What changed in this filing

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Item 1. Financial Statements

2026-02-05 compared with 2025-08-07 · 386 added, 277 removed, 541 unchanged (55% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

June 30, 2025 September 30, 2024

December 31, 2025 September 30, 2025

Current assets:

Cash, cash equivalents and restricted cash $ 71,370 $ 88,706

Cash at variable interest entity 130,273 137,842

Accounts receivable 218,871 6,824

Available-for-sale securities, at fair value 770,579 578,276

Available-for-sale securities, at fair value and short-term investments

714,967 692,818

Prepaid expenses 16,053 10,933

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Lease liabilities, net of current portion 102,129 104,112

Deferred revenue, net of current portion 53,825 —

Liability related to the sale of future royalties 374,997 367,397

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Authorized 290,000 shares;

issued and outstanding 138,144 and 124,376 shares

140,052 shares issued and 137,391 outstanding as of December 31, 2025 and 138,363 shares issued and 135,702 outstanding as of September 30, 2025

Additional paid-in capital 2,211,026 2,139,725

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Accumulated deficit ( 1,596,343 ) ( 1,627,154 )

Treasury stock;

2,661 shares of common stock at December 31, 2025 and September 30, 2025

( 53,193 ) ( 53,193 )

Stockholders’ equity 568,422 466,052

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Arrowhead Pharmaceuticals, Inc.

Consolidated Statements of Operations and Comprehensive (Loss) Income

Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except per share amounts)

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

Three Months Ended December 31,

Revenue $ 264,033 $ 2,500

3 unchanged sentences

Total operating expenses 223,224 163,912

Operating (loss) income ( 165,550 ) ( 176,141 ) 54,240 ( 438,877 )

Operating income (loss) 40,809 ( 161,412 )

Other (expense) income:

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Other, net 277 341

Total other (expense) income ( 13,539 ) 2,164 ( 38,828 ) ( 785 )

(Loss) income before income tax expense and noncontrolling interest ( 179,089 ) ( 173,977 ) 15,412 ( 439,662 )

Income tax (benefit) expense ( 437 ) — 1,419 ( 3,313 )

Net (loss) income including noncontrolling interest $ ( 178,652 ) $ ( 173,977 ) $ 13,993 $ ( 436,349 )

Total other expense ( 12,538 ) ( 13,703 )

Income (loss) before income tax expense and noncontrolling interest 28,271 ( 175,115 )

Income tax expense 29 103

Net income (loss) including noncontrolling interest $ 28,242 $ ( 175,218 )

Net loss attributable to noncontrolling interest, net of tax ( 2,569 ) ( 2,133 )

Net (loss) income attributable to Arrowhead Pharmaceuticals, Inc.

Net income (loss) attributable to Arrowhead Pharmaceuticals, Inc.

$ 30,811 $ ( 173,085 )

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

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

Basic $ 0.22 $ ( 1.39 )

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Other comprehensive income (loss), net of tax:

Unrealized gains on available-for-sale securities 876 249 1,022 2,374

Unrealized gains (losses) on available-for-sale securities 146 ( 507 )

Foreign currency translation adjustments 110 ( 106 )

Comprehensive (loss) income $ ( 177,685 ) $ ( 173,869 ) $ 14,600 $ ( 434,114 )

Comprehensive loss attributed to noncontrolling interest $ ( 2,569 ) $ ( 2,133 )

Other comprehensive income (loss) $ 28,498 $ ( 175,831 )

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Comprehensive

Common Stock in Treasury Amount ($) Non-

controlling Interest Total

3 unchanged sentences

Common stock - restricted stock units vesting 704 1 1 — — — — — 2

Issuance of pre-funded warrants — — 25,000 — — — 25,000

Foreign currency translation adjustments — — — ( 106 ) — — ( 106 )

Unrealized losses on available-for-sale securities — — — ( 507 ) — — ( 507 )

Net loss — — — — ( 173,085 ) ( 2,133 ) ( 175,218 )

Balance at December 31, 2024 124,655 $ 217 $ 1,846,843 $ 4,137 $ ( 1,798,608 ) $ 3,486 $ 56,075

Stock-based compensation — — 16,027 — — — 16,027

Exercise of stock options 353 — 2,619 — — — 2,619

Common stock - restricted stock units vesting 1,128 1 — — — — 1

Common stock issued 11,926 12 241,375 — — — 241,387

Foreign currency translation adjustments — — — ( 400 ) — — ( 400 )

Unrealized gains on available-for-sales securities — — — 653 — — 653

Net income — — — — 370,445 ( 2,582 ) 367,863

Balance at March 31, 2025 138,062 $ 230 $ 2,106,864 $ 4,390 $ ( 1,428,163 ) $ 904 $ 684,225

Stock-based compensation — — 13,043 — — — 13,043

Exercise of stock options 36 — 223 — — — 223

Common stock - restricted stock units vesting 46 — — — — — —

Issuance of common stock under at-the-market offering, net of issuance costs

689 1 46,831 — — — — — 46,832

Foreign currency translation adjustments — — — 110 — — — — 110

Unrealized gains on available-for-sales securities — — — 876 — — 876

Unrealized gains on available-for-sale securities, net

— — — 146 — — — — 146

Balance at June 30, 2025 138,144 $ 230 $ 2,120,130 $ 5,357 $ ( 1,603,404 ) $ ( 2,507 ) $ 519,806

Dividends declared by variable interest entity to noncontrolling shareholders — — — — — — — ( 40,520 ) ( 40,520 )

Net income (loss) — — — — 30,811 — — ( 2,569 ) 28,242

Balance at December 31, 2025 140,052 $ 233 $ 2,211,026 $ 6,699 $ ( 1,596,343 ) ( 2,661 ) $ ( 53,193 ) $ ( 5,725 ) $ 562,697

Amount ($) Additional

Comprehensive

Common Stock in Treasury Amount ($) Non-

controlling Interest Total

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Common stock - restricted stock units vesting 209 — — — — — — — —

Issuance of pre-funded warrants 917 1 24,999 — — — — — 25,000

Foreign currency translation adjustments — — — ( 106 ) — — — — ( 106 )

Unrealized gains on available-for-sale securities — — — 1,909 — — 1,909

Unrealized losses on available-for-sale securities, net — — — ( 507 ) — — — — ( 507 )

Net loss — — — — ( 173,085 ) — — ( 2,133 ) ( 175,218 )

Balance at December 31, 2024 125,572 $ 218 $ 1,846,842 $ 4,137 $ ( 1,798,608 ) — $ — $ 3,486 $ 56,075

Stock-based compensation — — 17,750 — — — 17,750

Exercise of stock options 120 — 1,512 — — — 1,512

Common stock - restricted stock units vesting 723 1 ( 1 ) — — — —

Common stock issued, net of offering costs 15,790 16 429,249 — — — 429,265

Foreign currency translation adjustments — — — ( 56 ) — — ( 56 )

Unrealized gains on available-for-sale securities — — — 216 — — 216

Net loss — — — — ( 125,300 ) ( 1,696 ) ( 126,996 )

Balance at March 31, 2024 124,133 $ 217 $ 1,768,866 $ ( 1,095 ) $ ( 1,284,194 ) $ 11,611 $ 495,405

Stock-based compensation — — 17,050 — — — 17,050

Exercise of stock options 43 — 388 — — — 388

Common stock - restricted stock units vesting 51 — — — — — —

Foreign currency translation adjustments — — — ( 141 ) — — ( 141 )

Unrealized gains on available-for-sale securities — — — 249 — — 249

Net loss — — — — ( 170,793 ) ( 3,184 ) ( 173,977 )

Balance at June 30, 2024 124,227 $ 217 $ 1,786,304 $ ( 987 ) $ ( 1,454,987 ) $ 8,427 $ 338,974

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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(in thousands)

Nine Months Ended June 30,

Three Months Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Depreciation and amortization 6,390 5,235

(Accretion) amortization of note premiums/discounts ( 4,545 ) 7,886

Realized loss on investments — ( 80 )

Accretion of note premiums/discounts

( 1,215 ) ( 5,704 )

Realized gain on investments

Non-cash interest expense on liability related to the sale of future royalties 7,600 5,415

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Accounts receivable ( 212,046 ) ( 2,500 )

Prepaid expenses and other assets ( 22,342 ) ( 1,746 )

Prepaid expenses and other current assets

( 13,182 ) ( 592 )

Accounts payable 15,263 3,069

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CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment ( 15,177 ) ( 117,180 )

Purchases of property, plant and equipment

( 2,148 ) ( 7,516 )

Purchases of investments ( 136,933 ) ( 33,749 )

Proceeds from sales and maturities of investments 115,339 118,175

Net cash used in investing activities ( 201,913 ) ( 197,149 )

Net cash (used in) provided by investing activities

( 23,742 ) 76,910

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from the exercises of stock options 5,098 634

Proceeds from the issuance of common stock, net of offering costs — 429,265

Proceeds from the sales of future royalties — 50,000

Proceeds from the issuance of warrants 25,000 —

Proceeds from the issuance of pre-funded warrants — 25,000

Payments of debt issuance costs — ( 5,000 )

Proceeds from the issuance of common stock 241,388 —

Proceeds from the issuance of common stock, net of issuance costs paid

Repayments of credit facility ( 66,680 ) —

Proceeds from Visirna credit agreement 7,098 —

Net cash provided by financing activities 70,337 481,431

Net increase (decrease) in cash, cash equivalents and restricted cash 27,485 ( 41,353 )

Net cash (used in) provided by financing activities

( 14,750 ) 20,634

Net decrease in cash, cash equivalents and restricted cash

( 25,011 ) ( 48,728 )

Effect of exchange rate on cash, cash equivalents and restricted cash 106 ( 68 )

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END OF PERIOD $ 201,643 $ 53,889

Supplementary disclosure of cash flows:

Interest paid $ ( 19 ) $ —

Supplemental disclosure of cash flows:

Income taxes paid $ ( 9,907 ) $ ( 11 )

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

Approved Products

REDEMPLO ® (plozasiran) is approved by the U.S.

Food and Drug Administration (“FDA”) as an adjunct to diet to reduce triglycerides for adults with Familial Chylomicronemia Syndrome (“FCS”).

REDEMPLO is also approved by the Chinese National Medical Products Administration (NMPA).

In addition, Health Canada has issued a Notice of Compliance (NOC) authorizing REDEMPLO™ (plozasiran) as an adjunct to diet to reduce triglycerides in adults with FCS for whom standard triglyceride lowering therapies have been inadequate.

REDEMPLO is a small interfering RNA (“siRNA”) therapeutic designed to suppress the production of apolipoprotein C-III (APOC3), a protein produced in the liver that raises triglyceride levels by slowing their breakdown and clearance.

By targeting the APOC3 gene with sustained silencing, REDEMPLO delivers significant reductions in triglyceride levels.

REDEMPLO is the first and only FDA-approved siRNA treatment studied in both genetically confirmed and clinically diagnosed patients living with FCS.

The following table presents the Company’s current pipeline:

Therapeutic Area Name Stage Product Rights

Cardiometabolic plozasiran Phase 3

zodasiran Phase 3

Cardiometabolic plozasiran

Phase 3 Arrowhead (1)

zodasiran Phase 3 Arrowhead

olpasiran Phase 3 Amgen

ARO-PNPLA3 Phase 1

GSK-4532990 Phase 2b GSK

ARO-INHBE Phase 1/2a

Pulmonary ARO-RAGE Phase 1/2a

SRP-1002 (ARO-MMP7)

Liver fazirsiran

Takeda and Arrowhead

Neuromuscular

SRP-1001 (ARO-DUX4)

Phase 1/2a Sarepta

SRP-1003 (ARO-DM1)

Phase 1/2a Sarepta

Central Nervous System (CNS)

SRP-1004 (ARO-ATXN2)

Phase 1/2a Sarepta

ARO-PNPLA3 Phase 1 Arrowhead

ARO-INHBE Phase 1/2a Arrowhead

ARO-ALK7 Phase 1/2a Arrowhead

Phase 1/2a Arrowhead

Pulmonary ARO-RAGE Phase 1/2a Arrowhead

SRP-1002 (ARO-MMP7) Phase 1/2a Sarepta

Liver fazirsiran Phase 3 Takeda and Arrowhead

daplusiran/tomligisiran

Neuromuscular SRP-1001 (ARO-DUX4) Phase 1/2a Sarepta

SRP-1003 (ARO-DM1) Phase 1/2a Sarepta

SRP-1004 (ARO-ATXN2) Phase 1/2a Sarepta

SRP-1005 (ARO-HTT)

Other ARO-C3 Phase 1/2a Arrowhead

ARO-CFB Phase 1/2a Arrowhead

(1) Greater China rights for plozasiran are out-licensed to Sanofi.

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’s principal executive offices are located in Pasadena, California.

During the first three quarters of fiscal 2025, the Company has continued to develop and advance its pipeline and partnered candidates.

During the first quarter of fiscal 2026, the Company continued to develop and advance its pipeline and partnered candidates.

The following is a summary of select significant developments affecting our business that have occurred since the filing of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025:

• Triggered a $ 100.0 million milestone payment from Sarepta Therapeutics, Inc., which was triggered 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);

• Announced the signing of an asset purchase agreement between Sanofi and Visirna Therapeutics, 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 plozasiran.

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

The Company previously submitted a New Drug Application to the U.S.

Food and Drug Administration (“FDA”) on November 16, 2024 for plozasiran based on positive Phase 3 PALISADE study results in patients with familial chylomicronemia syndrome, which the FDA accepted on January 17, 2025, with a Prescription Drug User Fee Act (PDUFA) action date of November 18, 2025, and indicated it is not currently planning to hold an advisory committee meeting;

• 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 Therapeutics, Inc (“Sarepta”) on November 25, 2024, which closed on February 7, 2025.

• Filed a request for regulatory clearance to initiate a Phase 1/2a clinical trial of ARO-DIMER-PA, the Company’s investigational 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.;

• On November 20, 2025, the Company earned a $ 200.0 million milestone payment from Sarepta Therapeutics, Inc., which was triggered on November 20, 2025, when the Company reached the second 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);

• Initiated and dosed the first subjects in 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;

• Announced that the FDA has granted Breakthrough Therapy designation to investigational plozasiran as an adjunct to diet to reduce triglyceride (TG) levels in adults with severe hypertriglyceridemia (SHTG) (TG levels greater than or equal to 500 mg/dL);

• The FDA approved the Company's New Drug Application (NDA) for REDEMPLO 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;

• Entered into a global licensing and collaboration agreement with Novartis Pharma AG ("Novartis") on August 29, 2025, which closed on October 17, 2025.

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, 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.

Upon closing, the Company received $ 200.0 million as an upfront payment on October 23, 2025.

Additionally, the Company is eligible to receive up to $ 2.0 billion in potential milestone payments plus royalties on commercial sales.

The bullets below highlight other key developments in our business subsequent to the first quarter of fiscal year 2026:

• Completed upsized offerings of convertible senior notes, common stock, and pre-funded warrants with gross proceeds of $ 930.0 million, which strengthened the Company’s balance sheet.

• Announced interim results from two Phase 1/2a clinical trials of ARO-INHBE and ARO-ALK7, the Company’s investigational RNAi therapeutics being developed as potential treatments for obesity, showing for patients enrolled in the study that's:

◦ ARO-INHBE in combination with tirzepatide, a GLP-1/GIP receptor co-agonist, nearly doubled weight loss at week 16 and roughly tripled reductions in visceral fat, total fat, and liver fat versus tirzepatide alone in obese patients with type 2 diabetes mellitus at those same endpoints at week 12.

◦ ARO-ALK7, the first RNAi-therapeutic to show adipocyte gene target silencing in a clinical trial, achieved dose dependent reductions in adipose ALK7 mRNA with a mean reduction of -88% at the 200 mg dose at week 8 with a maximum reduction of -94%.

Consolidation and Basis of Presentation

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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 as of June 30, 2025 and the results of operations and cash flows for the periods presented.

In the opinion of management, all material adjustments of a normal recurring nature have been made to present fairly the Company’s financial position as of December 31, 2025 and the results of operations and cash flows for the periods presented.

All intercompany transactions and balances have been eliminated.

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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 fiscal year ended September 30, 2024 for more complete descriptions and discussions.

Operating results and cash flows for the nine months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2025.

Readers are urged to review the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025 for more complete descriptions and discussions.

Operating results and cash flows for the three months ended December 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2026.

The Company operates as a single segment as the chief operating decision maker (“CODM”), reviews operating results on an aggregate basis and manages the operations as a single operating segment.

Refer to Note 15, Segment Information , for further details on the segment information.

The Company’s primary sources of financing have been 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 in the future, particularly as the Company’s pipeline of drug candidates and its headcount have both expanded.

Additionally, significant investment will be required as the Company’s pipeline matures into later stage clinical trials and commercialization efforts.

As of June 30, 2025, the Company had $ 129.8 million in cash, cash equivalents and restricted cash ($ 2.2 million in restricted cash) and $ 770.6 million in available-for-sale securities to fund operations.

During the nine months ended June 30, 2025, the Company’s cash, cash equivalents and restricted cash and investments balance increased by $ 219.4 million, which was primarily due to the $ 500.0 million as an upfront payment under the Sarepta agreement and $ 325.0 million in the form of an equity investment under the Sarepta agreement, and $ 25.0 million in the form of pre-funded warrants, partially offset by ongoing expenses related to the Company’s research and development programs, $ 201.6 million payments on its credit facility, and $ 28.2 million interest income earned on investments.

In total, the Company is eligible to receive up to $ 13.3 billion in additional 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.

Additionally, significant investment will be required as a growing commercial-stage Company and as the Company’s pipeline matures into later stage clinical trials.

As of December 31, 2025, the Company had $ 201.6 million in cash, cash equivalents and restricted cash ($ 1.9 million in restricted cash) and $ 715.0 million in available-for-sale securities to fund operations.

During the three months ended December 31, 2025, the Company’s cash, cash equivalents and restricted cash and investments balance decreased by $ 2.8 million, which was primarily due to the $ 66.7 million payment on its credit facility and ongoing expenses related to the Company’s research and development programs, which were partially offset by a $ 200.0 million received as an upfront payment under the Novartis agreement, $ 46.8 million in net proceeds from the issuance of common stock under the Company's at-the-market equity offering program with Jefferies LLC and $ 9.7 million interest income earned on investments.

In total, the Company is eligible to receive up to $ 15.3 billion in additional developmental, regulatory and sales milestones based on programs that have been partnered, and may receive various royalties on net sales from its licensing and collaboration agreements, subject to the terms and conditions of those agreements.

Summary of Significant Accounting Policies

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These updates require entities to provide disaggregated disclosures of income statement expenses.

The ASUs do not affect the expense captions presented on the face of the income statement but instead require the disaggregation of certain expense captions into specified categories within the footnotes to the financial statements.

The ASUs do not affect the expense captions presented on the face of the income statement but instead require the disaggregation of certain expense

captions into specified categories within the footnotes to the financial statements.

The ASUs will become effective for the Company beginning October 1, 2027, and the Company is currently evaluating the impact on its consolidated financial statements and related disclosures.

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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 ASU will become effective for the Company beginning October 1, 2025, and is not expected to have a material impact on its consolidated financial statements and related disclosures.

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.

This ASU requires public companies with a single reportable segment to provide all disclosures required under ASC 280.

In addition, this ASU 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.

While the ASU implements further segment disclosure requirements, it does not change how an entity identifies its operating or reportable segments and it will have no impact on the Company’s consolidated financial condition, results of operations or cash flows.

The Company plans to adopt the ASU's in connection with our Annual Report on Form 10-K for the fiscal year ending September 30, 2025, as required and will be applied retrospectively to all periods presented.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which enacts significant changes to U.S.

tax and related laws.

Some of the provisions of the new tax law affecting corporations include but are not limited to expensing of domestic research expenses, reinstate the limit of the deduction of interest expense to thirty percent of EBITDA, and one hundred percent bonus depreciation on eligible property acquired after January 19, 2025.

The Company is currently evaluating the impact the new tax law will have on its financial condition and results of operations.

Preliminarily, the Company does not anticipate a material change to its effective income tax rate and its net deferred federal income tax assets as the Company maintains a full valuation allowance.

This guidance became 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.

COLLABORATION AND LICENSE AGREEMENTS

The following table provides a summary of revenue recognized:

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

The following table provides a summary of revenue recognized from our collaboration and license agreements:

Three Months Ended December 31,

(in thousands)

GSK $ — $ 2,500

Takeda — — — 866

Sarepta 229,464 —

Novartis 34,242 —

Total $ 263,916 $ 2,500

The following table summarizes the balance of receivables and contract liabilities related to the Company’s collaboration and license agreements:

June 30, 2025 September 30, 2024

The following table summarizes the balance of receivables, contract assets and contract liabilities related to the Company’s collaboration and license agreements, which, as of December 31, 2025, relate solely to the Company’s agreements with Sarepta and Novartis:

December 31, 2025 September 30, 2025

(in thousands)

Receivables included in accounts receivable $ 218,354 $ 6,824

Contract liabilities included in deferred revenue $ 22,979 $ —

Contract assets included in other current assets

Contract liabilities included in deferred revenue, current $ 111,933 $ 2,399

Contract liabilities included in deferred revenue, non-current

Deferred revenue consisted of the following:

Three Months Ended December 31,

(in thousands)

Balance at beginning of period

Deferred revenue additions

Revenue recognized

( 263,706 ) —

Balance at end of period

Plus contract assets included in other current assets

Less deferred revenue, current

( 111,933 ) —

Deferred revenue, non-current

GlaxoSmithKline Intellectual Property (No.

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GSK is wholly responsible for all clinical development and commercialization of GSK-4532990 in its territory.

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.

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, 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.

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The Company is eligible to receive up to $ 830.0 million in development and sales milestone payments under the GSK-HBV Agreement.

As of June 30, 2025, the Company had no contract assets and liabilities recorded.

As of December 31, 2025, the Company had no contract assets and liabilities recorded.

Takeda Pharmaceutical Company Limited (“Takeda”)

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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.

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.

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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, 2025.

The Company recorded $ 24.6 million as accrued expenses as of June 30, 2025 that was primarily driven by co-development and co-commercialization activities.

Janssen Pharmaceuticals, Inc.

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.

There are no currently active trials for ARO-PNPLA3.

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 JNJ-3989 (formerly ARO-HBV).

JNJ-3989 had previously been licensed to Janssen in October 2018.

There were no further deferred revenue and contract liabilities as of December 31, 2025.

As of December 31, 2025, the accrued expense balance is $ 28.5 million that was primarily driven by co-development and co-commercialization activities.

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.

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.

The Company has substantially completed its performance obligations under the Olpasiran Agreement.

There were no contract assets and liabilities recorded as of June 30, 2025.

There were no contract assets and liabilities recorded as of December 31, 2025.

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”).

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The Company concurrently entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Sarepta (see Note 6).

Under the Sarepta Collaboration Agreement, Sarepta received an exclusive sublicensable worldwide license to

SRP-1001 (formerly ARO-DUX4), SRP-1003 (formerly ARO-DM1), SRP-1002 (formerly ARO-MMP7), and SRP-1004 (formerly ARO-ATXN2) clinical stage programs (the “C1” programs).

Under the Sarepta Collaboration Agreement, Sarepta received an exclusive sublicensable worldwide license to SRP-1001 (formerly ARO-DUX4), SRP-1003 (formerly ARO-DM1), SRP-1002 (formerly ARO-MMP7), and SRP-1004 (formerly ARO-ATXN2) clinical stage programs (the “C1” programs).

Sarepta also received an exclusive sublicensable worldwide license to the Company’s ARO-HTT, ARO-ATXN1, and ARO-ATXN3 preclinical stage programs (the “C2” programs).

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The performance obligations for the licenses were satisfied in the second quarter of fiscal 2025 upon delivery and the research and development performance obligations will be satisfied as the work is performed.

The remaining nine performance obligations include three C2 preclinical stage program licenses and research and development activities, and six C3 unidentified discovery target licenses and research and development activity.

The remaining nine performance obligations include three C2 preclinical stage program licenses and research and development activities, and six C3 discovery target licenses and research and development activities.

Each of the three C2 programs and the six C3 programs were determined to represent one performance obligation, as the customer cannot benefit from the use of the product license at the point of transfer until the specified research and development activities are performed.

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The Company is entitled to receive $ 250.0 million to be paid in annual installments of $ 50.0 million over the first five years of the agreement.

The Company is also eligible receive reimbursement of certain costs related to carrying out the research and development activities for the C1 programs.

The fixed consideration of $ 833.6 million and an estimated variable consideration of $ 71.2 million were allocated to all performance obligations based on their relative standalone selling price.

The Company is also eligible to receive reimbursement of certain costs related to carrying out the research and development activities for the C1 programs.

At contract inception, the transaction price was determined to be $ 904.9 million, consisting of fixed consideration of $ 833.6 million and estimated variable consideration of $ 71.2 million.

The fixed consideration was allocated to all performance obligations based on their relative standalone selling price.

The variable consideration was allocated to the

performance obligation to which it is determined to be related, which is the respective development work that is being reimbursed.

Standalone selling prices for the product licenses were determined using an adjusted market-based approach through the net present value of the expected future cash flows for each program.

The standalone selling prices for the research and development work were determined based on an expected cost plus margin approach.

The fixed and estimated variable consideration of $ 904.9 million was allocated in accordance to the following table:

June 30, 2025

(in thousands)

Upfront payment

Equity premium

Fixed consideration

Estimated variable consideration

Total transaction price

Standalone selling prices for the research and development work were determined based on an expected cost plus margin approach.

During the fourth quarter of fiscal 2025, the Company earned the first of two ARO-DM1 development milestone payment of $ 100.0 million, of which $ 50.0 million was settled in cash and the remaining $ 50.0 million was settled through the repurchase of Company's common stock.

In November 2025, the Company earned the second of two $ 200.0 million ARO-DM1 development milestone payments and received the milestone payment in January 2026.

ARO-DM1 development milestones were allocated between the license and development work based on the allocation of the standalone selling price.

Revenue allocated to the license has been recognized in the periods these milestones were achieved, revenue allocated to the development work is recognized over time as the work is performed.

The Company estimates the stand-alone selling price for each distinct performance obligation, which involves assumptions that may require significant judgment.

The Company’s estimates of the stand-alone selling price for license-related performance obligations 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.

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

The Company identified a discount based on the difference between the aggregate stand-alone selling price and the transaction price for accounting revenue recognition purposes.

The Company allocated the discount proportionally to each of the performance obligations based upon their standalone selling price.

The Company receives reimbursement of certain costs related to carrying out the research and development activities for the C1 programs and may receive development milestone payments of up to $ 300.0 million .

Further, for each of the 13 programs, the Company is eligible to receive regulatory milestone payments between $ 110.0 million and $ 180.0 million per program.

Variable consideration associated with the milestones that may be achieved will be allocated to the performance obligation to which it is determined to be related, which will be the respective development work that is being reimbursed and the respective programs to which the milestones relate.

ARO-DM1 development milestones were allocated between the license and development work based on the allocation of the standalone selling price.

The Company will recognize the ARO-DM1 development milestones and other development milestones as revenue in the periods the underlying milestone events are achieved as achievement of the milestone events are highly susceptible to factors outside of the entity's influence and therefore there is a possibility that the milestone event will not be achieved.

For each of the 13 programs, the Company is also eligible to receive regulatory milestone payments between $ 110.0 million and $ 180.0 million per program.

The Company will recognize the regulatory milestones as revenue in the periods the underlying milestone events are achieved as achievement of the milestone events are highly susceptible to factors outside of the entity's influence and therefore there is a possibility that the milestone event will not be achieved.

The Company is also eligible to receive sales milestone payments between $ 500.0 million and $ 700.0 million per program as well as tiered royalties on net sales of licensed products of up to the low double digits, subject to the terms and conditions of the Sarepta Collaboration Agreement.

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Unless earlier terminated, the Sarepta Collaboration Agreement expires on a product-by-product and country-by-country basis, upon the date of expiration of the relevant royalty term for such product in such country.

As of June 30, 2025, the Company recorded $ 570.3 million in revenue from Sarepta, $ 9.7 million in accounts receivable and $ 23.0 million in deferred revenue.

The recognition of the remaining revenue for the performance obligations is dependent upon the time it takes to complete the respective research and development activities and in consideration of the timing of the selection of the C3 programs.

In August 2025, the Company repurchased 2,660,989 shares of its common stock from Sarepta in connection with the $ 100.0 million DM1 first development milestone under the Sarepta Collaboration Agreement.

The repurchase satisfied $ 50.0 million of the milestone payment through delivery of the Company’s common stock, with the remaining $ 50.0 million settled in cash.

The shares were recorded as treasury stock at their fair value of $ 53.2 million, resulting in a $ 3.2 million gain on settlement.

The repurchased shares are presented as a reduction to total stockholders’ equity in accordance with ASC 505-30.

For the three months ended December 31, 2025, the Company recorded $ 229.5 million in revenue from Sarepta.

As of December 31, 2025, the Company recorded $ 218.4 million in accounts receivable and $ 9.8 million in contract assets related to the Sarepta Collaboration Agreement.

Revenue recognized that are not invoiced to the customer as a result of recognizing revenue over time are recorded as a contract asset included in other current assets in the consolidated balance sheet.

Upon invoicing to the customer, the balance is recorded in accounts receivable in the consolidated balance sheet.

Novartis Pharma AG

On August 29, 2025, the Company entered into an Exclusive License and Collaboration Agreement (the “Novartis Collaboration Agreement”) with Novartis for the development and commercialization of multiple preclinical programs in rare, genetic diseases of the central nervous system.

Under the Novartis Collaboration Agreement, Novartis received an exclusive sublicensable worldwide license to the Company’s ARO-SNCA preclinical stage program.

The Company will perform certain research and development activities

for the program.

Further, Novartis has selected additional gene targets ("Collaboration Target") for which the Company has accepted and will perform discovery, optimization and preclinical development activities to identify RNAi compounds against each selected target.

Novartis has received an exclusive license to the Company’s intellectual property rights to exploit compounds directed to those targets (the "CT" programs) and is wholly responsible for clinical development and commercialization of each compound after the Company delivers a Clinical Trial Application ready data package (the "CTA package").

The Company identified performance obligations under the Novartis Collaboration Agreement.

They include the ARO-SNCA preclinical stage program licenses and research and development activities, and CT programs licenses and research and development activities.

Each of the programs were determined to represent one performance obligation, as the customer cannot benefit from the use of the product license at the point of transfer until the specified research and development activities are performed.

As such, each of the product licenses and respective research and development work will be combined to form one performance obligation.

For these performance obligations, revenue is recognized over time as the work is performed.

For performance obligations recognized over time, the estimated performance period over which revenue will be recognized is determined to be the period over which the Company estimates it will perform the research and development activities.

The Company determined that the most appropriate method of measuring progress for these performance obligations is an input method based on research and development costs in the program budget.

Accordingly, the Company has estimated the total cost required to complete its obligation and recognized an amount of revenue equal to the proportion of services performed, which is reassessed on an ongoing basis as the program progresses.

In the period an agreement expires or is terminated, remaining deferred revenue, if any, is recognized as revenue.

Under the terms of the Novartis Collaboration Agreement, the Company received an upfront payment of $ 200.0 million on October 23, 2025.

The Company is also eligible to receive research milestone payments of up to $ 30.0 million and reimbursement of certain costs related to carrying out the research, development and manufacturing activities for the programs.

The fixed consideration of $ 200.0 million and an estimated variable consideration of $ 32.0 million for a total of $ 232.0 million were allocated to all performance obligations based on their relative standalone selling price.

Standalone selling prices for the product licenses were determined using an adjusted market-based approach through the net present value of the expected future cash flows for each program.

The standalone selling prices for the research and development work were determined based on an expected cost plus margin approach.

The Company estimates the stand-alone selling price for each distinct performance obligation, which involves assumptions that may require significant judgment.

The Company’s estimates of the stand-alone selling price for license-related performance obligations includes forecasted revenues, phase dates, probability of success, development timelines, and the discount rate.

The Company identified a premium based on the difference between the aggregate stand-alone selling price and the transaction price for accounting revenue recognition purposes.

The Company allocated the premium proportionally to each of the performance obligations based upon their standalone selling price.

Further, for each of the programs, the Company is eligible to receive regulatory milestone payments between $ 175.0 million and $ 245.0 million per program.

The Company is also eligible to receive sales milestone payments between $ 285.0 million and $ 370.0 million per program as well as tiered royalties on net sales of licensed products of up to the low double digits, subject to the terms and conditions of the Novartis Collaboration Agreement.

The Company has applied the sales-based scope exception to the sales milestones and the royalty-based payments.

The Novartis Collaboration Agreement commenced in October 2025 and may be terminated by either party in the event of a material breach as defined therein.

In addition, Novartis may voluntarily terminate the Novartis Collaboration Agreement with 30 days' written notice to the Company if terminated prior to any regulatory approval of a licensed product, or with 180 days' written notice to the Company if terminated after any regulatory approval of a licensed product.

Unless earlier terminated, the Novartis Collaboration Agreement expires on a product-by-product and country-by-country basis, upon the date of expiration of the relevant royalty term for such product in such country.

For the three months ended December 31, 2025, the Company recorded $ 34.2 million in revenue from Novartis.

of December 31, 2025, the Company recorded $ 111.9 million in deferred revenue, current and $ 53.8 million in deferred revenue, non-current related to the Novartis Collaboration Agreement.

The recognition of the remaining revenue for the performance obligations is dependent upon the time it takes to complete the respective research and development activities.

Visirna Therapeutics Inc.

(“Visirna”) and Genzyme Corporation (“Sanofi”)

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”).

In connection with the Asset Purchase Agreement, the Company consented to the partial assignment of the Visirna License Agreement by Visirna HK to Sanofi (as so assigned, the “Sanofi License Agreement”), amongst other agreements between the Company and Visirna, effective as of the closing of the Asset Purchase Agreement.

This agreement was not deemed a legal sale of intellectual property from the consolidated perspective of the Company.

After giving effect to the Asset Purchase Agreement, Visirna HK retains rights to develop and commercialize in Greater China other cardiometabolic drugs licensed to it pursuant to the Visirna License Agreement.

Upon closing of the Asset Purchase Agreement, Visirna received an upfront payment of $ 130.0 million from Sanofi and is eligible to receive further development milestone payments of up to $ 265.0 million upon approval of plozasiran across various indications in mainland China.

In January 2026, as a subsequent event, the NMPA approved REDEMPLO in Greater China, which triggered the $ 10.0 million milestone payment to Visirna.

The Company is also eligible to receive royalties from Sanofi on net commercial product sales in Greater China under the Sanofi License Agreement.

During the quarter ended December 31, 2025, the Company recorded $ 0.2 million in revenue.

Visirna identified the licenses as defined in the agreement as the performance obligations under the Asset Purchase Agreement.

The performance obligations for the licenses was satisfied in the fourth quarter of fiscal 2025 upon delivery.

The fixed consideration of $ 130.0 million was allocated to the performance obligations.

The Company will recognize the development milestones as revenue in the periods the underlying milestone events are achieved as achievement of the milestone events are highly susceptible to factors outside of the entity's influence and therefore there is a possibility that the milestone events will not be achieved.

The Company has also applied the sales-based scope exception to the royalty-based payments.

The Sanofi License Agreement may be terminated by either party in the event of a material breach as defined therein.

Unless earlier terminated, the Sanofi License Agreement expires on a product-by-product basis, upon the date of expiration of the relevant royalty term for such product in Greater China.

BALANCE SHEET ACCOUNTS

1 unchanged sentence

The following table summarizes the Company’s major classes of property, plant and equipment:

June 30, 2025 September 30, 2024

December 31, 2025 September 30, 2025

(in thousands)

10 unchanged sentences

Property, plant and equipment, net $ 378,584 $ 382,515

Depreciation and amortization expense for property, plant and equipment for the three months ended June 30, 2025 and 2024 was $ 5.8 million and $ 4.4 million, respectively.

Depreciation and amortization expense for property, plant and equipment for the nine months ended June 30, 2025 and 2024 was $ 16.2 million and $ 12.3 million, respectively.

Depreciation and amortization expense for property, plant and equipment for the three months ended December 31, 2025 and 2024 was $ 6.0 million and $ 4.8 million, respectively.

During the first quarter of fiscal 2026, the Company capitalized $ 1.2 million from construction in progress to buildings related to lab and office build out and $ 3.5 million from construction in progress to manufacturing equipment relating to the further build out of the manufacturing facility.

During the first quarter of fiscal 2025, the Company substantially completed the build out of its manufacturing facility in Verona, Wisconsin, leading to the reclassification of $ 162.7 million from construction in progress to buildings and $ 2.6 million from construction in progress to manufacturing equipment.

The Company subsequently incurred and capitalized $ 10.6 million to buildings and $ 13.9 million to manufacturing equipment during the second and third quarters of fiscal 2025.

The Company subsequently incurred and capitalized $ 10.6 million to buildings and $ 16.0 million to manufacturing equipment during the remainder of fiscal 2025.

Furthermore, the Company began depreciating the newly completed manufacturing facility over a 39 -year period and the manufacturing equipment over 7 - or 10 -year periods.

During the first quarter of fiscal 2024, the Company completed the build out of its laboratory and office facilities in Verona, Wisconsin, which resulted in the reclassification of $ 71.8 million from construction in progress to buildings.

The Company subsequently incurred and capitalized $ 4.2 million from construction in progress to buildings in fiscal 2024.

Accrued Expenses

Accrued expenses consisted of the following as of:

June 30, 2025 September 30, 2024

December 31, 2025 September 30, 2025

(in thousands)

5 unchanged sentences

Accrued capital expenditures 159 277

Accrued income taxes 10,891 20,799

Dividends declared by variable interest entity to noncontrolling shareholders 40,520 —

Other 7,913 7,717

Total accrued expenses $ 130,081 $ 90,419

$ 64,818 $ 63,017

As of June 30, 2025, the Company’s accrued research and development expenses was primarily attributable to ongoing clinical trial operations, preclinical animal studies, and associated toxicology assessments.

As of December 31, 2025, the Company’s accrued research and development expenses was primarily attributable to ongoing clinical trial operations, preclinical animal studies, and associated toxicology assessments.

In addition, accrued research and development expenses;

1 unchanged sentence

The Company’s investments consisted of the following:

As of June 30, 2025

As of December 31, 2025

(in thousands)

3 unchanged sentences

Available-for-sale securities $ 711,174 $ 3,121 $ ( 39 ) $ 714,256

Short‑term investments

Total current investments $ 711,885 $ 3,121 $ ( 39 ) $ 714,967

6 unchanged sentences

Total current investments $ 689,882 $ 2,956 $ ( 20 ) $ 692,818

The following table summarizes the contract maturity of the available-for-sale securities as of:

June 30, 2025 September 30, 2024

The following table summarizes the contract maturity of the available-for-sale securities and short-term investments as of:

December 31, 2025 September 30, 2025

(in thousands)

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After one to two years

After two to three years 95,119 —

348,406 468,490

As of June 30, 2025 and September 30, 2024, the gross unrealized losses were immaterial.

The Company has determined that the available-for-sale securities that were in an unrealized loss position did not have any credit loss impairment as of June 30, 2025 and 2024.

$ 714,967 $ 692,818

As of December 31, 2025 and September 30, 2025, the gross unrealized losses were immaterial.

The Company has determined that the available-for-sale securities that were in an unrealized loss position did not have any credit loss impairment as of December 31, 2025 and 2024.

INTANGIBLE ASSETS

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(in thousands) (in years)

As of June 30, 2025

As of December 31, 2025

Patents $ 21,728 $ 16,813 $ — $ 4,915 14

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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, 2025 and 2024.

No impairment indicators were identified during the three months ended December 31, 2025 and 2024.

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, 2025 and 2024, and $ 1.3 million for each of the nine months ended June 30, 2025 and 2024.

Intangible assets amortization expense was $ 0.4 million for the three months ended December 31, 2025 and 2024.

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, 2025:

The following table presents the estimated future amortization expense related to intangible assets as of December 31, 2025:

Amortization Expense

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2026 (remainder)

2030 and thereafter 967

Thereafter 817

Total $ 6,436

3 unchanged sentences

(in thousands)

As of June 30, 2025

As of December 31, 2025

Common stock (1)

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(1) Does not include shares of common stock into which the Avoro Pre-Funded Warrants may be exercised.

As of June 30, 2025 and September 30, 2024, respectively, 10,081,964 and 11,492,293 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.

As of December 31, 2025 and September 30, 2025, respectively, 8,857,038 and 9,851,400 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 November 25, 2024, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with an institutional and accredited investor for a private placement of pre-funded warrants to purchase shares of common stock with an exercise price of $ 0.001 per share (“Avoro Pre-Funded Warrants”).

8 unchanged sentences

Accordingly, the Company has classified the Avoro Pre-funded Warrants as permanent equity.

As of June 30, 2025, no shares underlying the Avoro Pre-Funded Warrants had been exercised.

As of December 31, 2025, no shares underlying the Avoro Pre-Funded Warrants had been exercised.

In connection with the Sarepta Collaboration Agreement, on November 25, 2024, the Company entered into the Stock Purchase Agreement with an affiliate of Sarepta for a private placement of shares of common stock of the Company (the “Private Placement”).

1 unchanged sentence

The Private Placement closed on February 7, 2025.

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”).

On August 13, 2025, the Company subsequently entered into an agreement with Sarepta to repurchase 2,660,989 common stock of the Company from Sarepta at a price per share of $ 18.79 for an aggregate value of approximately $ 50.0 million and approximately $ 50.0 million in cash to partially satisfy the milestone payment of $ 100.0 million due from Sarepta.

The shares were recorded as treasury stock at their fair value of $ 53.2 million, resulting in a $ 3.2 million gain on settlement.

As of the end of fiscal 2025, Sarepta no longer holds an equity position in the Company.

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 $ 250.0 million in shares of the Company’s common stock through Jefferies LLC (“Jefferies”), 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.

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The Company and Jefferies may each terminate the Open Market Sale Agreement at any time upon prior notice.

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

On December 10, 2025, the Company and Jefferies entered into an Amended and Restated Open Market Sale Agreement (the “Amended and Restated Sale Agreement”), which amended and restated the Open Market Sale Agreement in its entirety.

The Amended and Restated Sale Agreement continues to provide for the sale, from time to time, of shares of the Company’s common stock up to the maximum program amount permitted under the Company’s shelf registration statement and subject to continued compliance with the terms of the Amended and Restated Sale Agreement, including the delivery of issuance notices, prospectus supplements, and periodically updated representations, warranties, and deliverables.

The Amended and Restated Sale Agreement may be terminated by either party upon written notice, and the Company will continue to pay Jefferies a commission of up to 3.0 % of the gross proceeds of all sales made under the program.

During the first quarter of fiscal 2026, the Company sold approximately 689,000 shares of common stock under the ATM Offering, generating gross proceeds of $ 48.2 million and net proceeds of $ 46.8 million, after deducting underwriting commissions and offering costs.

COMMITMENTS AND CONTINGENCIES

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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, 2025.

The Company owns land in the Verona Technology Park in Verona, Wisconsin, where it has constructed an approximately 160,000 square foot drug manufacturing facility and an approximately 140,000 square foot laboratory and office facility to support manufacturing process development and analytical activities.

As of June 30, 2025, the build-out of these facilities was substantially completed, with total costs incurred of $ 293.2 million.

These costs included (i) $ 76.0 million capitalized to building, related to the laboratory and office facility, and (ii) $ 11.5 million capitalized to research equipment, $ 173.3 million capitalized to building, $ 16.5 million capitalized to manufacturing equipment, and $ 15.9 million in construction in progress, related to the drug manufacturing facility.

The Company has an expected outstanding balance of approximately $ 3.3 million remaining to be settled.

There were no contingent liabilities recorded as of December 31, 2025.

On September 10, 2025, the Company filed a Complaint for Declaratory Judgment in the United States District Court for the District of Delaware against Ionis Pharmaceuticals, Inc.

(“Ionis”) to declare that the United States Patent No.

9,593,333 (“the ’333 patent”) is invalid and not infringed by the Company’s planned commercialization of investigational plozasiran.

On September 11, 2025, Ionis filed a Complaint for Patent Infringement against the Company in the United States District Court for the Central District of California alleging patent infringement of the ’333 patent by the Company’s planned commercialization of investigational plozasiran and seeking damages.

On December 23, 2025, the court granted Ionis’ motion to dismiss.

The Company disputes the allegations of wrongdoing and intends to vigorously defend itself.

The Company owns land in the Verona Technology Park in Verona, Wisconsin, where it has constructed an approximately 160,000 square foot drug manufacturing facility and an approximately 140,000 square foot laboratory and office facility to support the Company's manufacturing, process development, and analytical activities.

As of December 31, 2025, the build-out of these facilities was substantially completed, with total costs incurred of $ 298.5 million.

These costs included $ 173.5 million capitalized to building, $ 79.1 million capitalized to building relating to the laboratory and office facility, $ 22.1 million capitalized to manufacturing equipment, $ 13.3 million in construction in progress relating to the drug manufacturing facility, $ 7.9 million capitalized to research equipment and $ 2.6 million capitalized to furniture.

RELATED PARTY DISCLOSURE

The Company through its consolidated variable interest entity, Visirna, entered into an Asset Transfer Agreement closing on January 15, 2026 (the “Asset Transfer Agreement”) with Bisirna Therapeutics, Inc.

See Note 16, Subsequent Events.

Bisirna is considered a related party because the CEO of the consolidated variable interest entity, Visirna, is the owner of Bisirna.

Under the Asset Transfer Agreement, Visirna has agreed to sell and transfer certain assets and rights associated with R&D technology to Bisirna, subject to the satisfaction of closing conditions.

As of December 31, 2025, the transaction has not closed and the Company has not recorded any amounts related to the transaction in the accompanying consolidated financial statements.

Pasadena, California :

2 unchanged sentences

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, 2025.

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 December 31, 2025.

San Diego, California :

1 unchanged sentence

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, 2025.

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 December 31, 2025.

The lease agreement, as amended, granted the Company the right to receive an Additional Tenant Improvement Allowance (“ATIA”) funded by the lessor.

5 unchanged sentences

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, 2025.

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 December 31, 2025.

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, 2025 September 30, 2024

Lease Assets and Liabilities Classification December 31, 2025 September 30, 2025

(in thousands)

2 unchanged sentences

Non-current operating lease liabilities Lease liabilities, net of current portion 102,129 104,112

Three Months Ended June 30, Nine Months Ended June 30,

Three Months Ended December 31,

Lease Cost Classification 2025 2024

7 unchanged sentences

(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 three and nine months ended June 30, 2025 and 2024, respectively.

The following table presents maturities of operating lease liabilities on an undiscounted basis as of June 30, 2025:

There was no short-term lease cost during the three months ended December 31, 2025 and 2024, respectively.

The following table presents maturities of operating lease liabilities on an undiscounted basis as of December 31, 2025:

(in thousands)

5 unchanged sentences

Supplemental cash flow and other information related to leases was as follows:

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

Three Months Ended December 31,

(in thousands)

1 unchanged sentence

Operating cash flows from operating leases $ — $ —

Right-of-use assets obtained in exchange for amended operating lease liabilities $ — $ — $ — $ ( 64 )

Right-of-use assets adjusted in exchange for new/amended operating lease liabilities

Cash paid for amounts included in the measurement of lease liabilities:

4 unchanged sentences

The Company has three plans that provide for equity-based compensation.

Under the 2013 Incentive Plan (the “2013 Plan”), 2,350,117 awards are granted and outstanding, relating to stock options and restricted stock awards to employees and directors as of June 30, 2025.

Under the 2013 Incentive Plan (the “2013 Plan”), 1,721,592 awards are granted and outstanding, relating to stock options and restricted stock awards to employees and directors as of December 31, 2025.

Under the 2021 Incentive Plan (the “2021 Plan”), 8,000,000 shares (subject to certain adjustments) of the Company’s common stock are authorized 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, 2025, 6,215,559 shares have been granted under the 2021 Plan.

As of December 31, 2025, 6,789,307 shares have been granted under the 2021 Plan.

The total number of shares available for issuance was 1,833,483 shares, which includes 170,898 and 451,892 shares that were forfeited under the 2013 and 2021 Plans, respectively.

1 unchanged sentence

Awards under the Inducement Plan may only be granted to new employees of the Company in accordance with the provisions of Rule 5635(c)(4) of the Nasdaq Listing Rules.

As of June 30, 2025, 607,340 shares have been granted under the Inducement Plan.

As of December 31, 2025, 821,145 shares have been granted, net of cancellations, under the Inducement Plan.

The total number of shares remaining available for issuance was 11,805 shares.

In addition, prior to adoption of the Inducement Plan, the Company previously granted stand-alone inducement awards in the form of stock options and restricted stock units outside of the Company ’ s equity plans to new employees under Rule 5635(c)(4) of the Nasdaq Listing Rules.

As of June 30, 2025, there were 602,355 and 138,775 shares underlying outstanding stand-alone inducement options and restricted stock units, respectively.

As of December 31, 2025, there were 684,030 and 69,375 shares underlying outstanding stand-alone inducement options and restricted stock units, respectively.

The following table presents a summary of awards outstanding attributable to Arrowhead Pharmaceuticals, Inc.:

June 30, 2025

December 31, 2025

2013 Plan 2021 Plan Inducement Awards Total

4 unchanged sentences

The following table summarizes stock-based compensation expenses included in operating expenses attributable to Arrowhead Pharmaceuticals, Inc.:

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

Three Months Ended December 31,

(in thousands)

3 unchanged sentences

Stock Option Awards

The following table presents a summary of the stock option activity for the nine months ended June 30, 2025:

The following table presents a summary of the stock option activity for the three months ended December 31, 2025:

Shares Weighted-

5 unchanged sentences

Exercised ( 296,682 ) 17.19

Outstanding at June 30, 2025

Outstanding at December 31, 2025

1,110,353 $ 32.03 3.5 $ 38,383,567

Exercisable at June 30, 2025

Exercisable at December 31, 2025

1,110,353 $ 32.03 3.5 $ 38,384,567

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, 2025 and 2024 was $ 0.3 million and $ 0.7 million, respectively.

The total intrinsic value of the options exercised during the nine months ended June 30, 2025 and 2024 was $ 4.9 million and $ 3.8 million, respectively.

For the three months ended June 30, 2025, there was no stock-based compensation expense related to stock options outstanding, while $ 0.4 million was recorded for the same period in 2024.

Stock-based compensation expense related to stock options outstanding for the nine months ended June 30, 2025 and 2024, was $ 0.1 million and $ 2.5 million, respectively.

As of June 30, 2025, the pre-tax compensation expense for all outstanding unvested stock options is considered nominal.

The total intrinsic value of the options exercised during the three months ended December 31, 2025 and 2024 was $ 12.6 million and $ 0.9 million, respectively.

Stock-based compensation expense related to stock options outstanding for the three months ended December 31, 2025 and 2024, was $ 0 and $ 0.1 million, respectively.

As of December 31, 2025, the pre-tax compensation expense for all outstanding unvested stock options is considered nominal.

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model.

1 unchanged sentence

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.

No options were granted during the nine months ended June 30, 2025 and 2024.

No options were granted during the three months ended December 31, 2025 and 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.

As of December 31, 2025, Visirna, a subsidiary of the Company, granted 14,612,000 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 months ended June 30, 2025 and 2024, stock-based compensation expense related to the Visirna ESOP was $ 1.1 million and $ 2.3 million, respectively.

For the nine months ended June 30, 2025 and 2024, stock-based compensation expense related to the Visirna ESOP was $ 3.0 million and $ 5.5 million, respectively.

For the three months ended December 31, 2025 and 2024, stock-based compensation expense related to the Visirna ESOP was $ 0.2 million and $ 1.0 million, respectively.

Restricted Stock Units

9 unchanged sentences

Forfeited ( 30,836 ) 22.89

Outstanding at June 30, 2025

Outstanding at December 31, 2025

5,901,397 $ 38.25

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, 2025 and 2024, the Company recorded $ 11.9 million and $ 14.3 million of expense related to RSUs, respectively.

For the nine months ended June 30, 2025 and 2024, the Company recorded $ 41.1 million and $ 46.5 million of expense related to RSUs, respectively.

As of June 30, 2025, there was $ 85.8 million of total unrecognized compensation cost related to RSUs that is expected to be recognized over a weighted-average period of 1.7 years.

For the three months ended December 31, 2025 and 2024, the Company recorded $ 19.6 million and $ 14.1 million of

expense related to RSUs, respectively.

As of December 31, 2025, there was $ 113.7 million of total unrecognized compensation cost related to RSUs that is expected to be recognized over a weighted-average period of 2.4 years.

FAIR VALUE MEASUREMENTS

6 unchanged sentences

The Company recognizes transfers between levels at either the actual date of the event or a change in circumstances that caused the transfer.

As of June 30, 2025 and September 30, 2024, the Company did not have any financial assets or financial liabilities based on Level 3 measurements.

As of December 31, 2025 and September 30, 2025, the Company did not have any financial assets or financial liabilities based on Level 3 measurements.

The following tables present 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, 2025

December 31, 2025

Level 1 Level 2 Level 3 Total

1 unchanged sentence

Available-for-sale securities

Certificate of deposits $ — $ 6,004 $ — $ 6,004

government and agency securities — 126,131 — 126,131

3 unchanged sentences

Total available-for-sale securities — 714,256 — 714,256

Short‑term investments

Term deposits — 711 — 711

Total Short‑term investments

Cash equivalents

1 unchanged sentence

Term deposit — 115,928 — 115,928

Treasuries — 7,960 — 7,960

Commercial notes — 23,770 — 23,770

Total cash equivalents

52,444 115,928 — 168,372

Total financial assets $ 52,444 $ 830,895 $ — $ 883,339

4 unchanged sentences

government and agency securities $ — $ 150,695 $ — $ 150,695

Certificate of deposits — 12,019 — 12,019

Municipal securities — 7,046 — 7,046

Commercial notes — 13,801 — 13,801

4 unchanged sentences

Money market instruments 64,460 — — 64,460

Term deposit — 134,357 — 134,357

Certificate of deposits — 3,001 — 3,001

Corporate debt securities — 16,182 — 16,182

Total cash equivalents

64,460 153,540 — 218,000

Total financial assets $ 64,460 $ 846,358 $ — $ 910,818

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, originally developed by the Company and licensed to Amgen in September 2016 under the Olpasiran Agreement.

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:

12 unchanged sentences

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, 2025, the estimated effective interest rate was 9.1 %.

As of December 31, 2025, the estimated effective interest rate was 8.3 %.

The following table presents the activity with respect to the liability related to the sale of future royalties.

June 30, 2025 September 30, 2024

Three Months Ended December 31,

(in thousands)

21 unchanged sentences

In the event the prepayment amounts result in fees being prepaid in excess of the actual amounts required to be paid, the excess fees shall be reallocated and applied to reduce the amount of the principal balance upon repayment in full of the loans under the Credit Facility.

As of June 30, 2025, the Company has paid $ 100.0 million in MOIC payments of which $ 25.3 million is expected to be applied to principal upon repayment in full.

To date, the Company has paid $ 201.6 million of the loans under the Credit Facility during fiscal 2025.

As of December 31, 2025, the Company has paid $ 133.3 million in MOIC payments of which $ 14.5 million is expected to be applied to principal upon repayment in full.

To date, the Company has paid $ 268.3 million of the loans under the Credit Facility.

The Amendment was accounted for as a debt modification under ASC 470-50, “Debt—Modification and extinguishments ” since the Amendment did not result in substantially different terms.

2 unchanged sentences

The Financing Agreement contains customary covenants, including, without limitation, a financial covenant to maintain liquidity (cash, cash equivalents and investments) of at least $ 100.0 million if the Company ’ s market capitalization is above $ 1.5 billion, and negative covenants that, subject to certain exceptions, restrict indebtedness, liens, investments (including acquisitions), fundamental changes, asset sales and licensing transactions, dividends, modifications to material agreements, payment of subordinated indebtedness, distributions from certain parties, and other matters customarily restricted in such agreements.

Pursuant to the terms of the Financing Agreement, the Company and its Subsidiaries are not permitted to have an aggregate principal amount of convertible indebtedness outstanding at any one time in excess of the greater of $ 300.0 million and 10 % of the market capitalization of the the Company (based on the closing price of the common stock of the the Company on the trading date immediately prior to the incurrence of such indebtedness), but in no event greater than $ 700.0 million in the aggregate.

The Company is subject to restrictions on sales and licensing transactions with respect to certain core intellectual property, subject to certain exceptions, including certain transactions related to areas outside the United States, United Kingdom, European Union, Japan and China.

The Financing Agreement contains certain embedded features that were identified and evaluated as not material to the consolidated financial statements.

On August 13, 2025, the Company entered into second amendment to the Financing Agreement (the "Second Amendment") that permitted the share repurchase of the Company's common stock from Sarepta and required the Company to pay a nominal administrative fee.

The outstanding balance of the Credit Facility consisted of the following:

June 30, 2025 September 30, 2024

December 31, 2025 September 30, 2025

(in thousands)

7 unchanged sentences

The following table sets forth total interest expense recognized related to the Credit Facility:

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

Three Months Ended December 31,

(in thousands)

Amortization of debt issuance costs

$ 420 $ — $ 1,533 $ —

Accretion of the MOIC Payment 1,284 —

3 unchanged sentences

$ 14,905 $ 16,231

The amounts shown in the table below, related to the Credit Facility, represent the expected repayments of principle and accrued interest balance as of June 30, 2025 as well as any mandatory prepayments that the Company is obligated to make to the Lenders during the indicated periods.

The principal balance will increase from accrued paid in kind interest and the table does not include MOIC payments beyond those contractually determined.

The amounts shown in the table below, related to the Credit Facility, represent the expected repayments of principle and accrued interest balance as of December 31, 2025 as well as any mandatory prepayments that the Company is obligated to make to the Lenders during the indicated periods.

The principal balance will increase from accrued paid in kind interest and the table does not include MOIC prepayments beyond those contractually determined.

Actual payments on current principal may vary from the amounts presented in the table.

4 unchanged sentences

The term of each loan is twelve months .

The amount outstanding as of June 30, 2025 was 50.8 million Chinese Yuan ($ 7.1 million) on the credit facility which was classified as other current liabilities.

NET (LOSS) INCOME PER SHARE

The following table presents the computation of basic and diluted net (loss) income per share for the three and nine months ended June 30, 2025 and 2024.

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

The amount outstanding as of December 31, 2025 was 72.9 million Chinese Yuan ($ 10.4 million) on the credit facility which was classified as other current liabilities.

NET INCOME (LOSS) PER SHARE

The following table presents the computation of basic and diluted net income (loss) per share for the three months ended December 31, 2025 and 2024.

Three Months Ended December 31,

(in thousands, except per share amounts)

Net (loss) income attributable to Arrowhead Pharmaceuticals, Inc.

Net income (loss) attributable to Arrowhead Pharmaceuticals, Inc.

$ 30,811 $ ( 173,085 )

4 unchanged sentences

140,706 124,848

Basic net (loss) income per share $ ( 1.26 ) $ ( 1.38 ) $ 0.17 $ ( 3.63 )

Diluted net (loss) income per share $ ( 1.26 ) $ ( 1.38 ) $ 0.17 $ ( 3.63 )

(1) Includes shares of common stock into which the Avoro Pre-Funded Warrants may be exercised.

The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net (loss) income per share because to include them would be anti-dilutive.

Three Months Ended June 30, Nine Months Ended June 30,

Basic net income (loss) per share

$ 0.22 $ ( 1.39 )

Diluted net income (loss) per share

$ 0.22 $ ( 1.39 )

(1) Includes shares of common stock into which the Avoro Pre-Funded Warrants may be exercised.

The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net income (loss) per share because to include them would be anti-dilutive.

Three Months Ended December 31,

(in thousands)

2 unchanged sentences

Total 1,664 4,584

The Company's estimated annual effective tax rate significantly fluctuates for fiscal 2025 with small changes to the Company’s estimated income.

For the three months ended June 30, 2025, the Company has recorded a discrete income tax benefit of $ 0.4 million.

The income tax provision for the three months ended June 30, 2024, resulted in no tax expense.

For the nine months ended June 30, 2025, the Company has recorded a discrete income tax expense of $ 1.4 million, and for the nine months ended June 30, 2024, the Company has recorded a discrete income tax benefit of $ 3.3 million.

Income tax expense for the three and nine months ended June 30, 2025 was based on actual year to date income recorded and statutory tax rates.

The Company does not anticipate any changes in its unrecognized tax benefits over the next 12 months.

Due to the presence of net operating loss carryforwards, all of the income tax years remain open for examination domestically.

The Company has not been notified that it is under audit by the Internal Revenue Service or foreign taxing authorities;

however, the Company has been notified of an income tax examination by the State of California.

There are no other audits in any other jurisdictions.

SEGMENT INFORMATION

We operate in a single segment dedicated to the discovery, development, manufacturing and commercialization of RNAi therapeutics.

The Company's RNAi therapeutics are comprised of siRNAs that function upstream of conventional medicines by potently silencing messenger RNA (“mRNA”) that encode for proteins implicated in the cause or pathway of disease, thus preventing them from being made.

Consistent with our operational structure, our Chief Executive Officer (“CEO”), as the CODM, manages and allocates resources on a consolidated basis at the global corporate level.

Our global research and development and technical operations and quality organizations are responsible for the discovery, development, and supply of products.

Commercial efforts that coordinate the marketing, sales and distribution of these products are organized by geographic region and therapeutic area.

All of these activities are supported by corporate staff functions.

Managing and allocating resources at the corporate level enables our CEO to assess the overall level of resources available and how to best deploy these resources in line with our overarching long-term, corporate-wide strategic goals.

The determination of a single segment is consistent with the consolidated financial information regularly reviewed by the CODM for the purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets.

Consistent with our management reporting, results of our operations are reported on a consolidated basis for purposes of segment reporting.

The CEO evaluates performance and decides how to allocate resources based on consolidated net income (loss) that is reported on the consolidated statements of operations and comprehensive income (loss).

The measure of segment assets is reported on the consolidated balance sheets as total assets.

The CEO uses consolidated net income (loss) to evaluate income generated from the Company’s business activities in deciding how to allocate company resources (such as pursuing clinical development or entering a strategic collaboration), monitoring budget versus actual results, and establishing management’s compensation.

Please refer to the consolidated financial statements for further information related to these measures of segment performance.

In addition, research and development and selling, general and administrative expenses are significant segment expenses regularly provided to the CEO with the following categories:

Research and Development

Three Months Ended December 31,

(in thousands)

Candidate costs $ 104,990 $ 76,896

R&D discovery costs 21,829 12,936

Salaries 30,039 27,145

Facilities related 8,102 7,750

Total research and development expense, excluding non-cash expense $ 164,960 $ 124,727

Stock compensation 6,357 7,549

Depreciation and amortization 5,886 4,726

Total research and development expense $ 177,203 $ 137,002

General & Administrative

Three Months Ended December 31,

(in thousands)

Salaries $ 11,940 $ 7,331

Professional, outside services, and other 18,900 10,126

Facilities related 1,663 1,285

Total general and administrative expense, excluding non-cash expense $ 32,503 $ 18,742

Stock compensation 13,014 7,659

Depreciation/amortization 504 509

Total general and administrative expense $ 46,021 $ 26,910

SUBSEQUENT EVENTS

The Asset Purchase Agreement is scheduled to close during the second half of the

After giving effect to the Asset Purchase Agreement, Visirna HK retains rights to develop and commercialize in Greater China three other cardiometabolic drugs licensed to it pursuant to the Visirna License Agreement.

Upon closing of the Asset Purchase Agreement, Visirna will receive an upfront payment of $ 130.0 million from Sanofi and is eligible to receive further milestone payments of up to $ 265.0 million upon approval of plozasiran across various indications in mainland China.

The Company is also eligible to receive royalties from Sanofi on net commercial product sales in Greater China under the Sanofi License Agreement.

Sarepta DM1 Milestone

On July 27, 2025, the Company triggered a $ 100.0 million milestone payment from Sarepta.

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 treatment of type 1 myotonic dystrophy (DM1), as outlined in the Sarepta Collaboration Agreement, triggering the milestone.

The Company is eligible to receive up to an additional $ 200.0 million in near-term milestone payments associated with the continued enrollment of certain cohorts of a Phase 1/2 study of ARO-DM1.

Convertible Senior Notes, Common Stock and Pre-Funded Warrants

On January 7, 2026, Arrowhead Pharmaceuticals entered into separate underwriting agreements for concurrent offerings of equity and convertible notes:

first, with Jefferies and J.P.

Morgan to sell 3,100,776 shares of common stock, $ 0.001 par value per share, at a public offering price of $ 64.50 per share, or alternatively in lieu of shares of common stock to certain investors, pre‑funded warrants to purchase up to 1,550,387 shares of common stock, at a public offering price of $ 64.499 , which represents the per share public offering price for the common stock less the $ 0.001 per share exercise price for each pre-funded warrant.

In addition, the Company granted the equity underwriters a 30-day option to purchase up to an additional 456,116 shares of common stock, on the same terms and conditions, which the equity underwriters exercised in full on January 8, 2026.

The net proceeds from this equity offering was approximately $ 216.6 million after deducting customary underwriting discounts and offering expenses.

These securities were issued under the Company’s automatic shelf registration statement, which closed on January 9, 2026.

Also on January 7, 2026, Arrowhead agreed with J.P.

Morgan and Jefferies to issue $ 625.0 million of 0.00 % convertible senior notes due 2032, with an additional $ 75.0 million overallotment option exercised in full on January 8, 2026.

The net proceeds from the convertible notes offering are to be approximately $ 681.3 million, after deducting customary underwriting discounts and offering expenses.

These securities were issued under the Company’s automatic shelf registration statement, which closed on January 12, 2026.

In connection with the convertible notes, Arrowhead entered into privately negotiated capped call transactions with one or more of the underwriters of the note offering or their affiliates or one or more other financial institutions.

The capped call transactions will cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of Arrowhead’s common stock underlying the notes and are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction

and/or offset subject to a cap, based on the cap price of the capped call transaction.

The cap price of the capped call transaction is approximately $ 119.33 per share (which represents a premium of approximately 85.0 % over the public offering price per share of the Company’s common stock in the equity offering).

The cost of the capped call transaction was approximately $ 47.9 million.

Asset Transfer Agreement with Bisirna Therapeutics, Inc (“Bisirna”)

On January 15, 2026, the consolidated variable interest entity, Visirna, closed on an Asset Transfer Agreement with Bisirna to sell and transfer certain assets and rights associated with R&D technology.

The purchase price was $ 19.0 million, payable as (i) $ 9.0 million in paid-in-full warrants (exercise price of $ 0.18 per share) issued by Bisirna at the closing of the asset transfer, and (ii) $ 10.0 million of Bisirna Series A preferred shares, which were issued upon the closing of Bisirna’s Series A equity financing on January 15, 2026.

The Company is currently evaluating the financial statement impact of the transaction, including the accounting for the consideration received and any contingent consideration.

China NMPA NDA Approval and FCS Milestone

On January 5, 2026, the consolidated variable interest entity, Visirna, received NDA approval from the National Medical Products Administration (“NMPA”) in China for REDEMPLO.

This approval triggered a $ 10.0 million regulatory milestone under the Sanofi License Agreement.

The milestone payment is expected to be recognized as revenue in the second quarter of fiscal year 2026.

The impact of this event was not reflected in the consolidated financial statements as of December 31, 2025.

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-Q

Item 1. Financial Statements