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BioBoyScout's
Proprietary Due Diligence, Analysis, Competitive Intelligence, and Opinion
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Meeting with Arrowhead in San Francisco during
the JP Morgan Healthcare Conference at the Sir Francis Drake Hotel on
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Tuesday, January 14, 2020. Meeting was with Bruce
Given, COO, and Vince Anzalone, VP Head of Investor Relations.
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Summations and not direct quotes.
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The person that was supposed to meet with Arrowhead just before me was a no
show, so I started 10 minutes early and this gave me a full 40 minutes
instead of just a half hour. The discussion initially began on my thoughts of
Dicerna and Ionis possibly merging with each other because Dicerna is
incredibly backlogged with all of its partnerships, and Ionis has potential
problems in the future with its ASO (antisense oligonucleotide) modality
being inferior to RNAi.
Vince pointed out that Dicerna basically made the decision to become a CRO
(contract research organization), therefore IT IS OBLIGATED to develop drugs
for its partners, and that leaves very little bandwidth for its own
development for wholly-owned drugs. He said that Ionis is also in the same
boat, and as a result, both companies are missing out on developing more of
their own wholly-owned drugs.
Vince thinks that it's tough for anyone to acquire these companies due to
the fact that much of the valuation of its drugs is partnered out, and that
leaves much less additional revenue for a potential acquiring company. Vince
pointed out that Arrowhead has a different business model by holding on to
the global product rights for its drugs for as long as it can. This allows
Arrowhead to build the MOST value for its shareholders, as well as having the
added benefit of getting its drugs to patients much faster. In my opinion, I
believe that one can come to the conclusion, and even reasonably assume from
Vince's arguments that IF a big pharma company wanted to acquire an RNAi or
gene silencing company, then Arrowhead would clearly be a much more
attractive candidate than Dicerna and Ionis because of the full revenue
potential that is available on its wholly-owned drug candidates. IMO, I still
believe that a merger between Dicerna and Ionis still makes a lot of sense
and would be in the best interests of both companies. Additionally, Dicerna
may be somewhat of an attractive suitor to one of their partners, particularly
Eli Lilly, as they already have some skin in the game.
With that said, Arrowhead believes that it executes in the drug developing
process better than any of its competitors. By keeping its drugs
wholly-owned, Arrowhead can then keep for itself most of the value of its
drugs. In addition, the best way to get drugs to the patients that need it
most in the quickest possible time is to keep the drug development process
in-house and wholly-owned, as that is the clearly the fastest path to
approval. Arrowhead further believes that its clinical operations and program
management operations are very fast and very good, and that its able to do
this without cutting any corners along the way. Contrasting this to Dicerna,
its drugs are licensed out and this slows down the entire process; because of
this Dicerna can't be as motivated for data readouts as Arrowhead is.
In Arrowhead's partnership with Amgen, Vince pointed out that the path for
getting the data was significantly slower than if Arrowhead were to do it
itself. For example, the IND-ready drug that Arrowhead gave to Amgen in the
fall of 2016 would have been in the clinic in early-to-mid 2017 if Arrowhead
was handling it. Amgen, however, didn't get the drug into the clinic until
the summer of 2018, as Amgen wanted to be extra sure of what it had.
Additionally, since the summer of 2018, Amgen has been slower with its data
readouts than the way Arrowhead would handle it.
Vince and Bruce pointed out that with the second target that Amgen asked
for (which Bruce personally never really liked), Arrowhead delivered to Amgen
exactly what it wanted, that it was a good drug, and that the drug did what
it was supposed to do. In the end, Bruce wasn't surprised that Amgen didn't
take the second target.
At the present time Arrowhead believes that it has a good mix of partnered
drugs and wholly-owned drugs. It would like to keep that particular mix the
way it is, but it will partner some indications when the time is right.
Presently, the main goal is to grow the wholly-owned pipeline, as it doesn't
see any present need to partner. Vince said that the goal when partnering is
to only partner when the partner can do something for you that you can't do yourself,
such as provide capital, development, commercialization, marketing, etc., and
Arrowhead doesn't need any of this at this present time.
Arrowhead doesn't want to waste its time and man hours on programs of other
companies, however, if companies like Amgen and JNJ come to them, then it is
willing to partner novel targets that are not part of Arrowhead's pipeline
and not part of what Arrowhead is already working on. By partnering NOVEL
targets (including new tissue types), this allows Arrowhead to get into areas
of technology that it wouldn't be otherwise working on, and that helps them
learn more and expand its expertise. With that said, Bruce pointed out that
Arrowhead is still guiding to have 10 drugs in, or submitted to the clinic by
the end of this year; and a few years after that it should be 20 drugs. No
doubt some of them will be licensed or partnered in
co-development/co-marketing partnerships. This is the first time I've heard
Arrowhead mention co-development and co-marketing - I consider this to be a
positive as it means that Arrowhead intends to keep growing and that it is
looking to keep a bigger piece of the pie in its partnered, wholly-developed
drugs.
I then asked about ARO-ANG3 and ARO-APOC3 and whether Arrowhead is looking
to partner the non-orphan indications. Bruce mentioned that Arrowhead could
probably get the resources to do it on its own, but that you probably
wouldn't want to do that off of the base of a $6 billion company, but you
might want to do it off of the base of a $12 to $20 billion market cap
company, and you don't know exactly where you're going to be in the future.
With $500 million in cash there is no urgency for Arrowhead to partner, as it
is currently in its best ever position of strength. It is most likely that
they will probably create some partnerships in the future, but it doesn't
feel currently forced to do so, and this allows Arrowhead to work out the
best deal possible that is most beneficial to the company, and to maximize
shareholder value.
Arrowhead is still guiding ARO-ENaC for its IND filing in the first half of
2020, and it is very excited about the target for a number of reasons.
ARO-ENaC is currently under GLP tox studies, and once that's finished
Arrowhead will immediately file an IND. At that point it then becomes
plug-and-play for a number of targets that big pharma has been wanting to
drug and is unable to drug. If ARO-ENaC turns out to do what it's supposed to
do, Arrowhead sees a franchise rolling out very rapidly. Bruce emphasized
that new classes of pulmonary drugs come out about once every decade, and
that there's been very little movement in this area. He further said that if
the pulmonary franchise evolves the way Arrowhead wants it to, then it could
see asthma, COPD, and other indications in the future, with possible
co-development and co-marketing in the mix.
The dimer and muscle target are still under wraps, as it appears that they
don't want the competition to find out anything about it until it's
necessary. There is currently no guidance yet for these targets.
I then asked Bruce about its HBV drug and if there's any possibility that
the FDA might possibly approve the drug if it has good data. He said that it
depends on how good the data and safety profile are, and that there are
"breakthrough pathways" in both the US and Europe right now, as the
trials are robust enough. So it isn't impossible, especially since the
regulators are more lenient nowadays, but it is unlikely, as the patient size
may not be big enough. If the regulators really like what they're seeing,
then they'll probably make the pathway to approval much easier, very
similarly in the way it happened with Gilead and HCV. In that instance, the
data from Pharmasset was so strong that the regulators provided a quicker and
easier path to approval, additionally, the regulators also eased up on the
standards because they liked what they were seeing.
With regards to ARO-AAT, Arrowhead probably won't be releasing any data
this year, especially the blinded Sequoia study - that might happen around
the 18 month mark, but not sure yet. With regards to the open label,
Arrowhead will assess that at the 6 month mark to determine if it's in
Arrowhead's best interest at that time or not. It is, however, unlikely, as
Arrowhead may not want to give competitors an early heads-up about the data.
I understand Bruce's thinking here, as the competition may be waiting to see
how Arrowhead's trial is proceeding before determining what to do next with
its own trials and how to best proceed next. The longer you can keep the
competition at bay, the bigger advantage Arrowhead is able make on the
competition.
With regards to ARO-APOC3 and ARO-ANG3, it is Arrowhead's goal to still
enter into a pivotal phase 2/3 study some time before the end of the year,
and that means that we should see phase 1 data coming from these targets.
Arrowhead needs to follow and analyze the patient data for quite a while and
then it will need to work with the regulators in order to get their approval.
Working with the regulators could take a while, as it took around 6 months
for Arrowhead to work out the pivotal phase 2/3 trial for ARO-AAT.
I had mentioned to Bruce and Vince that I noticed a big difference in
Arrowhead management's attitude on Analyst Day 2019 vs. Analyst Day 2018. In
2018 management was quite serious, rarely smiled, and pretty darn stiff,
whereas in 2019 management was much more relaxed, jovial, much more vocal,
transparent, and easier to talk to. Bruce's instant response to that was
"we knew we had something."
With regards to milestones, it is unlikely that Arrowhead will get any from
JNJ this year, as phase 3 will trigger the next milestone. With Amgen,
another milestone payment will get triggered when phase 2 of AMG 890
starts.
With regards to ARO-HIF2 and ARO-HSD, Arrowhead isn't currently guiding
that it will have data by the end of the year, but it's possible. I believe
that it is still a bit too early for Arrowhead to guide on when this will
happen and I'm guessing we'll know more by the middle of the year.
I then asked about Arrowhead's current share price and what they thought
was the reason behind the slightly downward movement this last month. Vince
explained that there are times of powerful moves followed by some
consolidation and pull-back, and then the process tends to repeat itself.
Vince believes that this type of pattern is a healthy way for the stock to
consolidate before it continues to grow onto the next step.
That's pretty much it, it was a fast 40 minutes, and I wasn't able to get
to everything. Some things I didn't have time to get to and cover with
them:
1. when Arrowhead plans on delivering JNJ1 (as well as JNJ2 and JNJ3), as
that should trigger a milestone payment;
2. commercialization efforts, including the new Chief Commercial Officer;
3. discussing new hires, including the new Chief Medical Officer, Chief
Scientific Officer, and the new Board Member;
4. analyst coverage, as well as more details from the latest offering that
took place;
5. thoughts on the midcap 400 and how that helps; and
6. thoughts on the Intellectual Property landscape, particularly as it
relates to the revelations I made in my August 14th Equity Research
Report.
With regards to attitude and body language during the meeting, it was clear
that Arrowhead was not only very relaxed, but they were confident in what
they were saying. Also, it helped that Vince and Bruce already knew me; Vince
had even thanked me for the work and coverage I provide on Arrowhead and that
it was greatly appreciated. There were lots of smiles and even a bit of
joking around. Some of you may have noticed, I was also able to snag a photo
with management later that same day after I finished a meeting with another
company.
While most of the information Arrowhead provided me in the meeting may not
be new, there are clearly a few nice new pieces of information to help
explain the competitive landscape and how Arrowhead is making key decisions
in a way to maximize shareholder value. This meeting also provided further
confirmation that things are on track and proceeding very nicely. I believe
that Arrowhead is doing a great job in establishing themselves as a quickly
growing solid pharmaceutical development company, and it is the type of
company big money managers should have in their portfolio on a long-term
basis. I anticipate Arrowhead to have a fantastic year and I will plan on
updating my price target shortly after Arrowhead officially begins dosing
ARO-HSD and/or ARO-HIF2.
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Follow-up Call with Vince Anzalone, VP Investor
Relations at Arrowhead Pharmaceuticals, Friday, November 8, 2019.
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Summations and not direct quotes.
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I had a short follow-up call with Vince on Friday after the
bell, here's what I covered:
The small-scale manufacturing facility is complete, and they're waiting on
getting GMP certification. Vince wasn't sure how long that would take. He didn't
know the cost, but he said that it's in their quarterly financials, and may
be combined with the build-out they had in Pasadena. He said the cost of the
manufacturing facility was more significant than Pasadena.
I asked about Roche's shares, as they had approximately 3 million shares of
the company when Arrowhead acquired their RNAi assets. I was a bit concerned
about Roche due to their recent deal with Dicerna. Unfortunately, Vince
wasn't even sure if Roche still owned any shares of Arrowhead, and that they
may have already sold them over time.
I then asked about the meeting they had with BRiley FBR (as publicized on
thefly.com). Vince said that it wasn't a meeting WITH BRiley, but rather
investor meetings (institutions) that BRiley had arranged.
I then asked Vince what the big takeaway was from the two poster
presentations that were released that day. His response was two-fold, first
that the drug is doing what it's supposed to do, and that more importantly,
the safety profile looks really good. When I asked about seeing one patient
seroclear (meaning the HBsAg levels dropped below the level of detection), he
said that there was more than one, but that it was still early to deduct
anything from that. Since the study did not have a "functional
cure" as one of the endpoints, we may not find out if any patients
actually functionally cured unless the patient and/or their doctor
voluntarily report it. Note that a patient must be off of drugs for 6 months
with undetectable HBsAg levels in order to be considered functionally cured.
The next couple of phase 2 studies now initiated by Janssen do have
"functional cure" as one of the endpoints.
Lastly, I asked Vince if there is any bad news or anything negative that I
may not be aware of that the company has publicly disclosed to anyone. I
consider this to be a key question, as all too often negative news can be
hidden or disguised. Vince's extremely gleeful response (with laughter) was
that there was nothing negative at all.
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Call with Vince Anzalone, VP Investor Relations
at Arrowhead Pharmaceuticals, Friday, October 25, 2019.
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Summations and not direct quotes.
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Had a telephone interview with Vince Anzalone on Friday. I
wanted to follow-up with him regarding a few questions I had after Analyst
Day. Some of the answers are quite revealing, and I will break up the
interview in a few posts, so enjoy.
I told Vince that I wasn't entirely convinced of the argument they provided
regarding their new "dimer" molecule. What I didn't buy was that 6
mg/kg of the dimer drug was equivalent to two 3 mg/kg doses of the monomer,
particularly since the dimer has twice as many triggers. So I therefore
wanted to know if there were any advantages with regarding to being able to
skip a step when testing the dimer in the clinic. Vince's confirmed that with
the dimer, Arrowhead can begin testing a combo drug immediately, whereas two
monomer drugs would need to be first tested individually before you can test
the combo. This is clearly a big advantage, as Arrowhead is able to save at
least 9-12 months time in the clinic, and it also saves on costs for having
to run two additional phase 1 safety trials. Since this info was not featured
in the presentation, I suggested to Vince that this significant piece of news
should be included in future presentation about the dimer. Vince further
elaborated that the dimer allows for simultaneous release of both triggers,
and that this can be important when you're trying to knock down two genes at
the same time, as the desired effectiveness may not be achieved if the timing
is off. Vince also stated that the dimer molecule has a similar configuration
as their ARO-HBV drug that has two triggers, except that the dimer knocks
down two genes, instead of one at two different locations.
Conclusion: the new "dimer" molecule not only allows Arrowhead to
target additional diseases with simultaneous targeting of two genes, but
they're able to save about a year's time in the clinic.
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The next topic I covered with Vince was manufacturing. At
Analyst Day, and prior to Analyst Day I heard a LOT of buzz about Arrowhead
building a manufacturing facility in Madison, but there was no official news
out there that I knew of. I told Vince that I'm hearing a lot of rumors about
Arrowhead building or planning on building a manufacturing facility in
Madison and if he had any news that he could share with me. Vince confirmed
that Arrowhead is currently building a small-scale manufacturing facility in
Madison. They leased out approximately 15,000 - 20,000 square feet from Roche
right next door to Arrowhead's R&D facility. This facility is intended to
be used for small clinical scale drug development (phase 1 - 3, and possibly
for orphan drugs??). They are in the process of trying to get FDA validation
of the facility. Arrowhead currently has no plans to develop a commercial
scale manufacturing facility. As far as costs are concerned, Vince confirmed
that Arrowhead is able to fund the development of this facility with their
existing funds.
Conclusion: great to know that Arrowhead is investing in small-scale
manufacturing without a capital raise. This shows Arrowhead's committment to
growing in the clinic with uncommon speed.
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Third and last post regarding my telephone interview with Vince.
I asked about Arrowhead's Annual shareholder meeting and if maybe they'll
open up the doors to shareholders and host a meet and greet event. Vince said
that many companies are now moving over to virtual events to handle their
shareholder vote business issues and that they currently have no plans to
hosting an on-site shareholder meeting. Considering that Arrowhead presents
across their entire platform on a regular basis at various events, I would
think that this should be sufficient at this time to address shareholder
issues.
Another topic I brought up with Vince is getting coverage from bulge
bracket investment firms (the largest and most profitable multi-national
investment banks in the world). I did not expect to get any significant
information on this topic, as Vince confirmed that Arrowhead has no control
in whether these investment firms would cover Arrowhead, BUT, he did tell me
that Arrowhead is in regular communication with a number of bulge bracket
firms. So at a very minimum, we at least know that there is some conitinuting
dialogue out there with the larger banks. I consider that to be great news,
as it's difficult, if not impossible, to ignore what Arrowhead has been
accomplishing lately, the least of which is its solid stock price movement.
So keep your fingers crossed, I smell it coming.
Lastly, Arrowhead is now following @BioBoyScout on Twitter.
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Vir S-1 -
https://www.sec.gov/Archives/edgar/data/1706431/000119312519236592/d755217ds1.htm
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If you look at the Vir S-1, you can see what they have to say
about safety. IMO it's written deceptively. Tell me what you think. Here is
the exact quote from the S-1
(https://www.sec.gov/Archives/edgar/data/1706431/000119312519236592/d755217ds1.htm):
"Across healthy volunteers and chronic HBV patients, a single serious
adverse event of Grade 2 headache, which resolved, has been reported. This
subject had a group of additional symptoms including fever, nausea, and
vomiting, assessed by us as consistent with a viral syndrome. Two Grade 3
events of upper-respiratory tract infection and low phosphate levels in the
blood have also been reported. No Grade 4 events have been reported. No
clinically significant alanine transaminase abnormalities, which is a
potential marker of liver inflammation, have been observed."
So Grade 2 is considered a "moderate" adverse event and a Grade 3
is considered a "severe" adverse event. Just by reading that paragraph,
it looks like there is only one serious adverse event and that it's most
likely due to a headache and the flu, but the Grade 3 is worse and there are
two of them, and they're both similar (upper-respiratory tract infection with
low phosphate levels). IMO, this could be an issue.
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Rush Lipid Conference, Saturday, November 8, 2019
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I had the pleasure of attending the Rush Lipid Conference this
morning where experts in the field (doctors and cardiologists, not
researchers) talked about all things lipids, particularly on how to treat
patients. They basically covered the whole lipid story, including
cardiovacular disease (CVD) management, new management guidelines, statins,
PCSK9 inhibitors, inclisiran, Vascepa, Lp(a), triglycerides and HDL, APOC3,
challenging cases, FH (both HeFH and HoFH), ANGPTL3, FCS, NAFLD, and NASH. I
attended this conference as an opportunity to learn more about CVD and the
various drugs used to manage it.
While most of the attendees were cardiologists, there were representatives
there from Novartis, Amgen, Regeneron, and The Medicines Company, to name a
few. If you're wondering, Arrowhead was not in attendance. The talk on Lp(a)
was amazing and was the highlight of the conference, apparently 20% of
Americans have high Lp(a), and it has a clear role in CVD. There was a lot of
mention on PCSK9 drugs, but I also heard the same APOC3 story that I heard on
Arrowhead's Analyst Day last year on how they thought APOC2 would be a good
candidate, but that APOC3 turned out to be a better one. That talk was given
by Dr. Alan Brown of the National Lipid Association, and as it turns out, he
knows Dr. Ira Goldberg (presenting on the 18th) very well. There was also a
lot of mention about Antisense Oligonucleotide drugs (ASOs), as they're
closer to coming to market than RNAi.
I have to admit that Arrowhead has a number of top notch targets that
they're hitting with their drugs. HSD has the potential to be the best drug
for NASH and NAFLD; AMG 890 the best drug for Lp(a); APOC3 the best drug for
FCS and hypertriglyceridemia; ANGPTL3 the best drug for HeFH, HoFH, elevated
LDL, and elevated triglycerides. While there are some other indicators that
may also contribute to CVD, Arrowhead appears to hit some of the main ones,
and it clearly has an advantage over ASOs. There clearly is no one drug that
is the magic bullet for CVD, as a combo regimen, depending on each patient's
circumstances, is the way to go.
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2019 Wisconsin
Biohealth Summit
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Proprietary and Confidential Notes from
one-on-one interview with Bruce Given, Chief Operating Officer, Arrowhead
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Pharmaceuticals on Wednesday, October 2, 2019.
Summations and not direct quotes.
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Just got back from the Wisconsin Biohealth Summit in Madison
where Bruce was involved in a fireside chat regarding RNAi and CRISPR. It was
a fantastic Summit. I was lucky and honored to have lunch at the Arrowhead
table with 6 Arrowhead employees. I attended and videotaped Bruce's fireside
chat, and then had about an hour with Bruce one on one.
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So there is so much to cover, I don't know where to start. I
didn't record any conversations, so this is all from memory and the wording
may not be exact.
When I arrived in Madison I first drove to Arrowhead's R&D facility
just to make sure it exists and that it's not some empty parking lot ;-) As I
pulled into the drive that goes by their facility, I noticed a Roche facility
right next door with the entrances being about 30 yards apart from each
other. Arrowhead's facility is a fairly new 2 story office building. I walked
into the reception area just to say hi. I introduced myself and mentioned
that I was heading to the Biohealth Summit and that I also had a meeting with
Bruce. The receptionist was incredibly nice and polite, and her excitement
about Arrowhead's future was clearly communicated. While in the reception
area I also met a senior scientist who was also visibly excited about
Arrowhead's future. So for any skeptics, the building does exist, lol.
I then headed off to the Summit about 15 minutes away. Bruce was scheduled
to go on at 1:30pm right after lunch. There were about 30 or so tables set up
for a buffet style lunch. As I was looking for a place to sit I ran across a
reserved table for Arrowhead where 6 Arrowhead employees were seated. I asked
if there was any available room at their table and they immediately invited
me to join them. Much to my surprise one of the employees knew who I was. To
remain professional, I prefer not to name names as none of them were part of
the leadership team, but they were all incredibly kind and very excited about
the company.
One thing we discussed is the process of getting a drug to the clinic.
While many may know this process, I wanted to go over some of the steps just
to make sure I wasn't missing anything. The process is actually quite simple,
but requires the expertise and knowledge that the company developed over the
years. They first identify their target gene, then they run their
bioinformatics screening process to identify viable triggers that would work
and would not have off-target effects - that process can take a few weeks,
but varies depending on the target. They then test it in rats and cynos
(monkeys). If it gets past that process then they have GLP tox studies done
(also rats and cynos). While I know that this process isn't particularly
"new" information, it's nice to hear it from Arrowhead directly on
how they do it.
I thanked the employees for being incredibly kind and hospitable to me.
IMO, I don't think the employees would have been so kind if they knew that
bad news was on the horizon. I truly felt their excitement in a similar way
that we all hear from Chris and Bruce in their public presentations.
It became obvious to me that Bruce is truly an amazing person that is
incredibly passionate about helping sick people using RNAi.
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On ARO-HSD - while there are many drugs that address NASH, Bruce
cited research saying that the HSD gene is the BEST target out there to
address NASH. He was very excited that Arrowhead was able to develop an RNAi
drug for HSD, and it appears that they'll be able to beat Alnylam/Regeneron
to clinic, as Arrowhead is still guiding an IND before the end of the year.
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Some more notes. Some of you know that I am attending Analyst
Day on the 18th. A couple of the Arrowhead employees I met, as well as Bruce
will also be in attendance. Some things I noticed regarding the short
discussions I had about Analyst Day with the employees and with Bruce later
on, they were all incredibly excited about that day. I know that relaying
their excitement is getting a bit redundant and old in my reports, but this
is well worth noting. It looks like Arrowhead is pulling out all the stops
for this day, as a number of their employees will be there. When referencing
Analyst Day I noticed a theme independently from the employees and Bruce,
they all referred to that day as "the 18th" and not "Analyst
Day", kind of like it's a very important and exciting day. As I said my
goodbyes to the employees, the ones that were going to Analyst Day said
"see you on the 18th" with huge grins on their faces. The exact
same thing happened with Bruce later on when I finally parted ways with him
after our meeting. So if you want to get with the program, you need to start
talking about "the 18th" and not "Analyst Day" ;-).
I don't know how many of you have read my Equity Research Report on Arrowhead,
but I believe it does a fairly comprehensive job of covering Arrowhead's
Intellectual Property position, including licensed and unlicensed technology.
I did quite a bit of extensive research regarding this particular section of
my report (it is fully cited showing my research), and I was able to
basically confirm that my analysis, which has not been discussed anywhere
else by any other analysts, was pretty much spot on from start to finish
regarding Arrowhead's IP and what their strategy is. I prefer not to get into
details here, as I think that this is critical information that sell-side
analysts do not have. For those of you who have read this section I'm sure
you understand. If a sell-side analyst wants this info, they will need to buy
the report. Again, I stress that this is pretty critical info and I am fairly
certain that if they had this info that it would most definitely be included
in their reports, and they would probably thank me personally for the info.
For those of you who have my report and may still be scratching their heads,
note that my conclusions and the related analysis is a perfect summation.
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Much of the information I got from Bruce was already previously
reported, so I'm trying to stick to reporting anything new and significant.
With regards to ARO-AAT, Bruce was very passionate about wanting to be able
to dose kids that are affected. When he talked about it, he sounded like a
father pleading for his own son or daughter to get some help. I asked Bruce
how soon can Arrowhead begin dosing in kids and if they needed to wait for
FDA approval in adults first. His response was that they do not need to get
to the point of FDA approval, but that they need much more safety data and
that this is a negotiation that happens with the FDA. He didn't have any
specific guidance, but it sounded like Arrowhead would be trying to work out
something with the FDA as soon as is reasonable. Bruce told me in a high
pitched pleading voice "if we can give these kids just one dose, it
could possibly help them get over the hump and it may be all they initially
need." So it's comforting to know that Arrowhead has full confidence in
ARO-AAT, as they're also looking forward to eventually being able to dose it
with kids.
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One topic of discussion I had with Bruce was with Arrowhead's
cardiovascular (CV) drugs, ARO-APOC3, ARO-ANG3, and AMG 890. I conducted some
extensive research in this area, including talking to a top cardiologist at a
teaching hospital. What I'm about to reveal has not been discussed by any
other analyst and can eventually have an impact on companies with PSCK9
drugs, like inclisiran. I asked this cardiologist about PCSK9 inhibitor
drugs, as well as her opinion on inclisiran. Her response surprised me. She
told me that while PCSK9 drugs can lower cholesterol, they do not low heart
attack risk. She said that PCSK9 drugs do not have a pleiotropic effect like
statins do. That means that statins are able to reduce more than just
cholesterol, and that includes hsCRP (high-sensitivity C-Reactive Protein).
She observed that patients that were only on PCSK9 drugs did not have a lower
risk of heart attacks, and that heart attack re-occurrence did not go down.
One thing she pointed to is that PSCK9 do not lower hsCRP levels, and that
this is one indicator that has shown to reduce heart attacks if it can be
reduced. She therefore makes sure that her patients stay on statins even if
they're also on PCSK9 drugs.
I think this revelation can be quite significant, as over time it will be
interesting to see how inclisiran fares in reducing heart attacks. Getting an
opinion from a cardiologist in the field is eye-opening, as many analysts can
be short-sighted and only rely on their own expertise in doing their
analysis. I am therefore really looking forward to seeing Dr. Ira Goldberg
speak on the 18th, as the opinion of doctors that prescribe the medications
is critical in being able to launch a drug successfully. With regards to CV
drugs, the cardiologists quickly figure out what works and what doesn't, and
so far PCSK9 drugs alone have not shown a reduction in heart attack risk. In
the end that will significantly affect the bottom line sales.
So after explaining this to Bruce, I asked him if any of Arrowhead's CV
drugs have any pleiotropic effects or if they reduce hsCRP. He said he wasn't
sure, and that he'd have to look at what metrics they're measuring. I
mentioned to Bruce that there's a company out of Ann Arbor that has a CV drug
that they're testing that reduces hsCRP. The founder of the company was a
co-developer of Lipitor. Bruce quickly chimed back and told me that the
company is Esperion and that he's very familiar with them (more familiar than
I am). Bruce said that there isn't one particular indicator that is
associated with heart attack risk, but that there are a number of them, and
that's why Arrowhead has Lp(a), APOC3, and ANG3.
After our conversation I did some additional research and found that there
are a handful of genes that could impact hsCRP. The genes include CRP, HNF1A,
and APOC. FWIW, I sent the research on to Bruce, as it looks like it's
possible that the APOC3 drug might have an impact on hsCRP.
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I asked Bruce about HIF2; the first question was why bother to
take on such a huge undertaking of entering oncology, as the whole clinical
trial phase can be quite expensive, tima consuming, and burdensome. Bruce
told me an interesting story about the drug. Arrowhead was working on this
drug back in the DPC days and they could have abandoned it, but they realized
that if they pressed on that this could end up being a fantastic learning
process for the company. This process enabled Arrowhead to gain insights in
drug development that he doesn't believe other RNAi companies have. Both he
and Chris knew that if they were going to make RNAi profitable, they knew
that they needed to be able to go after targets outside of the liver.
I then asked Bruce if he thinks HIF2 will be combo'd, if so, with what.
Bruce agreed, and said that he thinks the drug will be combo'd. He then
explained that the beauty of RNAi is that the drug is specifically designed
to target a particular gene, as their bioinformatics helps assure them that
they're not getting any other interactions or off-target effects. Therefore,
HIF2 could potentially be combo'd with ANY other cancer drug that's out
there.
I then asked him about how soon we might see a partner. Bruce explained
that they still don't have any human data and that they're not knocking on
anyone's doors to partner this drug right now. They intend to file an IND
before the end of the year and let it play out until they can get some solid
data.
I then shifted over to ENaC, and told him that I'm hearing lots of
skeptical talk from analysts saying that there is no way that they'll be able
to get delivery to the lung. Bruce's response was priceless - "I guess
we'll just have to soon see, never bet against Arrowhead."
I then mentioned to Bruce that, as a company, I see Arrowhead to be
"lean and frugal"; I asked him if that's an accurate assessment of
their company - without missing a beat Bruce responded "and FAST."
I may not have covered it enough in my previous posts, but Bruce made it
clear on a number of occasions on how fast Arrowhead is in being able to
develop their drugs because of the unique insights they have.
I then asked Bruce if these unique insights are trade secrets that are
proprietary to the company, and his response was absolutely, and that these
are closely held and protected trade secrets within the company with a select
group of employees. I then pivoted to a question that I believe may have
caught Bruce off guard a bit. I asked him if Zhen Li's departure (former Sr.
VP of Chemistry and Non-Clinical Development) from Arrowhead to Eli Lilly,
where Eli Lilly has partnered with Dicerna, may be of concern and if she
could be using those protected trade secrets. I understood that my question
entered a gray area, as Bruce really can't comment on the details of the
company's employment agreements. So without getting too deep into it, Bruce
assured me that the company has no concerns of Zhen misappropriating
Arrowhead's protected trade secrets and that Arrowhead still maintains its
trade secrets within the company.
If you've seen the RNA/CRISPR video I posted on my website, I think it's
pretty obvious that CRISPR is probably about 10+ years away (if that) before
becoming successful; I'm guessing that by that time Arrowhead will be so
flush with cash that they will be able to easily acquire any CRISPR company
of their choice.
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On to my last post about my meeting with Bruce, and I believe
that it may be the most important one of all (though the others were very
revealing as well). I delved into a touchy area of corporate valuation and
analyst coverage, and I was surprised to get the reactions and answers that I
did. The setup is a bit long, but it was necessary for me to explain to Bruce
the history of how I got to where I am now. I explained to Bruce my online
valuation calculators and how anyone can enter and change numbers to develop
their own valuation. I also explained to Bruce on how it all started when I
was in my MBA program and how I was solving financial puzzles in Harvard
Review papers, which is what led me to putting together a risk-adjusted DCF
valuation on Arrowhead and Alnylam. Bruce said that he was very familiar with
the Harvard Review papers and that he's been through them himself. I then
told him that around 4 years ago I was able to identify around a 4.5 billion
dollar valuation discrepancy between the two companies. I'll tell you that
Bruce was not surprised one bit and his reaction was in total agreement with
what I was saying. In observing Bruce's reactions, I continued along that
same line and explained that I read analysts reports from both companies and
that I observed, what appeared to be, a large group of analysts with a very
strong bias in promoting and protecting Alnylam, and that included the
analysts having a strong bias against Arrowhead. As you can imagine, I
entered into a super sensitive territory, but one that was directly related
to the valuation calculators and analysis that I was performing. Without
saying too much, I can see that Bruce understood why I was able to come to
those conclusions.
I then showed Bruce the first two pages of the 52 page Equity Research
Report I released in August where I gave Arrowhead an $81 price target, and
how I analyzed 12 keys to success of the company. I offered to send Bruce a
free copy of the report and he then handed me his business card telling me
that he would love to see it. Needless to say, I emailed Bruce a copy of the
report the next day. I then explained that I observed that sell-side analysts
are all over the board with how they value each of Arrowhead's drugs. I
pointed out one analyst in particular that recently gave the company a $50
price target, but that $50 price target only valued Arrowhead's HBV drug at
$164 million; I further pointed out that the next milestone payment might
exceed that (Bruce was in TOTAL agreement with my analysis and even laughed).
I further pointed out that if the analyst reasonably valued HBV at $3
billion, then his price target would easily match mine.
So with that discussion and narrative in place, I then asked Bruce: "Considering
Arrowhead is now fully funded to operate for at least the next few years, why
do you even bother continue doing road show presentations? Why not just spend
more time developing more drugs?" Bruce responded saying that they see
that there is much more value in the company, that they need to get the word
out, and that they'd like to see even more solid institutional investors; and
not to worry about needing more time to develop more drugs, as Arrowhead is
able to handle that without a problem - "we can easily do both things at
once." My response was "WOW!" - Arrowhead just admitted that
they believe that they're way undervalued and that they're going to bat for
their investors to get the word out where they can in order to increase value
and ownership. BRAVO!!!!! A perfect answer that helps confirm what all of us
here see in Arrowhead.
My last question to Bruce was for my self-development. I told him that I
wanted to learn more about the technology, the company, and the competitive
RNAi space and if he had any suggestions, based on our conversation, on what
I need to focus on and learn more of. His response flattered me, he told me
that he thought I had a really good handle on the technology and
understanding of the RNAi space. I presume he was being extra kind and
generous to me, but I'll take it. Bruce's parting words were (with the
excitement of a kid in a candy store) "see you on the 18th!"
It was a fantastic experience to have this treasured time with Bruce, and I
hope I did a good and honest job of relaying the information to everyone on
this message board. My goal was to cover areas that are not typically
discussed or known. I did my best to distinguish myself from the typical
analyst and to deliver information that is relevant to investors. If you
haven't read my report I highly recommend it, as it is along the same lines
of delivering valuable information that other analysts don't cover. Thank you
for your time, hope you enjoyed it.
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I have one more Bruce Given discussion tidbit to share, it's
about the targeting ligands that target specific tissues and allow the
trigger to get delivered where they want it to get delivered. It is a bit
complicated, and a portion of Bruce's response is even a bit over my head, so
please bear with me. I explained to Bruce that I read through the various
targeting ligand patents and found that Arrowhead uses integrin (targeting)
ligands that have an affinity for αvβ6 integrins in their ENaC drug (for example).
However, the αvβ6 integrins are not tissue specific to the lung, but they are
also present at other tissue locations, such as the kidney, eyes, breasts,
cancer, glands, intestines, etc. So I asked Bruce if they're also delivering
the drug to the other tissues that also have these same integrin receptors.
His answer was yes.
The next logical question is, so if you're delivering your drug to multiple
tissues, is there a concern of effects or toxicity in any of those tissues,
and what happens to the drug when it gets there? Bruce explained that since
Arrowhead uses very strict bioinformatics to select their triggers, the drug
will not be active or performing any knock-down anywhere else other than the
gene that is present in the particular tissue that they're targeting - the
bioinformatics make sure of that. With regards to toxicity, Bruce explained
that they didn't have a concern - this is where I kind of lost Bruce in his
explanation of why and I'll need to do a follow-up with him when I get a
chance, but he did cite research that Alnylam did on this specific topic
regarding the GalNAc, and that Arrowhead didn't have any toxicity concerns in
the other tissues, as the trigger wouldn't be active there. BTW, I have a
section on targeting ligands in my Equity Research Report and it not only
discusses it in some detail, but also addresses some concerns and doubts that
I was able to collect from analysts.
While this particular discussion may not be as interesting as the others, I
believe it helps address Arrowhead's expertise in being able to go
extrahepatic and why it has a nice lead on the competition. IMO once the
company can show effectiveness outside of the liver in not just one or two
other tissues, but three (tumor, lung, and muscle), then the company's
valuation should easily be trading at a significant premium, as they will
have first mover advantage across a broad spectrum that is bound to grow
significantly.
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20th Annual B. Riley FBR Institutional
Investor Conference, Beverly Hills, CA, May 23, 2019 8:30 a.m. (PT)
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Key comments from Christopher Anzalone, Ph.D.,
Arrowhead’s president and chief executive officer, with Mayank
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Mamtani, B. Riley FBR research analyst, during
the fireside chat. Answers are summations with partial quotes.
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1) I think that we are just capable of making more potent and
safer RNAi triggers than our competition and I think our data supports that.
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2) We view knocking down genes in solid tumors and in the lung
as sharp ends of the spear. Once we show that we can really knock down these
target genes, then you can imagine that we can go after a very large number
of targets for oncology. Obviously there's a ton of validated targets that we
can go after. For lungs we can go after additional targets beyond cystic
fibrosis, like asthma, COPD, pulmonary fibrosis, it's really a franchise unto
itself. Next year we'll be in the clinic going after muscle, we have active
programs there and we believe we will have additional preclinical data later
this year, and expect to be in the clinic next year for muscle. We also
expect that going forward we expect to be in a new cell type every 18 or so
months. So this is just a train that we believe will keep on moving.
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3) People talk about antisense oligonucleotides (ASOs) and how
that's competitive with RNAi. We think that there are certain constraints
with ASOs, not the least of which is that that is a consumptive process and
RNA interference is a catalytic process. So once you get these RNAi triggers
into the target cell, you will continue to knock down that gene for quite
some time, and we've seen that certainly preclinically, but now we've seen
that clinically. We see durability that is through the roof. In our HBV and
AAT programs, we had hoped to be able to administer this once a month, and
what we're seeing now is suggesting that we could even give this once a
quarter or maybe even less frequently than that because the durability is so
good.
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4) I don't know if there's much of a debate any longer about
HepB, and cccDNA vs. S antigen. I think people agree that S antigen is going
to be important. I think they also agree that knocking down the other viral
antigens is also probably important. We just need to see if that theory is
going to hold. We have data from a prior generation drug to suggest that it
should hold. That if you do knock down all the viral antigens, including S
antigen, then the body is able to reconstitute its immune system and control
the virus. So we are cautiously optimistic that we are on the right track and
I think that Janssen is as well. So lets talk about what we saw, I think we
checked all the boxes in our study last year. I think the data were
tremendous. We showed every viral marker that we could measure, and we
knocked all those down. So it appears that we are doing what we wanted to do,
which is to turn off that virus entirely - that's point one. Point two is
that if you look at S antigen, again people talk about that the most, and
that may or may not be the most important, but we do believe it's probably
critical in achieving a functional cure. If you look at that, after just
three doses, in 100% of patients we dropped S antigen by 1 log - no one's
ever showed anything near that. It was just stunning. I think 83% or so had
more than 1.5 log reduction, and mind you this is only after 3 doses. There
is nothing to suggest that we were done seeing knockdown. We just had tox
coverage at the time to dose only 3 doses, but it appears to me looking at
those traces that had we been able to give a 4th dose, a 5th dose, and a 6th
dose, that we would continue to see knockdown. The next thing is that within
those data, if you look closely, we had 88%, so in almost 90% of patients we
dropped S antigen below 100 iu/ml, and that has been thought of as predictive
of a better chance of achieving a functional cure. I want to say that we had
43% or 45% that were below 10 after just 3 doses. So this appears to be a
very potent drug against hepatitis B, and similarly with AAT it was very well
tolerated. No SAEs, and no dropouts due to drug. Only about 10% injection
site reactions - this also of course is subQ administered, and all those are
mild. So we're more excited going forward. Now what's the gating item for
Janssen to start their phase 2 study?
It really is just to get everything in order. So we did add, as you
mentioned, this cohort 12 on to our existing study just because Janssen was
interested in seeing data sooner than later. While they're preparing for this
larger phase 2 study, and we were very supportive of that of course, so we'll
run that and we're looking forward to seeing what that's going to look like
in combination with two other agents that they didn't want to disclose at
this point. But I expect them to move as quickly as they can into this phase
2 study. I don't have any guidance on when that could be, I think it should
be soon, and we think that Janssen is really well positioned to take this
very promising drug and really take it to a good international pivotal study
and then into the marketplace.
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5) If you look at APOC3 and ANGPTL3, these are our two latest
cardiovascular programs. We think that those are interesting for orphan
indications, as well as for broader indications. Our plan there is to get
into pivotal studies as quickly as we can, and I bet you that's next year
into orphan indications, and then work simultaneously towards the broader,
larger indications. I think APOC3 could be a very interesting drug against
FCS as an orphan indication, and then more broadly for secondary prevention of
cardiovascular disease. For ANGPTL3 I think it could be a very interesting
drug against homozygous FH, and then again for broader cardiovascular
secondary risk. I think it acts as a PCSK9 killer, to be honest. I think that
ANGPTL3 is a really interesting target that should do what PCSK9 is wanting
to do, but maybe do it a bit better. And also, it looks like there's data to
suggest that we can decrease liver fat, and so that opens up a whole variety
of indications from NASH to metabolic syndrome and the like. So we view that
as a really important big value driver for us going forward, and that's
wholly owned. That and APOC3 are both wholly owned.
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6) Mayank: And I think
that thesis is shared by some of your peers, like for example Regeneron has
an antibody for ANGPTL3.
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7) I'm sorry to interrupt, but really quickly, so we can do
things an antibody cannot do. Knocking down ANGPTL3 WITHIN the liver can do
things for liver fat that an antibody cannot do. So we view ourselves really
alone there. That and antisense oligos, and again we can go into that, but we
should have a dozen advantages over antisense.
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8) I think those PCSK9 drugs are good drugs, rollout has been
bumpy, but that's what happens sometimes. I just think that ANGPTL3 will be
more powerful in that space. There will be several years for those companies
to do well and to help a lot of patients, but I think that once we have our
ANGPTL3 drug on the market I think that it will be difficult for the
incumbent PCSK9 players to compete.
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Proprietary and Confidential Notes from
discussions with V.A., VP Investor Relations at Arrowhead
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Pharmaceuticals on Friday, April 26, 2019.
Answers are summations and not direct quotes.
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1) Can
you comment on how the drug Inclisiran (from ALNY & MDCO) could have an
impact on Arrowhead's drug pipeline?
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A:
Alnylam had some safety missteps early on with its ESC platform (ARO-AAT,
ARO-HBV) and those missteps were self-imposed. At the bioinformatics stage,
Alnylam allowed its screening of off-target effects to be lax which allows
for more chances for there to be problems. Arrowhead's bionformatics is
extremely stringent and we eliminate trigger sequences that could pose a
problem with off-target effects. While Inclisiran's target is different than
Arrowhead's, and it is also has a different chemical makeup, the basic
structure of ligand conjugated delivery is similar. Inclisiran could be the
first RNAi drug of this structure to receive FDA approval, and that event in
and of itself is significant for the RNAi field, especially since Inclisiran
is not a curative treatment, but rather a continuous dosing regimen.
Therefore, based on how Inclisiran fares (particularly with safety) there
will probably be a trickle-down effect for the whole RNAi field.
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Note from BBS: Through
the grapevine, other Analysts have indicated that positive Inclisiran data
would be a big de-risking event across the entire sector, and will probably
have an impact on share values across the board. The opposite also holds
true. MDCO will present interim results on long-term safety and efficacy of
Inclisiran at the National Lipid Association's Scientific Sessions in Miami
on May 18th. https://www.themedicinescompany.com/investor/pr/3762780/
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UPDATE:
May 18, 2019
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NATIONAL LIPID
ASSOCIATION SCIENTIFIC SESSIONS | May 16-19, 2019 MIAMI
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New Long-Term Data Show that Twice-a-Year Dosing with
Inclisiran Results in Persistent Lowering of LDL Cholesterol with No Material
Safety Observations Out to Three Years
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2) Do you
know how Alnylam has addressed their off-target effects? Is that why they transitioned to the ESC+
platform? Can you explain the
difference between those two platforms?
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A: The ESC+ platform is intended to minimize off-target effects
and it has shown good results in animal models. The ESC+ platform adds a
destabilizing chemical modification within their trigger sequence to help
address this. Arrowhead does not add a destabilizing chemical modification,
as we are extremely stringent at the bionformatics stage, therefore it is
unnecessary.
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3) On the
JNJ-3989 triple-combo cohort, can you comment on the undisclosed agents, and
how soon do you expect results?
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A: We can't comment on the undisclosed agents and can't say much
about this drug due to the terms of our relationship. Since we had
investigators and patients already in place, JNJ was able to immediately add
and begin dosing a triple-combo cohort. By adding this cohort to the existing
study, this will speed up the time it takes to get data for this
triple-combo.
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4) Will
the triple-combo cohort delay development, or delay the time it takes for
Janssen to enter the next phase?
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A: This triple-combo cohort will not delay development or the
timing on when Janssen intends to enter the next phase.
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5) Since
all the other testing cohorts have 4 patients per cohort, does cohort 12 for
the triple-combo also have 4 patients?
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A: There are more than 4 patients in cohort 12. Unable to
provide more details.
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6) Can
you comment on your HIF2 drug and how it is intended to be used, i.e. as a
monotherapy or complementary to other treatments?
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A: While HIF2 is intended to knock-down the accumulation of HIFs
due to inactivation of the Von Hippel-Lindau tumor suppressor gene, ARO-HIF2
is not designed to be used a single therapy, and will probably be
complementary to other drugs.
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7) Has
there been any change on when you will begin dosing ARO-AAT for its pivotal
phase 2?
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A: No changes, we will begin dosing this quarter.
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Proprietary and Confidential Notes from
discussions with V.A., VP Investor Relations at Arrowhead
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Pharmaceuticals on Monday, April 1, 2019. Answers
are summations and not direct quotes.
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1) When
do you anticipate Janssen to enter into phase 2 with JNJ-3989? How soon can
they make their move to enter phase 2?
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A: No guidance given, however, JNJ could enter whenever they
want to, and we have no reason to believe that it wouldn't. Long term tox
studies were completed back sometime between late December and mid-January,
at approximately the same time as ARO-AAT, and there was nothing surprising
or concerning regarding the tox report. While Arrowhead likes to move into
the clinic quickly by initiating a study with the first established
relationships (regulators, testing sites) and then grow from there, Janssen
has a history of entering all its testing jurisdictions at one time - this
would include working with all the various regulatory authorities, testing
sites, agents, etc. in advance so that it can all be ready at the same time.
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2) Have
you made any progress in partnering HIF2? Do you have any interested parties?
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A: No comment with regards to partners/progress, however,
Arrowhead is comfortable taking HIF2 through phase 1 to increase its value
for partnering. Should be a significant value driver for Arrowhead.
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3) How is
ARO-ENaC progressing? How soon can you enter the clinic after finalizing the
formulation?
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A: Arrowhead intends to file an IND or equivalent this year.
Arrowhead can typically have a drug ready for an IND approximately 6 months
after finalizing the drug formulation, as this is how long it takes to
complete the necessary IND tox studies.
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4) Did
you receive any feedback from Amgen on ARO-AMG? Can you share any info?
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A: Can't comment on that.
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5)
Dicerna signed a 10 target RNAi deal with Eli Lilly, would Arrowhead consider
pursuing a similar multi-target partnership? Why?
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A: Arrowhead is not interested in signing such a large deal, as
this would draw too many resources away from its own drug development for too
long of a period of time. More value can be obtained by taking drugs through
phase 1 and/or 2, and then partnering, if necessary.
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6) What
are some misconceptions you've been hearing about the company? How have you
addressed them? Can you provide some detail?
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A: Many thought that we were all about HBV, but over the last
year as we developed our pipeline it's clear that our other candidates,
especially AAT right now, are huge value drivers for the company.
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7) How
many patients serocleared on arc520 and arc521?
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A: We don't know, as we weren't able to follow-up. The contracts
with the patients expired and there was no further contact or follow-up. We
were able to learn of at least one that functionally cured, as he was a
patient of one of the investigators (there could be more, they just don't
know).
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8) Can
you comment on Dr. Locarnini’s revelation of 80% of patients developing a
Clearance Profile?
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A: That is Dr. Locarnini's "theory" and it is not part
of any FDA endpoint or review.
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9) Do you
know if any additional analysts will initiate coverage?
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A: As Arrowhead's market cap gets into the $2B+ range, we
believe that this will attract more analysts to cover the company.
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10) Do
you plan on adding any members to your board?
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A: We envision adding more strategic board members as our
company grows and when we feel it would help.
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Barclays Global
Healthcare Conference 2019, March 12, Loews Miami Beach Hotel, Miami
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Key comments from Bruce Given, M.D., Arrowhead’s
Chief Operating Officer, with Gena Wang, Ph.D., CFA,
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Director, Biotech Equity Research at Barclays.
Answers are summations with partial quotes.
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Q: Regarding half-life for ARO-HBV, in terms
of plasma into the cell?
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A: Yes, so plasma half-life for these drugs is like 5 hours. So
when we give one of these agents, it's out of the blood by the next day. It's
either vanishing, smaller, or it's out of the blood. So when we talk to
regulators, for instance, about these drugs, we talk about them essentially
as repeated single doses because we give a dose here, then we give a dose a
month later, or maybe 3 months later, and it's only in the blood for 24
hours. So most drugs cause problems when they're in the blood. They're
interacting with other things, they're getting in cells they're not supposed
to get into, etc. We're in the blood 24 hours and that's it until the next
time we dose, which is a month or more or later. That's one of the neat
things about siRNA I think that makes them generally so safe. But the
biologically half-life, how long they have their effect, as you can see we
can still have effect 3 months later, and maybe more.
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Proprietary and Confidential Notes from
discussions between BioBoyScout and Vince Anzalone, VP Investor
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Relations on Friday, February 15, 2019. Answers
are summations and not direct quotes.
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Q: I
heard that long-term tox studies for ARO-AAT were completed. How are
long-term tox studies coming along for JNJ-3989, and what can you report?
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A: The long-term tox studies for JNJ-3989 began at around the
same time as ARO-AAT, therefore they have already been completed for
JNJ-3989. The report showed that there was nothing surprising or concerning.
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Proprietary and Confidential Notes from
discussions between BioBoyScout and Vince Anzalone, VP Investor
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Relations on Friday, December 14, 2018. Answers
are summations and not direct quotes.
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Q: I have
heard some analysts mention that manufacturing RNAi drugs may be difficult
and expensive, and that this a problem that has not yet been resolved. Are
you able to address large-scale manufacturing issues?
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A: Yes, we are able to manufacture multi-kilogram lots with very
good yields. To help contain costs, we structured our manufacturing process
in such a way that we're able to apply the most expensive manufacturing
processes last. The cost of manufacturing an RNAi drug may not be as cheap as
small molecule drugs, but it is not nearly as expensive as antibody drugs.
Arrowhead has been able to develop a cost-effective way of manufacturing a
clinical supply at large scale with reliable yields.
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