What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-11-25 compared with 2024-11-26 · 146 added, 139 removed, 165 unchanged (63% of the section changed)

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The Company develops medicines that treat intractable diseases by silencing the genes that cause them.

Using a broad portfolio of RNA chemistries and efficient modes of delivery, the Company’s therapies trigger the RNAi interference mechanism to induce rapid, deep and durable knockdown of target genes.

Using a broad portfolio of RNA chemistries and modes of delivery, the Company’s therapies trigger the RNAi interference mechanism to induce rapid, deep and durable knockdown of target genes.

RNAi is a mechanism present in living cells that inhibits the expression of a specific gene, thereby affecting the production of a specific protein.

RNAi-based therapeutics may leverage this natural pathway of gene silencing to target and shut down specific disease-causing genes.

The Company believes that TRiM TM enabled therapeutics offer several potential advantages over prior generation and competing technologies, including:

The Company believes that TRiM enabled therapeutics offer several potential advantages over prior generations and competing technologies, including:

simplified manufacturing and reduced costs;

multiple routes of administration including subcutaneous injection and inhaled administration;

the ability to target multiple tissue types including liver, lung, central nervous system (CNS), muscle, and adipose tissue;

the ability to target multiple tissue types including liver, lung, skeletal muscle, central nervous system (CNS), adipose tissue, ocular, and cardio-myocytes;

and the potential for improved safety and reduced risk of intracellular buildup, because there are fewer metabolites from smaller, simpler molecules.

The Company’s pipeline includes:

• Hypertriglyceridemia - plozasiran (formerly ARO-APOC3)

• Dyslipidemia - zodasiran (formerly ARO-ANG3)

• Severe Hypertriglyceridemia - plozasiran (formerly ARO-APOC3, Greater China rights out-licensed to Sanofi);

• Homozygous familial hypercholesterolemia (HoFH) - zodasiran (formerly ARO-ANG3);

• Cardiovascular disease - olpasiran (formerly AMG 890 or ARO-LPA, out-licensed to Amgen);

• Muco-obstructive or inflammatory pulmonary conditions - ARO-MUC5AC and ARO-RAGE

• Idiopathic pulmonary fibrosis - ARO-MMP7

• Metabolic-dysfunction associated steatohepatitis (MASH) - GSK-4532990 (formerly ARO-HSD, out licensed to GSK);

• Mixed hyperlipidemia – ARO-DIMERPA (Greater China rights out-licensed to Sanofi);

• Inflammatory pulmonary conditions - ARO-RAGE;

• Idiopathic pulmonary fibrosis - SRP-1002 (formerly ARO-MMP7, out-licensed to Sarepta);

• Metabolic-dysfunction associated steatohepatitis (MASH) - GSK4532990 (formerly ARO-HSD, out

licensed to GSK and Visirna);

• Alpha-1 antitrypsin deficiency (AATD) - fazirsiran (formerly ARO-AAT, a collaboration with Takeda);

• Chronic hepatitis B virus - daplusiran/tomligisiran (GSK5637608, formerly JNJ-3989, out-licensed to GSK)

• Complement mediated diseases - ARO-C3

• Chronic Hepatitis B virus - daplusiran/tomligisiran - GSK5637608 (formerly JNJ-3989 and ARO-HBV, out-licensed to GSK);

• Complement mediated diseases - ARO-C3 and ARO-CFB;

• Metabolic-dysfunction associated steatohepatitis (MASH) - ARO-PNPLA3 (formerly JNJ-75220795 or ARO-JNJ1);

• Facioscapulohumeral muscular dystrophy - ARO-DUX4;

• Dystrophia myotonica protein kinase (DMPK) - ARO-DM1;

• Hepatic expression of complement factor B (CFB) - ARO-CFB

• Obesity - ARO-INHBE;

• Spinocerebellar ataxia 2 - ARO-ATXN2

• Obesity - ARO-INHBE and ARO-ALK7

• Facioscapulohumeral muscular dystrophy - SRP-1001 (formerly ARO-DUX4, out-licensed to Sarepta);

• Myotonic Dystrophy Type 1 - SRP-1003 (formerly ARO-DM1 out-licensed to Sarepta;

• Spinocerebellar ataxia 2 - SRP-1004 (formerly ARO-ATXN2, out-licensed to Sarepta).

• Parkinson’s disease – ARO-SNCA (out-licensed to Novartis)

• Alzheimer’s disease – ARO-MAPT

The Company operates lab facilities in California and Wisconsin, where its research and development activities, including the development of RNAi therapeutics, take place.

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The Company continues to develop other clinical candidates for future clinical trials.

Clinical candidates are tested internally and through GLP toxicology studies at outside laboratories.

Clinical candidates are tested internally and through Good Laboratory Practice (GLP) toxicology studies at outside laboratories.

Drug materials for such studies and clinical trials are either manufactured internally or contracted to third-party manufacturers.

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2025 Business Highlights

During fiscal year 2024, the Company continued to develop and advance its pipeline and partnered candidates and expand its facilities to support its growing programs.

During fiscal year 2025 and through the date of filing, the Company continued to develop and advance its pipeline and partnered candidates and expand its facilities to support its growing programs.

The bullets below highlight some of these key developments;

however, this list is not all-inclusive and is meant to be read in conjunction with the entirety of management’s discussion and analysis, the Company’s Consolidated Financial Statements and notes thereto, and all other items contained within this Annual Report on Form 10-K.

• Presented new pivotal Phase 3 Data from PALISADE study of plozasiran in patients with familial chylomicronemia syndrome (FCS) at the European Society of Cardiology (ESC) Congress 2024 and simultaneously published in The New England Journal of Medicine.

The Company filed a New Drug Application on November 16, 2024;

• Presented preclinical data and detailed plans to advance two next generation RNAi-based candidates, ARO-INHBE and ARO-ALK7, into upcoming clinical studies for the treatment of obesity and metabolic diseases.

In preclinical studies to date, these candidates demonstrated the potential to reduce body weight and fat mass with a novel mechanism of action that may lead to improved preservation of lean muscle mass compared to currently approved obesity therapies.

On September 23, 2024, the Company filed for regulatory clearance to initiate a Phase 1/2a clinical trial of ARO-INHBE and plans to file for regulatory clearance before the end of 2024 to initiate a clinical trial for its second obesity candidate, ARO-ALK7;

• 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;

• 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;

• Amgen completed enrollment in Amgen’s Phase 3 OCEAN(a) - outcomes trial of olpasiran, triggering a $50.0 million milestone payment to the Company from Royalty Pharma, 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 familial chylomicronemia syndrome (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.

2024 Financial Performance Summary

Net loss attributable to Arrowhead Pharmaceuticals, Inc.

was $599.5 million for the year ended September 30, 2024 as compared to $205.3 million for the year ended September 30, 2023.

Net loss per share – diluted was $5.00 for the year ended September 30, 2024 as compared to $1.92 for the year ended September 30, 2023.

The change in net loss for the year ended September 30, 2024 was mainly due to a decrease in revenue from the Company’s license and collaboration agreements, in conjunction with increased research and development expenses, which have continued to increase as the Company’s pipeline of candidates has expanded and progressed through clinical trial phases.

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.

Further, the Company entered into a financing agreement with Sixth Street Lending Partners, as representatives of the several lenders.

The financing agreement provides for a senior secured term loan facility of $500.0 million, which includes $400.0 million funded on the closing date with an additional $100.0 million at the Company’s option during the seven-year term of the agreement.

The Company received net proceeds of $388.9 million, after issuance costs as of September 30, 2024.

This is discussed further in Note 14, Financing Agreements of the Notes to the Company’s Consolidated Financial Statements in Part IV, “Item 15.

Exhibits and Financial Statement Schedules.”

The Company had $102.7 million of cash, cash equivalents and restricted cash and $578.3 million in available-for-sale securities as of September 30, 2024, as compared to $110.9 million of cash, cash equivalents and restricted cash and $292.7 million in available-for-sale securities as of September 30, 2023.

Based upon the Company’s current cash and

investment resources and operating plan, the Company expects to have sufficient liquidity to fund operations for at least the next twelve months from the date of the issuance of these consolidated financial statements.

• On November 20, 2025, the Company earned a $200.0 million milestone payment from Sarepta.

The milestone was earned when Arrowhead achieved the second development milestone event in a Phase 1/2 clinical study of ARO-DM1, also called SRP-1003, an investigational RNAi therapeutic for the treatment of type 1 myotonic dystrophy (DM1), the most common adult-onset muscular dystrophy.

The second milestone event included the achievement of a patient enrollment target, drug safety committee review and subsequent authorization to dose escalate and proceed, and completion of day 105 study visit by at least one patient in the clinical trial;

• The FDA approved the Company's New Drug Application (NDA) for REDEMPLO (plozasiran) injection for Familial Chylomicronemia Syndrome (FCS), on November 18, 2025.

This approval was supported by clinical data from the Phase 3 PALISADE study, a randomized, double-blind, placebo-controlled trial in adults with clinically diagnosed or genetically confirmed FCS.

The PALISADE study met its primary endpoint and all multiplicity-controlled key secondary endpoints, including demonstrating significant reductions in triglycerides and APOC3.

In PALISADE, 25 mg REDEMPLO achieved deep and durable reductions in triglycerides, with a median change from baseline of -80% versus -17% in the pooled placebo group, and a lower numerical incidence of acute pancreatitis compared with placebo;

• Filed a request for regulatory clearance to initiate a Phase 1/2a clinical trial of ARO-DIMER-PA, the Company’s investigational RNA interference (RNAi) therapeutic being developed as a potential treatment for atherosclerotic cardiovascular disease (ASCVD) due to mixed hyperlipidemia.

ARO-DIMER-PA is designed to silence expression of the proprotein convertase subtilisin kexin 9 (PCSK9) and apolipoprotein C3

(APOC3) genes.

This represents an important step forward for the RNAi field as it is the first clinical candidate to target two genes simultaneously in one molecule, enabled by Arrowhead’s innovative and proprietary TRiM platform;

• Filed a request for regulatory clearance to initiate a Phase 1/2a clinical trial of ARO-MAPT, the Company’s investigational RNAi therapeutic being developed as a potential treatment for tauopathies including Alzheimer’s disease, a progressive neurodegenerative disease characterized by cognitive and functional decline.

Alzheimer’s disease is the most common cause of dementia and is estimated to affect 32 million people worldwide and is part of a group of neurodegenerative diseases called tauopathies that are marked by the abnormal accumulation and formation of tau tangles in neurons.

• On August 29, 2025, the Company entered into a global licensing and collaboration agreement with Novartis for ARO-SNCA, Arrowhead’s preclinical stage siRNA therapy against alpha-synuclein for the treatment of synucleinopathies, such as Parkinson’s Disease, and for other additional collaboration targets that will utilize Arrowhead’s proprietary TRiM platform.

Closing of the transaction was subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.

Upon closing in October 2025, the Company received $200.0 million as an upfront payment and is eligible to receive up to $2.0 billion in potential milestone payments plus royalties on commercial sales.

• Triggered a $100.0 million milestone payment from Sarepta, which was achieved on July 27, 2025, when the Company reached the first of two prespecified enrollment targets and subsequent authorization to dose escalate in a Phase 1/2 clinical study of ARO-DM1, an investigational RNAi therapeutic for the treatment of type 1 myotonic dystrophy (DM1).

Arrowhead received $53.2 million worth of Arrowhead common stock and $50.0 million in cash from Sarepta Therapeutics, satisfying the payment of the $100.0 million milestone owed to Arrowhead.

• Announced the signing of an asset purchase agreement between Sanofi and Visirna, a majority-owned subsidiary of the Company, created to develop and commercialize four of the Company’s investigational cardiometabolic candidates in Greater China.

Under the terms of the agreement, Sanofi will acquire rights to develop and commercialize investigational plozasiran, the Company's first-in-class RNAi therapeutic candidate designed to reduce production of apolipoprotein C-III (APOC3) as a potential treatment for familial chylomicronemia syndrome (FCS) and severe hypertriglyceridemia (sHTG), in Greater China;

• Initiated and dosed the first subject in the YOSEMITE Phase 3 clinical trial of zodasiran, the Company’s investigational RNAi therapeutic being developed as a potential treatment for homozygous familial hypercholesterolemia (HoFH), a rare genetic condition that leads to severely elevated LDL-cholesterol and early onset cardiovascular disease;

• Completed enrollment of SHASTA-3, SHASTA-4, and MUIR-3 Phase 3 clinical trials of REDEMPLO .

The Company’s global Phase 3 clinical studies are designed to support regulatory submissions for approval of investigational REDEMPLO in the treatment of severe hypertriglyceridemia.

• Initiated a Phase 1/2a clinical trial of ARO-ALK7 for the treatment of obesity.

ARO-ALK7 is the first RNAi-based therapy designed to silence adipocyte expression of the ACVR1C gene to reduce the production of Activin receptor-like kinase 7 (ALK7), which acts as a receptor in a pathway that regulates energy homeostasis in adipose tissue;

• Announced Topline results from Part 2 of a Phase 1/2 clinical study of ARO-C3, the Company’s investigational RNAi therapeutic designed to reduce liver production of complement component 3 (C3) as a potential therapy for various complement mediated diseases.

ARO-C3 achieved reductions in alternative pathway complement activity and proteinuria;

• Entered into a global licensing and collaboration agreement with Sarepta on November 25, 2024, which closed on February 7, 2025.

Upon closing, the Company received $325.0 million through the purchase of 11,926,301 shares of Company common stock by Sarepta, at a price per share of $27.25, and received $500.0 million as an upfront payment on February 24, 2025.

The Company will also receive $250.0 million to be paid in equal installments over five years and is eligible to receive an additional $300.0 million in near-term payments.

Additionally, the Company is eligible to receive royalties on commercial sales and up to approximately $10.0 billion in future potential milestone payments;

• GSK dosed its fifth patient in a Phase 2 trial in December 2024, triggering a $2.5 million milestone payment to the Company which was paid in the second quarter of fiscal 2025;

• Announced that the Company dosed the first subjects in a Phase 1/2a clinical trial of ARO-INHBE;

• Presented interim results from a Phase 1/2a clinical study of ARO-CFB at the 8th Complement-Based Drug Development Summit.

The study resulted in multiple findings including:

(1) ARO-CFB led to dose dependent reductions in circulating CFB protein by up to 90% with greater than 3 months duration, (2) single and multiple doses of ARO-CFB led to near complete inhibition of alternative pathway activity based on Wieslab AP, and (3) single and multiple doses of ARO-CFB led to near complete inhibition of alternative pathway hemolytic activity, measured by AH50.

Critical Accounting Estimates

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Revenue Recognition —The Company has adopted Financial Accounting Standards Board (“FASB”) Topic 606 – Revenue for Contracts from Customers.

The Company has not yet achieved commercial sales of its drug candidates to date, however, this standard is applicable to its licensing and collaboration agreements.

The Company has not yet achieved commercial sales of its drug candidates to date;

however, this standard is applicable to its licensing and collaboration agreements.

This is discussed further in Note 2, Collaboration and License Agreements of the Notes to the Company’s Consolidated Financial Statements in Part IV, “Item 15.

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At the end of each subsequent reporting period, the Company re-evaluates the probability of a significant reversal of the cumulative revenue recognized for its milestones and royalties, and, if necessary, adjusts its estimate of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and net income in the Company’s consolidated statements of operations and comprehensive loss.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and net income in the Company’s consolidated statements of operations and comprehensive income (loss).

Typically, milestone payments and royalties are achieved after the Company’s performance obligations associated with the collaboration agreements have been completed and after the customer has assumed responsibility for the respective clinical or preclinical program.

Milestones or royalties achieved after the Company’s performance obligations have been completed are recognized as revenue in the period the milestone or royalty was achieved.

If a milestone payment is achieved during the performance period, the milestone payment would be recognized as revenue to the extent performance had been completed at that point, and the remaining balance would be recorded as deferred revenue.

If a milestone payment is achieved during

the performance period, the milestone payment would be recognized as revenue to the extent performance had been completed at that point, and the remaining balance would be recorded as deferred revenue.

The revenue standard requires the Company to assess whether a significant financing component exists in determining the transaction price.

The Company performs this assessment at the onset of its licensing or collaboration

The Company performs this assessment at the onset of its licensing or collaboration agreements.

Typically, a significant financing component does not exist because the customer is paying for a license or services in advance with an upfront payment.

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If other observable transactions in which the Company has sold the same performance obligation separately are not available, the Company estimates the standalone selling price of each performance obligation.

Key assumptions to determine the standalone selling price may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

The estimates includes forecasted revenues and expenses, phase dates, probability of success, development timelines, and the discount rate.

The estimates of the stand-alone selling price for research and development or other service-related performance obligations generally include forecasting the expected costs of satisfying a performance obligation at market rates.

Whenever we determine that goods or services promised in a contract should be accounted for as a combined performance obligation over time, the Company determines the period over which the performance obligations will be performed and revenue will be recognized.

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Accrual estimates may be based on vendor communications to obtain pending invoices and/or estimates for services performed during the period.

In some cases, these estimates require judgment, drawing on an understanding of research and development programs, services provided during the period, prior experience, and, where applicable, the expected duration of third-party contracts.

In some cases, these estimates require significant judgment, drawing on an understanding of research and development programs, services provided during the period, prior experience, and, where applicable, the expected duration of third-party contracts.

Actual costs upon settlement may differ significantly from the accrued amounts in the Company’s consolidated financial statements, though historical estimates have not differed materially from actual costs.

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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.

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.

RESULTS OF OPERATIONS

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Revenue $ 829,448 $ 3,551 $ 240,735

Operating loss $ (601,080) $ (205,002) $ (178,507)

Net loss attributable to Arrowhead Pharmaceuticals, Inc.

Operating income (loss)

$ 98,346 $ (601,080) $ (205,002)

Net loss per share (diluted) attributable to Arrowhead Pharmaceuticals, Inc.

Net loss attributable to Arrowhead

$ (1,631) $ (599,493) $ (205,275)

Net loss per share (diluted) attributable to Arrowhead

$ (0.01) $ (5.00) $ (1.92)

Year Ended September 30, 2025 Compared to Year Ended September 30, 2024

Total revenue for the year ended September 30, 2024 decreased to $3.6 million, 98.5%, from the same period of 2023.

The changes were primarily driven by decreased revenue recognition associated with the Company’s license and collaboration agreements during the year ended September 30, 2024.

Total revenue for the year ended September 30, 2025 increased by $825.9 million, from the same period of 2024.

The change was primarily driven by increased revenue recognition associated with the Sarepta, Sanofi, and GSK license agreements as discussed below.

The Company has evaluated each agreement in accordance with FASB Topic 808– Collaborative Arrangements and Topic 606- Revenue for Contracts from Customers .

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Exhibits and Financial Statement Schedules.”

In October 2020, Takeda and the Company entered into the Takeda License Agreement.

The Company determined that they key deliverables included the license and specific R&D services.

Given the specialized and unique nature of the R&D services, the Company concluded that these deliverables represent one combined performance obligation.

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.

During the fiscal year of 2023, the Company recorded $162.5 million of revenue, including a $40.0 million milestone payment by dosing the first patient in the Phase 3 REDWOOD clinical study of fazirsiran.

On December 11, 2023, GSK and the Company entered into the GSK-HBV Agreement.

Under the GSK-HBV Agreement, GSK received a worldwide, exclusive license to develop and commercialize daplusiran/tomligisiran (GSK5637608, formerly JNJ-3989).

Daplusiran/tomligisiran had previously been licensed to Janssen in October 2018.

Under the terms of the GSK-HBV Agreement, the Company received $2.7 million during fiscal year 2024 upon signing the GSK-HBV Agreement.

On November 22, 2021, GSK and the Company entered into the GSK-HSD License Agreement.

Under the GSK-HSD License Agreement, GSK has received an exclusive license for GSK-4532990.

The Company has completed its performance obligation related to this agreement, and the upfront payment of $120.0 million was fully recognized in the year ended September 30, 2022.

Further, during fiscal year 2023, the Company recorded a $30.0 million milestone payment by dosing the first patient in a Phase 2b trial under GSK-HSD License Agreement.

Horizon/Amgen :

During the fiscal year of 2023, the Company recognized $6.7 million of the total $40.0 million upfront payment received in July 2021, which was recognized on a straight-line basis over the timeframe for completing the Horizon R&D Services, concluding in the first quarter of 2023.

There was also $1.5 million of reimbursable costs.

Horizon enrolled the first subject in December 2022 in a Phase 1 randomized, placebo-controlled trial to assess the safety, tolerability, pharmacokinetics and pharmacodynamics of HZN-457, triggering a $15.0 million milestone payment to the Company which was paid in the second quarter of fiscal 2023.

Further, Amgen enrolled the first subject in its Phase 3 trial of olpasiran, which triggered a $25.0 million milestone payment to the Company which was paid in the second quarter of fiscal 2023.

On October 6, 2023, Amgen Inc.

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.

On November 25, 2024, the Company entered into the Sarepta Collaboration Agreement and Stock Purchase Agreement with Sarepta for the development and commercialization of multiple clinical and preclinical programs in rare, genetic diseases of the muscle, central nervous system, and lungs.

During the fourth quarter of fiscal 2025, a $100.0 million milestone payment from Sarepta Therapeutics, Inc.

was triggered, when the Company reached the first of two prespecified enrollment targets and subsequent authorization to dose escalate in a Phase 1/2 clinical study of ARO-DM1, an investigational RNAi therapeutic for the treatment of type 1 myotonic dystrophy (DM1).

The Company received $53.2 million of Arrowhead common stock and $50.0 million cash from Sarepta to satisfy the milestone payment.

During the year ended September 30, 2025 , the Company recorded $696.8 million in revenue.

On August 1, 2025, Visirna Therapeutics HK Limited (“Visirna HK”), a wholly owned subsidiary of Visirna Therapeutics, Inc, a majority owned subsidiary of the Company, entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Genzyme Corporation (“Sanofi”), a wholly owned subsidiary of Sanofi S.A., pursuant to which Visirna HK sold all of its assets and rights in investigational plozasiran to Sanofi, which included an assignment of Visirna HK’s rights (as successor by assignment from Visirna) to develop and commercialize investigational plozasiran in Greater China pursuant to that certain License Agreement by and between the Company and Visirna dated, April 25, 2022 (the “Visirna License Agreement”).

During the year ended September 30, 2025 , the Company recorded $130.0 million in revenue.

On December 11, 2023, the Company entered into 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.

Under the terms of the GSK-HBV Agreement, the Company received $2.7 million in December 2023, upon signing the GSK-HBV Agreement.

Further, GSK dosed the fifth patient in a Phase 2 trial in December 2024, triggering a $2.5 million milestone payment to the Company which was paid in the second qu arter of fiscal 2025.

During the year ended September 30, 2025 , the Company recorded $2.6 million revenue.

Operating Expenses

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Research and Development (R&D) Expenses

R&D expenses are related to the Company’s research and development discovery efforts and related candidate costs, which are comprised primarily of outsourced costs related to the manufacturing of clinical supplies, toxicity/efficacy studies and clinical trial expenses.

Research and development expenses consist of expenses for drug candidate and drug discovery costs, which are comprised primarily of outsourced costs related to the manufacturing of clinical supplies, toxicity/efficacy studies and clinical trial expenses.

Internal costs primarily relate to discovery operations at the Company’s research facilities in California and Wisconsin, including facility costs and laboratory-related expenses.

The Company does not separately track R&D expenses by individual research and development projects, or by individual drug candidates.

The Company operates in a cross-functional manner across projects and does not separately allocate facilities-related costs, candidate costs, discovery costs, compensation expenses, depreciation and amortization expenses, and other expenses related to research and development activities.

The following table provides details of research and development expenses:

The Company does not separately track research and development expenses by individual research and development projects, or by individual drug candidates.

The following table provides details of research and development expenses for the period indicated:

(in thousands) Year Ended

September 30, 2024

September 30, 2025 % of

Category Year Ended

September 30, 2023

September 30, 2024 % of

Category Increase (Decrease)

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Candidate costs increased $88.3 million, or 34%, for the year ended September 30, 2025 compared to the same period of 2024.

This increase was primarily due to the additional progression of the Company’s pipeline of candidates into and through clinical trials, which resulted in higher manufacturing, outsourced clinical trial, and toxicity study costs.

R&D discovery costs increased $18.6 million, or 33%, for the year ended September 30, 2024 compared to the same period of 2023.

This increase was primarily driven by the growth of the Company’s discovery efforts and continued advancement into novel therapeutic areas and tissue types, along with rising costs associated with central nervous system (CNS) studies and lab supplies.

The increase was primarily due to the additional progression of the Company’s pipeline of candidates into and through clinical trials, which resulted in higher manufacturing, outsourced clinical trial, and toxicity study costs.

R&D discovery costs decreased $7.4 million, or (10)%, for the year ended September 30, 2025 compared to the same period of 2024.

This decrease was primarily driven by strategic shifts toward clinical development and commercial launch.

R&D discovery costs are influenced by the Company’s ongoing discovery efforts, continued advancements into novel therapeutic areas and tissue types.

Salaries consist of salary, bonuses, payroll taxes, and related benefits for the Company’s R&D personnel.

Salaries expense increased $12.7 million, or 13%, for the year ended September 30, 2025 compared to the same period of 2024.

The increase was primarily due to an increase in R&D headcount that has occurred as the Company has expanded its pipeline of candidates, in addition to annual salary increases.

Facilities-related expense includes lease costs for the Company’s research and development facilities in San Diego, California and in Madison and Verona, Wisconsin.

The increase was primarily due to an increase in headcount that has occurred as the Company has expanded its pipeline of candidates, in addition to annual salary increases.

Facilities-related expense includes lease costs for the Company’s research and development facilities in San Diego, California and Madison and Verona, Wisconsin.

These expenses increased $3.5 million, or 13%, for the year ended September 30, 2025 compared to the same period of 2024.

The increase was primarily due to full-year expenses such as utilities and repair and maintenance charges associated with the new facilities in San Diego, California and Verona, Wisconsin

Stock compensation expense, a non-cash expense, is based upon the valuation of stock options and restricted stock units granted to employees.

The increase was primarily due to full-year expenses such as utilities and repair and maintenance charges associated with the new facilities in Verona, Wisconsin, which completed their build out during the first quarter of fiscal 2024.

Stock compensation expense, a non-cash expense, is primarily based on the valuation of restricted stock units granted to employees, which is based on the closing stock price on the grant date.

Stock compensation expense decreased $1.0 million, or 3%, for the year ended September 30, 2025 compared to the same period of 2024.

The decrease was primarily due to the cancellation of awards upon the departure of employees.

Depreciation and amortization expense, a non-cash expense, relates to depreciation on building, lab equipment and leasehold improvements.

Depreciation and amortization expense, a non-cash expense, relates to depreciation on buildings, lab equipment and leasehold improvements.

Depreciation and amortization expense increased $5.2 million, or 31% for the year ended September 30, 2025 compared to the same period of 2024.

The increase was primarily attributed to higher leasehold improvements due to completion of the development of the San Diego facility.

Additionally, as of December 31, 2023, the Company completed the build out of one of its laboratory and office facilities in Verona, Wisconsin, and commenced depreciation.

The Company anticipates these R&D expenses to continue to increase as its pipeline of candidates grows and progresses to later phase clinical trials, in addition to inflationary pressure on goods and services and the labor market.

The increase was primarily attributable to completion of the build out of facilities in Verona, Wisconsin, and the commencement of depreciation.

General & Administrative Expenses

The following table provides details of general and administrative expenses:

The following table provides details of general and administrative expenses for the periods indicated:

(in thousands) Year Ended

September 30, 2024

September 30, 2025 % of

Category Year Ended

September 30, 2023

September 30, 2024 % of

Category Increase (Decrease)

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Salaries expense increased $4.3 million, or 16%, for the year ended September 30, 2025 compared to the same period of 2024.

The increase was driven by the combination of annual salary increases and increased headcount required to support the Company’s growth.

The increase was driven by the combination of annual salary increases and an increase in headcount required to support the Company’s growth as the Company prepares for commercialization.

Professional, outside services, and other expenses include costs related to legal, audit, consulting, patent filings, business insurance, other external services, as well as travel, communication, and technology expenses.

This expense increased $4.0 million, or 19%, for the year ended September 30, 2024 compared to the same period of 2023.

The increase was primarily driven by legal services associated with patent applications and intellectual property matters, as well as other professional services.

These expenses increased $28.9 million, or 117%, for the year ended September 30, 2025 compared to the same period of 2024.

The increase was mainly due to professional services associated with commercialization and business development efforts as the Company prepares for a product launch, including costs for data analytics, marketing and commercial launch support.

Facilities related expense primarily includes rental costs and other facilities-related costs for the Company’s corporate headquarters in Pasadena, California.

Stock compensation expense, a non-cash expense, is based on the valuation of stock options and restricted stock units granted to employees.

These expenses increased $1.5 million, or 37%, for the year ended September 30, 2025 compared to the same periods of 2024.

The increase was primarily driven by higher common area maintenance charges, increased staff amenities expenses.

Stock compensation expense, a non-cash expense, is based on the valuation of restricted stock units granted to employees, which is based on the closing stock price on the grant date.

This expense decreased by $9.6 million, or 24%, for the year ended September 30, 2025 compared to the same period of 2024.

The decrease was mainly due to lower compensation costs related to performance awards, as the timing of these expenses can vary based on the achievement of related performance targets.

The decrease was primarily due to lower compensation costs related to performance awards, as the timing of these expenses can vary based on the achievement of related performance targets.

Depreciation and amortization expense, a noncash expense, was primarily related to amortization of leasehold improvements for the Company’s corporate headquarters.

Other than with respect to the stock compensation costs described above, the Company anticipates these general and administrative expenses to increase as its pipeline of candidates grows and progresses to later phase clinical trials including commercialization efforts, in addition to inflationary pressure on goods and services and the labor market.

Other Income (Expense)

Other income (expense) is primarily related to interest income and expense.

Other (Expense) Income

Other (expense) income is primarily related to interest income and expense.

Other expense increased $35.4 million for the year ended September 30, 2025 compared to the same period of 2024.

The increase was mainly due to non-cash interest expense associated with the liability related to the sale of future royalties and the Credit Facility, partially offset by higher income from increased investment yields due to higher average cash balance.

The increase was primarily due to non-cash interest expense associated with the liability related to the sale of future royalties and the Credit Facility, partially offset by higher income from increased investment yields.

Net loss attributable to Arrowhead Pharmaceuticals, Inc.

was $1.6 million for the year ended September 30, 2025 compared to a net loss attributable to Arrowhead Pharmaceuticals, Inc.

of $599.5 million for the year ended September 30, 2024.

Net loss per share – diluted was $0.01 for the year ended September 30, 2025 compared to net loss per share – diluted $5.00 for the year ended September 30, 2024.

The decrease in net loss attributable to Arrowhead Pharmaceuticals, Inc.

for the year ended September 30, 2025 compared to the same period of 2024 was primarily due to an increase in revenue from the Sarepta Collaboration Agreement, partially offset by higher research and development expenses, associated with the expansion of the Company's pipeline and progression through clinical trial phases.

Income Tax Expense (Benefit)

Income tax expense was $21.4 million for the year ended September 30, 2025, compared to an income tax benefit of $2.8 million for the same period in 2024.

The change of $24.2 million was primarily due to higher taxable income in fiscal 2025

resulting from the recognition of $696.8 million in revenue under the Sarepta Collaboration Agreement and $130.0 million in revenue recognized by Visirna.

Non-controlling Interest

Net income attributable to non-controlling interest was $31.7 million for the year ended September 30, 2025, compared to a loss attributable to non-controlling interest of $10.2 million for the same period in 2024.

The change of $41.9 million was primarily due to Visirna’s recognition of $130.0 million in revenue during fiscal 2025, resulting in a significant increase in net income, whereas Visirna incurred a net loss in fiscal 2024.

Year Ended September 30, 2024 Compared to Year Ended September 30, 2023

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The Company has historically financed its operations through the sale of its equity securities, credit facility, revenue from its licensing and collaboration agreements, and the sale of certain future royalties.

Research and development activities have required significant investment since the Company’s inception and are expected to continue to require significant cash expenditure as the Company’s pipeline continues to expand and matures into later stage clinical trials, including commercialization efforts.

Additionally, the Company expanded its facilities in Verona, Wisconsin and leased additional facilities in San Diego, California.

Each of these expansions is designed to increase the Company’s internal manufacturing and discovery capabilities and requires significant capital investment.

Research and development activities have required significant capital investment since the Company’s inception and are expected to continue to require significant cash expenditure as the Company’s pipeline continues to expand and matures into later stage clinical trials, including commercialization efforts.

For further information on the Company’s capital needs, see the section titled “Risks Related to Our Financial Condition” in “Item 1A.

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As of September 30, 2025, no shares have been issued under the Open Market Sale Agreement.

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.

Further, the Company entered into the Credit Facility, which provides for a senior secured term loan facility of $500.0 million, which includes $400.0 million funded on the closing date with an additional $100.0 million at the Company’s option during the seven-year term of the agreement.

In August 2024, the Company entered into the Credit Facility, which provides for a senior secured term loan facility of $500.0 million, which includes $400.0 million funded on the closing date with an additional $100.0 million at the Company’s option during the seven-year term of the agreement.

The Company received net proceeds of $388.9 million, after issuance costs as of September 30, 2024.

This is discussed further in Note 14, Financing Agreements of the Notes to the Company’s Consolidated Financial Statements in Part IV, “Item 15.

Exhibits and Financial Statement Schedules.” If the Company repays in full the aggregate principal outstanding under the Credit Facility and such payment in full occurs on or prior to August 7, 2028, the Company will be required to make an additional payment to the lenders under the Credit Facility on such date in an amount necessary for the lenders to achieve a multiple of two times on invested capital of the aggregate principal amount funded on the Closing Date.

If such payment in full occurs after August 7, 2028, the Company will be required to make an additional payment to the lenders under the Credit Facility on such date in an amount necessary for the lenders to achieve the greater of the multiple of two times on invested capital of the aggregate principal amount funded on the Closing Date and the present value of all interest payments that would have been payable from such date through the maturity date of the Credit Facility.

The Company believes its current financial resources are sufficient to fund its operations through at least the next twelve months from the date of the issuance of these consolidated financial statements.

On November 25, 2024, the Company entered into a licensing and collaboration agreement with Sarepta.

Upon closing, the Company received $325.0 million for the purchase of 11,926,301 shares of common stock, at a price per share of $27.25, and received $500.0 million as an upfront payment on February 24, 2025.

During the fourth quarter of fiscal 2025, a $100.0 million milestone payment from Sarepta was triggered, when the Company reached the first of two prespecified enrollment targets and subsequent authorization to dose escalate in a Phase 1/2 clinical study of ARO-DM1, an investigational RNAi therapeutic for the treatment of type 1 myotonic dystrophy (DM1).

The Company received $53.2 million of Arrowhead common stock and $50.0 million cash from Sarepta to satisfy the milestone payment.

The Company is eligible to receive additional milestones of up to $250.0 million over the 12 months from the date of this report, inclusive of the second DM1 milestone payment of $200.0 million earned in November 2025.

On August 29, 2025, the Company entered into a licensing and collaboration agreement with Novartis.

Upon closing in October 2025, the Company received $200.0 million as an upfront payment.

The Company projects it will be eligible to receive additional milestones of up to $25.0 million over the 12 months from the date of this report.

Based upon the Company's current cash and investment resources and operating plan, the Company expects to have sufficient liquidity to fund its operations through at least the next twelve months from the date of the issuance of these consolidated financial statements.

The following table presents a summary of cash flows:

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Financing activities 74,006 870,520 253,053

Net (decrease) increase in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

$ 124,264 $ (12,403) $ 3,008

Cash, cash equivalents and restricted cash at end of period $ 226,548 $ 102,685 $ 110,891

Cash used in investing activities amounted to $420.1 million, which was primarily attributable to capital expenditures of $141.5 million and investment purchases of $720.9 million, offset by proceeds from sales and maturities of investments of $442.3 million.

Cash provided by financing activities of $870.5 million was related to cash

received from the issuance of common stock, the Credit Facility, a milestone payment from Royalty Pharma, and stock option exercises.

(See Note 13 — Liability Related to the Sale of Future Royalties and Note 14 — Financing Agreement of Notes to Consolidated Financial Statements of Part IV, “Item 15.

Exhibits and Financial Statement Schedules.”).

During the year ended September 30, 2023, cash flow used in operating activities was $153.9 million, which was primarily due to the ongoing expenses related to the Company’s research and development programs and general and administrative expenses, partially offset by the receipt of the $110.0 million from collaboration and license agreements.

Cash used in investing activities was $96.2 million, which was primarily related to the purchase of property and equipment of $176.7 million, offset by net proceeds of $80.6 million from maturities of securities.

Cash provided by financing activities of $253.1 million was primarily related to the $250.0 million payment from Royalty Pharma as well as cash received from stock option exercises.

During the year ended September 30, 2025, cash flow provided by operating activities was $179.6 million, which was primarily due to $500.0 million upfront payment and $50.0 million milestone payment received as part of the Sarepta agreement, partially offset by the ongoing expenses related to the Company’s research and development programs and general and administrative expenses.

Cash used in investing activities amounted to $129.3 million, which was primarily attributable to capital expenditures of $22.7 million and investment purchases of $796.3 million, partially offset by proceeds from sales and maturities of investments of $689.6 million.

Cash provided by financing activities of $74.0 million was related to cash received from the issuance of common stock in the Sarepta agreement, pre-funded warrants, and stock

option exercises.

(See Note 6 — Stockholders' Equity of Notes to Consolidated Financial Statements of Part IV, “Item 15.

Exhibits and Financial Statement Schedules.”), partially offset by $201.6 million repayments of the Credit Facility.

During the year ended September 30, 2024, cash flow used in operating activities was $462.9 million, which was primarily due to the ongoing expenses related to the Company’s research and development programs and general and administrative expenses, Cash used in investing activities amounted to $420.1 million, which was primarily attributable to capital expenditures of $141.5 million and investment purchases of $720.9 million, offset by proceeds from sales and maturities of investments of $442.3 million.

Cash provided by financing activities of $870.5 million was related to cash received from the issuance of common stock, the Credit Facility, a milestone payment from Royalty Pharma, and stock option exercises.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Form 10-K for the year ended September 30, 2024 for a discussion of cash flows from the year ended September 30, 2023.

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• A secured term loan facility of $500.0 million, which includes $400.0 million funded on the closing date with an additional $100.0 million at the Company’s option during the seven-year term of the agreement.

The Company does not expect to make payments within the next 12 months.

See Note 14 of Notes to the Company’s Consolidated Financial Statements of Part IV, “Item 15.

Exhibits and Financial Statement Schedules.”

• The liability related to the sale of future royalties were $341.4 million at September 30, 2024, for which the Company does not expect to make payments within the next 12 months.

The Company expects to make $40.0 million of prepayments on the facility within the next 12 months in additional to the $66.7 million prepayment made in November 2025 relating to the receipt of the upfront payment under the terms of the Novartis Collaboration Agreement.

See Note 14 of Notes to the Company’s Consolidated Financial Statements of Part IV, “Item 15.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis