 520 | 520 | ||||
Exercise of stock options (in shares) | 64,000 | |||||
Common stock - restricted stock units vesting (in shares) | 665,000 | |||||
Foreign currency translation adjustments | (74) | (74) | ||||
Net income (loss) | 47,676 | 48,675 | (999) | |||
Ending balance at Mar. 31, 2023 | 465,106 | $ 199 | 1,260,310 | (332) | (813,405) | 18,334 |
Ending balance (in shares) at Mar. 31, 2023 | 106,869,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 19,947 | 19,947 | ||||
Exercise of stock options | 1,136 | 1,136 | ||||
Exercise of stock options (in shares) | 198,000 | |||||
Common stock - restricted stock units vesting (in shares) | 35,000 | |||||
Foreign currency translation adjustments | (79) | (79) | ||||
Change in unrealized losses on available-for-sale securities | 0 | |||||
Net income (loss) | (104,125) | (102,946) | (1,179) | |||
Ending balance at Jun. 30, 2023 | 381,985 | $ 199 | 1,281,393 | (411) | (916,351) | 17,155 |
Ending balance (in shares) at Jun. 30, 2023 | 107,102,000 | |||||
Beginning balance at Sep. 30, 2023 | 287,162 | $ 200 | 1,300,395 | (3,222) | (1,026,030) | 15,819 |
Beginning balance (in shares) at Sep. 30, 2023 | 107,312,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 19,694 | 19,694 | ||||
Exercise of stock options | 267 | 267 | ||||
Exercise of stock options (in shares) | 34,000 | |||||
Common stock - restricted stock units vesting (in shares) | 154,000 | |||||
Foreign currency translation adjustments | 58 | 58 | ||||
Change in unrealized losses on available-for-sale securities | 1,909 | 1,909 | ||||
Net income (loss) | (135,376) | (132,864) | (2,512) | |||
Ending balance at Dec. 31, 2023 | 173,714 | $ 200 | 1,320,356 | (1,255) | (1,158,894) | 13,307 |
Ending balance (in shares) at Dec. 31, 2023 | 107,500,000 | |||||
Beginning balance at Sep. 30, 2023 | $ 287,162 | $ 200 | 1,300,395 | (3,222) | (1,026,030) | 15,819 |
Beginning balance (in shares) at Sep. 30, 2023 | 107,312,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options (in shares) | 197,398 | |||||
Foreign currency translation adjustments | $ (139) | |||||
Change in unrealized losses on available-for-sale securities | 2,374 | |||||
Net income (loss) | (436,349) | |||||
Ending balance at Jun. 30, 2024 | 338,974 | $ 217 | 1,786,304 | (987) | (1,454,987) | 8,427 |
Ending balance (in shares) at Jun. 30, 2024 | 124,227,000 | |||||
Beginning balance at Dec. 31, 2023 | 173,714 | $ 200 | 1,320,356 | (1,255) | (1,158,894) | 13,307 |
Beginning balance (in shares) at Dec. 31, 2023 | 107,500,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 17,750 | 17,750 | ||||
Exercise of stock options | 1,512 | 1,512 | ||||
Exercise of stock options (in shares) | 120,000 | |||||
Common stock - restricted stock units vesting | 0 | $ 1 | (1) | |||
Common stock - restricted stock units vesting (in shares) | 723,000 | |||||
Common stock issued, net of offering costs | 429,265 | $ 16 | 429,249 | |||
Common stock issued, net of offering costs (in shares) | 15,790,000 | |||||
Foreign currency translation adjustments | (56) | (56) | ||||
Change in unrealized losses on available-for-sale securities | 216 | 216 | ||||
Net income (loss) | (126,996) | (125,300) | (1,696) | |||
Ending balance at Mar. 31, 2024 | 495,405 | $ 217 | 1,768,866 | (1,095) | (1,284,194) | 11,611 |
Ending balance (in shares) at Mar. 31, 2024 | 124,133,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 17,050 | 17,050 | ||||
Exercise of stock options | 388 | 388 | ||||
Exercise of stock options (in shares) | 43,000 | |||||
Common stock - restricted stock units vesting (in shares) | 51,000 | |||||
Foreign currency translation adjustments | (141) | (141) | ||||
Change in unrealized losses on available-for-sale securities | 249 | 249 | ||||
Net income (loss) | (173,977) | (170,793) | (3,184) | |||
Ending balance at Jun. 30, 2024 | $ 338,974 | $ 217 | $ 1,786,304 | $ (987) | $ (1,454,987) | $ 8,427 |
Ending balance (in shares) at Jun. 30, 2024 | 124,227,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (436,349) | $ (98,260) |
Adjustments to reconcile net loss to net cash flow from operating activities | ||
Stock-based compensation | 54,494 | 59,949 |
Depreciation and amortization | 13,570 | 8,634 |
Amortization (accretion) of note premiums/discounts | 7,886 | (1,030) |
Realized gain on investments | (80) | 0 |
Non-cash interest expense on liability related to the sale of future royalties | 17,705 | 13,064 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 0 | 164 |
Prepaid expenses and other assets | (1,746) | 27,913 |
Accounts payable | 2,785 | 5,001 |
Accrued expenses | 13,086 | (32,082) |
Deferred revenue | (866) | (113,144) |
Operating lease, net | 3,880 | 1,827 |
Net cash used in operating activities | (325,635) | (127,964) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (117,180) | (112,830) |
Purchases of investments | (428,611) | (233,984) |
Proceeds from sales and maturities of investments | 348,642 | 220,150 |
Net cash used in investing activities | (197,149) | (126,664) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from the exercises of stock options | 2,166 | 2,232 |
Proceeds from the issuance of common stock, net of offering costs | 429,265 | 0 |
Proceeds from the sale of future royalties | 50,000 | 250,000 |
Net cash provided by financing activities | 481,431 | 252,232 |
Net decrease in cash, cash equivalents and restricted cash | (41,353) | (2,396) |
Effect of exchange rate on cash, cash equivalents and restricted cash | (139) | (275) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | ||
BEGINNING OF PERIOD | 110,891 | 108,005 |
END OF PERIOD | 69,399 | 105,334 |
Supplementary disclosure of cash flows: | ||
Income taxes paid | (3,062) | 0 |
Supplemental disclosure of non-cash investing activities: | ||
Capital expenditures included in accrued expenses | $ 6,909 | $ 15,624 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES General and Recent Developments Arrowhead Pharmaceuticals, Inc. and its subsidiaries (referred to herein collectively as the “Company”) are primarily engaged in developing medicines that treat intractable diseases by silencing the genes that cause them. Using a broad portfolio of RNA chemistries and efficient modes of delivery, the Company’s 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. The Company’s RNAi-based therapeutics may leverage this natural pathway of gene silencing to target and shut down specific disease-causing genes. The following table presents the Company’s current pipeline: Therapeutic Area Name Stage Product Rights Cardiometabolic plozasiran (ARO-APOC3) Phase 3 Arrowhead zodasiran (ARO-ANG3) Phase 2b Arrowhead olpasiran Phase 3 Amgen Pulmonary ARO-RAGE Phase 1/2a Arrowhead ARO-MUC5AC Phase 1/2a Arrowhead ARO-MMP7 Phase 1/2a Arrowhead Liver GSK-4532990 Phase 2b GSK fazirsiran Phase 3 Takeda and Arrowhead daplusiran/tomligisiran (GSK5637608, formerly JNJ-3989) Phase 2 GSK ARO-PNPLA3 Phase 1 Arrowhead ARO-C3 Phase 1/2a Arrowhead ARO-CFB Phase 1/2a Arrowhead Muscle ARO-DUX4 Phase 1/2a Arrowhead ARO-DM1 Phase 1/2a Arrowhead Central Nervous System (CNS) Various Pre-Clinical Arrowhead The Company operates lab facilities in California and Wisconsin, where its research and development activities, including the development of RNAi therapeutics, take place. The Company’s principal executive offices are located in Pasadena, California. Thus far in fiscal 2024, the Company has continued to develop and advance its pipeline and partnered candidates. Several key recent developments include: • Announced plans to advance investigational plozasiran into a Phase 3 cardiovascular outcomes trial called CAPITAN, which is designed to enroll patients with mixed hyperlipidemia and residual risk of atherosclerotic cardiovascular disease; • Announced successful top-line results from the pivotal Phase 3 PALISADE study of investigational plozasiran in patients with familial chylomicronemia syndrome (FCS). The Company highlighted recent data for its cardiometabolic pipeline at its June 25, 2024, Cardiometabolic event; • Presented preclinical data on ARO-INHBE for the treatment of obesity and metabolic diseases at the American Diabetes Association 84 th Scientific Sessions. INHBE small interfering RNA (siRNA) administration resulted in multiple promising findings including: (1) 95% reduction in INHBE mRNA expression, (2) 19% suppression of body weight compared to saline controls, (3) 26% loss of fat mass, and (4) preservation of lean mass; • Announced results from the Phase 2b double blind, randomized ARCHES-2 study of investigational zodasiran in patients with mixed hyperlipidemia; • Announced that new interim clinical data on ARO-RAGE achieves high level of gene knockdown in patients with asthma; • Completed enrollment in Amgen’s Phase 3 OCEAN(a) - outcome trial of olpasiran, triggering a $50.0 million milestone payment to the Company, which was paid in the third quarter of fiscal 2024; • Presented final data from the double-blind treatment period of the Company’s Phase 2 SHASTA-2 study of investigational plozasiran in patients with severe Hypertriglyceridemia. Results from the SHASTA-2 study showed dramatic, consistent, and sustained reductions in Apolipoprotein C-III (APOC3) and triglycerides and improvement in multiple atherogenic lipoprotein levels; • Announced an Expanded Access Program (“EAP”) to make investigational plozasiran available outside of a clinical trial for qualifying patients with FCS; • Initiated a Phase 1/2a clinical trial of ARO-DM1, being developed as a potential treatment for type 1 myotonic dystrophy (DM1), the most common adult-onset muscular dystrophy; • Filed an application for clearance to initiate a Phase 1/2a clinical trial of ARO-CFB, being developed as a potential treatment for complement mediated renal disease; • Entered into an Amended and Restated License Agreement with GSK, pursuant to which GSK received a worldwide, exclusive license to develop and commercialize daplusiran/tomligisiran (GSK5637608, formerly JNJ-3989). Daplusiran/tomligisiran had previously been licensed to Janssen Pharmaceuticals, Inc. See Note 2. Consolidation and Basis of Presentation The interim Consolidated Financial Statements include the accounts of Arrowhead Pharmaceuticals, Inc. and its subsidiaries (wholly-owned subsidiaries and a variable interest entity for which the Company is the primary beneficiary). Subsidiaries refer to Arrowhead Madison, Inc., Visirna Therapeutics, Inc. (“Visirna”), and Arrowhead Australia Pty Ltd. For subsidiaries in which the Company owns or is exposed to less than 100% of the economics, the Company records net loss attributable to noncontrolling interests in its consolidated statements of operations equal to the percentage of the economic or ownership interests retained in such entity by the respective noncontrolling party. The interim Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). The financial data of the Company included herein are unaudited. In the opinion of management, all material adjustments of a normal recurring nature have been made to present fairly the Company’s financial position at June 30, 2024 and the results of operations and cash flows for the periods presented. All intercompany transactions and balances have been eliminated. Certain prior period amounts have been reclassified to conform with the current period presentation. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted from the accompanying interim consolidated financial statements and related notes. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended September 30, 2023 for more complete descriptions and discussions. Operating results and cash flows for the nine months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2024. Liquidity The Company’s primary sources of financing have been through the sale of its equity securities, revenue from its licensing and collaboration agreements and the sale of certain future royalties. Research and development activities have required significant capital investment since the Company’s inception and are expected to continue to require significant cash expenditure in the future, particularly as the Company’s pipeline of drug candidates and its headcount have both expanded. Additionally, significant capital investment will be required as the Company’s pipeline matures into later stage clinical trials. As of June 30, 2024, the Company had $69.4 million in cash, cash equivalents and restricted cash ($2.2 million in restricted cash) and $367.3 million in available-for-sale securities to fund operations. During the nine months ended June 30, 2024, the Company’s cash, cash equivalents and restricted cash and investments balance increased by $33.0 million which was primarily due to the net proceeds of $429.3 million from the underwritten offering in January 2024 discussed below, offset by ongoing expenses related to the Company’s research and development programs, general and administrative expenses and capital expenditures. On January 2, 2024, the Company entered into an underwriting agreement with Jefferies LLC, BofA Securities, Inc., and Cowen and Company, LLC, as representatives of the several underwriters. The Company issued 15,790,000 shares of common stock at a price of $28.50 per share. The aggregate purchase price paid by investors was $450.0 million and the Company received net proceeds of $429.3 million after deducting advisory fees and offering expenses. In total, the Company is eligible to receive up to $2.7 billion in developmental, regulatory and sales milestones, and may receive various royalties on net sales from its licensing and collaboration agreements, subject to the terms and conditions of those agreements. The revenue recognition for these collaboration agreements is discussed further in Note 2. Summary of Significant Accounting Policies There have been no changes to the significant accounting policies disclosed in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Uncertainty in Income Taxes The Company recorded an income tax benefit of $3.3 million and expense of $0.8 million for the nine months ended June 30, 2024 and 2023, respectively. The income tax benefit is primarily due to the discrete change in the Company’s uncertain tax positions related to the statute of limitation expiration. Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , to improve its income tax disclosure requirements. Under the guidance, entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. This guidance will become effective for the Company beginning on October 1, 2025. The Company does not expect any material impact on its consolidated financial statements and related disclosures resulting from applying this ASU. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses. The guidance requires public companies with a single reportable segment to provide all disclosures required under ASC 280. In addition, the guidance requires public companies to include in interim reports all disclosures related to a reportable segment’s profit or loss and assets that are currently required in annual reports. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect any material impact on its consolidated financial statements and related disclosures resulting from applying this ASU. |
Collaboration and License Agree
Collaboration and License Agreements | 9 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaboration and License Agreements | COLLABORATION AND LICENSE AGREEMENTS The following table provides a summary of revenue recognized: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 (in thousands) GSK $ — $ 277 $ 2,685 $ 29,600 Horizon — 1,539 — 23,206 Takeda — 14,009 866 146,477 Janssen — — — 355 Amgen — — — 25,000 Total $ — $ 15,825 $ 3,551 $ 224,638 The following table summarizes the balance of receivables and contract liabilities related to the Company’s collaboration and license agreements: June 30, 2024 September 30, 2023 (in thousands) Receivables included in accounts receivable $ — $ — Contract liabilities included in deferred revenue $ — $ 866 Glaxosmithkline Intellectual Property (No. 3) Limited (“GSK”) GSK-HSD License Agreement On November 22, 2021, GSK and the Company entered into an Exclusive License Agreement (the “GSK-HSD License Agreement”). Under the GSK-HSD License Agreement, GSK has received an exclusive license for GSK-4532990 (formerly ARO-HSD). The exclusive license is worldwide with the exception of greater China. GSK is wholly responsible for all clinical development and commercialization of GSK-4532990 in its territory. GSK dosed the first patient in a Phase 2b trial in March 2023 and paid a $30.0 million milestone payment to the Company in the third quarter of fiscal 2023. The Company is eligible for an additional payment of $100.0 million upon achieving the first patient dosed in a Phase 3 trial. Furthermore, should the Phase 3 trial read out positively, and the potential new medicine receives regulatory approval in major markets, the deal provides for commercial milestone payments to the Company of up to $190.0 million at first commercial sale, and up to $590.0 million in sales-related milestone payments. The Company is further eligible to receive tiered royalties on net product sales in a range of mid-teens to twenty percent. GSK-HBV Agreement On December 11, 2023, the Company entered into an Amended and Restated License Agreement with GSK (the “GSK-HBV Agreement”) pursuant to which GSK received a worldwide, exclusive license to develop and commercialize daplusiran/tomligisiran (GSK5637608, formerly JNJ-3989), the Company’s third-generation subcutaneously administered RNAi therapeutic candidate being developed as a potential therapy for patients with chronic hepatitis B virus infection. GSK5637608 had previously been licensed to Janssen in October 2018. Under the terms of the GSK-HBV Agreement, the Company received $2.7 million in December 2023, upon signing the amended GSK-HBV Agreement. The Company is eligible to receive up to $832.5 million in development and sales milestone payments under the GSK-HBV Agreement. There were no contract assets and liabilities recorded as of June 30, 2024. Horizon Therapeutics Ireland DAC (“Horizon”) In June 2021, Horizon and the Company entered into a collaboration and license agreement (the “Horizon License Agreement”). Under the terms of the Horizon License Agreement, Horizon received a worldwide exclusive license for HZN-457, a clinical-stage medicine being developed by Horizon as a potential treatment for people with uncontrolled gout. At the inception of the Horizon License Agreement, the Company identified one distinct performance obligation. The Company determined that the key deliverables included the license and certain R&D services, including the Company’s responsibilities to conduct all activities through the preclinical stages of development of HZN-457 (the “Horizon R&D Services”). The Company received a $40.0 million upfront payment in July 2021. Revenue was recognized on a straight-line basis over the timeframe for completing the Horizon R&D Services, concluding in the first quarter of 2023. Further, the Company received an additional $15.0 million upon Horizon’s initiation of a Phase 1 clinical trial in January 2023. On October 6, 2023, Amgen completed its acquisition of Horizon and subsequently notified the Company of Amgen’s intent to terminate the HZN-457 license. Horizon exercised its right to terminate the Horizon License Agreement for convenience, which took effect on December 21, 2023. Takeda Pharmaceutical Company Limited (“Takeda”) In October 2020, Takeda and the Company entered into an Exclusive License and Co-Funding Agreement (the “Takeda License Agreement”). Under the Takeda License Agreement, Takeda and the Company will co-develop the Company’s fazirsiran program (formerly TAK-999 and ARO-AAT), the Company’s second-generation subcutaneously administered RNAi therapeutic candidate being developed as a treatment for liver disease associated with alpha-1 antitrypsin deficiency. Within the United States, fazirsiran, if approved, will be co-commercialized under a 50/50 profit sharing structure. Outside the United States, Takeda received an exclusive license to commercialize fazirsiran and will lead the global commercialization strategy, while the Company will be eligible to receive tiered royalties of 20% to 25% on net sales. At the inception of the Takeda License Agreement, the Company identified one distinct performance obligation. The Company determined that the key deliverables included the license and certain R&D services including the Company’s responsibilities to complete the initial portion of the SEQUOIA study, to complete the ongoing Phase 2 AROAAT2002 study and to ensure certain manufacturing of fazirsiran drug product is completed and delivered to Takeda (the “Takeda R&D Services”). Due to the specialized and unique nature of these Takeda R&D Services and their direct relationship with the license, the Company determined that these deliverables represent one distinct bundle and, thus, one performance obligation. Beyond the Takeda R&D Services, which are the responsibility of the Company, Takeda will be responsible for managing future clinical development and commercialization outside the United States. Within the United States, the Company will also participate in co-development and co-commercialization efforts and will co-fund these efforts with Takeda as part of the 50/50 profit sharing structure within the United States. The Company considers the collaborative activities, including the co-development and co-commercialization, to be a separate unit of account within Topic 808, and as such, these co-funding amounts are recorded as research and development expenses or general and administrative expenses, as appropriate. Under the terms of the Takeda License Agreement, the Company received $300.0 million as an upfront payment in January 2021 and an additional $40.0 million upon Takeda’s initiation of a Phase 3 REDWOOD clinical study of fazirsiran in March 2023, and is eligible to receive up to $527.5 million in additional potential development, regulatory and commercial milestones. The Company allocated the total $300.0 million initial transaction price to its one distinct performance obligation for the fazirsiran license and the associated Takeda R&D Services. Revenue was recognized using the input method (based on actual patient visits completed versus total estimated visits completed for the ongoing SEQUOIA and AROAAT2002 clinical studies). The Phase 2 study visits for patients in the SEQUOIA and AROAAT2002 studies concluded by December 31, 2023, and the Company has substantially completed its performance obligation under the Takeda License Agreement. As such, all revenue has been fully recognized as of December 31, 2023. There were no further deferred revenue and contract liabilities as of June 30, 2024 . The Company recorded $21.3 million as accrued expenses as of June 30, 2024 that was primarily driven by co-development and co-commercialization activities. Janssen Pharmaceuticals, Inc. (“Janssen”) On April 7, 2023, Janssen voluntarily terminated its collaboration agreement with the Company and the Company regained full rights to ARO-PNPLA3, formerly called JNJ-75220795. ARO-PNPLA3 is in Phase 1 clinical trials, which are now being developed by the Company. Further, on December 11, 2023, the Company entered into the GSK-HBV Agreement, as discussed above, pursuant to which GSK received an exclusive license for daplusiran/tomligisiran (GSK5637608, formerly JNJ-3989). Daplusiran/tomligisiran had previously been licensed to Janssen in October 2018. Amgen Inc. (“Amgen”) In September 2016, Amgen and the Company entered into two collaboration and license agreements and a common stock purchase agreement. Under the Second Collaboration and License Agreement (the “Olpasiran Agreement”), Amgen received a worldwide, exclusive license to the Company’s novel RNAi olpasiran (previously referred to as AMG- 890 or 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 Olpasiran Agreement, Amgen is wholly responsible for clinical development and commercialization. Under the Olpasiran Agreement, the Company has received $35.0 million in upfront payments and $21.5 million in the form of an equity investment by Amgen in the Company’s common stock. Further, the Company received an additional $55.0 million in milestone payments; $10.0 million upon Amgen’s initiation of a Phase 1 study in September 2018, $20.0 million upon its initiation of a Phase 2 clinical study in July 2020, and $25.0 million upon its first subject enrollment in a Phase 3 trial in December 2022. The Company has substantially completed its performance obligations under the Olpasiran Agreement. There were no contract assets and liabilities recorded as of June 30, 2024. In November 2022, Royalty Pharma Investments 2019 ICAV (“Royalty Pharma”) and the Company entered into a Royalty Purchase Agreement with Royalty Pharma (the “Royalty Pharma Agreement”). In consideration for the payments under the Royalty Pharma Agreement, Royalty Pharma is entitled to receive all royalties otherwise payable by Amgen to the Company under the Olpasiran Agreement. The Company remains eligible to receive up to an additional $485.0 million in remaining development, regulatory and sales milestone payments payable from Amgen and Royalty Pharma. See Note 11. Visirna Therapeutics, Inc. (“Visirna”) In April 2022, the Company and Visirna, its subsidiary, entered into a License Agreement (the “Visirna License Agreement”), pursuant to which Visirna received an exclusive license to develop, manufacture and commercialize four of the Company’s RNAi-based investigational cardiometabolic medicines in Greater China (including the People’s Republic of China, Hong Kong, Macau and Taiwan). |
Balance Sheet Accounts
Balance Sheet Accounts | 9 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Accounts | BALANCE SHEET ACCOUNTS Property, Plant and Equipment The following table summarizes the Company’s major classes of property, plant and equipment: June 30, 2024 September 30, 2023 (in thousands) Land $ 2,996 $ 2,996 Building 75,868 — Research equipment 64,207 56,509 Furniture 5,593 1,540 Computers and software 976 700 Leasehold improvements 104,396 103,813 Construction in progress 175,778 166,655 429,814 332,213 Less: Accumulated depreciation and amortization (53,903) (41,951) Property, plant and equipment, net $ 375,911 $ 290,262 Depreciation and amortization expense for property, plant and equipment for the three months ended June 30, 2024 and 2023 was $4.4 million and $2.9 million, respectively. Depreciation and amortization expense for property and equipment for the nine months ended June 30, 2024 and 2023 was $12.3 million and $7.4 million, respectively. During the first quarter of fiscal 2024, the Company completed the build out of one of its laboratory and office facilities in Verona, Wisconsin, which resulted in the reclassification of $75.9 million from construction in progress to building as of June 30, 2024. Further, the Company commenced depreciation on the newly completed facility over a 39-year period. Accrued Expenses Accrued expenses consist of the following: June 30, 2024 September 30, 2023 (in thousands) Accrued R&D expenses $ 17,911 $ 16,125 Accrued R&D expenses; co-development 21,280 5,895 Accrued capital expenditures 6,909 14,044 Other 1,799 3,699 Total accrued expenses $ 47,899 $ 39,763 |
Investments
Investments | 9 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | INVESTMENTS The Company’s investments consisted of the following: As of June 30, 2024 (in thousands) Adjusted Basis Gross Gross Fair Value Available-for-sale securities $ 367,862 $ 8 $ (598) $ 367,272 Total current investments $ 367,862 $ 8 $ (598) $ 367,272 As of September 30, 2023 (in thousands) Adjusted Basis Gross Gross Fair Value Available-for-sale securities $ 295,699 $ 3 $ (2,967) $ 292,735 Total current investments $ 295,699 $ 3 $ (2,967) $ 292,735 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 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 following table presents the components of intangible assets: Gross Carrying Amount Accumulated Amortization Impairment Net Carrying Amount Useful Lives (in thousands) (in years) As of June 30, 2024 Patents $ 21,728 $ 14,485 $ — $ 7,243 14 License 3,129 1,385 — 1,744 21 Total intangible assets, net $ 24,857 $ 15,870 $ — $ 8,987 As of September 30, 2023 Patents $ 21,728 $ 13,321 $ — $ 8,407 14 License 3,129 1,274 — 1,855 21 Total intangible assets, net $ 24,857 $ 14,595 $ — $ 10,262 Intangible assets are reviewed annually for impairment and more frequently if potential impairment indicators exist. No impairment indicators were identified during the nine months ended June 30, 2024 and 2023. Intangible assets with definite useful lives are amortized on a straight-line basis over their useful lives. Intangible assets amortization expense was $0.4 million for the three months ended June 30, 2024 and 2023, and $1.3 million for the nine months ended June 30, 2024 and 2023. None of the intangible assets with definite useful lives are anticipated to have a residual value. The following table presents the estimated future amortization expense related to intangible assets as of June 30, 2024: Amortization Expense Year Ending September 30, (in thousands) 2024 (remainder) $ 425 2025 1,700 2026 1,700 2027 1,700 2028 1,700 Thereafter 1,762 Total $ 8,987 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY The following table summarizes the Company’s shares of common stock and preferred stock: Shares Par Value Authorized Issued Outstanding (in thousands) As of June 30, 2024 Common stock $ 0.001 290,000 124,227 124,227 Preferred stock $ 0.001 5,000 — — As of September 30, 2023 Common stock $ 0.001 290,000 107,312 107,312 Preferred stock $ 0.001 5,000 — — As of June 30, 2024 and September 30, 2023, respectively, 11,608,148 and 12,709,837 shares of common stock were reserved for issuance upon exercise of options and vesting of restricted stock units granted or available for grant under the Company’s 2013 and 2021 Incentive Plans, as well as for other inducement grants made to new employees under Rule 5635(c)(4) of the Nasdaq Listing Rules. On January 2, 2024, the Company entered into an underwriting agreement with Jefferies LLC, BofA Securities, Inc., and Cowen and Company, LLC, as representatives of the several underwriters. The Company issued 15,790,000 shares of common stock at an offering price of $28.50 per share. The aggregate purchase price paid by investors was $450.0 million and the Company received net proceeds of $429.3 million after deducting advisory fees and offering expenses. On December 2, 2022, the Company entered into an open market sale agreement (the “Open Market Sale Agreement”), pursuant to which the Company may, from time to time, sell up to $250,000,000 in shares of the Company’s common stock through Jefferies LLC, acting as the sales agent and/or principal, in an at-the-market offering (“ATM Offering”). The Company is not required to sell shares under the Open Market Sale Agreement. The Company will pay Jefferies LLC a commission of up to 3.0% of the aggregate gross proceeds received from all sales of the common stock under the Open Market Sale Agreement. Unless otherwise terminated, the ATM Offering shall terminate upon the earlier of (i) the sale of all shares of common stock subject to the Open Market Sale Agreement and (ii) the termination of the Open Market Sale Agreement as permitted therein. The Company and Jefferies may each terminate the Open Market Sale Agreement at any time upon prior notice. As of June 30, 2024, no shares have been issued under the Open Market Sale Agreement. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Litigation From time to time, the Company may be subject to various claims and legal proceedings in the ordinary course of business. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount is reasonably estimable, the Company will accrue a liability for the estimated loss. There were no contingent liabilities recorded as of June 30, 2024. Commitments The Company owns land in the Verona Technology Park in Verona, Wisconsin, which is being developed into an approximately 160,000 square foot drug manufacturing facility and an approximately 140,000 square foot laboratory and office facility which will support the Company’s manufacturing process development and analytical activities. During the first quarter of fiscal 2024, the Company completed the build out of one of its laboratory and office facilities. |
Leases
Leases | 9 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Leases | LEASES Pasadena, California : The Company leases 49,000 square feet of office space located at 177 East Colorado Blvd. for its corporate headquarters from 177 Colorado Owner, LLC, which lease expires on April 30, 2027. The lease contains an option to renew for one additional five-year term. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of June 30, 2024. San Diego, California : The Company leases 144,000 square feet of office and research and development laboratory space located at 10102 Hoyt Park from 11404 & 11408 Sorrento Valley Owner, LLC, which lease expires on April 30, 2038. Pursuant to the lease, within twelve months of the expiration of the initial 15-year term, the Company has the option to extend the lease for up to one additional ten-year term, with certain annual increases in base rent. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of June 30, 2024. The lease agreement grants the Company the right to receive an Additional Tenant Improvement Allowance (“ATIA”) funded by the lessor, with a maximum amount of $7.2 million, subject to a 7% interest per annum over the base term. Further, on September 25, 2023, the Company executed the first amendment to the lease, which grants a second ATIA with a maximum amount of $23.6 million, bearing interest at a rate of 9% per annum over the base term. The Company received $30.8 million ATIA from the lessor during the first quarter of fiscal 2024. As a result, the Company remeasured its lease liability and right-of-use assets to reflect these additional allowances and the related increased lease payments. The Company has further concluded that these ATIAs have no effects on the classification of the lease. The Company previously subleased additional research and development space in San Diego, California, which sublease ended during the fiscal year of 2023. Madison, Wisconsin : The Company leases 115,000 square feet space located at 502 South Rosa Road for its office and laboratory facilities, which lease expires on September 30, 2031. The lease contains options to renew for two terms of five years. The Company is not reasonably certain that it will exercise this option and therefore it is not included in right-of-use assets and liabilities as of June 30, 2024. The components of lease assets and liabilities along with their classification on the Company’s consolidated balance sheets were as follows: Lease Assets and Liabilities Classification June 30, 2024 September 30, 2023 (in thousands) Operating lease assets Right-of-use assets $ 44,339 $ 45,297 Current operating lease liabilities Lease liabilities 6,053 10,563 Non-current operating lease liabilities Lease liabilities, net of current portion 112,040 104,608 Three Months Ended June 30, Nine Months Ended June 30, Lease Cost Classification 2024 2023 2024 2023 (in thousands) Operating lease cost Research and development $ 2,965 $ 3,323 $ 8,531 $ 7,735 General and administrative expense 537 509 1,504 1,542 Variable lease cost (1) Research and development 863 257 2,478 627 General and administrative expense — — — — Total $ 4,365 $ 4,089 $ 12,513 $ 9,904 (1) Variable lease cost is primarily related to operating expenses associated with the Company’s operating leases. There was no short-term lease cost during the nine months ended June 30, 2024. There was $0.6 million and $1.2 million short-term lease cost during the three and nine months ended June 30, 2023, respectively. The following table presents maturities of operating lease liabilities on an undiscounted basis as of June 30, 2024: Year Amounts (in thousands) 2024 (remainder of fiscal year) $ 3,793 2025 15,356 2026 15,696 2027 14,869 2028 13,511 2029 and thereafter 128,356 Total $ 191,581 Less imputed interest $ (73,488) Total operating lease liabilities (includes current portion) $ 118,093 Supplemental cash flow and other information related to leases was as follows: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 (in thousands) Cash received for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ — $ 5,414 $ 3,099 $ 23,343 Right-of-use assets adjusted in exchange for new/amended operating lease liabilities $ — $ 3,519 $ (64) $ (19,063) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,204 $ 1,885 $ 7,221 $ 4,081 June 30, 2024 2023 Weighted-average remaining lease term (in years) 12.8 13.4 Weighted-average discount rate 8.0 % 8.0 % |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION Stock Plans The Company has two plans that provide for equity-based compensation under the 2013 and the 2021 plans. Under the 2013 Incentive Plan (the “2013 Plan”), 2,924,586 shares of the Company’s common stock are reserved for grants of stock options and restricted stock awards to employees and directors as of June 30, 2024. Under the 2021 Incentive Plan (the “2021 Plan”), 8,000,000 shares (subject to certain adjustments) of the Company’s common stock are reserved for grants of stock options, stock appreciation rights, restricted and unrestricted stock, performance awards, cash awards and other awards convertible into or otherwise based on shares of the Company’s common stock. The maximum number of shares authorized under the 2021 Plan will be (i) reduced by any shares subject to awards made under the 2013 Plan after January 1, 2021, and (ii) increased by any shares subject to outstanding awards under the 2013 Plan as of January 1, 2021 that, after January 1, 2021, are canceled, expired, forfeited or otherwise not issued under such awards (other than as a result of being tendered or withheld to pay the exercise price or withholding taxes in connection with any such awards) or settled in cash. As of June 30, 2024, the total number of shares available for issuance was 4,565,727 shares, which includes 158,928 and 154,139 shares that were forfeited under the 2013 and 2021 Plans, respectively, and 3,697,189 shares have been granted under the 2021 Plan. In addition, there were 665,020 shares reserved for options and 616,638 shares reserved for restricted stock units issued as inducement grants to new employees granted outside of the Company’s equity-based compensation plans under Rule 5635(c)(4) of the Nasdaq Listing Rules. The following table presents a summary of awards outstanding: As of June 30, 2024 2013 Plan 2021 Plan Inducement Awards Total Granted and outstanding awards: Options 1,315,326 32,151 665,020 2,012,497 Restricted stock units 1,609,260 2,804,026 616,638 5,029,924 Total 2,924,586 2,836,177 1,281,658 7,042,421 The following table summarizes stock-based compensation expenses included in operating expenses: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 Research and development $ 6,221 $ 8,982 $ 21,634 $ 26,129 General and administrative 8,490 10,965 27,350 33,820 Total $ 14,711 $ 19,947 $ 48,984 $ 59,949 Stock Option Awards The following table presents a summary of the stock option activity for the nine months ended June 30, 2024: Shares Weighted- Weighted- Aggregate Outstanding at September 30, 2023 2,263,477 $ 22.68 Granted — — Cancelled or expired (53,582) 36.62 Exercised (197,398) 10.98 Outstanding at June 30, 2024 2,012,497 $ 23.22 3.8 $ 22,486,304 Exercisable at June 30, 2024 2,001,968 $ 23.05 3.8 $ 22,486,304 The aggregate intrinsic values represent the amount by which the market price of the underlying stock exceeds the exercise price of the option. The total intrinsic value of the options exercised during the three months ended June 30, 2024 and 2023 was $0.7 million and $6.5 million, respectively. The total intrinsic value of the options exercised during the nine months ended June 30, 2024 and 2023 was $3.8 million and $10.1 million, respectively. Stock-based compensation expense related to stock options outstanding for the three months ended June 30, 2024 and 2023, was $0.4 million and $2.1 million, respectively. Stock-based compensation expense related to stock options outstanding for the nine months ended June 30, 2024 and 2023, was $2.5 million and $6.7 million, respectively. As of June 30, 2024, the pre-tax compensation expense for all outstanding unvested stock options in the amount of $0.4 million will be recognized in the Company’s results of operations over a weighted average period of 3 months. 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 pricing 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, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. The following table provides the assumptions used in the calculation of grant-date fair values of these stock options based on the Black-Scholes option pricing model: Nine Months Ended June 30, 2024 (5) 2023 Expected dividend yield (1) N/A — Risk-free interest rate (2) N/A 3.69% Expected volatility (3) N/A 86.4% Expected term (in years) (4) N/A 6.25 Weighted average grant date fair value per share of options granted N/A $24.80 (1) The dividend yield is zero as the Company currently does not pay a dividend. (2) The risk-free interest rate is based on that of the U.S. Treasury yields with equivalent terms in effect at the time of the grant. (3) Volatility is estimated based on volatility average of the Company’s common stock price. (4) The computation of expected term was determined based on safe harbor rules, considering the contractual terms of the awards and vesting schedules. (5) No options were granted during the nine months ended June 30, 2024. Visirna ESOP : On October 1, 2023, Visirna, a subsidiary of the Company, granted 7,500,000 stock options to its employees from the Employee Stock Option Plan (the “Visirna ESOP”), which authorizes 20,000,000 shares for issuance. The Visirna ESOP is independently managed by Visirna, including the valuation process. For the three and nine months ended June 30, 2024, stock-based compensation expense related to the Visirna ESOP was $2.3 million and $5.5 million, respectively. Restricted Stock Units Restricted Stock Units (“RSUs”), including market-based, time-based and performance-based awards, have been granted under the Company’s 2013 and 2021 Plans and as inducements grants granted outside of the Company’s equity-based compensation plans. At vesting, each outstanding RSU will be exchanged for one share of the Company’s common stock. 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- Outstanding at September 30, 2023 4,241,640 $ 58.43 Granted 1,876,825 30.67 Vested (927,766) 53.16 Forfeited (160,775) 41.75 Outstanding at June 30, 2024 5,029,924 $ 49.58 The fair value of RSUs was determined based on the closing price of the Company’s common stock on the grant date, with consideration given to the probability of achieving service and/or performance conditions for awards. For the three months ended June 30, 2024 and 2023, the Company recorded $14.3 million and $17.8 million of expense related to RSUs, respectively. For the nine months ended June 30, 2024 and 2023, the Company recorded $46.5 million and $53.2 million of expense related to RSUs, respectively. As of June 30, 2024, there was $96.3 million of total unrecognized compensation cost related to RSUs that is expected to be recognized over a weighted-average period of 1.6 years. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company employs a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The Company’s valuation techniques and inputs used to measure fair value and the definition of the three levels (Level 1, Level 2, and Level 3) of the fair value hierarchy are disclosed in Note 10 - Fair Value Measurements of Notes to Consolidated Financial Statements of Part IV, “Item 15. Exhibits and Financial Statement Schedules” of its Annual Report on Form 10-K for the year ended September 30, 2023. The Company uses prices and inputs that are current as of the measurement date, including during periods of market disruption. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2, or from Level 2 to Level 3. The Company recognizes transfers between levels at either the actual date of the event or a change in circumstances that caused the transfer. At June 30, 2024 and September 30, 2023, the Company did not have any financial assets or financial liabilities based on Level 3 measurements. The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques utilized by the Company: June 30, 2024 Level 1 Level 2 Level 3 Total (in thousands) Available-for-sale securities U.S. government bonds $ — $ 80,946 $ — $ 80,946 Commercial notes — 114,616 — 114,616 Corporate debt securities — 171,710 — 171,710 Total available-for-sale securities — 367,272 — 367,272 Cash equivalents Money market instruments 29,495 — — 29,495 Commercial notes — 4,986 — 4,986 Total cash equivalents 29,495 4,986 — 34,481 Total financial assets $ 29,495 $ 372,258 $ — $ 401,753 September 30, 2023 Level 1 Level 2 Level 3 Total (in thousands) Available-for-sale securities U.S. government bonds $ 31,553 $ — $ — $ 31,553 Municipal securities — 7,093 — 7,093 Commercial notes — 22,205 — 22,205 Corporate debt securities — 231,884 — 231,884 Total available-for-sale securities 31,553 261,182 — 292,735 Cash equivalents Money market instruments 39,733 — — 39,733 Total cash equivalents 39,733 — — 39,733 Total financial assets $ 71,286 $ 261,182 $ — $ 332,468 |
Liability Related to the Sale o
Liability Related to the Sale of Future Royalties | 9 Months Ended |
Jun. 30, 2024 | |
Liability Related To The Sale Of Future Royalties [Abstract] | |
Liability Related to the Sale of Future Royalties | LIABILITY RELATED TO THE SALE OF FUTURE ROYALTIES In November 2022, the Company and Royalty Pharma entered into the Royalty Pharma Agreement, pursuant to which Royalty Pharma agreed to pay up to $410.0 million in cash to the Company in consideration for the Company’s future royalty interest in olpasiran, a siRNA originally developed by the Company and licensed to Amgen in September 2016 under the Olpasiran Agreement. Pursuant to the Royalty Pharma Agreement, Royalty Pharma paid $250.0 million upfront and agreed to pay up to an additional $160.0 million in aggregate one-time milestone payments due if and when the following milestone events occur: (i) $50.0 million on completion of enrollment in the OCEAN Phase 3 clinical trial for olpasiran, (ii) $50.0 million upon receipt of FDA approval of olpasiran for an approved indication (reduction in the risk of myocardial infarction, urgent coronary revascularization, or coronary heart disease death in adults with established cardiovascular disease and elevated Lp(a)), and (iii) $60.0 million upon Royalty Pharma’s receipt of at least $70.0 million of royalty payments under the Royalty Pharma Agreement in any single calendar year. During the third quarter of fiscal 2024, Amgen completed enrollment of the Phase 3 OCEAN(a) outcomes trial of olpasiran, which triggered a $50.0 million milestone payment that the Company received in the same quarter. In consideration for the payment of the foregoing amounts under the Royalty Pharma Agreement, Royalty Pharma is entitled to receive all royalties otherwise payable by Amgen to the Company under the Olpasiran Agreement. The Company remains eligible to receive any milestone payments potentially payable by Amgen under the Olpasiran Agreement. The Company has evaluated the terms of the Royalty Pharma Agreement and concluded, in accordance with the relevant accounting guidance, that the Company accounted for the transaction as debt and the funding of $250.0 million and $50.0 million from Royalty Pharma were recorded as liabilities related to the sale of future royalties on its consolidated balance sheets. The Company is not obligated to repay these funds received under the Royalty Pharma Agreement. The Company records the obligations at their carrying value using the effective interest method. In order to amortize the sale of future royalties, the Company utilizes the prospective method to estimate the future royalties to be paid by the Company to the counterparty over the life of the arrangement. Under the prospective method, a new effective interest rate is determined based on the revised estimate of remaining cash flows. The new rate is the discount rate that equates the present value of the revised estimate of remaining cash flows with the carrying amount of the debt, and it will be used to recognize non-cash interest expense for the remaining periods. The Company periodically assesses the amount and the timing of expected royalty payments using a combination of internal projections and forecasts from external sources. The estimates of future net product sales (and resulting royalty payments) are based on key assumptions including population, penetration, probability of success and sales price, among others. To the extent such payments are greater or less than the Company’s initial estimates or the timing of such payments is different than its original estimates, the Company will prospectively adjust the amortization of the royalty financing obligations and the effective interest rate. As of June 30, 2024, the estimated effective interest rate was 6.3%. The following table presents the activity with respect to the liability related to the sale of future royalties. Carrying Amount (in thousands) Carrying value as of September 30, 2023 $ 268,326 Milestone payment received 50,000 Non-cash interest expense recognized 17,705 Carrying value as of June 30, 2024 $ 336,031 |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NET LOSS PER SHARE The following table presents the computation of basic and diluted net loss per share for the three and nine months ended June 30, 2024 and 2023. Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 (in thousands, except per share amounts) Numerator: Net loss attributable to Arrowhead Pharmaceuticals, Inc. $ (170,793) $ (102,946) $ (428,957) $ (95,596) Denominator: Weighted-average basic shares outstanding 124,199 107,004 118,260 106,597 Effect of dilutive securities — — — — Weighted-average diluted shares outstanding 124,199 107,004 118,260 106,597 Basic net loss per share $ (1.38) $ (0.96) $ (3.63) $ (0.90) Diluted net loss per share $ (1.38) $ (0.96) $ (3.63) $ (0.90) The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive. Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 (in thousands) Options 753 637 711 768 Restricted stock units 3,976 2,830 4,060 3,256 Total 4,729 3,467 4,771 4,024 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Financing Agreement On August 7, 2024 (the “Closing Date”), the Company entered into a financing agreement (the “Financing Agreement”) with the guarantors party thereto, the lenders party thereto (the “Lenders”), and Sixth Street Lending Partners, as the administrative agent and collateral agent for the Lenders. The Financing Agreement provides for a senior secured term loan facility of $500.0 million (the “Credit Facility”), which includes $400.0 million funded on the Closing Date with an additional $100.0 million at the Company’s option, subject to mutual agreement between Sixth Street and the Company, during the seven-year term of the agreement. The Credit Facility matures on August 7, 2031 (the “Maturity Date”) and bears interest at an annual rate equal to 15.0%. The Credit Facility does not provide for scheduled amortization payments during the term, and all principal will be due on the Maturity Date. The Company has the right to prepay loans under the Financing Agreement at any time. See Item 5. Other Information of Part II, for more information. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net loss attributable to Arrowhead Pharmaceuticals, Inc. | $ (170,793) | $ (102,946) | $ (428,957) | $ (95,596) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 9 Months Ended |
Jun. 30, 2024 shares | Jun. 30, 2024 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | During the quarter ended June 30, 2024, the following directors and officers (as defined in Exchange Act Rule 16a-1(f)) adopted certain trading plans intended to satisfy Rule 10b5-1(c): Name Title Adoption Date Plan Start Date Plan End Date Shares Vesting and Subject to Sell-To- Cover (1) Other Victoria Vakiener Board Member 5/15/2024 12/16/2024 12/31/2024 n/a 8,994 (1) | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Victoria Vakiener [Member] | ||
Trading Arrangements, by Individual | ||
Name | Victoria Vakiener | |
Title | Board Member | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | 5/15/2024 | |
Expiration Date | 12/31/2024 | |
Arrangement Duration | 15 days | |
Aggregate Available | 8,994 | 8,994 |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , to improve its income tax disclosure requirements. Under the guidance, entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. This guidance will become effective for the Company beginning on October 1, 2025. The Company does not expect any material impact on its consolidated financial statements and related disclosures resulting from applying this ASU. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses. The guidance requires public companies with a single reportable segment to provide all disclosures required under ASC 280. In addition, the guidance requires public companies to include in interim reports all disclosures related to a reportable segment’s profit or loss and assets that are currently required in annual reports. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect any material impact on its consolidated financial statements and related disclosures resulting from applying this ASU. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Company's Current Pipeline | The following table presents the Company’s current pipeline: Therapeutic Area Name Stage Product Rights Cardiometabolic plozasiran (ARO-APOC3) Phase 3 Arrowhead zodasiran (ARO-ANG3) Phase 2b Arrowhead olpasiran Phase 3 Amgen Pulmonary ARO-RAGE Phase 1/2a Arrowhead ARO-MUC5AC Phase 1/2a Arrowhead ARO-MMP7 Phase 1/2a Arrowhead Liver GSK-4532990 Phase 2b GSK fazirsiran Phase 3 Takeda and Arrowhead daplusiran/tomligisiran (GSK5637608, formerly JNJ-3989) Phase 2 GSK ARO-PNPLA3 Phase 1 Arrowhead ARO-C3 Phase 1/2a Arrowhead ARO-CFB Phase 1/2a Arrowhead Muscle ARO-DUX4 Phase 1/2a Arrowhead ARO-DM1 Phase 1/2a Arrowhead Central Nervous System (CNS) Various Pre-Clinical Arrowhead |
Collaboration and License Agr_2
Collaboration and License Agreements (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Revenue | The following table provides a summary of revenue recognized: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 (in thousands) GSK $ — $ 277 $ 2,685 $ 29,600 Horizon — 1,539 — 23,206 Takeda — 14,009 866 146,477 Janssen — — — 355 Amgen — — — 25,000 Total $ — $ 15,825 $ 3,551 $ 224,638 |
Schedule of Receivables and Contract Liabilities | The following table summarizes the balance of receivables and contract liabilities related to the Company’s collaboration and license agreements: June 30, 2024 September 30, 2023 (in thousands) Receivables included in accounts receivable $ — $ — Contract liabilities included in deferred revenue $ — $ 866 |
Balance Sheet Accounts (Tables)
Balance Sheet Accounts (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Property and Equipment | The following table summarizes the Company’s major classes of property, plant and equipment: June 30, 2024 September 30, 2023 (in thousands) Land $ 2,996 $ 2,996 Building 75,868 — Research equipment 64,207 56,509 Furniture 5,593 1,540 Computers and software 976 700 Leasehold improvements 104,396 103,813 Construction in progress 175,778 166,655 429,814 332,213 Less: Accumulated depreciation and amortization (53,903) (41,951) Property, plant and equipment, net $ 375,911 $ 290,262 |
Schedule of Accrued Expenses | Accrued expenses consist of the following: June 30, 2024 September 30, 2023 (in thousands) Accrued R&D expenses $ 17,911 $ 16,125 Accrued R&D expenses; co-development 21,280 5,895 Accrued capital expenditures 6,909 14,044 Other 1,799 3,699 Total accrued expenses $ 47,899 $ 39,763 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Short-term and Long-term Investments and Marketable Securities | The Company’s investments consisted of the following: As of June 30, 2024 (in thousands) Adjusted Basis Gross Gross Fair Value Available-for-sale securities $ 367,862 $ 8 $ (598) $ 367,272 Total current investments $ 367,862 $ 8 $ (598) $ 367,272 As of September 30, 2023 (in thousands) Adjusted Basis Gross Gross Fair Value Available-for-sale securities $ 295,699 $ 3 $ (2,967) $ 292,735 Total current investments $ 295,699 $ 3 $ (2,967) $ 292,735 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following table presents the components of intangible assets: Gross Carrying Amount Accumulated Amortization Impairment Net Carrying Amount Useful Lives (in thousands) (in years) As of June 30, 2024 Patents $ 21,728 $ 14,485 $ — $ 7,243 14 License 3,129 1,385 — 1,744 21 Total intangible assets, net $ 24,857 $ 15,870 $ — $ 8,987 As of September 30, 2023 Patents $ 21,728 $ 13,321 $ — $ 8,407 14 License 3,129 1,274 — 1,855 21 Total intangible assets, net $ 24,857 $ 14,595 $ — $ 10,262 |
Schedule of Intangible Assets Future Amortization Expense | The following table presents the estimated future amortization expense related to intangible assets as of June 30, 2024: Amortization Expense Year Ending September 30, (in thousands) 2024 (remainder) $ 425 2025 1,700 2026 1,700 2027 1,700 2028 1,700 Thereafter 1,762 Total $ 8,987 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Schedule of Shares of Common Stock and Preferred Stock | The following table summarizes the Company’s shares of common stock and preferred stock: Shares Par Value Authorized Issued Outstanding (in thousands) As of June 30, 2024 Common stock $ 0.001 290,000 124,227 124,227 Preferred stock $ 0.001 5,000 — — As of September 30, 2023 Common stock $ 0.001 290,000 107,312 107,312 Preferred stock $ 0.001 5,000 — — |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Schedule of Lease Assets and Liabilities and Lease Cost | The components of lease assets and liabilities along with their classification on the Company’s consolidated balance sheets were as follows: Lease Assets and Liabilities Classification June 30, 2024 September 30, 2023 (in thousands) Operating lease assets Right-of-use assets $ 44,339 $ 45,297 Current operating lease liabilities Lease liabilities 6,053 10,563 Non-current operating lease liabilities Lease liabilities, net of current portion 112,040 104,608 Three Months Ended June 30, Nine Months Ended June 30, Lease Cost Classification 2024 2023 2024 2023 (in thousands) Operating lease cost Research and development $ 2,965 $ 3,323 $ 8,531 $ 7,735 General and administrative expense 537 509 1,504 1,542 Variable lease cost (1) Research and development 863 257 2,478 627 General and administrative expense — — — — Total $ 4,365 $ 4,089 $ 12,513 $ 9,904 (1) Variable lease cost is primarily related to operating expenses associated with the Company’s operating leases. |
Summary of Maturities of Operating Lease Liabilities on an Undiscounted Basis | The following table presents maturities of operating lease liabilities on an undiscounted basis as of June 30, 2024: Year Amounts (in thousands) 2024 (remainder of fiscal year) $ 3,793 2025 15,356 2026 15,696 2027 14,869 2028 13,511 2029 and thereafter 128,356 Total $ 191,581 Less imputed interest $ (73,488) Total operating lease liabilities (includes current portion) $ 118,093 Supplemental cash flow and other information related to leases was as follows: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 (in thousands) Cash received for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ — $ 5,414 $ 3,099 $ 23,343 Right-of-use assets adjusted in exchange for new/amended operating lease liabilities $ — $ 3,519 $ (64) $ (19,063) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,204 $ 1,885 $ 7,221 $ 4,081 June 30, 2024 2023 Weighted-average remaining lease term (in years) 12.8 13.4 Weighted-average discount rate 8.0 % 8.0 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Awards Outstanding | The following table presents a summary of awards outstanding: As of June 30, 2024 2013 Plan 2021 Plan Inducement Awards Total Granted and outstanding awards: Options 1,315,326 32,151 665,020 2,012,497 Restricted stock units 1,609,260 2,804,026 616,638 5,029,924 Total 2,924,586 2,836,177 1,281,658 7,042,421 |
Share-Based Payment Arrangement, Expensed | The following table summarizes stock-based compensation expenses included in operating expenses: Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 Research and development $ 6,221 $ 8,982 $ 21,634 $ 26,129 General and administrative 8,490 10,965 27,350 33,820 Total $ 14,711 $ 19,947 $ 48,984 $ 59,949 |
Summarized Information about Stock Options | The following table presents a summary of the stock option activity for the nine months ended June 30, 2024: Shares Weighted- Weighted- Aggregate Outstanding at September 30, 2023 2,263,477 $ 22.68 Granted — — Cancelled or expired (53,582) 36.62 Exercised (197,398) 10.98 Outstanding at June 30, 2024 2,012,497 $ 23.22 3.8 $ 22,486,304 Exercisable at June 30, 2024 2,001,968 $ 23.05 3.8 $ 22,486,304 |
Assumptions Used to Value Stock Options | The following table provides the assumptions used in the calculation of grant-date fair values of these stock options based on the Black-Scholes option pricing model: Nine Months Ended June 30, 2024 (5) 2023 Expected dividend yield (1) N/A — Risk-free interest rate (2) N/A 3.69% Expected volatility (3) N/A 86.4% Expected term (in years) (4) N/A 6.25 Weighted average grant date fair value per share of options granted N/A $24.80 (1) The dividend yield is zero as the Company currently does not pay a dividend. (2) The risk-free interest rate is based on that of the U.S. Treasury yields with equivalent terms in effect at the time of the grant. (3) Volatility is estimated based on volatility average of the Company’s common stock price. (4) The computation of expected term was determined based on safe harbor rules, considering the contractual terms of the awards and vesting schedules. (5) No options were granted during the nine months ended June 30, 2024. |
Summary of Share Activity Related to RSUs | The following table summarizes the activity of the Company’s RSUs: Number of Weighted- Outstanding at September 30, 2023 4,241,640 $ 58.43 Granted 1,876,825 30.67 Vested (927,766) 53.16 Forfeited (160,775) 41.75 Outstanding at June 30, 2024 5,029,924 $ 49.58 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements for Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques utilized by the Company: June 30, 2024 Level 1 Level 2 Level 3 Total (in thousands) Available-for-sale securities U.S. government bonds $ — $ 80,946 $ — $ 80,946 Commercial notes — 114,616 — 114,616 Corporate debt securities — 171,710 — 171,710 Total available-for-sale securities — 367,272 — 367,272 Cash equivalents Money market instruments 29,495 — — 29,495 Commercial notes — 4,986 — 4,986 Total cash equivalents 29,495 4,986 — 34,481 Total financial assets $ 29,495 $ 372,258 $ — $ 401,753 September 30, 2023 Level 1 Level 2 Level 3 Total (in thousands) Available-for-sale securities U.S. government bonds $ 31,553 $ — $ — $ 31,553 Municipal securities — 7,093 — 7,093 Commercial notes — 22,205 — 22,205 Corporate debt securities — 231,884 — 231,884 Total available-for-sale securities 31,553 261,182 — 292,735 Cash equivalents Money market instruments 39,733 — — 39,733 Total cash equivalents 39,733 — — 39,733 Total financial assets $ 71,286 $ 261,182 $ — $ 332,468 |
Liability Related to the Sale_2
Liability Related to the Sale of Future Royalties (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Liability Related To The Sale Of Future Royalties [Abstract] | |
Schedule of Liability Related to the Sale of Future Royalties | The following table presents the activity with respect to the liability related to the sale of future royalties. Carrying Amount (in thousands) Carrying value as of September 30, 2023 $ 268,326 Milestone payment received 50,000 Non-cash interest expense recognized 17,705 Carrying value as of June 30, 2024 $ 336,031 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the computation of basic and diluted net loss per share for the three and nine months ended June 30, 2024 and 2023. Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 (in thousands, except per share amounts) Numerator: Net loss attributable to Arrowhead Pharmaceuticals, Inc. $ (170,793) $ (102,946) $ (428,957) $ (95,596) Denominator: Weighted-average basic shares outstanding 124,199 107,004 118,260 106,597 Effect of dilutive securities — — — — Weighted-average diluted shares outstanding 124,199 107,004 118,260 106,597 Basic net loss per share $ (1.38) $ (0.96) $ (3.63) $ (0.90) Diluted net loss per share $ (1.38) $ (0.96) $ (3.63) $ (0.90) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive. Three Months Ended June 30, Nine Months Ended June 30, 2024 2023 2024 2023 (in thousands) Options 753 637 711 768 Restricted stock units 3,976 2,830 4,060 3,256 Total 4,729 3,467 4,771 4,024 |
Organization and Significant _4
Organization and Significant Accounting Policies - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jan. 02, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Sep. 30, 2023 | |
Organization And Significant Accounting Policies [Line Items] | ||||||
Cash, cash equivalents and restricted cash | $ 69,400 | $ 69,400 | ||||
Restricted cash | 2,200 | 2,200 | ||||
Available-for-sale securities, at fair value | 367,272 | 367,272 | $ 292,735 | |||
Increase (decrease) in cash and investments | 33,000 | |||||
Development regulatory and sales milestones payments | 2,700,000 | 2,700,000 | ||||
Income tax expense (benefit) | 0 | $ 742 | (3,313) | $ 759 | ||
Underwriting Agreement | ||||||
Organization And Significant Accounting Policies [Line Items] | ||||||
Net proceeds | $ 429,300 | |||||
Shares of common stock issued (in shares) | 15,790,000 | |||||
Common stock offering price (in dollars per share) | $ 28.50 | |||||
Aggregate purchase price paid by investors | $ 450,000 | |||||
Amgen | Royalty Pharma Agreement | ||||||
Organization And Significant Accounting Policies [Line Items] | ||||||
Milestone payment receivable upon achievement of enrollment in phase 3 clinical trial | $ 50,000 | $ 50,000 |
Collaboration and License Agr_3
Collaboration and License Agreements - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 0 | $ 15,825 | $ 3,551 | $ 224,638 |
GSK | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 277 | 2,685 | 29,600 |
Horizon | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 1,539 | 0 | 23,206 |
Takeda | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 14,009 | 866 | 146,477 |
Janssen | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 355 |
Amgen | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 25,000 |
Collaboration and License Agr_4
Collaboration and License Agreements - Receivables and Contract Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Sep. 30, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Receivables included in accounts receivable | $ 0 | $ 0 |
Contract liabilities included in deferred revenue | $ 0 | $ 866 |
Collaboration and License Agr_5
Collaboration and License Agreements - Glaxosmithkline Intellectual Property (No. 3) Limited (Details) - USD ($) | 1 Months Ended | |||||
Dec. 31, 2023 | Jun. 30, 2024 | Dec. 11, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Nov. 22, 2021 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Contract liabilities | $ 0 | $ 866,000 | ||||
GSK | GSK-HSD License Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Milestone payment receivable | $ 30,000,000 | |||||
Milestone payment receivable upon achievement of phase two and first patient dosed in phase three | $ 100,000,000 | |||||
GSK | GSK-HSD License Agreement | Maximum | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Commercial milestone payments at first commercial sale | 190,000,000 | |||||
Sales-related milestone payments | $ 590,000,000 | |||||
GSK | GSK-HBV Agreement | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Initial transaction price | $ 2,700,000 | |||||
Contract assets | 0 | |||||
Contract liabilities | $ 0 | |||||
GSK | GSK-HBV Agreement | Maximum | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Development and sales milestone payments | $ 832,500,000 |
Collaboration and License Agr_6
Collaboration and License Agreements - Horizon Therapeutics Ireland DAC (Details) - Horizon - Horizon License Agreement $ in Millions | 1 Months Ended | ||
Jul. 31, 2021 USD ($) | Jun. 30, 2021 obligation | Jan. 31, 2023 USD ($) | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Number of distinct performance obligations | obligation | 1 | ||
Initial transaction price | $ 40 | ||
Milestone payment | $ 15 |
Collaboration and License Agr_7
Collaboration and License Agreements - Takeda Pharmaceutical Company Limited (Details) $ in Thousands | 1 Months Ended | |||
Oct. 31, 2020 USD ($) bundle obligation | Jun. 30, 2024 USD ($) | Sep. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||
Development regulatory and sales milestones payments | $ 2,700,000 | |||
Accrued expenses | 47,899 | $ 39,763 | ||
Takeda | License and Co-Funding Agreement | ||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||
Number of distinct performance obligations | obligation | 1 | |||
Number of distinct bundle | bundle | 1 | |||
Initial transaction price | $ 300,000 | |||
Milestone payment | $ 40,000 | |||
Accrued expenses | 21,300 | |||
Takeda | License and Co-Funding Agreement | Minimum | ||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||
Percentage of eligible to receive tiered royalties on net sales | 20% | |||
Takeda | License and Co-Funding Agreement | Maximum | ||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||
Percentage of eligible to receive tiered royalties on net sales | 25% | |||
Development regulatory and sales milestones payments | $ 527,500 |
Collaboration and License Agr_8
Collaboration and License Agreements - Amgen, Inc (Details) | 1 Months Ended | 9 Months Ended | |||||
Sep. 30, 2016 USD ($) agreement | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jul. 31, 2020 USD ($) | Sep. 30, 2018 USD ($) | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Proceeds from the issuance of common stock, net of offering costs | $ 429,265,000 | $ 0 | |||||
Contract liabilities | 0 | $ 866,000 | |||||
Amgen | Olpasiran Agreement | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Number of agreements | agreement | 2 | ||||||
Upfront payment | $ 35,000,000 | ||||||
Proceeds from the issuance of common stock, net of offering costs | $ 21,500,000 | ||||||
Milestone payments | 55,000,000 | $ 25,000,000 | $ 20,000,000 | $ 10,000,000 | |||
Contract assets | 0 | ||||||
Contract liabilities | 0 | ||||||
Amgen | Olpasiran Agreement | Maximum | |||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||
Additional remaining development regulatory and sales milestones payments | $ 485,000,000 |
Collaboration and License Agr_9
Collaboration and License Agreements - Visirna Therapeutics, Inc. (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Sep. 30, 2023 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||
Revenue | $ 0 | $ 15,825 | $ 3,551 | $ 224,638 | |
Deferred revenue | 0 | 0 | $ 866 | ||
Visirna Therapeutics, Inc. | Visirna License Agreement | |||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||
Revenue | 100 | $ 900 | |||
Contract assets | 0 | 0 | |||
Deferred revenue | $ 0 | $ 0 |
Balance Sheet Accounts - Summar
Balance Sheet Accounts - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Sep. 30, 2023 | |
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | $ 429,814 | $ 429,814 | $ 332,213 | |||
Less: Accumulated depreciation and amortization | (53,903) | (53,903) | (41,951) | |||
Property, plant and equipment, net | 375,911 | 375,911 | 290,262 | |||
Depreciation and amortization expense for property and equipment | 4,400 | $ 2,900 | 12,300 | $ 7,400 | ||
Land | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 2,996 | 2,996 | 2,996 | |||
Building | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 75,868 | 75,868 | 0 | |||
Property, plant and equipment, reclassification | 75,900 | |||||
Useful life | 39 years | |||||
Research equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 64,207 | 64,207 | 56,509 | |||
Furniture | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 5,593 | 5,593 | 1,540 | |||
Computers and software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 976 | 976 | 700 | |||
Leasehold improvements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | 104,396 | 104,396 | 103,813 | |||
Construction in progress | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property, plant and equipment, gross | $ 175,778 | 175,778 | $ 166,655 | |||
Property, plant and equipment, reclassification | $ (75,900) |
Balance Sheet Accounts - Accrue
Balance Sheet Accounts - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Sep. 30, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued R&D expenses | $ 17,911 | $ 16,125 |
Accrued R&D expenses; co-development | 21,280 | 5,895 |
Accrued capital expenditures | 6,909 | 14,044 |
Other | 1,799 | 3,699 |
Total accrued expenses | $ 47,899 | $ 39,763 |
Investments - Summary of Short-
Investments - Summary of Short-term, Long-term Investments and Marketable Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Sep. 30, 2023 |
Schedule Of Held To Maturity Securities And Marketable Securities [Line Items] | ||
Current investments, Available-for-sale, Adjusted Basis | $ 367,862 | $ 295,699 |
Current investments, Available-for-sale, Gross Unrealized Gains | 8 | 3 |
Current investments, Available-for-sale, Gross Unrealized Losses | (598) | (2,967) |
Current investments, Available-for-sale, Fair Value | 367,272 | 292,735 |
Debt securities | ||
Schedule Of Held To Maturity Securities And Marketable Securities [Line Items] | ||
Current investments, Available-for-sale, Adjusted Basis | 367,862 | 295,699 |
Current investments, Available-for-sale, Gross Unrealized Gains | 8 | 3 |
Current investments, Available-for-sale, Gross Unrealized Losses | (598) | (2,967) |
Current investments, Available-for-sale, Fair Value | $ 367,272 | $ 292,735 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Sep. 30, 2023 | |
Finite Lived Intangible Assets [Line Items] | |||||
Net Carrying Amount | $ 8,987 | $ 8,987 | $ 10,262 | ||
Amortization expense | 400 | $ 400 | 1,300 | $ 1,300 | |
Novartis | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 24,857 | 24,857 | 24,857 | ||
Accumulated Amortization | 15,870 | 15,870 | 14,595 | ||
Impairment | 0 | 0 | 0 | ||
Net Carrying Amount | 8,987 | 8,987 | 10,262 | ||
Novartis | Patents | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 21,728 | 21,728 | 21,728 | ||
Accumulated Amortization | 14,485 | 14,485 | 13,321 | ||
Impairment | 0 | 0 | 0 | ||
Net Carrying Amount | $ 7,243 | $ 7,243 | $ 8,407 | ||
Useful Lives | 14 years | 14 years | 14 years | ||
Novartis | License | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 3,129 | $ 3,129 | $ 3,129 | ||
Accumulated Amortization | 1,385 | 1,385 | 1,274 | ||
Impairment | 0 | 0 | 0 | ||
Net Carrying Amount | $ 1,744 | $ 1,744 | $ 1,855 | ||
Useful Lives | 21 years | 21 years | 21 years |
Intangible Assets - Expected Fu
Intangible Assets - Expected Future Amortization (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Sep. 30, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 (remainder) | $ 425 | |
2025 | 1,700 | |
2026 | 1,700 | |
2027 | 1,700 | |
2028 | 1,700 | |
Thereafter | 1,762 | |
Net Carrying Amount | $ 8,987 | $ 10,262 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jan. 02, 2024 | Dec. 02, 2022 | Jun. 30, 2024 | Sep. 30, 2023 |
Class Of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized (in shares) | 290,000,000 | 290,000,000 | ||
Common stock, shares issued (in shares) | 124,227,000 | 107,312,000 | ||
Common stock, shares outstanding (in shares) | 124,227,000 | 107,312,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | ||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||
Common stock, share reserve for issuance (in shares) | 4,565,727 | |||
Underwriting Agreement | ||||
Class Of Stock [Line Items] | ||||
Shares of common stock issued (in shares) | 15,790,000 | |||
Common stock offering price (in dollars per share) | $ 28.50 | |||
Aggregate purchase price paid by investors | $ 450,000,000 | |||
Net proceeds | $ 429,300,000 | |||
At The Market Agreement | ||||
Class Of Stock [Line Items] | ||||
Shares issued | 0 | |||
At The Market Agreement | Maximum | ||||
Class Of Stock [Line Items] | ||||
Common stock shares value reserved for future issuance | $ 250,000,000 | |||
Percentage of commission to sales agent | 3% | |||
2013 and 2021 Incentive Plans and other inducement grants | ||||
Class Of Stock [Line Items] | ||||
Common stock, share reserve for issuance (in shares) | 11,608,148 | 12,709,837 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) ft² in Thousands | Jun. 30, 2024 USD ($) | Dec. 20, 2021 ft² |
Other Commitments [Line Items] | ||
Contingent liabilities | $ 0 | |
Drug Manufacturing Facility | Wisconsin | ||
Other Commitments [Line Items] | ||
Planned area of the site (in sq ft) | ft² | 160 | |
Laboratory and Office Facility | Wisconsin | ||
Other Commitments [Line Items] | ||
Planned area of the site (in sq ft) | ft² | 140 | |
Facilities | ||
Other Commitments [Line Items] | ||
Capital expenditures incurred | 266,000,000 | |
Facilities | Minimum | ||
Other Commitments [Line Items] | ||
Amount intends to invest for buildout of the facilities | 18,000,000 | |
Facilities | Maximum | ||
Other Commitments [Line Items] | ||
Amount intends to invest for buildout of the facilities | $ 32,000,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) ft² in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) ft² option | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | Sep. 25, 2023 USD ($) | |
Lessee Lease Description [Line Items] | |||||
Short-term lease cost | $ | $ 0.6 | $ 0 | $ 1.2 | ||
Corporate Headquarters In Pasadena | California | |||||
Lessee Lease Description [Line Items] | |||||
Office space leases (in sq ft) | ft² | 49 | ||||
Corporate Headquarters In Pasadena | California | Colorado Owner, LLC | |||||
Lessee Lease Description [Line Items] | |||||
Number of options to renew | option | 1 | ||||
Operating lease renewal term | 5 years | ||||
Research Facility in San Diego | California | |||||
Lessee Lease Description [Line Items] | |||||
Office space leases (in sq ft) | ft² | 144 | ||||
Operating lease renewal term | 10 years | ||||
Lease term | 15 years | ||||
Maximum additional tenant improvement allowance | $ | $ 7.2 | $ 23.6 | |||
Additional tenant improvement allowance interest per annum | 7% | 9% | |||
Additional tenant improvement allowance liability | $ | $ 30.8 | ||||
Research Facility in San Diego | California | Maximum | |||||
Lessee Lease Description [Line Items] | |||||
Number of options to renew | option | 1 | ||||
Research Facility in Madison | Wisconsin | |||||
Lessee Lease Description [Line Items] | |||||
Office space leases (in sq ft) | ft² | 115 | ||||
Number of options to renew | option | 2 | ||||
Operating lease renewal term | 5 years |
Leases - Components of Lease As
Leases - Components of Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Sep. 30, 2023 | |
Lease Assets and Liabilities | |||||
Right-of-use assets | $ 44,339 | $ 44,339 | $ 45,297 | ||
Lease liabilities | 6,053 | 6,053 | 10,563 | ||
Lease liabilities, net of current portion | 112,040 | 112,040 | $ 104,608 | ||
Lease Cost | |||||
Total | 4,365 | $ 4,089 | 12,513 | $ 9,904 | |
Research and development | |||||
Lease Cost | |||||
Operating lease cost | 2,965 | 3,323 | 8,531 | 7,735 | |
Variable lease cost | 863 | 257 | 2,478 | 627 | |
General and administrative expense | |||||
Lease Cost | |||||
Operating lease cost | 537 | 509 | 1,504 | 1,542 | |
Variable lease cost | $ 0 | $ 0 | $ 0 | $ 0 |
Leases - Summary of Maturities
Leases - Summary of Maturities of Operating Lease Liabilities on an Undiscounted Basis (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Leases [Abstract] | |
2024 (remainder of fiscal year) | $ 3,793 |
2025 | 15,356 |
2026 | 15,696 |
2027 | 14,869 |
2028 | 13,511 |
2029 and thereafter | 128,356 |
Total | 191,581 |
Less imputed interest | (73,488) |
Total operating lease liabilities (includes current portion) | $ 118,093 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow and Other Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Cash received for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ 0 | $ 5,414 | $ 3,099 | $ 23,343 |
Right-of-use assets adjusted in exchange for new/amended operating lease liabilities | 0 | 3,519 | (64) | (19,063) |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ 3,204 | $ 1,885 | $ 7,221 | $ 4,081 |
Weighted-average remaining lease term (in years) | 12 years 9 months 18 days | 13 years 4 months 24 days | 12 years 9 months 18 days | 13 years 4 months 24 days |
Weighted-average discount rate | 8% | 8% | 8% | 8% |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Oct. 01, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Sep. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Common stock, share reserve for issuance (in shares) | 4,565,727 | 4,565,727 | ||||
Granted (in shares) | 0 | |||||
Stock-based compensation expense | $ 14,711 | $ 19,947 | $ 48,984 | $ 59,949 | ||
Options | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Intrinsic value of options exercised | 700 | 6,500 | 3,800 | 10,100 | ||
Stock-based compensation expense | 400 | 2,100 | 2,500 | 6,700 | ||
Unrecognized pre-tax compensation expense | 400 | $ 400 | ||||
Weighted average period to recognize pre-tax compensation expense | 3 months | |||||
Restricted stock units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock-based compensation expense | 14,300 | $ 17,800 | $ 46,500 | $ 53,200 | ||
Weighted average period to recognize pre-tax compensation expense | 1 year 7 months 6 days | |||||
Unrecognized pre-tax compensation expense | $ 96,300 | $ 96,300 | ||||
2013 Incentive Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares reserve for issuance (in shares) | 2,924,586 | 2,924,586 | ||||
Number of shares forfeited (in shares) | 158,928 | |||||
2021 Incentive Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of shares authorized (in shares) | 8,000,000 | |||||
Number of shares forfeited (in shares) | 154,139 | |||||
Granted (in shares) | 3,697,189 | |||||
Inducement Awards | Options | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares reserve for issuance (in shares) | 665,020 | 665,020 | ||||
Inducement Awards | Restricted stock units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares reserve for issuance (in shares) | 616,638 | 616,638 | ||||
Visirna ESOP | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of shares authorized (in shares) | 20,000,000 | |||||
Granted (in shares) | 7,500,000 | |||||
Stock-based compensation expense | $ 2,300 | $ 5,500 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Granted and Outstanding Shares (Details) - shares | Jun. 30, 2024 | Sep. 30, 2023 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding (in shares) | 2,012,497 | 2,263,477 |
Total (in shares) | 7,042,421 | |
Restricted stock units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based payment award (in shares) | 5,029,924 | 4,241,640 |
2013 Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding (in shares) | 1,315,326 | |
Total (in shares) | 2,924,586 | |
2013 Incentive Plan | Restricted stock units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based payment award (in shares) | 1,609,260 | |
2021 Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding (in shares) | 32,151 | |
Total (in shares) | 2,836,177 | |
2021 Incentive Plan | Restricted stock units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based payment award (in shares) | 2,804,026 | |
Inducement Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of options outstanding (in shares) | 665,020 | |
Total (in shares) | 1,281,658 | |
Inducement Awards | Restricted stock units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based payment award (in shares) | 616,638 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expenses Included in Operating Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 14,711 | $ 19,947 | $ 48,984 | $ 59,949 |
Research and development | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 6,221 | 8,982 | 21,634 | 26,129 |
General and administrative expense | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 8,490 | $ 10,965 | $ 27,350 | $ 33,820 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summarize Information about Stock Options (Details) - USD ($) | 9 Months Ended |
Jun. 30, 2024 | |
Shares | |
Beginning balance (in shares) | 2,263,477 |
Granted (in shares) | 0 |
Cancelled (in shares) | (53,582) |
Exercised (in shares) | (197,398) |
Ending balance (in shares) | 2,012,497 |
Number of Options Outstanding, Exercisable (in shares) | 2,001,968 |
Weighted- Average Exercise Price Per Share | |
Beginning balance (in dollars per share) | $ 22.68 |
Granted (in dollars per share) | 0 |
Cancelled (in dollars per share) | 36.62 |
Exercised (in dollars per share) | 10.98 |
Ending balance (in dollars per share) | 23.22 |
Weighted-Average Exercise Price Per Share, Exercisable (in dollars per share) | $ 23.05 |
Weighted- Average Remaining Contractual Term (Years) | 3 years 9 months 18 days |
Weighted-Average Remaining Contractual Term, Exercisable | 3 years 9 months 18 days |
Aggregate Intrinsic Value | $ 22,486,304 |
Aggregate Intrinsic Value, Exercisable | $ 22,486,304 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used to Value Stock Options (Details) - $ / shares | 9 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||
Expected dividend yield | 0% | 0% |
Risk-free interest rate | 3.69% | |
Expected volatility | 86.40% | |
Expected life (in years) | 6 years 3 months | |
Weighted average grant date fair value per share of options granted (in dollars per share) | $ 24.80 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of RSUs Activity (Details) - Restricted stock units | 9 Months Ended |
Jun. 30, 2024 $ / shares shares | |
Number of RSUs | |
Beginning of period (in shares) | shares | 4,241,640 |
Granted (in shares) | shares | 1,876,825 |
Vested (in shares) | shares | (927,766) |
Forfeited (in shares) | shares | (160,775) |
End of period (in shares) | shares | 5,029,924 |
Weighted- Average Grant Date Fair Value Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 58.43 |
Granted (in dollars per share) | $ / shares | 30.67 |
Vested (in dollars per share) | $ / shares | 53.16 |
Forfeited (in dollars per share) | $ / shares | 41.75 |
Ending balance (in dollars per share) | $ / shares | $ 49.58 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Measurements for Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2024 | Sep. 30, 2023 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 367,272 | $ 292,735 |
Cash equivalents | 34,481 | 39,733 |
Total financial assets | 401,753 | 332,468 |
Money market instruments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 29,495 | 39,733 |
Commercial notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 4,986 | |
U.S. government bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 80,946 | 31,553 |
Municipal securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 7,093 | |
Commercial notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 114,616 | 22,205 |
Corporate debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 171,710 | 231,884 |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 31,553 |
Cash equivalents | 29,495 | 39,733 |
Total financial assets | 29,495 | 71,286 |
Level 1 | Money market instruments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 29,495 | 39,733 |
Level 1 | Commercial notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Level 1 | U.S. government bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 31,553 |
Level 1 | Municipal securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | |
Level 1 | Commercial notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Level 1 | Corporate debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 367,272 | 261,182 |
Cash equivalents | 4,986 | 0 |
Total financial assets | 372,258 | 261,182 |
Level 2 | Money market instruments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 2 | Commercial notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 4,986 | |
Level 2 | U.S. government bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 80,946 | 0 |
Level 2 | Municipal securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 7,093 | |
Level 2 | Commercial notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 114,616 | 22,205 |
Level 2 | Corporate debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 171,710 | 231,884 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Cash equivalents | 0 | 0 |
Total financial assets | 0 | 0 |
Level 3 | Money market instruments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 3 | Commercial notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Level 3 | U.S. government bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Level 3 | Municipal securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | |
Level 3 | Commercial notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Level 3 | Corporate debt securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 0 | $ 0 |
Liability Related to the Sale_3
Liability Related to the Sale of Future Royalties - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Nov. 30, 2022 | Jun. 30, 2024 | Jun. 30, 2024 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Milestone payment received | $ 50,000 | ||
Royalty Pharma Agreement | |||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Upfront payment | $ 250,000 | ||
Milestone payment receivable | 160,000 | ||
Milestone payment receivable upon FDA approval | 50,000 | ||
Milestone payment receivable upon receipt of royalty payments | 60,000 | ||
Royalty payment threshold | 70,000 | ||
Milestone payment received | $ 50,000 | ||
Liability related to the sale of future royalties | $ 250,000 | $ 250,000 | |
Liability related to the sale of future royalties, interest rate | 6.30% | 6.30% | |
Royalty Pharma Agreement | Amgen | |||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Milestone payment receivable upon achievement of enrollment in phase 3 clinical trial | $ 50,000 | $ 50,000 | |
Royalty Pharma Agreement | Maximum | |||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Initial transaction price | $ 410,000 |
Liability Related to the Sale_4
Liability Related to the Sale of Future Royalties - Activity (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Liability, Sale Of Future Royalties [Roll Forward] | ||
Carrying value as of September 30, 2023 | $ 268,326 | |
Non-cash interest expense recognized | 17,705 | $ 13,064 |
Carrying value as of June 30, 2024 | $ 336,031 |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Numerator: | ||||
Net loss attributable to Arrowhead Pharmaceuticals, Inc. | $ (170,793) | $ (102,946) | $ (428,957) | $ (95,596) |
Denominator: | ||||
Weighted-average basic shares outstanding (in shares) | 124,199 | 107,004 | 118,260 | 106,597 |
Effect of dilutive securities (in shares) | 0 | 0 | 0 | 0 |
Weighted-average diluted shares outstanding (in shares) | 124,199 | 107,004 | 118,260 | 106,597 |
Basic net loss per share (in dollars per share) | $ (1.38) | $ (0.96) | $ (3.63) | $ (0.90) |
Diluted net loss per share (in dollars per share) | $ (1.38) | $ (0.96) | $ (3.63) | $ (0.90) |
Net Loss Per Share - Antiduliti
Net Loss Per Share - Antidulitive (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of diluted earnings per share (in shares) | 4,729 | 3,467 | 4,771 | 4,024 |
Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of diluted earnings per share (in shares) | 753 | 637 | 711 | 768 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of diluted earnings per share (in shares) | 3,976 | 2,830 | 4,060 | 3,256 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Financing Agreement - Line of Credit $ in Millions | Aug. 07, 2024 USD ($) |
Subsequent Event [Line Items] | |
Debt instrument term | 7 years |
Interest rate | 15% |
Secured Debt | |
Subsequent Event [Line Items] | |
Maximum borrowing capacity | $ 500 |
Long-term line of credit | 400 |
Incremental Facility | |
Subsequent Event [Line Items] | |
Maximum borrowing capacity | $ 100 |