Q3 2020 Arrowhead Pharmaceuticals Inc Earnings Call

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Unknown Executive: will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. I will now hand the conference call over to Vincent Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vincent.

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Thank you Jeff Good afternoon, everyone. Thanks for joining us today to discuss your words results first fiscal third quarter ended June thirtyth.

Vincent Anzalone: Jeff, good afternoon, everyone. Thank you for joining us today to discuss Arrowhead's results for its fiscal third quarter ended June 30, 2020. With us today for management are President and CEO Dr. Christopher Anzalone, who will provide an overview of the quarter, Dr. Javier San Martin, Chief Medical Officer, who will discuss our clinical programs, and Ken Myszkowski, our Chief Financial Officer, who will give a review of the financials. In addition, James Hazard, our Chief Commercial Officer, and Dr. Kurt Bradshaw, our Chief Scientific Officer, will be available during the Q&A session Before we begin, I would like to remind you that comments made during today's call contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1935. All statements, other than statements of historical fact, including, without limitation, those with respect to Arrowhead's goals, plans, and strategies, are forward-looking statements. These include statements regarding our expectations regarding the development, safety, and efficacy of our drug candidates, projected cash runway, and expected future development and commercialization activities. These statements represent management's current expectations and are inherently uncertain.

2020, with us today for management, or President and CEO Dr., Christopher Anzalone, who will provide an overview of the core dr. hobby or send Martine Chief Medical officer, who will discuss our clinical programs and Ken Myszkowski, Our Chief Financial Officer, who will.

Reviews. The financials. In addition, James Hazard, our Chief commercial Officer, Dr. Kerr Bradshaw, our Chief Scientific officer will be available during the Q1 day session of today's call.

Before we begin I would like to remind you that comments made during today's call contains certain forward looking statements within the meaning of section 27 eight of the Securities Act of 1933 construction 21 eat the Securities Exchange Act 1934, all statements other than statements of historical.

Including without limitation those with respect to airlines goals plans and strategies are forward looking statements. These include statements regarding our expectations around the development safety that you weren't drug candidates projected cash runway and expected future development and commercialization activities. These statements represent management's current.

Expectations and are inherently uncertain.

Vincent Anzalone: Thus, actual results may differ materially. Arrowhead disclaims any intent and undertakes no duty to update any of the forward-looking statements discussed on today's call. You should refer to the discussions under risk factors in Arrowhead's annual report on Form 10-K and the company's subsequent quarterly reports on Form 10-Q for additional matters to be considered in this regard, including risks and other considerations that could cause actual results to vary from the presently expected results expressed in today's call. With that said, I'll turn the call over to Chris Anzalone, President and CEO of the company. Chris.

Actual results may differ materially.

Earwood disclaims any intention undertakes no duty to update any of the forward looking statements discussed on todays call you should refer to the discussions under risk factors and arrowheads annual report on form 10-K, and the company's subsequent quarterly reports on form 10-Q for additional matters to be considered in this regard including risks and other.

Considerations that could cause actual results to vary from the presently expected results expressed in today's call that said I'll turn the call over to Christians, launching president and CEO Chris.

Christopher R. Anzalone: Thanks, Vince. Good afternoon, everyone, and thank you for joining us today. We've already made a lot of progress this year, notwithstanding the challenges that COVID-19 has presented to the world broadly and particularly to those of us developing new medicines. We took decisive action and placed a voluntary pause on new patient screening and enrollment in some of our clinical studies in order to limit the risk of participation. We take very seriously our obligation to protect the health and safety of our employees, business partners, and patients that participate in our studies.

Thanks Vince.

Good afternoon, everyone and thank you for joining us today.

We've already made a lot of progress this year notwithstanding the challenges. The cobot 19 has presented to the world broadly and particularly to those about developing new medicines.

We took decisive action and placed a voluntary clause on new patient screening enrollment and some of our clinical studies in order to limit the risk of participants.

We take very seriously our obligation to protect the health safety health and safety of our employees business partners and patients to participate in our studies that was the right thing to do.

Christopher R. Anzalone: The good news is that we don't believe any of our development programs are affected in a material way. That is a testament to the Arrowhead drive toward innovation, speed, and precision. We find a way forward even when the way is not clear. This is a hallmark of the Arrowhead culture and something that I am very proud of.

The good news is that we don't believe any of our development programs were affected in a material way.

That is a testament to the arrow and drive toward innovation speed and precision.

We find a way forward, even when the way is not clear.

This is a hallmark of the airway culture, and something that I'm very proud of even though it's still present. Some uncertainty we are confident the 2020 could continue to be a highly productive.

Christopher R. Anzalone: Even though COVID still presents some uncertainty, we are confident that 2020 can continue to be a highly productive last part of the year as we work to, one, expand our pipeline, and two, make progress and provide data readouts on multiple clinical programs. And three, gain clinical proof of concept for our first extra hepatic candidate. So what have we done, and what are our plans in order to achieve these three important goals? Let's answer that by reviewing some key programs.

So last part of the year as we work to one expand our pipeline.

To make progress in provide data read outs on multiple clinical programs and Threed game clinical proof of concept brought first extra pattern candidates.

So what are we done and what our plans in order to achieve these three important goals, let's answer that by reviewing some key programs I'll start by speaking broadly about our discovery stage programs. The partnership we signed with Janssen in 2018 included three potential new products against targets to be selected by Janssen, well I can't disclose the targets the specifics.

Christopher R. Anzalone: I'll start by speaking broadly about our Discovery Stage program. The partnership we signed with Janssen in 2018 included three potential new products against targets to be selected by Janssen. While we can't disclose the targets, the specific stage, or data on these potential product candidates, we can say that we have made good progress on all three. We previously talked about Arrow J and J1 because the first target was selected early on in the partnership, and work began soon after.

Page or poor data on these potential product candidates, we can say that we haven't made good progress on all three we previously talked about arrow JNJ one because the first Argo selected early on in the partnership and work began soon after we are now its sufficiently advanced stage of the other two potential product candidates to add them to our pipeline.

Christopher R. Anzalone: We are now at a sufficiently advanced stage of the other two potential product candidates to add them to our pipeline and designate them as Arrow J&J 2 and Arrow J&J 3. The partnership with Janssen has been very productive, including for Arrow HPV, now called J&J 3989, which continues to progress rapidly in multiple Phase IIb studies being conducted by Janssen. Staying with earlier stage development, let's move on to our preclinical programs that utilize our TRMM platform targeting the pulmonary space. Our second program after Arrow ENAC is Arrow Lung 2, designed to treat COPD by inhibiting an undisclosed target in pulmonary epithelia. We previously announced that it had officially been nominated as a candidate and moved from preclinical to the pre-IND stage. We have continued to make good progress on the IND-enabling studies and are on track to potentially file a CTA for Arrow Lung 2 at the end of this year. It has been our goal to gain clinical proof of concept and then move into a rapid pipeline expansion phase for the pulmonary platform. We think we're just on the cusp of that phase now.

Designate them as Aero JNJ to an arrow JJ three.

The partnership with Janssen has been very productive including for Aero H.B.B. now called JJ 39, 89, which continues to progress rapidly in multiple phase to be studies being conducted by Janssen.

And with the earlier stage development, let's move onto our preclinical programs that utilize our trim platform targeting the pulmonary space. Our second program. After Arrow Enac is arrow long to designed to treat see LPD by inhibiting an undisclosed target in pulmonary Ophelia.

We previously announced that it had officially been nominated as a candidate and moved from preclinical the pre I'd stage.

We have continued to make good progress on the idea, enabling studies and are on track to potentially file a C.T.A. for aero lung too at the end of this year.

It has been our goal to gain clinical proof of concept and then move into a rapid pipeline expansion phase for the pulmonary platform.

We think we're just on the cost but that phase now.

Christopher R. Anzalone: To that end, we continue to work in parallel on multiple additional targets in the pulmonary space. We think the lung is a target-rich environment with multiple opportunities for asthma, COPD, idiopathic pulmonary fibrosis, and other diseases that are not adequately treated. We've also made good progress on several potential candidates designed to treat the novel coronavirus that causes COVID-19. This is the first time we have disclosed that we are pursuing multiple different therapeutics at the same time, and I think it's important. This is a difficult virus, and we believe the best way forward is to address multiple strategies. One is to close the front door, if you will, by knocking down a receptor that the virus uses to gain entry into cells. Second, is a direct antiviral approach that targets the viral mRNA. And third, is to pursue anti-inflammatory pathways. We are pursuing all of these in parallel and believe this broad, holistic strategy gives us multiple shots on goal and a more complete approach to a poorly underlined violation.

To that end, we continue to work in parallel on multiple additional targets in the pulmonary space. We think the long as a target rich environment with multiple opportunities for asthma, CRPD idiopathic pulmonary fibrosis and other diseases that are not adequately treated.

We've also made good progress on several potential candidates designed to treat the novel Krona virus the causes cobot 19.

It's the first time, we've disclosed that we are pursuing multiple different therapeutics at the same time I think it's important.

This is a difficult virus and we believe the best way forward is to address multiple strategies. One is to close the front door. If you will find knocking down receptor that the virus uses to gain entry into cells.

Second is a direct anti viral approach the targets the viral M&A if there is to pursue anti inflammatory pathways.

We are pursuing all of these in parallel and believe this broad holistic strategy gives us multiple shots on goal and a more complete approach to a poorly understood.

Given our experience in alone and our work in HBV I believe we're well positioned to play a role in addressing coping 19, and possibly future Corona buyers outbreaks.

Christopher R. Anzalone: Given our experience in the lung and our work in HPV, I believe we're well positioned to play a role in addressing COVID-19 and possibly future coronavirus outbreaks. With Arrow ENAC, Arrow Lung 2, our suite of COVID-19 programs, and the additional potential candidates that are progressing rapidly, we are confident in our belief that the emerging lung pipeline can be an engine that drives substantial value in the near to midterm. What we have done and continue to do in the liver, we now speak of doing in the lungs.

With Arrow Enoch Aero loved to our suite of Cobot 19 programs and the additional potential candidates that are progressing rapidly. We're confident in our belief that the emerging long pipeline can be an engine the drive substantial value in the near to midterm.

What we've done it continued to do in the liver, we now seek to do an alone.

Christopher R. Anzalone: Now moving on to our clinical pipeline, I'll start with Arrow AAT, our Phase 2-3 candidate against a rare genetic liver disease associated with Alpha-1 antitrypsin deficiency. We have fully enrolled, dosed, and collected six-month repeat biopsies for the first cohort of the Open Label 2002 study. Biopsies are now being analyzed, and we plan to present data before the end of the year. This is important progress and an important readout. It will be the first data for a therapeutic targeted at alpha-1 liver disease, and it will be an important step in understanding what happens at the hepatocyte level after patients are treated. We will be looking at many measures of alpha-1 liver disease, but most will be focused on the change from baseline in ZAAT monomer. That is a direct measure of the drug's ability to inhibit production of the faulty mutant protein.

Now moving onto our clinical pipeline I'll start with Arrow 80, or phase two three candidates against a rare genetic liver disease associated with Alpha one antitrypsin deficiency.

We are fully enrolled dose and collected six month repeat biopsies for the first cohort of the open label 2002 study.

Biopsies are now being analyzed and we plan to present data before the end of year.

This is important progress and an important read out.

It will be the first data for a therapeutic targeted at alpha one liver disease and it will be an important step and understanding what happens at that had a site level after patients are treated.

We will be looking at many measures alpha one liver disease, but most focused on the change from baseline Z 18 monomer.

That is a direct measure of the drugs ability to inhibit production of the faulty mutant proteins.

Christopher R. Anzalone: We have a high level of confidence in our ability to show improvements here, but we will also be assessing other measures that will likely require longer drug exposure to show a treatment effect. That includes ZAAT polymer content and inflammation. We don't believe that six months of therapy is enough time to see changes, but we are the first company to investigate the disease in humans. So we really don't know what to expect.

We have a high level of confidence in our ability to show improvements here.

We will we will also be assessing other measures that will likely require longer drug exposure to show treatment effect that includes a Z 80 polymer content and inflammation.

We don't believe that six months of therapy is enough time to see changes, but we are the first company to investigate the disease in humans. So we really don't know what to expect [noise].

Remember that in a phase two three Sequoia study patients will receive around two years of treatment. If we see signs of improvement at earlier time points unexpected that would be a very exciting results and could cause us to consider working with the regulators to change the parameters of the study.

Christopher R. Anzalone: Remember that in the Phase 2-3 Sequoia study, patients will receive around two years of treatment. If we see signs of improvement at earlier time points than expected, that would be a very exciting result and could cause us to consider working with the regulators to change the parameters of the study. I will now talk about our cardiometabolic programs. Let's start with AMG 890, the candidate that we licensed to Amgen, targeting LP little a for the treatment of cardiovascular disease. We announced last week that Amgen started a Phase II study and that this triggered a $20 million milestone payment. These represent important steps forward for the AMG 890 program and support Arrowhead's strategy of utilizing our platform and expertise in RNAi therapeutics to build a valuable pipeline of both wholly owned and partnered drug candidates.

I will now talk about a cardiometabolic programs, let's start with AG 90, the candidate we licensed to Amgen targeting LP little eight for the treatment of cardiovascular disease.

We announced last week that Amgen started to phase two study and this and that this triggered a 20 million dollar milestone payments. These represent important steps forward for the AG 890 program and support Arrowhead strategy of utilizing our platform and expertise in already out there predicts to build a valuable pipeline of both wholly owned and partner drug candidates.

Christopher R. Anzalone: Amgen has extensive experience in developing and commercializing innovative cardiovascular medicines, and we are excited to see the program continue to advance. Our two wholly-owned cardiometabolic candidates, Arrow ApoC3 and Arrow Ans3, are both progressing rapidly toward value inflection points, including multiple data readouts this year and advancement into the next stages of clinical development. The second half of 2020 is going to be an important time for both programs.

Amgen has extensive experience in developing and commercializing innovative cardiovascular medicines and we're excited to see the program continued to advance.

Our two wholly owned Cardiometabolic cabinets Aero April see three an arrow and three are both progressing rapidly toward value inflection points, including multiple data read outs this year and advancement into the next stages of clinical development.

The second half 2020 is going to be an important time for both programs.

Both candidates are in phase one two studies and together have enrolled nearly 200 healthy volunteers and patients.

Christopher R. Anzalone: Both candidates are in Phase 1-2 studies and together have enrolled nearly 200 healthy volunteers and patients. Both studies include single and multiple dose assessments, and both have various cohorts with specific patient populations. This accelerated first-in-human study design yields data on safety and tolerability, dose response, duration of effect, and how different types of patients respond to the therapy. It also allows us to give data readouts from both programs at two or three conferences over the next few months. It also gives us enough actionable information about each candidate to engage regulators and discuss the next stages of clinical development up to and including potential registrational studies. We have already been communicating with the FDA on AeroApoC3, and our plan is beginning to take shape.

Both studies include single and multiple dose assessments and both have various cohorts what specific patient populations.

It's accelerated person human study design yields data on safety and Tolerability dose response duration of effect and how different types of patients respond to the therapy.

It allows us to give data read outs for both programs at two or three conferences over the next few months. It also gives us enough actionable information about each candidate to engage regulators and discuss the next stages of clinical development up to an including potential Registrational studies.

We have already been communicated with the FDA on Aero able to see three and our plan is to begin and our plan is beginning to take shape.

We will have similar discussions on Aero and three and also engage with authorities to gain clarity on various study design characteristics endpoints and target patient populations.

Christopher R. Anzalone: We will have similar discussions on Arrow Ang3 and also engage with working authorities to gain clarity on various study design characteristics, endpoints, and target patient populations. And, most importantly, both candidates provide a high level of optionality on which patient populations and disease characteristics to focus on and how to stage the clinical studies to assess the candidate's utility. For example, for Arrow ApoC3, there are potential patient populations that range from extremely rare, genetically defined conditions, such as FCS, in which patients have triglycerides in the thousands of milligrams per deciliter, to extremely high prevalence diseases, such as patients with mildly elevated triglycerides above 150 milligrams per deciliter. There are also various levels in between these extremes that each have their own characteristics and would require Taken together, this represents a very large market opportunity. In the U.S. alone, it is estimated that approximately 1 million adults have triglycerides greater than 1,000 mg per deciliter. More than 3 million adults have triglycerides between 500 and 1,000, and more than 41 million have triglycerides between 200 and 500.

Importantly, both candidates provide a high level of optionality on which patient populations and disease characteristics to focus on and how to stage the clinical studies to assess the candidates utility for.

For example for Airwave, we'll see three there are potential patient populations that range from ultra rare genetically defined such as Fcs.

In which which patients have triglycerides in the thousands and thousands of milligrams per deciliter, two extremely high prevalence disease, such as patients with mildly elevated triglycerides above 150 milligrams per deciliter.

There are also various levels. The between these extremes that each have their own characteristics and would require a different clinical design with respect to size of the study duration of treatment unacceptable endpoints.

Taken together this represents a very large market opportunity in the U.S. alone. There are estimated to be approximately 1 million adults with triglycerides greater than 1000 milligrams per deciliter more than 3 million adults with triglycerides between 501000.

More than 41 million with triglycerides between 200 500.

Of course, not all these patients will be potential candidates for therapy, but thinking of arrow able to see three solely as an orphan indication drug candidate is missing the larger breadth of opportunities ahead.

This type of opportunity also exists for Aero Amsthree in patients with pit with mixed Dyslipidemia is specifically triglycerides LDL C and other measures of cardiovascular and metabolic disease I.

I don't think investors fully appreciate the size of the potential commercial opportunities for both airwave, you'll see three and airline industry.

Christopher R. Anzalone: Of course, not all of these patients will be potential candidates for therapy, but thinking of Arrow ApoC3 solely as an orphan indication drug candidate is missing the larger breadth of opportunities ahead. This type of opportunity also exists for Arrowhang 3 in patients with mixed dyslipidemias, specifically triglycerides, LDL-C, and other measures of cardiovascular and metabolic disease. I don't think investors fully appreciate the size of the potential commercial opportunities for both Arrow Apo C3 and Arrow Ant.

This is an exciting time for these programs and we are beginning to see potential paths to commercialization, we'll be talking about these pads and timelines in the future.

Which should provide a level of detail for investors to properly assess how significant the opportunity is to help very large populations of patients that could benefit from new treatment options.

We've also made good progress on Aero HSD and development to treat alcohol and non alcohol related liver disease, we began dosing in a phase one two study in March.

Since completed all healthy volunteer cohorts and have activated the cohorts and enroll patients with Nash or suspected Nash.

Christopher R. Anzalone: This is an exciting time for these programs, as we are beginning to see potential paths to commercialization. We will be talking about these paths and timelines in the future, which should provide a level of detail for investors to properly assess how significant the opportunity is to help very large populations of patients that could benefit from new treatment options. We have also made good progress on Arrow HSD in development to treat alcohol and non-alcohol related liver disease. We began dosing in a Phase 1-2 study in March. We have since completed all healthy volunteer cohorts and have activated the cohorts that enroll patients with NASH or suspected NASH. The target, HSD-17-beta-13, is not a secreted protein, so we will be collecting liver biopsies to measure target engagement.

The target HST 17, beta 13 is not as accretive protein. So we'll be collecting liver biopsies to measure target engagement.

This program experienced the short pause in screening and enrollment due to the cobot 19 situation, but similar to other programs. We don't think this had a material effect on our anticipated timelines.

As long as patient screening and enrollment continue to move forward as planned we should be generating data through the end of 2020 and bina position to present in the first half of 2021.

Lastly, I would imagine arrow Enac, our first inhaled Arnie I candidate target the pulmonary appeal.

We just repeat dosing to start this month and our phase one two study in healthy volunteers and patients with cystic fibrosis.

The candidate is designed to reduce expression of the appeal. So in general or you know back in the loans to help rehydrate CF related dehydrated mucus and potentially help improve you facility clearance as we discussed on our equipment. Our last week. There has been great progress in new therapies to treat CF over the last decade, but significant unmet need still.

Christopher R. Anzalone: This program experienced a short pause in screening and enrollment due to the COVID-19 situation, but similar to other programs, we don't think this had a material effect on our anticipated timeline. As long as patient screening and enrollment continue to move forward as planned, we should be generating data through the end of 2020 and be in a position to present in the first half of 2021. Lastly, I want to mention Arrow-ENAC, our first inhaled RNAi candidate to target the pulmonary epithelium. We anticipate dosing to start this month in our Phase 1-2 study in healthy volunteers and in patients with Cystic Fibrosis. The candidate is designed to reduce expression of the epithelial sodium channel or ENAC in the lungs to help rehydrate CF-related dehydrated mucus and potentially help improve mucociliary clearance.

Yes.

We estimate that there are approximately 14000 patients in the U.S. alone that are either not eligible for the most advanced therapies because of their specific to your type or haven't shown in clinical trials to be nonresponders or insufficient responders.

This is lot of patients who still suffer from Seattle and are in need of alternative treatments.

We thinking that maybe that alternative and importantly, the mechanism of action should theoretically be genotype agnostic.

This is an exciting program and we hope to generate data through the rest of 2020 that may enable us to have a data read out in the first half 2021.

Our preclinical data has been has been highly promising and we're eager to see the translation of animal data to humans in our new pulmonary tree and platform.

With that overview NLX turn the call over to Dr. Javier say emerging heavier.

Thank you, Greece and good afternoon to everybody on the goal.

I want to highlight a few of our clinical programs Samcyprone is we may see sell will last conference call.

Christopher R. Anzalone: As we discussed on our ENAC webinar last week, there has been great progress in new therapies to treat CF over the last decade, but significant unmet needs still exist. For example, we estimate that there are approximately 14,000 patients in the U.S. alone that are either not eligible for the most advanced therapies because of their specific genotype or have been shown in clinical trials to be non-responders or insufficient responders. This is a lot of patients who still suffer from CF and are in need of alternative treatment. We think ENAC may be that alternative. And importantly, the mechanism of action should theoretically be genotype agnostic.

Like all by the company called we've had an effect on some of our Proto but I'm very pleased to say that need appears to be effect has been generally minor in fact, some protests experience little to no delay in that would anticipate and timely.

We continued to money, though this completion closely to ensure the study participants I've not been exposed to at least not risk what are the same time moving full what rapidly when it's safe to do so.

Even in the challenging environment of the last six months I'm proud that arrowheads clinical development team has executed at a very high level.

Javier San Martin: This is an exciting program, and we hope to generate data through the rest of 2020 that may enable us to have a data readout in the first half of 2021. Our preclinical data has been highly promising, and we are eager to see the translation of animal data to humans in our new pulmonary trim platform. With that overview, I'd now like to turn the call over to Dr. Javier San Martin. Okay, Javier?

Let's start with Italy, a T. I would say consolidation investigation that are anyhow I picked up that would be being developed team in foot in Riyadh genetic anybody sees associated with alpha one antitrypsin deficiency.

As we announced last quarter, we've fallen Sealy food the sequel, you're faced two three study and the 2002 open label study on a temporary pause for new screening and enrollment the two concerns around coffee 19, both studies on the backup and branding and opened two new patient screening and enrollment.

Javier San Martin: Thank you, Chris, and good afternoon to everybody on the call. I want to highlight a few of our clinical programs and some key progress we made since our last conference call. Just like all biotech companies, COVID had an effect on some of our programs, but I'm very pleased to say that it appears the effect has been generally minor. In fact, some programs experienced little to no delay in our anticipated timeline.

Well, it's close at the lay off at approximately eight weeks for sequel, yet for the second cohort in 2002.

We have begun to reopen and receiving patient screening.

Fiscal into south and into was already fully enrolled and importantly, we see no experience any concerning political deviation for those already on the study.

They felt more about 2000 and to open label study because we plan to have they Saturday that would this year.

Javier San Martin: We continue to monitor the situation closely to ensure the study participants are not being exposed to additional risk, while at the same time moving forward rapidly when it's safe to do so. Even in the challenging environment of the last several months, I'm proud that Arrowhead's clinical development team has performed at a very high level. Let's start with AOA-AT, our second-generation investigational RNAi therapeutic being developed as treatment for a rare genetic liver disease associated with alpha-1 and type-16 deficiency.

We view the studies designed to enroll approximately 12 parties that into sequential quotes between the two cohorts by up to date that would be assist basin and that's the six month 12 to 18 and 24 months of C met with Italy 80.

As I mentioned, the first go which for patients was already fully enbrel talking to Colby 19 patients.

On the Uh Huh, all doses would have minister and the six lastly, do biopsy have all been collected.

Javier San Martin: As we announced last quarter, we voluntarily put the Sequoia Phase 2-3 study and the 2002 Open-Level Study on a temporary pause for new screening and enrollment due to concerns around COVID-19. Both studies are now back up and running and open to new patients for screening and enrollment. The post caused a delay of approximately 8 weeks for Sequoia and for the second cohort in 2002, after which sites began to reopen and resume patient screening. The first cohort in 2002 was already fully enrolled, and, importantly, we did not experience any concerning protocol deviation for those already on staff.

Emphasizing assist us we speak I know, we're planning to have analysis completed in time to some neither laboring could have tied to the it'll be leveraged meeting later this year.

This is a potential importantly, though for the program absolutely feel because he is the first you will help us insight and even and that's the one patient actively seeking fit happy.

We'll be assessed seemed reduction in did see a de minimis, which we would expect based on the plasma data from our phase one help people into the study.

Phase one data demonstrated the April 18th treatment led to that Abyssinian. Soon 18 gave us down to below the 11 Ocwen station within one can masturbation effect.

Javier San Martin: Let's talk more about the 2002 open-label study because we plan to have data readout this year to review the studies designed to enroll approximately 12 participants in two sequential cohorts. Between the two cohorts, biopsy data will be assessed at Baselin and after 6 months, 12, 18, and 24 months of treatment with Arrowhead. I mentioned the first cohort, which is four patients, was already fully enrolled prior to COVID-19, and patients have continued on the study as planned. All doses were administered, and the six months repeat biopsy have all been collected.

He said tests that we may be achieving he had completed suppression of the even production of the mute then see 80 protein the I'm no. Other fit up you have some these type of we saw you've seen anymore that.

We will also be looking at whether the accumulated D.A.T., putting most cats has to be pieces to seek Smith, which I've noticed speaking, but would be if we simply surprise to see no. Additional we will look at changes in inflammation and values histologic parameters again, we were going to stick to see these measures change has to only six months treatment.

But it would be very exciting decide if we went to seem to me the squeaky.

Javier San Martin: Samples are being processed as we speak, and our plan is to have analysis completed in time to submit a late break-it-after to the ASLB liver meeting later this year. This is a potentially important readout for the program and for the field because it is the first view of what happens inside the liver in alpha 1 patients after receiving therapy. We will be assessing reduction in the ZAAT monomers, which we would expect based on the plasma data from our phase one healthy volunteer staff. Phase I data demonstrated that Arrow AAT treatment led to reduction in serum AAT levels down to below the level of quantitation with a multi-mas This suggests that we may be achieving near complete suppression of the liver production of the mutant Z-AAT protein.

Now moving to our Calumet that wouldn't pipeline.

Let's start with AMC, a 90, an investigational it's I I made that if they decide to low wed like to clothing A.O.L.P. lead to a for the treatment of cardiovascular disease, which is license to hand.

Chris mentioned action would be some systems to the phase two studies, which I'm very excited about it.

That is double blind randomized placebo controlled phase two studies wherever they efficacy safety and Tolerability of age AMG, a 90 in approximately 240 section with elevated.

The primary endpoint that percent chance you know P.A. from baseline two weeks and receipts. He secondary endpoints include that person change and that would be a from they sent the week, 48% change in LDL cholesterol and April be from May send to we certainly seeks I'm 48.

Javier San Martin: This time, no other therapies have shown this type of result using any modality. We will also be looking at whether the accumulated ZAAT polymers can start to decrease after six months, which I'm not expecting but would be pleasantly surprised to see. In addition, we will look at changes in inflammation and in various histologic parameters. Again, we wouldn't expect to see these measures change after only six months of treatment, but it would be a very exciting result if we were to see improvement in these. Let's now move to our cardiometabolic pipeline. I will start with AMG A90, an investigational siRNA therapeutic designed to lower lipocodone A or Lp a for the Treatment of Cardiovascular Disease, which is licensed to AMC. Chris mentioned Amgen recently started a Phase II study, which I'm very excited about. The study is a double-blind, randomized, placebo-controlled study to evaluate efficacy, safety, and tolerability of AMG-A90 in approximately 240 subjects with elevated health.

Now moving to our two wholly own copy them at that when it can be based it'll April CZ and Ano agency.

Let's begin we.

See I would come to that targets in April that the protein cc being the Belo potential significant patient with Highpin Union, we continue to be very Chris I'm encouraged by at least from the ongoing phase one two and tested equal in April CP 1001.

I was talking about the study sign and progress that's discuss where and when we expect two person data.

We'll see 1001, it's a phase one two single and multiple both studies away by the way the safety put it I really see pharmacokinetic and Pharmacodynamic effect, Italy proceeds.

It's a single goes on multiple both personal for studying that'll help people.

Javier San Martin: The primary endpoint is the percent change in LTA from baseline to week 36. The secondary endpoints include the percent change in LTA from baseline to week 48, and the percent change in LDL cholesterol and ApoB from baseline to week 36 and 48. Now, moving to our two wholly owned cardiometabolic candidates, Arrowhead Pocitri and Arrowhead. Let's begin with Arrowhead PC3, our candidate targeting A-polypropylene C3 being developed as a potential treatment for patients with hypertrophic kidney disease. We continue to be very impressed and encouraged by results from the ongoing Phase I-II clinical study called Arrow ApoC-3-1001.

For those pushing up the study in patients with high but B C D.

Studies reach for platinum Goldman of eight reception. We subsequently expanded its starting to assist in total of.

What kind of them 12, Sachin as of today 100, Pepsi Hem B.

The first data from a single both healthy volunteer to push or what's the center of the American Heart Association in 29 team. We have been accepted put this in additional data at the European Society of Cardiology meeting the nationally Peter Association meeting and we might potentially have additional data at the American heart pending et cetera.

[music].

We can be seen in the second half of 2020, we tend to have multiple those I'm followed by state that in both those people MTS and patient cohorts together. These represents that rather for data center and should be a good view on the safety Act PBT of Italy proceeds.

Javier San Martin: I will talk about the study design and progress, and we will discuss where and when we expect to present it. Arrowhead POSIT-3-1001 is a phase 1, 2, single and multiple dose study to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamic effect of Arrowhead POSIT-3-1001, a single-dose and multiple-dose portion of the study in adult healthy volunteers and a multiple-dose portion of the study The study reached full planned enrollment of 80 subjects, and we have sequentially expanded the study to assess a total of up to 112 subjects. As of today, 100 subjects have been enrolled. The first data from a single-dose healthy volunteer portion will be presented at the American Heart Association in 2019.

[noise] data from the Italy, plus you'd see fake went to study have indicated a very potent I guess you'd have reduction.

On t. more putting that anything I seen before.

Because of these we are exploring potential design for the next pages of clinical development to study the dog in multiple patient populations that might benefit from time to day to day reduction.

We have been engaging with regulators on that topic I hope that the lifetime Kt later this year.

Hopefully what hopeful that during the first half of 2021 would be able to initiate a phase three study in a smaller population and they face to be study in a larger population.

Javier San Martin: We have been accepted to present additional data at the European Society of Cardiology meeting, the National Lipid Association meeting, and we might potentially have additional data at the American Heart Association meeting, pending acceptance. Within this team, in the second half of 2020, we plan to have multiple dose and follow-back data in both healthy volunteers and patient cohorts. Together this represents a rather full data set and should be a good view on the safety and activity of Arrowhead. Data from the Arrowhead Positive 3 Phase 1-2 study have indicated a very potent triglyceride reduction, frankly more potent than anything I've seen before.

What other wholly own cutting them at that really candidate is aero and see how to get team angiopoietin like coating C or H.P.T., a key and he's been developed I say potential treatment for patients with mixed dyslipidemia.

The current clinical studies call ill age 1001, it is a phase one two single and multiple dose study to about like safety Tolerability pharmacokinetics and Pharmacodynamic effect, both healthy volunteer and patient portions of these study has reached full plan and goal and Oh, it's nice to see stops.

Similar to a policy C., we continue to be very encouraged by the can because they don't plan to person at E. C. As an L.A. I hoped was a person or the American Heart Association pending after fit.

Javier San Martin: Because of this, we are exploring potential designs for the next stages of clinical development to study the drug in multiple patient populations that might benefit from triglycerides reduction. We have been engaging with regulators on that topic and hope to provide some clarity later this year. We're hopeful that during the first half of 2021, we will be able to initiate a phase three study in a smaller population and a phase two study in a larger population. Our other wholly-owned cardiometabolic candidate is ArrowH3, targeting N-chipoietin-like protein 3 or N-PTL3, and it's being developed as a potential treatment for patients with mixed dyslipidemia.

We're working on clinical development plan I would be engaged engaging with regulators so quickly discuss these.

I would hope is to study phase Twob study in the first half of 2021 in appropriate patient population that might benefit from a low what do you know both calculation and LDL cholesterol. These may affect what because he left but we felt the same then you'll see which is potentially very exciting.

I will now briefly touch on pro is you know what earlier stage pipeline.

Anyway, just the so what investigation I can do they for the potential treatment of alcohol and or no alcohol correlate them because we see.

The genetic money they shouldn't be strong for anything that target HST 17 beat that fit Philippine in that she's we'll see an alcoholic hepatitis and see those patients. This is an exciting pull them for that I think these this first can do they can be snowbirds target you see any modality to enter clinical studies.

Javier San Martin: The current clinical study is called Arrowhange-1001. It is a phase 1-2 single and multiple dose study to evaluate safety, tolerability, pharmacokinetics, and pharmacodynamic effects. Both the healthy volunteer and patient portions of this study have reached full planned enrollment of 93,000.

What are conducting a phase one two seen going on multiple dose escalation study to evaluate the safety and reliability I don't know kind of become pharmacodynamic effect of into it you see the normal held people Tia us Willis inpatient witness for suspected us additional it stood out to your should this include assessment of various various miss.

Javier San Martin: Similar to AeroApoc3, we continue to be very encouraged by the clinical data and plan to present at ECS and NLA and hope to also present at the American Heart Association, pending acceptance, who are working on a clinical development plan and will be engaged, engaging with regulators shortly to discuss this. Our hope is to start a phase 2b study in the first half of 2021 in appropriate patient populations that might benefit from a lowering of both triglycerides and LDL cholesterol. This may affect multiple cardiovascular risk factors simultaneously, which is potentially very exciting. I will now briefly touch on progress in our earlier stage pipeline. AOHSD is our investigational candidate for the potential treatment of alcohol and or no alcohol related liver disease. The genetic validation is strong for inhibiting the target Hsp17-beta-13 in NASH cirrhosis and alcoholic hepatitis and cirrhosis patients.

Just to fill activity using lever biopsy.

We have completed enrollment and dosing of help people to get a portion of the study and we have initiated and multiple dose portion of the study. It was it should be late in this study the called me my team, but it did not materially affect our anticipated timeline. When do you see paid that initial date that should be able to have able to the.

And in 2021.

I went to other heavily stage Proto labs, it'll he's too.

You know I've also at first candidate targeting teaches outside of the leader.

He's too is designed to feed renal cell carcinoma, and what it couldn't 15 patients to be in phase one be study.

You know arena the signs that sees cystic fibrosis scaling to begin dosing in phase one two study these Matt.

We hosted at waving a last week to talk about the targeted the preclinical data and the plan for the candidate.

Javier San Martin: This is an exciting program for us as it is the first candidate against this novel target using any modality to enter clinical status. We are conducting a phase 1, 2, single and multiple dose escalating study to evaluate the safety, tolerability, pharmacokinetic, and pharmacodynamic effects of Aero-HSD in normal healthy volunteers, as well as in patients with NASH or suspected NASH. Additional exploratory objectives include assessment of various measures of throat activity using liver We have completed enrollment and dosing of the healthy volunteer portion of the study, and we have initiated the multiple-dose portion of the study. There was a short delay in this study due to COVID-19, but it did not materially affect our anticipated timeline. We anticipate that initial data should be available to present in 2021. Our two other early stage programs, Arrow HIF-2 and Arrow Enoch, are also our first candidates targeting tissues outside the liver. Arrow HIF-2 is designed to treat renal cell carcinoma, and we are currently screening patients to begin a phase 1b study.

It will be not also featured outsize cystic fibrosis ex the micro small it was full of good information about the program and I highly recommend you would still be pay if you didn't see like.

It is still available on the and then some presentation page on our website.

I will now going to coil with Ken Myszkowski, <unk> as Chief Financial Officer Kim.

[laughter]. Thank you happier.

We reported [laughter] as we reported today, our net loss for the quarter ended June 32020 was 13.6 million or 13 cents per share based on 101.8 million fully diluted weighted average shares outstanding.

This compares with net income of 20.3 million or 21 cents per share based on 98.9 million fully diluted weighted average shares outstanding for the quarter ended June Thirtyth 2019.

Revenue for the quarter ended June 30, 2020 was 27.4 million compared to 42.7 million for the quarter ended June 32019.

Revenue in the current period relates to the recognition of a portion of the upfront payments and milestones received for our license and collaboration agreements with Janssen.

Javier San Martin: Arrow-Enac, designed to treat cystic fibrosis, is scaled to begin dosing in Phase I-II studies this month. We hosted a webinar last week to talk about the target, the preclinical data, and the plan for the candidate. The webinar also featured outside cystic fibrosis expert, Dr. Marcus Moore.

As we continue to work toward completing our for performance obligation of managing the current phase one two HPV clinical trial.

Revenue from a Janssen agreement is recognize based on our estimate of the proportion of effort expended toward fulfilling our performance obligations, primarily overseeing the completion of the current phase one two HBV clinical trial.

Javier San Martin: It was full of good information about the program, and I highly recommend you watch and replay it if you didn't see it live. It's still available on the events and presentation page on our website. I will now turn the call over to Ken Myszkowski, Arrowhead's Chief Financial Officer.

We expect the remaining 26.3 million of deferred revenue to be recognized in this calendar year.

In addition current period revenue also included the 20 million dollar milestone payment, we accrued due to amgen initiating their phase two clinical trial for AMG 90.

Kenneth A. Myszkowski: Thank you, Javier. As we reported today, our net loss for the quarter ended June 30, 2020, was $13.6 million, or 13 cents per share, based on 101.8 million fully diluted weighted average shares outstanding. This compares with net income of $20.3 million, or $0.21 per share, based on $98.9 million fully diluted weighted average shares outstanding for the quarter ended June 30, 2019.

Revenue in the prior period related to.

The recognition of a portion of the upfront payments and milestones received for our license and collaboration agreements with Janssen.

Total operating expenses for the quarter ended June 32024, 43.3 million compared to 24.1 million for the quarter ended June 32019.

[noise]. This increase is primarily due to increased noncash stock compensation expense.

Kenneth A. Myszkowski: Revenue for the quarter ended June 30, 2020 was $27.4 million, compared to $42.7 million for the quarter ended June 30, 2019. Revenue in the current period relates to the recognition of a portion of the upfront payments and milestones received from our license and collaboration agreements with Janssen, as we continue to work toward completing our performance obligation of managing the current Phase I-II HPV clinical trial. Revenue from the Janssen Agreement is recognized based on our estimate of the proportion of effort expended towards fulfilling our performance obligations, primarily overseeing the completion of the current Phase I-II HPV clinical trial. We expect the remaining $26.3 million of deferred revenue to be recognized in this calendar year.

Stock compensation expense has increased because the valuation of new stock option and restricted stock awards granted has increased with the growth in our stock price.

Additionally, stock compensation expense increased due to the timing of achievement of certain performance based awards in each period.

The increase in their total operating expenses was also driven by the increased clinical trial costs.

As our pipeline of clinical candidates as increased and increased personnel costs in both R&D and DNA as our head count continues to grow.

Net cash used by operating activities. During the quarter ended June 32020 was 33.4 million compared with net cash provided by operating activities of $10.5 million during the quarter ended June 32019.

Kenneth A. Myszkowski: In addition, current period revenue also included the $20 million milestone payment we accrued due to Amgen initiating their Phase II clinical trial for AMG-890. Revenue in the prior period related to the recognition of a portion of the upfront payments and milestones received from our license and collaboration agreements with Janssen. Total operating expenses for the quarter ended June 30, 2020 were $43.3 million, compared to $24.1 million for the quarter ended June 30, 2019. This increase is primarily due to increased non-cash stock compensation expenses.

The increase in cash used by operating expenses during the quarter is consistent with the increase in our cash operating expenses.

The cash provided by operating activities in the prior period was driven by the receipt of a 25 million dollar milestone payments from Janssen due to the initiation of the triple combination cohorts in the HBV phase one two clinical study.

We estimate our near term cash burn to average 30 to 35 million per quarter.

Kenneth A. Myszkowski: Stock compensation expense has increased because the valuation of new stock options and restricted stock awards granted has increased with the growth in our stock price. Additionally, stock compensation expense has increased due to the timing of the achievement of certain performance-based awards in each period. The increase in our total operating expenses was also driven by increased clinical trial costs, as our pipeline of clinical candidates has increased, and increased personnel costs in both R&D and G&A as our headcount continues to grow. Net cash used by operating activities during the quarter ended June 30, 2020 was $33.4 million, compared with net cash provided by operating activities of $10.5 million during the quarter ended June 30, 2019. The increase in cash used for operating expenses during the quarter is consistent with the increase in our cash operating expenses.

Turning to our balance sheet.

Our cash and investments totaled 464 point Sixmillion at June Thirtyth 2020, compared to 302.9 billion at September 32019.

The increase our cash and investments was primarily due to the to December 2019 equity financing, we completed which generated 250.5 million net cash proceeds for the company.

Our common shares outstanding at June 32020 were 102.3 million.

With that brief overview I will now turn the call back to Chris.

Thanks, Ken.

As we've discussed everybody has a lot going on in all of the following stages, one platform development and expansion into new extra hepatic tissues, such as lung tumor muscle and other cell types.

Kenneth A. Myszkowski: The cash provided by operating activities in the prior period was driven by the receipt of a $25 million milestone payment from Janssen due to the initiation of the triple combination cohort in the HBV Phase 1-2 clinical study. We estimate our near-term cash burn to average $30 to $35 million per quarter. Turning to our balance sheet, our cash and investments totaled $464.6 million at June 30, 2020, compared to $302.9 million at September 30, 2019. The increase in our cash and investments is primarily due to the December 2019 equity financing we completed, which generated $250.5 million in net cash proceeds for the company. Our common shares outstanding at June 30, 2020 were $102.3 million.

To early discovery as evidenced by several cobot related programs Aero JNJ, one two and three and other undisclosed programs three early development such as air along to Aero hip too narrow enac and Arrow HST.

And for emerging mid to later stage development, such as Arrow, a T Aero APC three Aero, an sthree and partnered programs JNJ 30 on 89 AMG 90.

This is a very large pipeline with enormous opportunity for a company of only 200 people. The currently only burns between $30 million to $35 million per quarter and has a market cap less than $5 billion.

This again speaks to air and culture of finding a way forward and not allowing bureaucracy or legacy processes to block innovation.

It was also a testament to our commitment to capital efficiency and being good responsible stewards of the capital that we had been interested with.

Christopher R. Anzalone: With that brief overview, I will now turn the call back to Chris. Thank you. As we have discussed, Arrowhead has a lot going on in all of the following stages. One Platform Development and Expansion into New Extrahepatic Tissues such as Lung, Tumor, Muscle, and Other Cells, to Early Discovery, as evidenced by several COVID-related programs, Arrow J&J 1, 2, and 3, and other undisclosed programs. 3 early development, such as Arrow Lung 2, Arrow Hip 2, Arrow ENAC, and Arrow HSD. 4, emerging mid-to-later stage developments such as Arrow AET, Arrow ApoC 3, Arrow Anz 3, and partner programs J&J 3989 and AMG 890. This is a very large pipeline with enormous opportunity for a company of only 200 people that currently only burns between $30 to $35 million per quarter and has a market cap of less than $5 billion.

Even as we continued to grow these attributes will be important parts of the or had culture. The rest of 2020 is going to be very busy we anticipate multiple data read outs important clarity on the future pads and timelines for some of our programs and new announcements about previously undisclosed targets and candidates.

Our existing programs continue to advance and the reach of our technology platform continues to expand this is a very exciting place to be.

Thanks again for joining us today I would now like to open the call your questions operator.

Thank you at this time.

Can you just touched question. Please press star one on your telephone.

Our first question from the line of elite a young.

Your line is now open.

Hi, Thank you Mrs. Alberto on for at least your from Cantor Fitzgerald, Congratulations on the corner.

Two quick questions. So first in the hip two program when she started in December if I recall correctly. We were just curious about how you're thinking regarding updating the street on that when you do in trim read out later this year or are you waiting for all patients to be treated.

Christopher R. Anzalone: This again speaks to the Arrowhead culture of finding a way forward and not allowing bureaucracy or legacy processes to block innovation. It is also a testament to our commitment to capital efficiency and being good stewards of the capital that we have been entrusted with. Even as we continue to grow, these attributes will be important parts of the Arrowhead culture. The rest of 2020 is going to be very busy.

Yes, Thanks a question.

We're not planning I need to read out this year I'll tell you the that has progressed a bit more slowly than we had hoped as you mentioned, we filed that I ending in December and frankly, I expected us to be to be dosing that by June.

Christopher R. Anzalone: We anticipate multiple data readouts, important clarity on the future paths and timelines for some of our programs, and new announcements about previously undisclosed targets and candidates. Our existing programs continue to advance, and the reach of our technology platform continues to expand. This is a very exciting place to be. Thanks again for joining us today. I would now like to open the call to your questions. Operator.

But really slowed us down that we are because it's a biopsy study. We are we are focused not entirely but largely in academic institutions and so that's just taking a long time to get to get contracting done to start that study.

We are hopeful that we will start to dose that shortly.

And look at participation to give led to a one to report that once that study is complete and so so.

Unknown Executive: Thank you at this time. If you wish to ask a question, please press star 1 on your telephone. Our first question is from the line of Alethea Young. Your line is now open.

By the end of this year. It is unlikely you know maybe that maybe the middle of next year, but we'll have we'll see how that goes we'll give you better guidance once we start goes.

Thank you for that and then just on the edge H.C. assets do you. How are you on potential differentiation that different arnie I approaches can happen liver disease and longer life still your goal to find a partner for this program or are you considering going out at a.

Unknown Executive: Hi, thank you. This is Alberto on behalf of Aletheia from Cantor Fitzgerald. Congratulations on the quarter, and I have two quick questions. First, the HIP2 program, which you started in December, if I recall correctly. We were just curious about how you're thinking regarding updating the street on that. Will you do an interim readout later this year, or are you waiting for all patients to be treated? Yeah, thanks for that question. We're not planning an interim readout this year.

Loan and if so or either way I guess, what gives you the competence to continue investing in this given the challenging snakes.

Sorry, with broker aegis Aegis did you say.

Christopher R. Anzalone: I'll tell you, that has progressed a bit more slowly than we had hoped. As you mentioned, we filed that IND in December, and frankly, I expected us to be dosing that by June. COVID really slowed us down on that.

Yes, okay.

Okay.

Yes look so I'd say, our our our initial and differentiator is our is our speed, where we were the first as I understand it I think we're the first company of any modality.

It's you would to bring in HST based therapeutic shoe the clinic.

Christopher R. Anzalone: You know, we are because it's a biopsy study, and we are focused, not entirely, but largely, on academic institutions. And so that's just taken a long time to get contracting done to start that study. We are hopeful that we'll start to dose that shortly, and look, it's our anticipation to report that, you know, once that study is complete. And so, by the end of this year, it is unlikely, you know, maybe the middle of next year, but we'll see how that goes.

And so so that's some interesting. So that's first second look you know I expect that to be a good a good therapeutic I expect that to be to be potent and I expect you know good deep knockdown in sales and so I think we've got a very good shot having something thats going knocked down that that.

Thats a protein so here the challenges challenged one is that is that it's not it's accreted protein and so at least right. Now there is no secreted biomarkers and so it's going to have to be at least in the near term a biopsy study.

Christopher R. Anzalone: We'll give you better guidance once we start. Thank you for that. And then, just on the AHC assets, do you have a view on potential differentiation that different RNAi approaches could have in liver disease? And along those lines, is it still your goal to find a partner for this program? Or are you considering going at it alone?

We're okay with that and as you know the current study enables Aston and I think that we can roll that no problem, but that's going to beat that can be a bit of challenge.

The second challenges that is that the the mechanisms of vis a vis targets are not well understood. The genetic validation is clear.

Christopher R. Anzalone: And if so, or either way, I guess it would give you the confidence to continue investing in this, given the challenges? Thank you. Sorry, which program?

It appears that that that knocking HST down should be very beneficial for Nash and even more beneficial potentially for alcohol related.

Christopher R. Anzalone: HSB, did you say? Yes. Okay. Yeah, so look, so I'll tell you, our, our, initial and differentiator is our speed. You know, we're the first, as I understand it, I think we're the first company of any modality, you know, to bring an HSD-based therapeutic to the clinic. And so, so that's gonna be interesting. So that's first.

I haven't Titus, but that but that the biology that steel is a bit lagging and so and so we'll see where that goes where we are we are excited about the program.

You know at some point could that be something that we target sure but at least right now it's we're happy to push that board as it is we can handle it as it is a nash as it is a complicated space, but at least in this the state. It at this early stages. This program. We're happy to continue to move Board and then what is the optimistic you know should should it go.

Christopher R. Anzalone: Second, look, you know, I expect that to be a good, a good therapeutic, I expect that to be potent, and I expect, you know, good deep knockdown. And so, and so, I think we've got a very good shot of having something that's going to knock down that protein. So here are the challenges.

Deal at some point happened, we're happy to listen, but right now we're happy to continue to treat patients.

Thanks, again for that and congratulations.

Thank you.

Christopher R. Anzalone: Challenge one is that it's not a secreted protein. And so, at least right now, there are no secreted biomarkers. And so it's going to have to be, at least in the near term, a biopsy study. We are okay with that. And as you know, the current study enables that, and I think that we can enroll that, no problem. But that's going to be, that's gonna be a bit of a challenge.

Thank you next question from Glenn themselves.

Richer of Goldman Sachs.

Your line is now open.

Great. Thank you putting into question what levels of the polymer reduction do you expect to see in the six month 18, liver biopsies and what do you think is necessary in order to you guys approach the FDA on changing the primary endpoint and our shortening the phase two three trial and then I just didn't follow up on the a in that program.

Christopher R. Anzalone: The second challenge is that the, you know, the mechanisms of this, of this target are not well understood. However, the genetic validation is clear. You know, it appears that knocking HSD down should be very beneficial for NASH and even more beneficial potentially for alcohol-related hepatitis. But the biology of that is still a bit lagging. And so, and so we'll see where that goes. We are excited about the program.

Sure.

So I'm glad you asked the question because all the clear on this we don't expect to changes in polymer content. After just six months.

Oh, we do expect substantial monomer reduction and that would be that would be reflective of.

Of our expected activity of this drug as we saw in the healthy volunteer study all those are plasma levels. We saw good production is as I mentioned and so we expect good reduction in monarch at this point polymer as hard as a different story. It look at it's not it's not clear how that's metabolize or one of the.

Christopher R. Anzalone: You know, at some point, you know, could that be something that we target? Sure. But at least right now, we're happy to push that forward as it is. We can handle it as it is. NASH is a complicated space, but at least in this state, at this early stage of this program, we're happy to continue to move it forward.

Good news bad news of being pioneers here is that yes were first but but bad news is where first and so and so there's a lot of things we have to learn here, but one of the things is how this polymers metabolized it could be the bid that we are relying on that have sites to turn over to decrease that polymer because because we don't know it gets parcel that metabolism. This is.

Christopher R. Anzalone: And then we'll, you know, we'll just be optimistic. Should a good deal at some point happen, we're happy to listen. But right now, we're happy to continue to treat patients. Thanks again for that. And congratulations.

Very slow if it if they can capitalize it all so so our take on messages look we do expect good be production of monomer, we expect we expect virtually no or no reduction polymer.

Christopher R. Anzalone: Sure. Thank you. Thank you. Next question from the line of Salvin Richard of Golden Sack. Your line is now open.

Christopher R. Anzalone: Great, thank you for taking the question. What levels of polymer reduction do you expect to see in the six-month AAT liver biopsies? And what do you think is necessary in order to approach the FDA on changing the primary endpoint and or shortening the Phase 2, 3 trial? And then I just have a follow-up question on the ENAC. Sure. I'm glad you asked that question, because I want to be clear on that. We don't expect changes in polymer content after just six months.

And probably no changes in inflammation at this early point at six months you know I think it's there's a there's a better likelihood that we would see some of those changes starting after maybe a year therapy.

Got it that's that's helpful and then when the.

Program, what dose level would you penetrate the tissue and how do you see or as a differentiated from the competitors in the space.

Okay.

Christopher R. Anzalone: We do expect substantial monomer reduction, you know, and that would be reflective of, you know, our expected activity of this drug, as we saw in the Healthy Volunteers study, although those are plasma levels, we saw good deproduction, as Javier mentioned. And so we expect good reduction in monomer at this point. Polymer is a hard, is a different story.

So.

This is how.

What dosing patients Oh.

Yes present than patients and this is coming from the 30 minutes in the preclinical lab.

When you see the total dose that will win those patient approximately 25% that those expected to the de lever to the lung and inefficiencies related to that namely station. So that's an estimation, but right now you know we don't know for sure, but that's how we seen in the pick any kind of where kind of thing.

Christopher R. Anzalone: Look, it's not, it's not clear how that's metabolized. You know, one of the good and bad news of being pioneers here is that yes, we're first. But, but the bad news is that we're first.

Christopher R. Anzalone: And so and so there are a lot of things we have to learn here. One of the things is how this polymer is metabolized. It could be that we are relying on the heptazolites to turn over to decrease that polymer because we don't know. And, you know, it's possible that metabolism is very slow if they can metabolize at all. So, our take-home message is, look, we do expect good deproduction of monomer. We expect, we expect virtually no or no reduction in polymer and probably no changes in inflammation at this early point, at six months. You know, I think there's a better likelihood that we would see some of those changes starting after maybe a year of therapy. Got it, that's helpful. And then, on the Arrow ENAC program, what dose level would you penetrate the tissue, and how do you see your asset differentiated from the competitors in the space? Javier?

And.

Elevating painting.

No.

More specifically.

Regarding competition I look I think I think we sit favorably from a competitive standpoint.

It's a well validated target people have gone after even at a small molecules in the past, but have generally not been able to.

You reduce it enough in the long, but sparing the kidneys, we are confident that we that that we will not reducing the kidneys and we've done exhaustive studies in animals to suggest that that we don't expect production can you. So look I think where I think that we are we are virtually alone.

At least with this target right now in cystic fibrosis.

I have been a son antisense.

Programs, but both but I think that that those will likely have the same issues that other innocence programs of pad, which is which has been related talks.

Javier San Martin: Um, so... This is how we're dosing patients, health volunteers first and then patients, and this comes from the experiments in the preclinical lab. When you see the total dose that we will give patients, approximately 25% of that dose is expected to be delivered to the lungs, and that is efficiency related to the nebulization process.

Great. Thank you.

Okay. Next question, that's not a line of Ted Tenthoff from Piper something let's now open.

Great. Thank you very much for taking my question I.

I wanted to ask a little bit more in terms of Ur Cobot program.

With so much curve on in the space what are the benefits of R&D mechanism.

Javier San Martin: So that's an estimation. But right now, you know, we don't know for sure. But that's what we've seen in the preclinical work, and it's, And regarding competition, look, I think I think we fit favorably from a competitive standpoint. You know, it's a well-validated target. People have gone after ENAC with small molecules in the past, but they have generally not been able to, you know, reduce it enough in the lung but spare it in the kidneys.

Potentially for co Red and can you tell us a little bit more about sort of maybe how that clinical program looks like.

Sure. So there's not much we can tell you on that because we're still early there and we're still really exploring a lot of things as I mentioned in the prepared remarks. There are three there three broad areas that we are we are interrogating simultaneously. One is is knocking out are knocking down receptors.

In the long that that enabled a virus to Gideon.

That biology is reasonably clear our as clear as it can be in this.

Christopher R. Anzalone: We are confident that we that we will not reduce in the kidneys. You know, we've done exhaustive studies in animals to suggest that we don't expect a reduction in the kidneys. So, look, I think we're I think that we are virtually alone, at least with this target right now in cystic fibrosis. There have been some antisense programs, but I think that those will likely have the same issues that other antisense programs have had, which is related to tox.

For this virus and so we're going so we will be going after that.

I think we have I think we have a role to play there and look we've got we've got a clinic ready loan program. We've been leaders in HBV. We were the first ones to show good potent anti viral effect in hepatitis B and so I think we're well positioned to play here. So we feel good about that second.

Is is direct anti virus again.

We showed with HPV they were pretty good that and and I think the opportunity here is not just to look at the current.

Christopher R. Anzalone: Great, thank you. Thank you, next question from the line of Ted Tenthoff from Piper Chandler, your line is now open. Great, thank you very much for taking the question. I wanted to ask a little bit more in terms of the COVID program. With so much going on in the space, you know, what are the benefits of the RNAi mechanism potentially for COVID? And can you tell us a little bit more about sort of maybe how that clinical program looks? Thanks.

Current a virus, but to think of this more broadly you know if one were to expect there will be krona virus outbreak in the future and passes is prelude.

That's probably good assumption.

We would hope to find some wells in certain regions. Among known current viruses that we could knock out and have antiviral effects. We are interrogating out right. Now we think the plane I think you play in that space and third what that inflammatory.

Christopher R. Anzalone: Sure, there's not much we can tell you about that because we're still early there and we're still really exploring a lot of things. But as I mentioned in the prepared remarks, there are three broad areas that we are interrogating simultaneously. One is knocking out or knocking down receptors in the lung that enable the virus to get in. That biology is reasonably clear or as clear as it can be for this virus. So we will be going after that. I think we have a role to play there.

Vis vis jobs, well with with our other loan programs and we think that there are that there are good good indications.

For Angie for anti Inflammatories and so we're we're developing that right now and we think that might play a role in a in a therapeutic for a four for car buyers.

Oh, it's interesting illiquid to anymore.

Yeah. Thanks.

Christopher R. Anzalone: And look, we've got a clinic-ready lung program. You know, we've been leaders in HPV. We were the first ones to show a good potent antiviral effect in hepatitis B. And so I think we're well positioned, you know, to play here. And we feel good about that.

Yeah.

Next question from the line of Luca easing of obviously busy.

Capital.

Your long is now open.

Terrific. Thanks for taking my question, Okay see from RBC capital. That's two questions maybe one for Javier on you any t. and maybe one bigger picture question for you Chris So.

Christopher R. Anzalone: Second, is direct antivirals. Again, you know, we showed with HPV that we're pretty good at that. And I think the opportunity here is not just to look at the current Coronavirus, but to think of this more broadly. If one were to expect there would be coronavirus outbreaks in the future, and if history is a prelude, that's probably a good assumption. We would hope to find some well-conserved regions among known coronaviruses that we can knock down and have antiviral effects.

He sounds to me that you're saying that there's somewhat of a time lag between the reduction to monomer versus the reduction into polymer.

However, when I see the preclinical data published just yet.

Feed that much of a lag beer as actually it appears to the monomer into polymer gets reduced concurrently there. So just curious just curious about what am I missing there. That's the first question. My second question, Chris and the strategy you, obviously had a very impressive pipeline at this point can you just maybe dichotomy the world for us right.

Christopher R. Anzalone: We are interrogating that right now. We think we can play in that space. And third, with anti-inflammatory. This jibes well with our other lung programs. We think that there are good indications for anti-inflammatories. And so we're developing that right now. And we think that that might play a role in a therapeutic for coronavirus. Cool. Sounds interesting.

<unk> assets that you feel you have generating enough data did you would consider a partnership now versus assets that you want to further de risk before entertaining any type of corn.

Christopher R. Anzalone: I look forward to hearing more. Yeah. Thanks, Chad. Next question from the line of Luca Issi of RCBC.

Christopher R. Anzalone: Sabato, your lung is now open. Oh, terrific. Thanks for taking my question, Luca Issi from RBC Capital. Two questions, maybe one for Javier on A1AT and maybe one bigger picture question for you, Chris. So, on A1AT, it sounds to me that you're saying that there is somewhat of a time lag between the reduction in the monomer versus the reduction in the polymer.

Sure.

Alright, so on the first part of the question related to how they can you kind of correlate to the clinical I think the first defense is we haven't look at many of these times when the preclinical work is more like on on the longer time, So I don't see we how they wait to see the dynamic any additional reduction of.

Different incompetent and use of growth in in the leave.

So that's that's one component the thing we need to understand.

Javier San Martin: However, when I see the per-clinical data published at JCI, I don't see that much of a lag there as actually, it appears that the monomer and the polymer get reduced concurrently there. So, just curious about what I am missing there. So, that's the first question. And then the second question, Chris, on the strategy: you obviously have a very impressive pipeline at this point. Can you just maybe dichotomize the world for us between assets that you feel you have generated enough data that you would consider a partnership now versus assets that you want to further de-risk before entertaining any type of partnership?

The signal.

I think we are now getting more on one information from and that's a key three study that we done and what that way than others, but this is clearly a dynamic progressing crying DCC sending happens in different stages us we are learning. So the main problem. He said promotion of these abnormal needful protein.

I guess accumulate in delivery Nishan DS monomers, then eventually getting organized oney most of the time goes bust become these Nols DCC.

Christopher R. Anzalone: Thank you. All right, so the first part of the question related to how the preclinical work correlates to the clinical. I think the first difference is that we haven't looked at very early stage in the preclinical work. It's more like on the longer term.

At least on why then patients develop inflammation on us. These continue develop fibrosis and finish with may stage nivo to be season. So we see these very dynamic process.

Javier San Martin: So I don't think we have a way to see the dynamic inhibition or reduction of different components of the mutant protein in the lip. That's one component that I think we need to understand. Second, I think we are now getting more and more information from the natural history study that we've done and we're collaborating with others, that this is clearly a dynamic progressive chronic disease, and it happens at different stages as we are learning. So the main problem is the production of this abnormal misfolded protein that gets accumulated in the liver initially as monomers, but then eventually gets organized as polymers as time goes back, it becomes this global. This is the reason why patients develop inflammation and, as this continues, develop fibrosis and finish with late stage liver disease.

Something that can be hazardous immediately would you see TV promotion of the protein and overtime, we'll be US you with a decrease in the month one of less than that and they leave plenty mers and eventually that will be needed to be installed that currently inflammation determination that maybe but so that's.

How are seeking out actually the 2002 study Nike when asked this question, 1%, maybe when looking at biopsies for time points plus initiation of 50, 612, 18, 24 months, probably would be on my part how these dynamics sequence of events happen to how we got into.

Javier San Martin: So we see this as a very dynamic process that starts with something that can be addressed immediately, which is the inhibited production of this mutant protein, and that over time will be associated with a decrease in the monomers in the liver and then polymers. And eventually, that will reduce the insult that causes the inflammation, the progression of the liver disease. So that's our thinking and actually, the 2002 study likely will answer this question more precisely because we're looking at biopsies at four time points post initiation of therapy, 6, 12, 18 and 24 months. So we'll probably be able to map out how this dynamic sequence of events happens and how we can intervene by inhibiting the insult and allowing the liver Thanks.

I mean by inhibiting the installed.

Now when they leave it to two hill.

Yeah. Thanks.

So when they are with regard to your Youre more strategic question, that's Uh huh.

That's a key question for our strategy as you know Oh, we have we've been really focused on building. This large pipeline and not slowing down we heard me say before like I think we're going to have 10 clinical programs you know pretty soon.

We double that 20 in the next few years and so what that gives us isn't isn't an awful lot of currency to do some partnerships because look we are frankly, no company I don't think.

Nearly our size, even double our size, even triple our size could commercialize all those organizations. So we have.

Christopher R. Anzalone: So with regard to your more strategic question, that's a... That is a key question for our strategy. As you know, we have been really focused on building this large pipeline and not slowing down. You've heard me say it before, look, I think we're going to have 10 clinical programs pretty soon, and I think we'll double that to 20 in the next few years. With respect to which ones we can partner right now, so if you look at the current clinical programs where we have data, AAT, ApoC3, and Ang3, I'd be willing to suggest that we have enough data to partner with any of those. The data have been quite good on all of them. AAT, as Javier showed, in healthy volunteers, we were showing decreasing levels of plasma down below the level of quantitation. We'll have biopsy data shortly to see what that looks like intra-hepatic, but I think that we have already, from my perspective, we have already achieved clinical proof concept there that we are doing what we expect to do in a well-tolerated manner. With ApoC3, we're seeing 95% reduction of triglycerides in patients, and also lowering of LDL also. So far, I've been well-tolerated.

We've got the ability to go through that and find a clusters of assets that we can commercialize ourselves and to bring us to that next next level of growth and then and then that part of those out.

With respect to which ones are going partner right now. So if you look at you look at at the at the current clinical programs, where we have data on 88003 Nash three a I'd be willing to.

To suggest that we have enough data to pardon or any of those the data have been have been quite good all AG as Javier showed healthy volunteers, we were showing.

Decreasing levels of plasma down below the level of quantitative will have biopsy data shortly to see what that looks like in dramatically, but I think that that that we have already from my perspective, we've already achieved clinical proof of concept there than we were doing we expect to do well tolerated manner.

I agree we're seeing 95% reduction triglycerides in patients also lowered a lowering LDL also in these patients are so are going well tolerated I think I think enough data have been generating and what we think that dose 100 patients. So far our human subjects in patients in healthy volunteers I think there's nothing in there too.

Do you happen to part of that should we should we want to early and three we're seeing 85% reduction of triglycerides, 40% reduction of LDL and non LDL receptor median fashion well tolerated and same thing that we've dose was 93.

Christopher R. Anzalone: I think enough data have been generated. I think we've dosed 100 patients so far, or human subjects, between patients and healthy volunteers. I think there's enough data there to, you know, part of that should we want to. In Arrowhands 3, we're seeing an 85% reduction in triglycerides, and a 40% reduction in LDL in a non-LDL receptor-mediated fashion. Well-tolerated. The same thing is there with dose. What's 90?

Three patients I guess, so far and then well tolerated and back so I think we've we've.

Hurdle that bar as well so the point is I think those are all partner will now and I think it's now and come up a positive continue to move. These other programs forward and then to figure out which ones and at what time, we're going to one partner.

Super. Thank you. Thank you kinda congrats on the progress.

Thank you.

Christopher R. Anzalone: I guess so far, they've been well tolerated and have been active, and so I think that we've, You know, hurdled that far as well. So the point is, I think those are all partnerable now. And I think it's now come upon us to continue to move these other programs forward and then figure out which ones and at what time we're going to want to partner.

Next question from Atlanta, Maury Raycroft of Jefferies. Your line is open.

Hi, everyone not congrats on the progress and thanks for taking my questions.

First question was on Aero 80, just wondering if you validated inflammatory biomarker assay yet for that program.

We haven't funny that our itself, but they said very funny, they wait to Luca inflammation, we likely going to do an early look at the same way. We look I mean, if it can you kind of way, which is quantify philosophy inflammation and by feeding them by ports on area. So the first me the information would be.

Christopher R. Anzalone: Thank you. Thank you again and congrats on all the progress. Thank you. Next question from the line at Murray Raycroft of Jeffreys: Your line is open. Hi, everyone. Congratulations on the progress and thanks for taking my questions. My first question was on Arrow AAT.

Javier San Martin: Just wondering if you validated an inflammatory biomarker assay yet for that program? We haven't validated it ourselves, but there is a very valid way to look at inflammation. We're likely gonna do an early look at the same way we look at in the preclinical work, which is quantify forces of inflammation by field and by portal areas. So the first way that inflammation will be very standard, I think, well described, quantifiable, and that you can really, it's reliable, and you can compare, you know, baseline. I got it.

Sorry stand out in weather describe quantifiable on that you can really isn't a reliable and you can compare based thing to propose space.

Got it and I'm wondering for that program to if you can provide any details on the baseline characteristics of the patients that you've got in the open label study and how do those baseline characteristics compared to some of the patients that youve enrolled in a pivotal phase three.

Javier San Martin: And I'm wondering for that program, too, if you can provide any details on the baseline characteristics of the patients that you've got in the open label study and how those baseline characteristics compare to some of the patients that you've enrolled in Pivotal Phase 2-3. Well, so I don't have any details right now. We can follow up if you want offline.

Well, so I don't have any detailed right now we can follow up if you want offline. So I don't recall exactly but.

We can get back to you.

Of course.

The goal there was was it was to be treating similar patients and so what we see any open label study, our anticipation and that will read on what is what is likely happening within them. The blinded study. So if the question is how are they different fluctuations answer they really shouldn't be because they couldn't go Daddy singular.

Christopher R. Anzalone: So I don't recall exactly, but we can get back to you. Of course, yeah, the goal there was to be treating similar patients. And so and so what we see in the open-label study, our anticipation is that that will shed light on what is likely happening within the blinded study. So the question is, you know, are they different patients? The answer is they really shouldn't be because the inclusion criteria are similar.

So if I could you repeat that by the essentially you know the age groups. This 80 250 or 65, Oh, probably has come in if you want higher that 65, or so interesting I guess I'm very very seamless. So we spent that these for side will be applicable to understand what happened on the last year.

Javier San Martin: And so I was about to repeat that, but essentially, you know, the age groups are 18 to. [inaudible] Got it. And I think in your prepared remarks, you said you've been having discussions with regulators about APO T3 and ANG3. Can you provide more clarity on when you're going to finalize plans and disclose some more of the details from your discussions with the regulators in the US and the EU? I don't think we are ready to provide guidance on that yet. We did have interactions with the FDA over the summer, and so we are still formulating our strategies there.

Okay.

Yes.

Got it and I think in the prepared remarks, you said you you've been having discussions with regulators April's eathree enhanced three can you provide more clarity on when you're going to finalize plans and disclose some more of the details from from your discussions with regulators you asked any you.

I don't think we're ready to provide guidance on that yet we did have interactions with the FDA of over the summer and so and so we're still formulating our strategy there.

Got it okay. Thanks for taking my questions.

Javier San Martin: Okay, thanks for taking my questions. You're welcome. Thank you. Next question from the line, Madhu Kumar. Your line is open.

Welcome.

Your next question from the line Madu Tomorrow.

Your line is open.

Everyone. Thanks for taking my question. So my first one is on age what kind of following up on because question. So you can imagine there are two schools of thought around clinical benefit can be alpha one antitrypsin liver disease, what he died or reversal of polymer and globule formation variances liver.

Unknown Executive: Hey everyone, thanks for taking our questions. So my first one is on AAT, so it's kind of following up on Luca's question.

Javier San Martin: So you can imagine there are two schools of thought around clinical benefit in the alpha-1 and atribs in liver disease related to either reversal of polymer and globular formation versus liver cell turnover. So based on your belief that six months will not be enough for AAT knockdown to translate to clinical benefit, do you put yourself in the kind of liver turnover school of thought, or do you think you're kind of spread between the two? Or like, how do you think about it in terms of which realm do you think you'll get benefit from in terms of the alpha-1 and atribs in liver disease? I'll let Javier expand on this. I don't think we know why.

Well turnover. So based on you believe six months will not be enough for 18 now tend to translate to clinical benefit do you put yourself in the kind of liver and turned over school of thought or do you think you're kind of spread between the two or like how do you think about it in terms of which well do you think you'll get benefit in terms of the alpha one antitrypsin.

Liver disease.

I'll I'll comment.

I don't think we know.

We look we know that we can that that polymer should be reduced via the Robert.

Javier San Martin: You know, we look, we know that we can, that the polymer should be reduced via the liver or via hepatocyte turnover. That's, that's what we think we know. And that's about it. I don't think we have a good idea about metabolism. But beyond that, Javier? Yeah, I think, as I said before, this is one of those liver diseases that start with an insult, such as hepatitis, such as NASH.

We have had a slight turnover.

That's definitely think we know that's about it I don't think we have a good idea about metabolism, but beyond that okay. Yeah, I think that they said before.

It's one of those LIBOR.

But anyway. So I just I think this such as non US and ask you know when you remove the installed more like de lever in pool and that is shown in many different secret, Pennsylvania. So this is treatment that we'll be moving so studies no. We have time to remind you will get rebuild.

Javier San Martin: And as you know, when you remove the insult, the liver is more likely to improve, and that's what is shown in many different circumstances like this. So this is a treatment that will remove the insult that is new, and with time, the remodeling will get rid of the polymers and globules, and that will hopefully allow the cells, the hepatocytes, to heal and, you know, prevent complications and the progression of the disease to a stage of cirrhosis. So that's how we're thinking about it. Interesting. So you don't think the preclinical data suggests there's a back reaction that occurs where the polymer or monomer converts back to its state if you don't have a nascent AAT forming? Do you think there's a back reaction that happens? A back reaction, meaning an un-polymerization, if you will.

Claimants and goes and that will hopefully allow the health and that's a site to heal and and you know event.

Vacation than the provision of the disease.

The way stage.

That's how we're thinking about.

Interesting to you all don't think the preclinical data suggests a back reaction that occurs where.

Polymer or monomer couldn't reverts back to.

Steve you don't have a they can meet saying Hey T. For me you don't think there's a bag reaction that happens.

A back reaction merit.

I'm wondering if you will.

Javier San Martin: Exactly. I have stuff that we just don't know. Okay, and then on the Arrow email...

Exactly.

I still think we had we just don't know.

Okay, and then on Aero economic So you, obviously had kind of gone into the long and that's really exciting as an opportunity what data do you need to see from arrow economic to kind of more broadly pursued a long, including the CRPD indication either kind of pulmonary petroleum directed lung indications like what do you need to see.

Christopher R. Anzalone: So you obviously have kind of gone into the lung, and that's really exciting as an opportunity. What data do you need to see from Arrow-ENAC to kind of more broadly pursue the lung, including the COPD indication, and the other kind of pulmonary petroleum-directed lung indications? Like, what do you need to see?

Javier San Martin: Do you need to see an FEV1 benefit, or do you need to see something more proximal to that that will give you kind of confidence that you can hit targets in the lung? Yeah, also, this is a phase one study, of course, but we're doing two assessments in patients, which is FE1, so spirometry, which is well-established, and then LCI, or Lung Clearance Index. And we think that that is particularly sensitive methodology to assess early changes and somehow probably related or correlated to the MCCO, the Mycoselial Clearance, test. So we did a webinar about a week ago. And there are a number of details in that webinar that you may want to if you haven't seen it, you can take a look because it's on our web page. But I think the LCI, you know, we have enough patients in this phase one study to likely see a difference in LCI or changes. And also if you put all the patients together, because LCI will be done in a subset of patients with an FE1 greater than 70% because the methodology is precise in that kind of patient population.

Let me see at TV, one benefit or do you eat it doesn't mean more proximal to that that will give you kind of confidence you can hit targets in the long.

Yeah, well, so [laughter] faced with the when doing to a assessment and patients which is if you want to speed commentary was comedies and then L. CIO Lantheus index.

And we think that that is particularly sensitive mid to low she has any changes and somehow it really relates to correlate it to the NCCN other than to see your kids.

Yes, so we do that.

Let me now at about a week ago, and maybe that number will be does not and that living there. You know you may want him to if you haven't.

You can take a little because its you know when web page.

I think the let's see I you know we have enough patients in this phase one study to like you see the fancy Nailsea changes and also you on the patients to get that because healthy I wouldn't be nanning, it's tough to the issue if anyone greater than 70% because they make all she is precise and that kind of patient.

Jason.

Javier San Martin: And we're doing FE1 in all patients, all three cohorts of patients with cystic fibrosis. So we think that we're in a good situation to look at change from baseline and perhaps see an initial difference, assuming, you know, a significant change. So we do believe that we will have proof of concept data; at least, the study is designed to achieve that goal. Okay, so then, following that logic... The Lung Clearance Index as a measure for ENAC inhibition is like a surrogate measure for ENAC inhibition.

And then if you want in all patients on T. cohorts of patients with cystic fibrosis. So we think that we're getting a good situation to look at change from baseline.

I see an initial Nissan defense.

Assuming no significant change so we do believe that we will have proof of concept beta well at least how the east decide what she's done on the.

The phase one.

Okay. So then following that logic the lung clearance index has a major for even like individually I guess, a surrogate measure or you're not getting mission. That's the kind of key barometer for you take kind of broadly appreciate alone.

Javier San Martin: That's the kind of key barometer for you to kind of broadly pursue the lungs. Well, no, it will give us information that there is a pharmacodynamic effect, not necessarily only inhibition, that will tell us that there is an improvement in respiratory or ventilation homogeneity, which is related to MCC and eventually clinical benefits. So it's actually a pharmacodynamic effect. It's not just a level of no-cow

Well no [laughter]. It will you misinformation that these fundamental dynamic in fact, not necessarily only the innovation that will tell us that he's an improvement <unk> CFO to you in TV teenage on how much in 80, which is related to NCCN eventually could benefit so it's happened.

On the Pharmacodynamic, it's not shutting them, though no wont be able to measure the value of course.

Christopher R. Anzalone: We won't be able to measure that, of course, clinically with this target because, you know, you have to have a lab bio. So it's gonna be a real pharmacodynamic result, and the study is designed to be able to see those changes definitely with LCI and, hopefully, also with. Gotcha, awesome. So, stepping back and thinking, previously, we've all talked about this idea of kind of the fancy term, I guess, is by specific RTO, like hitting multiple targets at the same time. Like, where's your progress on that?

And with de stocking because you know you had to come in on biopsy.

It's kind of be really a pharmacodynamic response and the study is designed to be able to see those changes definitely with Sci isn't hopefully also.

One.

Gotcha Awesome. So then stepping back and thinking I know previously we've all talked about this idea of kind of.

The fancy term I get the bi specific already out like King multiple targets at the same done like where is your progress on that and where are you thinking about pursuing that considering you've got this whole kind of basket of cardio metabolic targets, where I think a.

Christopher R. Anzalone: And where are you thinking about pursuing that considering you've got this whole kind of basket of cardiometabolic targets, where I think a not unreasonable expectation would be, well, why not go after multiple targets at the same time? How are you thinking about that? What do you need to do to kind of really pursue that with gusto? Yeah, that's very smart. It's a very smart question, I think, and it's something we think about a lot because you're right. Cardiometabolic, you know, we've got The data we've seen so far with APO and ANG are so intriguing that if you could combine those, that's even more intriguing. But you can also imagine that within the lung, there are several targets that could be very interesting by combining those. You can also think of this in NAS as well. There There are multiple pathways you could address if you go after what they call a bispecific or dimer.

Not quite a reasonable expectation would be well why not go after multiple targets at the same time. So how are you thinking about that what do you need to do to kind of really pursued that and in gsell.

Yeah. So that's a very smart that's very smart question I think that and it's something we think about a lot because you can because you're right you're cardiometabolic. We've got we've got.

The data we've seen so far with April and and our so intriguing, but if you combine those that's even more intriguing, but you can also imagine that within the long. There. There are several targets that that could be very interesting by combining those you can also looking I think of this in Nash as well. There are there are multiple pathways and you can address if you could go after.

Sure what they called pipes, Vice President for dimer. So you. So yes, we're on the same pace with that the great possibility of the bi specific or dimers. We are we're still working on that.

Christopher R. Anzalone: So yes, we are on the same page, you know, with the great possibility of bispecific or dimers. We are, we're still working on that. You know, there are challenges associated with potency and such, and we're still working on it. We can I think we can see it, but we're not there yet. So, you know, stay tuned. We'll have additional updates as we as we can approach the clinic with one of these. But it's still, you know, the earliest days on this concept.

You know there are challenges there socio potency and such and we're still working there. We can I think we can see it but were but we're not there yet. So so stay tune we'll have we'll have additional updates as we as we approach that like with what I was one of these but it's still it's still early days.

On this concept.

Okay, great. Thanks, very much guys.

Unknown Executive: Okay, great. Thanks very much, guys. Question from the line of Mani, Foroohar, of SVB Fairlane: Your line is open.

<unk>.

Questions on the line of money.

Huh.

SVB settling.

Your line is open.

Christopher R. Anzalone: Hey, thank you very much. So I don't think I can match the elegance of Madhu's question around the law of mass action as A1AT. So thinking about it in perhaps a more, Well, we'll say a little bit more of a crafty way, going back up 10,000 feet.

Hi, Thank you very much so I don't think I can match the elegance of bodies or question around law mass action.

He so thinking about it and perhaps a more.

Now, we'll say a little bit more of our crap, where we bought back book going back up 10000 feet. When you think about but I'm horizon to see a polymer benefit and clearly if I could be six month at least some longer period.

Christopher R. Anzalone: When you think about the time horizon to see a polymer benefit, and clearly it's not gonna be six months, it'll be some longer period, versus the time horizon to see a histology improvement, what should we expect? Polymer benefit to lead histology improvement by a year, two years, some very long period of time, or should it be very quick, one striking after the other, given what we know about from the preclinical data, Data, and Natural History. And then I have one quick follow-up on Boring Finance. We really don't know the good news. I think we're going to answer that question as we go along. And the phase 2, 3 study, the post-baseline biopsy, is right now two years post-initiation of the study. So we're taking, right now, a relatively conservative approach to do the post-baseline biopsy two years after the initiation of therapy to allow enough time to be able to see what we've seen in the preclinical work.

Versus the time horizon.

Oh, the improvement should we expect.

Polymer benefit to lead histology improvement by year two years, sometimes some very long period of time or should it be very quick one striking after the other given what we know about.

From the preclinical data.

Natural history, and then I have one quick follow up on a boring plenty of question.

Well you know we wouldn't be done no. Thank goodness I think we're going to answer the question.

As we bought on the Phase I study.

They also baseline biopsy is try now two years suppose post initiation of its probably so one thinking right now I don't know sequencing looking up close to the post pay somebody Hep C. Yeah, because any she's not be to allow enough time to you want to see what we've seen in depicting work no exactly how that will.

Javier San Martin: Now, exactly how that will look like, I don't know, but 2002, as a sequence of biopsy at different time points, different patient populations, might help us to, you know, fine-tune the time frame of changes in monomer, polymers, globules, and the consequence, liver damage associated with that. So more... Yeah, and just to reiterate our time and expectations here, as we mentioned, we are processing and analyzing the bio It is our anticipation that we'll have data in time to submit a late break or abstract to AASLD. You know, my hope is that we get accepted there. And so I think we can have more educated conversations about what we're seeing and what we could be seeing in the future sometime around then. It's just too early to tell.

Look like I don't know, but 2000 and to a sequence sequence of biopsy at different time point and different patient populations might help us to.

Fine tune the timeframe of changes monomer, putting most levels and the consequence LIBOR damage associated with that.

So more to come and just to get in.

To reiterate our timing expectations here as we mentioned we are we're processing, the and analyze and that the the biopsies right. Now is our anticipation that we'll have data in time to submit a late breaker abstract.

SLB.

My hope is that we get accepted there and so so I think we can have we can have more educated conversations about about what we're Seattle, we could be seen ginger sometime around around that so.

It's just it's just too early to tell us. They are the preclinical data were interesting you know, we we saw improvements and all of these measures. We just don't know how the kinetic so those are going to translate from for us.

Christopher R. Anzalone: The preclinical data were interesting. We saw improvements in all of these measures. We just don't know how the kinetics of those are going to translate from Marodin's data, so that's really helpful. So and on the more boring finance question, you spoke a little bit about the impact of stock-based compensation, etc. So clearly, your stock has been volatile the last couple of years, which is not surprising, given the amount of data that you've produced and the number of milestones that you've hit, etc. So when we think about modeling stock-based comp, we think about it in terms of the total number of shares issued as opposed to dollars, which takes that event, that impact, out of the picture a little bit. What should we expect?

Siemens.

That's really helpful. So and on the more boring finance question, you spoke a little bit about the impact of stock based compensation et cetera. So clearly your stock has been had been volatile over the last couple of years would have not surprising given the amount of data that you produce.

<unk> milestones that you could et cetera. So we think we're modeling stock based comp we think about it in terms of total of shares issued as opposed to dollars, which takes that event that impact out a little bit should we expect.

Shares issued or option issued in the notional sets up to be about flat versus this year up up materially.

Kenneth A. Myszkowski: Shares issued or options issued in a notional sense to be about flat versus this year, up, up materially, you know, down slightly. How should we think about that as we model that going forward on a stock issuance perspective as opposed to trying to use a dollar amount for pretty volatile equity securities like yours? Yeah, I would expect that to be pretty flat, you know, on a on a on a stock basis again, you know, to use your differentiation, right? You're not on a dollar basis but on a number of share basis.

Down slightly how should we think about that as a model that going forward I'm on a stock issuance perspective as opposed to try to use a dollar amount for pretty volatile equity security like yours.

Yeah, I would attract that'd be pretty flat on an ice eye on a stock basis again do you use your differentiation right or not on a dollar reasons, but on a on a number of share basis.

Christopher R. Anzalone: Great, that's really helpful. Thanks, guys. You're welcome. Thank you. Next question from the line of Maya Mamtani of Beef Rally. Your line is open.

Great that's really helpful. Thanks, guys.

You're welcome.

Thank you next question from the line of my out one Penny B. Riley.

Your line is open.

I've got steam on the progress just no more you any direction I just want vetted out on the Cardiometabolic portfolio.

Christopher R. Anzalone: Congratulations team on the progress. Just no more A180 questions. I just want to drill down on the cardiometabolic portfolio. Starting with 890, the Amgen compound, could you just comment on what data they have presented or that they will present? And you know, in the context of another agent that is already in an outcome study, just kind of anything that is out there, you can talk about the data that they have so far. Right, yeah, so, as far as I know, they have not presented any data. I'm not in any jeopardy of telling you something I shouldn't tell you because they haven't told us anything. My expectation is that they will present some data by the end of this year. At what venue, what time, I don't know, and what I'm going to see, I don't know.

So I think with the E zero the Amgen compound could you just comment on what beat out they have presented at the present and you know in context of.

The agent that is already in outcome study. This just kind of anything that is out there you can talk about the data that they have so far.

Right Yeah. So.

As far as I know they have not they've not presented any data I'm not any jeopardy of appealing something I should tell you that because I don't because they haven't told us anything.

My expectation is that is that is that they would do.

They would present some data by the end of this year and what venue what time I don't know and what is going to see I don't know world, where we are optimistic that they should be good data because look we thought that wasn't really good trigger we expected to be potent we expect them to lead to good deep and durable helped a little a knock out.

Christopher R. Anzalone: We are optimistic that they should be good data because we thought that was a really good trigger. We expected it to be potent. We expected it to lead to good, deep, and durable healthy little knockdown.

Christopher R. Anzalone: But that was just speculation based on the animal model. We'll be looking forward to seeing that side-by-side with you. Okay. And then on ApoC3, I sense there's a little bit of a change relative to, I think, what you were talking about earlier, you know, with Ang3 maybe positioned for the broader population, but it seems like you want to do ApoC3 also in the broader hyper-triglyceridine space. So just curious, is it more to do with how the landscape there is evolving or with the, you know, the regulatory dialogue you're having in real time? Or is it like the data that, you know, we'll get to see more at NLA and other conferences? Could you just maybe give it more color there?

Yeah, but that but that was speculation based on the al. So we'll be looking forward to see not side by side view.

Okay, and then on E books, he see I'm sensing, there's a little bit of our teams are that it does do I think what you were talking about earlier, a you know that adds to maybe position for the broader population, but it seems like you want to do it was he also in the broader hypothetically say.

Even space. So just curious as it is it more to do that how the landscape that into our link all I would be you know the regulatory dialogue with the housing in real time like just or does it make the data that you do get to see more that annaly and and other conferences.

He is maybe give more color there.

Christopher R. Anzalone: Thanks for asking that question, because I think it's important. You know, part of this may be that we could have messaged this better. But another part is that our thinking really has evolved. You know, we've talked a lot about addressing smaller populations because that looked like a near-term path to commercialization. And so we've always thought that that's how we should approach this asset.

Yeah. Thanks for asking a question because because I think it's important.

Pardon part of this may be.

That we couldn't message this better but another part is that our thinking really has evolved we talked a lot of out about addressing smaller populations because that looked like a near term past commercialization and so we've always thought that we've been that's how we approach this asset we get into these these smaller populations relatively.

Christopher R. Anzalone: You know, we get into these smaller populations relatively quickly, and then we expand the label by essentially walking down the triglyceride levels. And so, you know, think of this just in broad terms of, say, above 1,000, and then, say, 500 to 1,000, and then, say, 200 to 500, as we talked about in the prepared remarks. I think the CIPA, I think their first branch, if you will, was 500 to 1,000, I think, was their first group they got approved for.

Quickly and then expand the label by essentially walking down the.

The triglyceride levels and so think of this just in broad terms of say about 1000, and then say 502000, and say 200 to 500 as we've talked about in the prepared remarks.

I think the Super I think I think there first their first.

Traunch. If you will was was tool was 520000 I think was there first first group they got to prove out in any event. You know we so so are so eight we are trying to messages a bit better than we see this as it as a whole as a spectrum of patients we can occur.

Christopher R. Anzalone: In any event, you know, we, so our, so A, we are trying to message this a bit better, that we see this as a whole, as a spectrum of patients that we can address, you know, from small market to larger market. So I want to talk about that a bit more. But also, as I mentioned, I think our thinking has changed here a bit, in part because the data has just been so good. You know, as we look at the safety profile, and as we look at the depth of triglyceride knockdown we're seeing, and frankly, the increase in HDL, which we have not talked very much about, but we think could still be important. You know, as we look at all that, we just say to ourselves, we've got something here that really should be brought to larger populations. And so, again, our goal here is to, you know, maybe start with small populations, because we can get to that commercial opportunity most rapidly.

Yes.

You know from small market to larger market. So I want to talk about that bit more but also as I mentioned I think our I think that are thinking has changed here, but in part because the data have just been so good you know as we look at at the at the the safety profile as we look at at the depth of of triglyceride knock on wood.

Seeing and frankly, the increase in HDL and is not very much about but we think still could be important as you look at all that we just see ourselves. We've got something here that that really should should be proc larger populations and so and so.

Our goal here is to is to maybe start with lot with small populations, because we can get to that to that commercial opportunity. Most rapidly, but then to expand this out and look I think this is this is at least as large a market opportunity as an sthree, maybe larger but at least as large as that given that the type of patients weekend.

Christopher R. Anzalone: But then, to expand this out, then look, I think this is at least as large a market opportunity as AM3, maybe larger, but at least as large as that, given the type of patients that we can address. Look, you know, the numbers we talked about. 41 million adults are estimated to have triglycerides between 200 and 500 in the U.S. alone. You know, that's a pretty big swath for us to potentially treat some subset of that. Okay, great. And then on the ANTS-3, can you confirm if you still have some fatty liver disease patients, subjects being enrolled there, and are you still planning to do PDFF on some of these subjects? Yeah, so it's Javier couldn't didn't understand what you said.

Dress look we know the number to talk about 41 million adults are estimated to have after it was right between 200 500 in the U.S. alone Oh, that's a that's a pretty big swap.

For us to a potentially a tanker treat some subset of that.

Okay, Great and then a and B adds to the just can you confirm is Oh, you still have some fatty liver disease based patient subjects being enrolled and you still you still guiding to do pdfs on some of these subjects.

Yeah.

Yeah. So so it's.

Javier.

Good dinner Stanley said so.

Javier San Martin: So you're talking about the various patient cohorts, and are we still enrolling? OH3 is completely enrolled, so we will complete that study. We're starting to look at the data to come. So, no, we complete that study together, and as Chris said, we're planning on the first interaction with the regulatory agency here, the FDA, to plan the phase 2b study to start, hopefully, at the beginning of the first half of 2021. So the study is complete in terms of enrollment, and very soon, we'll have completed 113 days of final data for all patients, all subjects. And we've talked about lipid panels, you know, for all these patients. And what has always excited us about this pathway and this target has been the possibility of lowering LDL in a non-LDL receptor mediated fashion and lowering triglycerides. You know, that's been the Now, if you go a bit beyond that, you look at the possibility of insulin sensitivity and liver fat. You know, the data that we and others have seen in animal models have been interesting.

You're talking about the various patient cohorts and are we still enrolling launched three it's completely enrolled so what we see that's how the where how to look at the data come. So no. We completed a study and then.

He said we're planning on the first international we did.

So you see he has the feet on the phase Twob study to start hopefully the beginning August 1st half.

When he wants so studies completed enrollment very soon would have completely what kind of that 15 days I know they definitely on pace on passing on patients.

We've talked about about living panels for all these patients and what has always excited about vis vis pathway. In this target has been has been the possibility of lowering LDL non LDL receptor mediated fashion and lowering triglycerides and that's been the core of our interest now yeah. If you. If you go but beyond that you look at the possibility of insulin.

Insensitivity and liver fat the data that would that we and others have seen in animal models have been interesting and so that was you know that was nice happened not a need to have if you will and we were looking forward to see whether or not we see that translate into humans given given the data from antisense candidates.

Christopher R. Anzalone: And so that was, you know, that was a nice thing to have, but not a need to have, if you will. And we were looking forward to seeing whether or not we see that translate into humans. Given the data from antisense candidates, we are not, we are not expecting to see that translate; we're not expecting to see changes in or improvement in insulin sensitivity; we're not expecting to see changes in liver fat. Now that you know, we haven't seen the data yet. So maybe we're wrong about that.

We are we we're not expecting to see.

To see that translate we're not expecting to see changes and or improvement in insulin sensitivity, we're not expecting to see changes in liver fat now that we have some data yet so maybe we'll wrong. There just given given what we've seen from any sense. We're not we're not expecting to see that when that's fine because it's the triglycerides and LTL that make us a really powerful assets.

Javier San Martin: But just given what we've seen from antisense, we're not, we're not expecting to see that. We think that's fine, because it's the triglycerides and LDL that make this a really powerful asset. But we do, we do have those cohorts enrolled. And so we'll find that out. And we'll be reporting on those as well. Excellent. Look forward to those updates.

But we but we do we do have those those cohorts enrolled and so we'll find out and we'll be reporting on those as well.

Excellent look forward to those updates thanks for taking my questions.

Welcome.

Thank you and the last question from Robert.

Christopher R. Anzalone: Thanks for taking my questions. You're welcome. Thank you. And the last question from Robert. [inaudible] of Bayeux Boy Scouts.com. I'm sure your line is open.

See Keith.

Abided by itself that Hum.

I'm Sir your line is open.

Christopher R. Anzalone: Hi, thank you so much for taking my questions. First off, congratulations on your progress and continued growth. I only have a couple quick matters as you cover my other questions. I'm sorry if I missed it, but did Sequoia Part B start dosing yet? No, it has not.

Hi, Thank you so much for taking my questions. The first off congrats on your progress continued growth.

We have a couple of quick matters as you could cover my other questions Oh, I'm, sorry, if I missed it but it's quite apart Easter dosing that.

No one has not.

Okay.

Okay, and I know that you mentioned before that Arrowhead is comfortable rolling out its own orphan drugs. Would you consider partnering with or selling any of your orphan drugs, especially ENAC or AAT? Or are your orphan drugs off the table when it comes to these kinds of deals? Now, I would say that off the table, you know, we don't so don't think of us as an organ indication company, but also don't think of us, you know, as holding on to everything that we have in those spaces. I think that, you know, if you fast forward five or 10 years from now, I think you'll see a portfolio of drugs, some are small indications, some are large indications, some could be very large.

And I know that you mentioned before that Arrowhead is comfortable in rolling out its own orphan drugs or would you consider partnering or selling any of your orphan drugs, especially NACHER achy or are your orphan drugs off the table when it comes to these kinds of deals.

No I would say they're off the table, where you don't.

I don't think about as an organ indication company, but also don't think of US you know as as holding on everything that we have in those spaces. I think that that you have you fast forward five or 10 years from now I think you'll see you'll see a portfolio of drugs, you know somewhere to small and occasionally some large indication some can be very large indication. So.

So no, there's nothing about smaller indications that would indicate that we are absolutely going to hold on to those, you know, come hell or high water. Okay, that's all I have. Thank you so much. All right, thank you. Thank you, and there are no further questions at this time. I would like to turn it over to Chris Anzalone. Closing Remarks, Thank you everyone for joining our call today. I hope everyone stays safe and enjoys the rest of their summer to the extent that they can. Thank you, and that concludes today's conference. Thank you everyone for participating and giving us all of this tonight. [inaudible]

So no there's nothing about about.

Smaller indications that that would indicate that we are absolutely got hold onto those you know come hell or high water.

Okay. That's all I have thank you so much.

Thank you.

Thank you and there are no further questions at this time I would like turn it over to quit ends aloni.

For closing remarks.

Thanks, everyone for joining our call today, I hope everyone stay safe.

And enjoy the rest of your summer to the extent you can.

Yes.

Thank you and that concludes today's conference thank everyone for participating.

It's Tonight.

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