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Arrowhead Pharmaceuticals, Inc. (ARWR)
:ARWR
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Arrowhead Pharmaceuticals
(NASDAQ:ARWR)47Neutral
Positive Factors
Drug Approval Potential
NDA filing places plozasiran on-track for potential approval for the treatment of familial chylomicronemia syndrome, which could generate near-term value for shareholders.
Strategic Partnerships
The collaboration with SRPT has closed, and ARWR will receive $825mm, consisting of $500mm cash and $325mm as an equity investment priced at a 35% premium to 30-day volume weighted average price.
Negative Factors
Risks and Challenges
Risks include clinical development risk, competitor risk, novel modality risk, commercialization risk, reimbursement risk, pricing risk, business development risk, capital market and dilution risk, and disruptions to clinical trials.
Arrowhead Pharmaceuticals (ARWR) vs. S&P 500 (SPY)
Market Cap
$2.16B
Dividend YieldN/A
Average Volume (3M)2.22M
Price to Earnings (P/E)―
Beta (1Y)2.00
Revenue Growth-98.62%
EPS Growth-86.21%
CountryUS
Employees609
SectorHealthcare
Sector Strength74
IndustryBiotechnology
Share Statistics
EPS (TTM)-5.15
Shares Outstanding126,098,114
10 Day Avg. Volume1,453,646
30 Day Avg. Volume2,220,464
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)356.62
Price to Cash Flow (P/CF)-3.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$42.22Price Target Upside143.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Arrowhead Pharmaceuticals Business Overview & Revenue Model
Company DescriptionArrowhead Pharmaceuticals, Inc. is a biopharmaceutical company focused on developing medicines that treat intractable diseases by silencing the genes that cause them. The company leverages its proprietary Targeted RNAi Molecule (TRiM) platform to design and develop therapies for the treatment of various conditions, including those affecting the liver, lungs, and tumors. Arrowhead is committed to improving the lives of patients by advancing a robust pipeline of drug candidates across multiple therapeutic areas.
How the Company Makes MoneyArrowhead Pharmaceuticals generates revenue primarily through collaboration and license agreements with larger pharmaceutical companies. These partnerships often involve upfront payments, milestone payments based on the achievement of development, regulatory, and commercial goals, as well as royalties on sales of any successfully commercialized products. The company's strategic collaborations allow it to leverage the expertise and distribution networks of its partners while focusing on its core competencies in drug discovery and development. Significant partnerships with companies such as Janssen Pharmaceuticals and Amgen have been instrumental in driving revenue growth. Additionally, Arrowhead may earn revenue from government grants and other funding sources, although these are not the primary drivers of its financial performance.
Arrowhead Pharmaceuticals Financial Statement Overview
Summary
Arrowhead Pharmaceuticals faces significant financial challenges with negative profitability and cash flow metrics. The company's increasing leverage and dependence on external financing underscore the need for strategic improvements to enhance financial sustainability. Continued monitoring of revenue growth and profitability trends is critical for assessing long-term viability.Income Statement
Arrowhead Pharmaceuticals exhibits a challenging income statement profile. The company reports negative gross profit margins, indicating that its costs exceed revenues. The net profit margin is also deeply negative, driven by substantial losses, highlighting significant profitability challenges. Revenue growth was volatile, with a sharp decline in the most recent TTM period compared to the previous year.30
Negative
Balance Sheet
The balance sheet shows a mixed picture. The debt-to-equity ratio has increased over time, reflecting rising leverage. Return on equity is negative due to consistent net losses. However, the company maintains a reasonable equity ratio, suggesting some stability in assets to equity. Overall, there is room for improvement in financial stability.45
Neutral
Cash Flow
Cash flow analysis reveals negative operating and free cash flows, indicating cash burn and potential liquidity pressures. Free cash flow growth is negative, and both operating and free cash flow to net income ratios are unfavorable due to operating losses. The company relies heavily on financing activities to support cash needs, suggesting potential future financing risks.40
Negative
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.50M | 3.55M | 240.74M | 243.23M | 138.29M | 87.99M | Gross Profit |
| -6.81M | 3.55M | 240.74M | 232.81M | 138.29M | 87.99M | EBIT |
| -625.95M | -601.08M | -205.00M | -178.51M | -149.04M | -93.16M | EBITDA |
| -580.69M | -561.51M | -175.67M | -162.29M | -132.58M | -87.22M | Net Income Common Stockholders |
| -639.71M | -599.49M | -205.28M | -176.49M | -140.85M | -84.55M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 552.93M | 680.96M | 403.63M | 376.40M | 367.79M | 315.49M | Total Assets |
| 1.01B | 1.14B | 765.55M | 691.94M | 710.15M | 522.50M | Total Debt |
| 115.86M | 510.55M | 115.17M | 81.58M | 25.55M | 21.14M | Net Debt |
| 61.97M | 407.87M | 4.28M | -26.43M | -158.89M | -122.44M | Total Liabilities |
| 957.62M | 948.74M | 478.39M | 585.98M | 301.33M | 60.72M | Stockholders Equity |
| 52.59M | 185.44M | 271.34M | 105.96M | 408.82M | 461.78M |
| Cash Flow | Free Cash Flow | ||||
| -571.61M | -604.32M | -330.63M | -188.91M | 147.66M | -107.34M | Operating Cash Flow |
| -491.28M | -462.85M | -153.89M | -136.13M | 171.22M | -95.39M | Investing Cash Flow |
| -408.00M | -420.07M | -96.16M | -5.42M | -141.68M | -240.78M | Financing Cash Flow |
| 890.89M | 870.52M | 253.05M | 65.19M | 11.30M | 257.95M |
Arrowhead Pharmaceuticals Technical Analysis
Negative
17.35
Price Trends
19.47
Negative
20.25
Negative
22.24
Negative
Market Momentum
-0.56
Positive
36.76
Neutral
10.19
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARWR, the sentiment is Negative. The current price of 17.35 is below the 20-day moving average (MA) of 19.37, below the 50-day MA of 19.47, and below the 200-day MA of 22.24, indicating a bearish trend. The MACD of -0.56 indicates Positive momentum. The RSI at 36.76 is Neutral, neither overbought nor oversold. The STOCH value of 10.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARWR.
Arrowhead Pharmaceuticals Risk Analysis
Arrowhead Pharmaceuticals disclosed 65 risk factors in its most recent earnings report. Arrowhead Pharmaceuticals reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Arrowhead Pharmaceuticals Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $9.98B | 45.17 | 19.71% | ― | 52.97% | ― | |
50 Neutral | $31.45B | ― | -414.62% | ― | 22.97% | 38.54% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% | |
49 Neutral | $5.24B | ― | -93.03% | ― | -10.48% | -18.79% | |
48 Neutral | $419.58M | ― | -21.96% | ― | -50.30% | -159.03% | |
48 Neutral | $11.72B | ― | -28.77% | ― | -52.75% | 25.00% | |
47 Neutral | $2.16B | ― | -600.68% | ― | -98.62% | -86.21% |
* Healthcare Sector Average
Performance Comparison
ARWR
Arrowhead Pharmaceuticals
17.35
-18.05
-50.99%
ALNY
Alnylam Pharma
249.23
99.57
66.53%
IONS
Ionis Pharmaceuticals
33.75
-10.54
-23.80%
SRPT
Sarepta Therapeutics
107.67
-12.64
-10.51%
ARCT
Arcturus Therapeutics
16.05
-21.73
-57.52%
MRNA
Moderna
35.21
-62.89
-64.11%
Arrowhead Pharmaceuticals Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -12.90% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment with major highlights such as the closing of a significant deal with Sarepta Therapeutics, upcoming launches, and strong pipeline advancements in obesity and CNS. However, increased operating expenses and a higher net loss were noted as lowlights, with some uncertainties regarding the timing of the CVOT for plozasiran.Highlights
Sarepta Therapeutics Collaboration
Arrowhead closed a significant collaboration agreement with Sarepta Therapeutics, expecting to receive $500 million upfront and a total potential value exceeding $11 billion, providing substantial capital infusion and reducing R&D expenses.
Plozasiran Commercial Launch
Pending FDA approval, Arrowhead anticipates the commercial launch of plozasiran for FCS by late 2025, with potential to become a $2 billion to $3 billion per year drug in the SHTG market alone.
Obesity Program Advances
Initiation of Phase I/II clinical trials for obesity candidates ARO-INHBE and ARO-ALK7, with promising preclinical results in fat mass reduction and muscle mass preservation.
CNS Pipeline Development
Development of CNS pipeline with potential treatments for Huntington's, Alzheimer's, and Parkinson's diseases, leveraging new TRiM platform capable of delivering sRNA across the blood-brain barrier.
Strong Cash Position
Arrowhead reports a pro forma cash balance of $1.4 billion, providing runway into 2028 and supporting future growth initiatives.
Lowlights
Increased Operating Expenses
Total operating expenses increased to $163.9 million, driven by higher candidate costs and salaries as the pipeline advances into later development stages.
Net Loss Expansion
Reported net loss for the quarter was $173.1 million, an increase from the previous year's $132.9 million.
Uncertain CVOT Timing
Arrowhead expressed the need for additional capital before initiating the CVOT for plozasiran, delaying the assessment of its cardiovascular benefits.
Company Guidance
In the recent earnings call, Arrowhead Pharmaceuticals provided guidance highlighting several key financial metrics and strategic initiatives. The company announced the closure of its license and collaboration agreement with Sarepta Therapeutics, which includes a $500 million upfront payment and $325 million from Sarepta's purchase of Arrowhead common stock at $27.25 per share. Arrowhead is also set to receive $250 million over five years in annual installments of $50 million and has the potential for an additional $300 million in near-term payments related to a Phase I/II study of ARO-DM1. Additionally, the deal includes potential development milestone payments ranging from $110 million to $410 million per program and sales milestone payments between $500 million and $700 million per program, with the total potential value exceeding $11 billion. The company is now funded into 2028, with strategic focus areas including plozasiran, obesity, and CNS, as well as plans for a Phase III study for zodasiran. Arrowhead expects its first commercial launch of plozasiran, pending FDA approval, by the end of the year and anticipates the product could become a $2 billion to $3 billion yearly revenue generator in the SHTG market alone.Arrowhead Pharmaceuticals Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Arrowhead Pharmaceuticals Appoints Douglas Ingram as Director
Neutral
Feb 7, 2025
Arrowhead Pharmaceuticals appointed Douglas Ingram as a director on February 5, 2025, effective February 6, 2025, following an Investor Rights Agreement with Sarepta Therapeutics. Ingram, currently CEO of Sarepta, brings extensive industry experience from his previous leadership roles at Chase Pharmaceuticals and Allergan. His appointment coincides with Arrowhead’s strategic Collaboration Agreement with Sarepta for co-development and commercialization of various programs, marking a significant step in their partnership. This action impacts the company’s governance as Ingram is not considered an independent director under Nasdaq Listing Rules due to the Agreements.
Executive/Board Changes
Leadership Transition at Arrowhead Pharmaceuticals’ Board
Neutral
Dec 18, 2024
Douglass Given, M.D., Ph.D., is retiring from Arrowhead Pharmaceuticals’ Board of Directors after fourteen years of service, effective December 31, 2024. The company plans to appoint Douglas S. Ingram, CEO of Sarepta Therapeutics, to the Board in early 2025, coinciding with the closing of their Exclusive License and Collaboration Agreement with Sarepta.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.