Arrowhead Pharmaceuticals: A Promising Biotech Play with Strong Growth Prospects

Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR) recently reported its Q1 2025 earnings, missing analyst expectations with a reported EPS of $-1.39. Despite the earnings miss, the company's strategic collaborations and future growth prospects make it an attractive investment opportunity. This article will delve into the key aspects of Arrowhead's recent earnings call and explore the potential catalysts that could drive growth in the near term.



Arrowhead Pharmaceuticals' strategic collaborations and partnerships have been a significant driver of its growth. The company recently closed a licensing and collaboration agreement with Sarepta Therapeutics, which is expected to bring in $1.375 billion in cash payments. This deal not only provides Arrowhead with substantial immediate capital but also reduces its reliance on partnering noncore assets to fund its wholly owned assets. Additionally, the partnership brings in a partner with extensive development, regulatory, and commercial expertise, which can accelerate the development and commercialization of Arrowhead's pipeline.



Arrowhead's focus on plozasiran, obesity, and CNS programs is expected to fuel growth in the near term. Plozasiran, a potential treatment for familial chylomicronemia syndrome (FCS) and severe hypertriglyceridemia (SHTG), is expected to drive substantial growth pending positive FDA review and approval. The company is on pace to complete enrollment for the registration of SHASTA-3, SHASTA-4, and MUIR 3 studies in 2025, which would enable study completion in 2026 and a subsequent sNDA filing. This would broaden the reach of plozasiran and provide a large opportunity for growth. Arrowhead believes plozasiran has the potential to be a $2 billion to $3 billion per year drug in the SHTG market alone.

Arrowhead's obesity programs, ARO-IoN-HPE and ARO-ALK7, represent high-value opportunities with near and midterm data readouts that can provide more clarity on their potential fit in the obesity and metabolic treatment paradigm. Both programs are supported by published human genetic studies and preclinical data that have demonstrated dramatic results. The company has initiated a Phase 1/2a clinical trial for ARO-INHBE and received regulatory clearance for a Phase 1/2a clinical trial for ARO-ALK7 in New Zealand. These trials will assess body composition using full-body MRI and weight loss, alongside safety, plasma PK, and biomarker activity in the blood.

Arrowhead's emerging CNS pipeline, including the new TRiM platform, is expected to drive near-term growth. The company is exploring partnerships to fund a cardiovascular outcomes trial (CVOT) for plozasiran, which could also provide additional capital and resources for its CNS pipeline.



In conclusion, Arrowhead Pharmaceuticals' strategic collaborations and partnerships, combined with its focus on promising programs in plozasiran, obesity, and CNS, position the company for strong growth in the near term. Despite the recent earnings miss, the company's potential catalysts and growth prospects make it an attractive investment opportunity. As the company continues to execute on its strategic initiatives and advance its pipeline, investors can expect to see significant value creation in the coming years.