Arrowhead Pharmaceuticals(ARWR) - 2024 Q2 - Quarterly Report

Financial Performance - The company reported a net loss of $125.3 million for the three months ended March 31, 2024, compared to a net income of$ 48.7 million for the same period in 2023, marking a significant decline [88]. - Total revenue for the three months ended March 31, 2024, decreased by $146.3 million or 100.0% from the same period in 2023, primarily due to decreased revenue recognition from license and collaboration agreements [93]. - The company recorded a net loss per share – diluted of$ 1.02 for the three months ended March 31, 2024, compared to net income per share – diluted of $0.45 for the same period in 2023 [92]. Cash and Assets - The company had$ 127.7 million in cash, cash equivalents, and restricted cash as of March 31, 2024, an increase from $110.9 million as of September 30, 2023 [89]. - The company had total assets of$ 955.2 million as of March 31, 2024, compared to $765.6 million as of September 30, 2023 [89]. - Cash, cash equivalents, and restricted cash at the end of the period totaled$ 127.7 million as of March 31, 2024, compared to $135.0 million at the end of March 31, 2023 [108]. - The net increase in cash, cash equivalents, and restricted cash for the six months ended March 31, 2024, was$ 16.7 million, down from $27.2 million in the prior year [108]. Research and Development - Research and development expenses increased as the company's pipeline of candidates expanded and progressed through clinical trial phases [88]. - Total research and development expense was$ 101.1 million for the three months ended March 31, 2024, up from $74.9 million for the same period in 2023, representing a 35% increase [102]. - Candidate costs increased by$ 7.3 million, or 28%, for the three months ended March 31, 2024, and $10.3 million, or 15%, for the six months ended March 31, 2024 compared to the same period of 2023 [98]. - R&D discovery costs rose by$ 7.4 million, or 42%, for the three months ended March 31, 2024, and $23.9 million, or 79%, for the six months ended March 31, 2024 compared to the same period of 2023 [99]. - The company continues to develop other clinical candidates for future trials, with candidate costs expected to increase as development progresses [88]. - The company initiated a Phase 1/2a clinical trial of ARO-DM1 for type 1 myotonic dystrophy and filed for clearance to initiate a Phase 1/2a trial of ARO-CFB for complement-mediated renal disease [88]. Expenses - General and administrative expenses totaled$ 25.1 million for the three months ended March 31, 2024, an increase of $1.8 million, or 8%, compared to$ 23.2 million for the same period in 2023 [101]. - Salaries increased by $8.5 million, or 52%, for the three months ended March 31, 2024, and$ 16.4 million, or 53%, for the six months ended March 31, 2024 compared to the same period in 2023 [99]. - Facilities-related expenses increased by $2.5 million, or 72%, for the three months ended March 31, 2024, compared to the same period of 2023 [99]. - Depreciation and amortization expense increased by$ 1.8 million, or 81%, for the three months ended March 31, 2024, compared to the same period of 2023 [99]. - Other expense increased by $0.3 million and$ 2.8 million for the three and six months ended March 31, 2024, respectively, compared to the same periods of 2023 [105]. Cash Flow - Cash flow used in operating activities for the six months ended March 31, 2024, was $210.2 million, compared to$ 107.2 million for the same period in 2023, reflecting increased ongoing expenses related to research and development and administrative costs [108]. - Cash used in investing activities amounted to $204.1 million for the six months ended March 31, 2024, primarily due to capital expenditures of$ 102.7 million and investment purchases of $310.0 million, offset by proceeds from sales and maturities of investments of$ 208.6 million [108]. - Cash provided by financing activities was $431.0 million for the six months ended March 31, 2024, mainly from the issuance of common stock and stock option exercises, compared to$ 251.1 million in the same period in 2023 [108]. Other Information - The company completed enrollment in Amgen's Phase 3 OCEAN trial of olpasiran, triggering a $50.0 million milestone payment, which was received in Q3 of fiscal 2024 [88]. - There has been no material change in the Company's contractual obligations from the previous reporting period [109]. - The Company's exposure to market risk has not materially changed from the previous reporting period [110].