What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2026-02-05 · 359 added, 276 removed, 651 unchanged (49% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

December 31, 2025 September 30, 2025

March 31, 2026 September 30, 2025

Current assets:

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Credit facility, net of current portion 159,639 214,883

Convertible notes, net 681,940 —

Total long-term liabilities 1,374,129 686,392

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Authorized 290,000 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

143,232 shares issued and 140,571 outstanding as of March 31, 2026 and 138,363 shares issued and 135,702 outstanding as of September 30, 2025

Additional paid-in capital 2,395,267 2,139,725

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Treasury stock;

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

2,661 shares of common stock at March 31, 2026 and September 30, 2025

( 53,193 ) ( 53,193 )

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Arrowhead Pharmaceuticals, Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Operations and Comprehensive (Loss) Income

(in thousands, except per share amounts)

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

Revenue $ 73,737 $ 542,709 $ 337,770 $ 545,209

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Research and development 173,253 133,102 350,456 270,104

General and administrative 46,021 26,910

Selling, general and administrative 41,744 28,405 87,765 55,315

Total operating expenses 214,997 161,507 438,221 325,419

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

Other (expense) income:

Operating (loss) income ( 141,260 ) 381,202 ( 100,451 ) 219,790

Other income (expense):

Interest income 16,869 9,615 26,560 17,217

Interest expense ( 23,846 ) ( 21,639 ) ( 46,351 ) ( 43,285 )

Loss on equity method investment ( 6,719 ) — ( 6,719 ) —

Gain on VIE's sale of IPR&D assets 19,000 — 19,000 —

Other, net ( 1,609 ) 438 ( 1,332 ) 779

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

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

Total other income (expense) 3,695 ( 11,586 ) ( 8,842 ) ( 25,289 )

(Loss) income before income tax expense and noncontrolling interest ( 137,565 ) 369,616 ( 109,293 ) 194,501

Income tax expense 7 1,753 35 1,856

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

Net (loss) income including noncontrolling interest $ ( 137,572 ) $ 367,863 $ ( 109,328 ) $ 192,645

Net loss attributable to noncontrolling interest, net of tax ( 4,840 ) ( 2,582 ) ( 7,409 ) ( 4,715 )

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

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

$ ( 132,732 ) $ 370,445 $ ( 101,919 ) $ 197,360

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

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

Basic $ ( 0.93 ) $ 2.78 $ ( 0.73 ) $ 1.53

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Diluted 142,417 134,484 139,762 130,265

Other comprehensive income (loss), net of tax:

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

Comprehensive (loss) income:

Net (loss) income including noncontrolling interest $ ( 137,572 ) $ 367,863 $ ( 109,328 ) $ 192,645

Other comprehensive (loss) income, net of tax:

Unrealized (losses) gains on available-for-sale securities ( 6,934 ) 653 ( 6,788 ) 146

Foreign currency translation adjustments 990 ( 400 ) 1,100 ( 506 )

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

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

Total other comprehensive (loss) income ( 5,944 ) 253 ( 5,688 ) ( 360 )

Comprehensive (loss) income ( 143,516 ) 368,116 ( 115,016 ) 192,285

Comprehensive loss attributable to noncontrolling interest ( 4,425 ) ( 2,582 ) ( 6,966 ) ( 4,715 )

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

$ ( 139,091 ) $ 370,698 $ ( 108,050 ) $ 197,000

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

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Comprehensive

Common Stock in Treasury Amount ($) Non-

Common Stock in Treasury Treasury Amount ($) Non-

controlling Interest Total

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

Stock-based compensation — — 16,670 — — — — — 16,670

Exercise of stock options 121 — 1,968 — — — — — 1,968

Common stock - restricted stock units vesting 1,043 1 — — — — — — 1

Issuance of common stock in follow-on offering, net of issuance costs 2,016 2 116,605 — — — — — 116,607

Issuance of pre-funded warrants — — 99,998 — — — — — 99,998

Purchase of Capped Calls related to the 2026 Convertible Note — — ( 47,880 ) — — — — — ( 47,880 )

Foreign currency translation adjustments — — — 990 — — — 990

Unrealized losses on available-for-sales securities — — — ( 6,934 ) — — — ( 6,934 )

Change in ownership interest in consolidated VIE — — ( 3,120 ) ( 13 ) — — — 3,133 —

Gain on VIE's sale of IPR&D assets — — — — — — — ( 7,629 ) ( 7,629 )

— — — — ( 132,732 ) — — ( 4,840 ) ( 137,572 )

Balance at March 31, 2026 143,232 $ 236 $ 2,395,267 $ 742 $ ( 1,729,075 ) ( 2,661 ) $ ( 53,193 ) $ ( 15,061 ) $ 598,916

Amount ($) Additional

Comprehensive

Common Stock in Treasury Amount ($) Non-

Common Stock in Treasury Treasury Amount ($) Non-

controlling Interest Total

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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-sale securities — — — 653 — — — — 653

Net income (loss) — — — — 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

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

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(in thousands)

Three Months Ended December 31,

Six Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) $ 28,242 $ ( 175,218 )

Adjustments to reconcile net income (loss) to net cash flow from operating activities

Net (loss) income $ ( 109,328 ) $ 192,645

Adjustments to reconcile net (loss) income to net cash flow from operating activities

Stock-based compensation 36,041 31,236

Depreciation and amortization 12,758 11,319

Accretion of note premiums/discounts

( 1,215 ) ( 5,704 )

Accretion of available-for-sale securities premiums/discounts ( 2,515 ) ( 2,788 )

Amortization of convertible notes issuance costs 657 —

Realized gain on investments

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Non-cash interest expense on credit facility 29,262 32,369

Loss on equity method investment 6,719 —

Gain on VIE's sale of IPR&D assets ( 19,000 ) —

Non-cash transfer of property and equipment to affiliate 555 —

Changes in operating assets and liabilities:

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Other 361 3,169

Net cash provided by (used in) operating activities 13,481 ( 146,272 )

Net cash provided by operating activities 97,923 313,781

CASH FLOWS FROM INVESTING ACTIVITIES:

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( 4,713 ) ( 12,813 )

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

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

Net cash (used in) provided by investing activities

( 23,742 ) 76,910

Purchases of available-for-sale securities ( 1,061,577 ) ( 677,892 )

Proceeds from sales of available-for-sale securities 23,748 —

Proceeds from maturities of available-for-sale securities 124,518 347,402

Net cash used in investing activities ( 918,024 ) ( 343,303 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from the exercises of stock options 10,146 3,253

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

Proceeds from issuance of warrants 99,998 25,000

Proceeds from issuance of convertible notes 700,000 —

Payments of debt issuance costs ( 18,716 ) ( 5,000 )

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

Purchase of capped calls ( 47,880 ) —

Proceeds from issuance of common stock related to ATM offering 48,156 241,388

Payments of issuance costs of common stock related to ATM offering ( 1,324 ) —

Proceeds from issuance of common stock related to follow-on offering 130,000 —

Payments of issuance costs of common stock related to follow-on offering ( 13,393 ) —

Repayments of credit facility ( 84,506 ) ( 151,625 )

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 )

Dividends paid by variable interest entity to noncontrolling shareholders ( 41,514 ) —

Net cash provided by financing activities 780,967 113,016

Net (decrease) increase in cash, cash equivalents and restricted cash ( 39,134 ) 83,494

Effect of exchange rate on cash, cash equivalents and restricted cash 1,103 ( 470 )

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Supplemental disclosure of cash flows:

Interest paid $ — $ ( 19 )

Income taxes paid $ ( 21,565 ) $ ( 81 )

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Capital expenditures included in accrued expenses

$ 159 $ 2,574

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

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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 also approved by the Chinese National Medical Products Administration (“NMPA”), Health Canada, and the Australian Therapeutic Goods Administration (TGA) for the same indication.

REDEMPLO also received a positive Committee for Medicinal Products for Human Use (“CHMP”) opinion recommending approval to reduce triglycerides in adults with FCS in Europe.

The European Commission is expected to issue a decision on REDEMPLO’s Marketing Authorization in the second calendar quarter of 2026.

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.

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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 Arrowhead (1)

zodasiran Phase 3 Arrowhead

olpasiran Phase 3 Amgen

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.

The Company also operates an active pharmaceutical ingredient manufacturing and supporting laboratory facility in Verona, Wisconsin.

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

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:

• 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 $ 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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and its subsidiaries (wholly-owned subsidiaries and a variable interest entity for which the Company is the primary beneficiary).

Subsidiaries refer to Arrowhead Madison, Inc., Arrowhead Australia Pty Ltd., Arrowhead Pharmaceuticals Ireland Limited, Arrowhead Pharmaceuticals NZ Limited and Visirna Therapeutics, Inc.

Wholly-owned subsidiaries refer to Arrowhead Madison, Inc., Arrowhead Australia Pty Ltd., Arrowhead Pharmaceuticals Ireland Limited, Arrowhead Pharmaceuticals NZ Limited.

The Company’s variable interest entity is Visirna Therapeutics, Inc.

For subsidiaries in which the Company owns or is exposed to less than 100% of the economics, the Company records net loss attributable to noncontrolling interests in its consolidated statements of operations equal to the percentage of the economic or ownership interests retained in such entity by the respective noncontrolling party.

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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 December 31, 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 March 31, 2026 and the results of operations and cash flows for the periods presented.

All intercompany transactions and balances have been eliminated.

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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.

Operating results and cash flows for the six months ended March 31, 2026 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 16, 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.

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, the sale of certain future royalties and issuance of convertible debt.

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 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.

As of March 31, 2026, the Company had $ 188.5 million in cash, cash equivalents and restricted cash ($ 1.9 million in restricted cash) and $ 1,595.6 million in available-for-sale securities to fund operations.

In total, the Company is eligible to receive up to $ 15.2 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

There have been no changes to the significant accounting policies disclosed in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

There have been no changes to the significant accounting policies disclosed in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2025, other than below:

Equity method investment

The Company accounts for investments over which it has significant influence but not control under the equity method.

The investment is initially recorded at cost and subsequently adjusted for the Company’s proportionate share of the investee’s net income or loss and are included in other assets in the accompanying consolidated balance sheets.

The Company presents income or losses from equity investments as loss on equity method investment on the consolidated statements of operations and comprehensive (loss) income.

If the share of losses exceeds the carrying value of the Company’s investment, the Company will suspend recognizing additional losses and will continue to do so unless it commits to providing additional funding or commits to guarantee investee liabilities.

As of March 31, 2026, the Company had an equity method investment in Bisirna Therapeutics, Inc.

Refer to Note 8, Equity Method Investment, for further details.

Convertible debt

The Company accounts for its convertible debt instrument as a single unit of accounting, classified as a liability, as the conversion features do not require bifurcation as a derivative under ASC 815-15 and the convertible debt instrument was not issued at a substantial premium.

The Company records debt issuance costs as contra-liabilities in the consolidated balance sheets at issuance, and amortizes them over the contractual term of the convertible debt instrument based on the effective interest method.

The balance of the convertible notes presented in the consolidated balance sheets represents the principal balance of the convertible debt instrument less the unamortized portion of the debt issuance costs.

As of March 31, 2026, the Company had outstanding convertible notes, which mature on January 15, 2032.

Refer to Note 14, Convertible Notes, for further details.

Recent Accounting Pronouncements

In January 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable

and Contract Asset.

This ASU allows companies to elect a practical expedient to assume that conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when estimating the expected credit losses of the asset.

The ASU will become effective for the Company beginning October 1, 2026, and the Company is currently evaluating the impact on its consolidated financial statements and related disclosures.

In January 2025, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, in November 2024, and ASU 2025-01, Clarifying the Effective Date .

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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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.

The Company is currently evaluating the impact of this new ASU on its financial statements and plans to adopt ASU 2023-09 on a prospective basis during this fiscal year.

COLLABORATION AND LICENSE AGREEMENTS

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

Three Months Ended December 31,

Three Months Ended March 31, Sixth Months Ended March 31,

2026 2025 2026 2025

(in thousands)

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Novartis 20,471 — 54,713 —

Sanofi 10,533 — 10,742 —

Total $ 72,739 $ 542,709 $ 336,654 $ 545,209

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

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 March 31, 2026, relate solely to the Company’s agreements with Sarepta, Novartis and Sanofi:

March 31, 2026 September 30, 2025

(in thousands)

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Deferred revenue consisted of the following:

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(in thousands)

Balance at beginning of period

$ 155,931 $ — $ 2,399 $ —

Deferred revenue additions

63,434 585,974 480,672 585,974

Revenue recognized

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Balance at end of period

157,158 43,268 157,158 43,268

Plus contract assets included in other current assets

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Deferred revenue, non-current

$ 48,615 $ — $ 48,615 $ —

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 the upfront payment under the GSK-HSD License Agreement, and accordingly the $ 120.0 million upfront payment 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 further eligible to receive tiered royalties on net product sales in a range of mid-teens to twenty percent.

As of March 31, 2026, the Company had no contract assets and liabilities recorded.

GSK-HBV Agreement

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

As of March 31, 2026, the Company had no contract assets and liabilities recorded.

Takeda Pharmaceutical Company Limited (“Takeda”)

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Within the United States, the Company and Takeda are responsible in the co-development and co-commercialization efforts.

The Company considers the collaborative activities, including the co-development and co-commercialization, to be a separate unit of account within Topic 808, and as such, these co-funding amounts are recorded as research and development expenses or general and administrative expenses, as appropriate.

The Company considers the collaborative activities, including the co-development and co-commercialization, to be a separate unit of account within Topic 808, and as such, these co-funding amounts are recorded as research and development expenses or selling, general and administrative expenses, as appropriate.

Under the terms of the Takeda License Agreement, the Company received $ 300.0 million as an upfront payment in January 2021 and an additional $ 40.0 million upon Takeda’s initiation of a Phase 3 REDWOOD clinical study of fazirsiran in March 2023, and is eligible to receive up to $ 527.5 million in additional potential development, regulatory and commercial milestones.

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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 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.

There were no further deferred revenue and contract liabilities as of March 31, 2026.

As of March 31, 2026, the accrued expense balance is $ 32.7 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 December 31, 2025.

There were no contract assets and liabilities recorded as of March 31, 2026.

In November 2022, Royalty Pharma Investments 2019 ICAV (“Royalty Pharma”) and the Company entered into a Royalty Purchase Agreement with Royalty Pharma (the “Royalty Pharma Agreement”).

In consideration for the payments under the Royalty Pharma Agreement, Royalty Pharma is entitled to receive all royalties otherwise payable by Amgen to the Company under the Olpasiran Agreement.

In consideration for the payments

under the Royalty Pharma Agreement, Royalty Pharma is entitled to receive all royalties otherwise payable by Amgen to the Company under the Olpasiran Agreement.

The Company remains eligible to receive up to an additional $ 485.0 million in remaining development, regulatory and sales milestone payments payable from Amgen and Royalty Pharma.

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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.

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.

1 unchanged sentence

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.

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.

In February 2026, the Company earned and received the first installment of the annual fee payment of $ 50.0 million.

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

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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.

For the three months ended March 31, 2026, Sarepta exercised its contractual step‑in right under the Sarepta Collaboration Agreement with respect to certain C1 programs, pursuant to which Sarepta will assume responsibility for ongoing clinical trials for such programs on mutually agreed transition dates.

Sarepta’s exercise of the step‑in right represents a contract modification under ASC 606, as it reduces both the scope of the Company’s remaining obligations and the amount of variable consideration related to reimbursable research and development costs for the affected C1 programs.

The Company evaluated the modification and determined that the remaining research and development activities to be performed after the modification are not distinct from those performed prior to the modification and, accordingly, the modification is accounted for as part of the original performance obligation through a cumulative catch‑up adjustment.

For the three months ended March 31, 2026, the Company did not record a cumulative catch‑up adjustment to revenue, as the revised C1 reimbursement budgets remain subject to mutual agreement between Sarepta and the Company.

As a result, the associated variable consideration is constrained until the uncertainty is resolved.

Any cumulative catch‑up adjustment will be recognized in future periods when the uncertainty related to the variable consideration is subsequently resolved.

The contract modification did not impact revenue previously recognized related to the four C1 licenses, which were delivered as distinct performance obligations.

In December 2025, pursuant to the Sarepta Collaboration Agreement, the Company entered into a clinical supply agreement with Sarepta (the “Sarepta Clinical Supply Agreement”), whereby the Company is responsible for manufacturing and supplying certain materials to Sarepta for specified activities.

For the three months ended March 31, 2026, the Company recorded $ 37.4 million and $ 4.3 million in revenue under the Sarepta Collaboration Agreement and the Sarepta Clinical Supply Agreement, respectively.

As of March 31, 2026, the Company held $ 14.0 million in accounts receivable and $ 11.1 million in current deferred revenue, relating to the Sarepta Collaboration Agreement and the Sarepta Clinical Supply 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 and in consideration of the timing of the selection of the rest of the targets within the C3 programs.

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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.

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.

The Company identified multiple 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.

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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.

For the three months ended March 31, 2026, the Company recorded $ 20.5 million in revenue from Novartis.

As of March 31, 2026, the Company recorded $ 97.4 million in current deferred revenue and $ 48.6 million in non-current deferred revenue, 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.

6 unchanged sentences

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.

1 unchanged sentence

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 recognizes approval 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.

In January 2026, the NMPA approved REDEMPLO in Greater China, which triggered a $ 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.

For the three months ended March 31, 2026, the Company recorded $ 10.5 million in revenue and $ 0.5 million in accounts receivable as of March 31, 2026 under the Sanofi License Agreement.

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

3 unchanged sentences

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

December 31, 2025 September 30, 2025

March 31, 2026 September 30, 2025

(in thousands)

10 unchanged sentences

Property, plant and equipment, net $ 374,822 $ 382,515

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 $ 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.

Depreciation and amortization expense for property, plant and equipment for the three months ended March 31, 2026 and 2025 was $ 5.9 million and $ 5.6 million, respectively.

Depreciation and amortization expense for property, plant and equipment for the six months ended March 31, 2026 and 2025 was $ 11.9 million and $ 10.4 million, respectively.

Accrued Expenses

Accrued expenses consisted of the following as of:

December 31, 2025 September 30, 2025

March 31, 2026 September 30, 2025

(in thousands)

3 unchanged sentences

co-development 32,676 31,296

28,498 31,296

Accrued capital expenditures 334 277

3 unchanged sentences

Total accrued expenses $ 76,585 $ 90,419

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;

co-development relates to the co-development and co-commercialization activities under the Takeda License Agreement (see Note 2).

As of March 31, 2026, the Company’s accrued research and development expenses were primarily attributable to ongoing clinical trial operations, preclinical animal studies, and associated toxicology assessments.

Research and development expenses related to co-development and co-commercialization activities per the Takeda License Agreement are reported as accrued research and development expenses;

co-development in the table above.

(see Note 2).

The Company’s investments consisted of the following:

As of December 31, 2025

As of March 31, 2026

(in thousands)

13 unchanged sentences

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

March 31, 2026 September 30, 2025

(in thousands)

3 unchanged sentences

566,425 468,490

After two to three years 449,926 —

$ 1,595,574 $ 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.

As of March 31, 2026 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 March 31, 2026 and 2025.

INTANGIBLE ASSETS

3 unchanged sentences

(in thousands) (in years)

As of December 31, 2025

As of March 31, 2026

Patents $ 21,728 $ 17,201 $ — $ 4,527 14

6 unchanged sentences

Intangible assets are reviewed annually for impairment and more frequently if potential impairment indicators exist.

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

No impairment indicators were identified during the six months ended March 31, 2026 and 2025.

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 December 31, 2025 and 2024.

Intangible assets amortization expense was $ 0.4 million for the three months ended March 31, 2026 and 2025, and $ 0.9 million for each of the six months ended March 31, 2026 and 2025.

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 December 31, 2025:

The following table presents the estimated future amortization expense related to intangible assets as of March 31, 2026:

Amortization Expense

7 unchanged sentences

(in thousands)

As of December 31, 2025

As of March 31, 2026

Common stock (1)

3 unchanged sentences

Common stock (1)

$ 0.001 290,000 138,363 135,702

Preferred stock $ 0.001 5,000 — —

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

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.

(1) Does not include shares of common stock into which the 2024 and 2026 Avoro Pre-Funded Warrants may be exercised.

As of March 31, 2026 and September 30, 2025, respectively, 18,192,429 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 (“2024 Avoro Pre-Funded Warrants”).

1 unchanged sentence

The outstanding 2024 Avoro Pre-Funded Warrants are exercisable at any time and do not have an expiration date.

The Company determined that the Avoro Pre-Funded Warrants are freestanding financial instruments because they (i) are immediately exercisable, (ii) do not embody an obligation for the Company to repurchase its shares, (iii) permit the holders to receive a fixed number of shares of common stock upon exercise, and (iv) are indexed to the Company’s common stock.

As such, the Company evaluated the Avoro Pre-Funded Warrants to determine whether they represent instruments that require liability classification pursuant to the guidance in ASC 480.

However, the Company concluded that the Avoro Pre-Funded Warrants are not a liability within the scope of ASC 480 due to their characteristics.

Further, the Company determined that the Avoro Pre-Funded Warrants do not meet the definition of a derivative under ASC 815 because they do not meet the criteria regarding no or little initial net investment.

Accordingly, the Company assessed the Avoro Pre-Funded Warrants relative to the guidance in ASC 815-40, Contracts in Entity's Own Equity , to determine the appropriate treatment.

The Company concluded that the 2024 Avoro Pre-funded Warrants are both indexed to its own stock and meet all other conditions for equity classification.

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

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

Accordingly, the Company has classified the 2024 Avoro Pre-funded Warrants as equity and recorded within additional paid-in capital.

As of March 31, 2026, no shares underlying the 2024 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”).

4 unchanged sentences

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.

The Company will pay Jefferies LLC a commission of up to 3.0 % of the aggregate gross proceeds received from all sales of the common stock under the Open Market Sale Agreement.

Unless otherwise terminated, the ATM Offering shall terminate upon the earlier of (i) the sale of all shares of common stock subject to the Open Market Sale Agreement and (ii) the termination of the Open Market Sale Agreement as permitted therein.

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

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.

On December 2, 2022, the Company entered into an open market sale agreement (the “Open Market Sale Agreement”) with Jefferies LLC (“Jefferies”).

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

Under the Amended and Restated Sale Agreement, the Company may, from time to time, sell up to $ 500.0 million in shares of the Company’s common stock through Jefferies, acting as the sales agent and/or principal, in an at-the-market offering (“ATM Offering”).

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.

The Company pays Jefferies a commission of up to 3.0 % of the aggregate gross proceeds received from all sales of the common stock under the ATM Offering.

The Amended and Restated Sale Agreement may be terminated by either party upon written notice.

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.

The Company did no t make any sales under the ATM Offering during the second quarter

of fiscal 2026.

On January 7, 2026, the Company entered into an underwriting agreement with Jefferies and J.P.

Morgan Securities, LLC (“J.P.

Morgan”) for an underwritten public offering (the “2026 Offering”) of:

(i) 2,015,505 shares of common stock with $ 0.001 par value per share, at a public offering price of $ 64.50 per share, and (ii) pre‑funded warrants (“2026 Avoro Pre-Funded Warrants”) to purchase 1,550,387 shares of common stock, at a public offering price of $ 64.499 per share, 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.

The 2026 Offering closed on January 9, 2026, generating gross proceeds of $ 230 million and net proceeds of $ 216.6 million after deducting the underwriting discounts and commissions and other offering expenses.

The Company concluded that the 2026 Avoro Pre-funded Warrants are both indexed to its own stock and meet all other conditions for equity classification.

Accordingly, the Company has classified the 2026 Avoro Pre-funded Warrants as equity and recorded within additional paid-in capital.

As of March 31, 2026, no shares underlying the 2026 Avoro Pre-Funded Warrants had been exercised.

On January 2, 2026, option holders of Visirna, the Company's consolidated variable interest entity, exercised 14,000,000 stock options.

As a result, the Company’s ownership interest in Visirna decreased from 66.25 % to 56.38 %.

Because the Company retained its controlling financial interest in Visirna, the change in ownership was accounted for as an equity transaction in accordance with ASC 810-10-45-22 through 45-24.

The noncontrolling interest was increased by $ 3.1 million to reflect the change in ownership resulting from exercise of 14,000,000 stock options by Visirna option holders.

The decrease of $ 3.1 million was recorded to additional paid‑in capital attributable to Arrowhead.

During the first quarter of fiscal 2026, Visirna declared a cash dividend of $ 100.0 million to its shareholders.

As of December 31, 2025, the portion of the dividend declared payable to the Company’s noncontrolling shareholders totaled $ 40.5 million and was included in the accompanying consolidated statements of equity.

In March 2026, Visirna paid cash dividends totaling $ 94.8 million, consisting of $ 56.4 million paid to the Company and $ 38.4 million paid to the Company’s noncontrolling shareholders.

The remaining $ 3.1 million of the declared dividend represents exercise prices paid by certain noncontrolling shareholders in connection with the exercise of their stock options, which were netted against the dividend otherwise payable to those shareholders.

As of March 31, 2026, Visirna had a remaining dividend payable of $ 2.1 million to the Company’s noncontrolling shareholder, which was included in accrued expenses in the accompanying consolidated balance sheets.

COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

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 December 31, 2025.

There were no contingent liabilities recorded as of March 31, 2026.

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.

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

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

On December 23, 2025, the court granted Ionis’s motion to dismiss the Delaware DJ action.

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.

As of March 31, 2026, the Company did not have any material commitments.

EQUITY METHOD INVESTMENT

On January 15, 2026, the Company, through its consolidated variable interest entity, Visirna, entered into and closed an Asset Transfer Agreement (the “Asset Transfer Agreement”) with Bisirna, pursuant to which the Company received 26,500,000 ordinary shares and 6,625,000 Series A preferred shares in exchange for in‑process research and development (“IPR&D”) assets transferred from Visirna to Bisirna.

As a result of the asset transfer, the Company recognized a gain of $ 19.0 million in other income in the accompanying consolidated statements of operations and comprehensive (loss) income

for the three months ended March 31, 2026.

The Company evaluated whether there was a basis difference between the carrying value and fair value of its proportionate share of Bisirna’s underlying net assets.

As Bisirna was not deemed a business as defined in ASC 805, Business Combinations , the Company immediately expensed the basis difference to the extent it related to acquired IPR&D assets.

As of March 31, 2026, the Company held a 25.29 % voting interest in Bisirna and one seat on Bisirna’s board of directors.

The Company accounts its ownership in Bisirna under the equity method.

As of March 31, 2026, the carrying value of the Company’s investment in Bisirna was $ 4.7 million, which was included in other assets in the accompanying consolidated balance sheets.

Pasadena, California :

The Company leases 49,000 square feet of office space located at 177 East Colorado Blvd.

for its corporate headquarters from 177 Colorado Owner, LLC, which lease expires on April 30, 2027.

The lease contains an option to renew for one additional five-year term.

The Company is not reasonably certain that it will exercise this option to

renew and therefore it is not included in right-of-use assets and liabilities as of December 31, 2025.

for its corporate headquarters from 177 Colorado Owner, LLC.

The lease expires on April 30, 2027, and contains an option to renew for one additional five-year term.

As of March 31, 2026, the Company had not exercised the renewal option and therefore it is not included in right-of-use assets and liabilities.

Subsequent to March 31, 2026, the Company entered into a lease amendment with 177 Colorado Owner, LLC.

See Note 17, Subsequent Events.

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 December 31, 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 March 31, 2026.

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 December 31, 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 March 31, 2026.

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 December 31, 2025 September 30, 2025

Lease Assets and Liabilities Classification March 31, 2026 September 30, 2025

(in thousands)

2 unchanged sentences

Non-current operating lease liabilities Lease liabilities, net of current portion 100,106 104,112

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

Lease Cost Classification 2026 2025 2026 2025

1 unchanged sentence

Operating lease cost Research and development $ 2,789 $ 2,709 $ 5,518 $ 5,520

General and administrative expense 511 493

Selling, general and administrative 497 500 1,008 993

Variable lease cost (1)

Research and development 1,138 951 2,090 1,937

General and administrative expense — —

Selling, general and administrative — — — —

Total $ 4,424 $ 4,160 $ 8,616 $ 8,450

(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 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:

There was no short-term lease cost during the three and six months ended March 31, 2026 and 2025, respectively.

The following table presents maturities of operating lease liabilities on an undiscounted basis as of March 31, 2026:

(in thousands)

5 unchanged sentences

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

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(in thousands)

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

Operating cash flows from operating leases $ 3,944 $ 3,840 $ 7,887 $ 7,680

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

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

Operating cash flows from operating leases $ 3,943 $ 3,840

Weighted-average remaining lease term (in years) 11.3 12.1

2 unchanged sentences

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

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 2013 Incentive Plan (the “2013 Plan”), 1,657,364 awards are granted and outstanding, relating to stock options and restricted stock awards to employees and directors as of March 31, 2026.

Under the 2021 Incentive Plan (the “2021 Plan”), 18,500,000 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 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.

As of March 31, 2026, 7,940,708 shares have been granted under the 2021 Plan, the total number of shares available for issuance was 11,354,663 shares, which includes 170,898 and 624,473 shares that were forfeited under the 2013 and 2021 Plans, respectively.

This reflects an amendment and restatement of the 2021 Plan approved by the Company’s stockholders on March 19, 2026 to increase the total number of authorized shares by 10,500,000 shares and extend the term of the plan to January 21, 2036.

Under the Company ’ s Inducement Plan (the “Inducement Plan”), 832,950 shares of the Company’s common stock are authorized for issuance pursuant to grants of stock options, stock appreciation rights, restricted and unrestricted stock, stock units (including restricted stock units), performance awards, cash awards, and other awards convertible into or otherwise based on shares of the Company’s common stock.

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

As of March 31, 2026, 807,012 shares have been granted, net of cancellations, under the Inducement Plan.

The total number of shares remaining available for issuance was 25,938 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 December 31, 2025, there were 684,030 and 69,375 shares underlying outstanding stand-alone inducement options and restricted stock units, respectively.

As of March 31, 2026, there were 399,705 and 50,850 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.:

December 31, 2025

March 31, 2026

2013 Plan 2021 Plan Inducement Awards Total

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

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(in thousands)

Research and development $ 8,441 $ 7,264 $ 14,817 $ 14,110

General and administrative 13,214 7,329

Selling, general and administrative 8,127 7,817 21,341 15,147

Total $ 16,568 $ 15,081 $ 36,158 $ 29,257

Stock Option Awards

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

The following table presents a summary of the stock option activity for the six months ended March 31, 2026:

Shares Weighted-

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Exercised ( 427,001 ) 17.26

Outstanding at December 31, 2025

Outstanding at March 31, 2026

980,034 $ 33.83 3.3 $ 29,108,721

Exercisable at December 31, 2025

Exercisable at March 31, 2026

980,034 $ 33.83 3.3 $ 29,108,721

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 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 total intrinsic value of the options exercised during the three months ended March 31, 2026 and 2025 was $ 5.8 million and $ 3.7 million, respectively.

The total intrinsic value of the options exercised during the six months ended March 31, 2026 and 2025 was $ 18.4 million and $ 4.6 million, respectively.

Stock-based compensation expense related to stock options outstanding for the three months ended March 31, 2026 and 2025, was $ 0 and $ 3.0 thousand, respectively.

Stock-based compensation expense related to stock options outstanding for the six months ended March 31, 2026 and 2025, was $ 0 and $ 0.1 million, respectively.

As of March 31, 2026, 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.

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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 three months ended December 31, 2025 and 2024.

No options were granted during the six months ended March 31, 2026 and 2025.

Visirna ESOP :

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.

Through March 31, 2026, Visirna, a subsidiary of the Company, granted an aggregate of 16,400,000 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 December 31, 2025 and 2024, stock-based compensation expense related to the Visirna ESOP was $ 0.2 million and $ 1.0 million, respectively.

For the three months ended March 31, 2026 and 2025, stock-based compensation expense related to the Visirna ESOP was $ 0.1 million and $( 0.1 ) million, respectively.

For the six months ended March 31, 2026 and 2025, stock-based compensation expense related to the Visirna ESOP was $( 0.1 ) million and $ 1.9 million, respectively.

Restricted Stock Units

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Forfeited ( 209,239 ) 27.89

Outstanding at December 31, 2025

Outstanding at March 31, 2026

5,831,794 $ 45.60

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 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.

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 March 31, 2026 and 2025, the Company recorded $ 16.6 million and $ 15.1 million of expense related to RSUs, respectively.

For the six months ended March 31, 2026 and 2025, the Company recorded $ 36.2 million and $ 29.2 million of expense related to RSUs, respectively.

As of March 31, 2026, there was $ 171.5 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

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

As of March 31, 2026 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:

December 31, 2025

March 31, 2026

Level 1 Level 2 Level 3 Total

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Available-for-sale securities

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

government and agency securities $ — $ 256,086 $ — $ 256,086

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Term deposit — 16,950 — 16,950

Commercial notes — 30,246 — 30,246

Total cash equivalents

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

Convertible Notes

Our Convertible Notes (see Note 14) had a fair value of $ 722.8 million at March 31, 2026.

We determine the fair value of the Convertible Notes based on quoted market prices for these notes, which are Level 2 measurements because the

Convertible Notes do not trade regularly.

Credit Facility

The fair value of the Company’s outstanding credit facility (see Note 13) was estimated using the net present value of the expected contractual payments, discounted at an interest rate consistent with a market interest rate, which represents a Level 2 input.

As of March 31, 2026, the estimated fair value of our credit facility approximated its carrying amount.

LIABILITY RELATED TO THE SALE OF FUTURE ROYALTIES

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During the third quarter of fiscal 2024, Amgen completed enrollment of the Phase 3 OCEAN(a) outcomes trial of olpasiran, which triggered a $ 50.0 million milestone payment that the Company received in the same quarter.

As of March 31, 2026, up to $ 110.0 million of additional milestone payments remain payable in the future, contingent upon the achievement of the remaining regulatory and royalty-based milestones.

In consideration for the payment of the foregoing amounts under the Royalty Pharma Agreement, Royalty Pharma is entitled to receive all royalties otherwise payable by Amgen to the Company under the Olpasiran Agreement.

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

During the three months ended March 31, 2026, the Company updated its estimates of future royalty payments based on revised assumptions related primarily to expected pricing, product launch timing, and projected sales.

These revisions resulted in changes to the expected amount and timing of future cash flows and, accordingly, an increase in the effective interest rate.

As a result, the estimated effective interest rate increased from 8.3 % as of September 30, 2025 to 9.4 % as of March 31, 2026.

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

Three Months Ended December 31,

Six Months Ended March 31,

(in thousands)

Beginning carrying value $ 367,397 $ 341,361

$ 367,397 $ 341,361

Milestone payment received — —

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Ending carrying value $ 383,829 $ 352,276

$ 374,997 $ 346,776

FINANCING AGREEMENT

On August 7, 2024 (the “Closing Date”), the Company entered into a Financing Agreement with the guarantors party thereto, the lenders party thereto (the “Lenders”), and Sixth Street Lending Partners (“Sixth Street”), as the administrative agent and collateral agent for the Lenders (the “Financing Agreement”).

The Financing Agreement establishes a senior secured term loan facility of $ 500.0 million (the “Credit Facility”), consisting of $ 400.0 million funded on the Closing Date and an additional $ 100.0 million available at the Company’s option, subject to mutual agreement with Sixth Street.

The Financing Agreement

establishes a senior secured term loan facility of $ 500.0 million (the “Credit Facility”), consisting of $ 400.0 million funded on the Closing Date and an additional $ 100.0 million available at the Company’s option, subject to mutual agreement with Sixth Street.

The loans under the Credit Facility bear interest at an annual rate of 15.0 %, which is paid in kind and added to the outstanding principal balance of the Credit Facility each period.

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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 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.

As of March 31, 2026, the Company has paid $ 142.3 million in MOIC payments of which $ 21.5 million is expected to be applied to principal upon repayment in full.

To date, the Company has paid $ 286.1 million of the loans under the Credit Facility.

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The Financing Agreement contains customary covenants, including, without limitation, a financial covenant to maintain liquidity (cash, cash equivalents and investments) of at least $ 250.0 million if the Company ’ s market capitalization is above $ 2.0 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.

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 Company (based on the closing price of the common stock of 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.

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:

December 31, 2025 September 30, 2025

March 31, 2026 September 30, 2025

(in thousands)

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

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(in thousands)

Amortization of debt issuance costs

$ 367 $ 1,129 $ 748 $ 1,682

Accretion of the MOIC Payment 1,178 — 2,462 —

3 unchanged sentences

$ 14,357 $ 16,138 $ 29,262 $ 32,369

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.

The amounts shown in the table below, related to the Credit Facility, represent the expected repayments of principle and accrued interest balance as of March 31, 2026 inclusive of scheduled 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 scheduled.

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

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The term of each loan is twelve months .

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,

The amount outstanding as of March 31, 2026 was 72.9 million Chinese Yuan ($ 10.5 million) on the credit facility which was classified as other current liabilities.

CONVERTIBLE NOTES

In January 2026, the Company issued 700.0 million aggregate principal amount of 0.00 % Convertible Notes (the “Notes”) due January 15, 2032.

The initial conversion rate is 11.4844 shares of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $ 87.07 per share, subject to adjustment upon the occurrence of certain specified events.

The Notes are convertible into an aggregate of approximately 8,039,080 shares of the Company’s common stock.

The conversion rate is subject to adjustment, including in the case of conversions in connection with a make-whole fundamental change as defined in the indenture for the Notes or a redemption of the Notes.

The Notes are convertible at the option of the holders upon the occurrence of certain events prior to October 15, 2031, and thereafter at any time until the close of business on the second scheduled trading day immediately preceding the

maturity date.

Prior to October 15, 2031, holders may convert the Notes only upon the occurrence of one of the following circumstances:

(i) during any calendar quarter commencing after the calendar quarter ending March 31, 2026, if the last reported sale price of the Company’s common stock exceeds 130 % of the conversion price for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading‑day period ending on, and including, the last trading day of the immediately preceding calendar quarter;

(ii) during the five business days immediately following any ten consecutive trading‑day period in which the trading price per $1,000 principal amount of the Notes for each trading day of such ten consecutive trading-day period is less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day;

(iii) upon the occurrence of certain specified corporate events or distributions on the common stock;

or (iv) if the Company calls the Notes for redemption.

Upon conversion, the Company may, at its election, settle the Notes in cash, shares of the Company’s common stock, or a combination thereof.

The Company may not redeem the Notes prior to January 16, 2029.

On or after January 16, 2029 and on or before the 30 th scheduled trading day immediately preceding the maturity date, the Company may redeem for cash all or any portion of the Notes, at its option, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading‑day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption.

The redemption price will equal 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date.

Upon the occurrence of a fundamental change, which includes certain change-of-control transactions, a delisting of the Company’s common stock, or a liquidation event, holders may require the Company to repurchase their Notes for cash at a price equal to 100 % of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.

The outstanding balance of the Notes consisted of the following:

March 31, 2026 September 30, 2025

(in thousands)

Outstanding principal balance

$ 700,000 $ —

Unamortized debt issuance costs

Convertible Notes, Net

$ 681,940 $ —

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

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(in thousands)

Amortization of debt issuance costs

$ 657 $ — $ 657 $ —

Total interest expense

$ 657 $ — $ 657 $ —

Capped Call Transactions

In connection with the issuance of the Notes, the Company entered into privately negotiated capped call transactions (the “Capped Calls”) with certain financial institutions.

The Capped Calls have an initial strike price corresponding to the initial conversion price of the Notes and an initial cap price of $ 119.33 per share, subject to adjustment under the terms of the Capped Call confirmations.

The Capped Calls are intended to reduce or offset potential dilution to the Company’s common stock upon conversion of the Notes, with such reduction or offset subject to the applicable cap price.

The Capped Calls cover, subject to anti‑dilution adjustments, the number of shares of the Company’s common stock underlying the Notes.

The Capped Calls are separate transactions that are not part of the terms of the Notes and do not affect the rights of holders of the Notes.

The Company paid $ 47.9 million in connection with the Capped Call transactions, which was recorded as a reduction to additional paid‑in capital in the consolidated balance sheets.

As the Capped Calls meet the applicable equity classification criteria under ASC 815, Derivatives and Hedging , they are recorded within stockholders’ equity and are not subsequently remeasured to fair value.

NET (LOSS) INCOME PER SHARE

The following table presents the computation of basic and diluted net (loss) income per share for the three and six months ended March 31, 2026 and 2025.

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(in thousands, except per share amounts)

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

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

$ ( 132,732 ) $ 370,445 $ ( 101,919 ) $ 197,360

4 unchanged sentences

142,417 134,484 139,762 130,265

Basic net income (loss) per share

$ 0.22 $ ( 1.39 )

Diluted net income (loss) per share

Basic net (loss) income per share $ ( 0.93 ) $ 2.78 $ ( 0.73 ) $ 1.53

Diluted net (loss) income per share $ ( 0.93 ) $ 2.75 $ ( 0.73 ) $ 1.52

(1) Include shares of common stock into which the 2024 and 2026 Avoro Pre-Funded Warrants may be exercised.

The following table sets forth the weight-average number of 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 March 31, Six Months Ended March 31,

2026 2025 2026 2025

(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)

1 unchanged sentence

Restricted stock units 5,605 5,289 5,389 4,567

If-converted common stock from convertible notes 7,057 — 3,489 —

Total 13,684 6,049 10,038 5,317

1 unchanged sentence

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.

The Company's RNAi therapeutics are comprised of siRNAs that function upstream of conventional medicines by potently silencing 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.

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

All of these activities are supported by corporate staff functions.

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

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.

The CEO uses consolidated net (loss) income to evaluate loss or 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:

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,

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(in thousands)

Candidate costs $ 99,449 $ 71,191 $ 204,439 $ 148,087

R&D discovery costs 21,829 12,936

Discovery costs

18,498 14,806 40,326 27,742

Salaries 33,546 26,907 63,585 54,052

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Total research and development expense $ 173,253 $ 133,102 $ 350,456 $ 270,104

General & Administrative

Three Months Ended December 31,

Selling, General & Administrative

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(in thousands)

2 unchanged sentences

Facilities related 1,496 1,082 3,159 2,367

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

Total selling, general and administrative expense, excluding non-cash expense

$ 32,871 $ 19,754 $ 65,375 $ 38,496

Stock compensation 8,373 8,140 21,386 15,799

Depreciation/amortization 500 511 1,004 1,020

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

Total selling, general and administrative expense

$ 41,744 $ 28,405 $ 87,765 $ 55,315

SUBSEQUENT EVENTS

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.

Lease Amendment

On April 27, 2026, the Company entered into a lease amendment (the “Pasadena Lease Amendment”) with 177 Colorado Owner, LLC for its corporate headquarters located at 177 East Colorado Blvd.

in Pasadena, California (the “Premises”).

Under the terms of the Pasadena Lease Amendment, the Company will lease approximately 98,444 square feet of office space at the Premises.

The 2026 Pasadena Lease Amendment is expected to commence on the later of May 1, 2027, or the date of substantial completion of tenant improvements, but in no event later than August 1, 2027.

The Pasadena Lease Amendment has a lease term of seven years and eight months and provides two consecutive options to extend the lease term by five years each.

Total rent and other obligations under the Pasadena Lease Amendment are expected to be approximately $ 50.3 million.

Licensing Agreement

On May 4, 2026, the Company entered into a Licensing Agreement with Madrigal Pharmaceuticals, Inc., (“Madrigal”).

Under the terms of the agreement, Madrigal will receive an exclusive global license to develop, manufacture, and commercialize ARO-PNPLA3, a clinical stage program.

The Company will receive an upfront payment of $ 25.0 million, and is eligible to receive milestone payments of up to $ 975.0 million.

The Company is further eligible to receive tiered royalties on commercial sales ranging from high-single digits to the mid-teens.

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