Q2 2021 Arrowhead Pharmaceuticals Inc Earnings Call

[music].

Operator: Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals conference call. Throughout today's recorded presentation, all participants will be in a listen-only mode.

Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals Conference call.

Throughout today's recorded presentation, all participants will be in a listen only mode.

Operator: 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, Vince.

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.

Vincent Anzalone: Thank you, Jesse. Good afternoon, everyone. Thank you for joining us today to discuss Arrowhead's results for its fiscal 2021 second quarter and for March 31st, 2021. With us today for management are President and CEO, Dr. Christopher Anzalone, who will provide an overview of the quarter, Dr. Javier San Martin, our Chief Medical Officer, who will provide an update on our pipeline, and Ken Myszkowski, our Chief Financial Officer, who will give a review of the financials

Please go ahead Vince.

Thank you Jessie and good afternoon, everyone and thank you for joining us today to discuss arrowheads results for its fiscal 2021 second quarter ended March 31, 2021 with US today from management are president and CEO, Dr. Christopher Anzalone, who will provide an overview of the quarter, Dr. Javier San Martin <unk>, our chief medical.

Officer, who will provide an update on our pipeline and Ken Moskovsky, Our Chief Financial Officer, who will give a review of the financials. In addition, James Hazard, our Chief commercial Officer and Dr. James Hamilton, Our senior Vice President of Discovery and translational medicine will be available during the Q&A session of today's call.

Vincent Anzalone: In addition, James Hazard, our Chief Commercial Officer, and Dr. James Hamilton, our Senior Vice President of Discovery and Translational Medicine, will be available during the Q&A session of today's call. Before we begin, I would like to remind you that comments made during today's call may 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 1934. 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.

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 27, a of the Securities Act of 1933 and section 21 E of the Securities Exchange Act of 1930 for all statements other than statements of historical fact, including without limitation.

For those with respect to arrowheads goals plans and strategies are forward looking statements. These include statements regarding our expectations around the development safety and efficacy of our drug candidates projected cash runway, the receipt of future milestone and licensing payments and expected future development and commercialization activities.

Vincent Anzalone: These include statements regarding our expectations regarding the development, safety, and efficacy of our drug candidates, projected cash runway, the receipt of future milestone and licensing payments, and expected future development and commercialization activities. These statements represent management's current expectations and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements.

These statements represent management's current expectations and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in any forward looking statements for further details concerning these risks and uncertainties. Please refer to our SEC filings, including our most recent annual.

Vincent Anzalone: For further details concerning these risks and uncertainties, please refer to our SEC filings, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. Arrowhead disclaims any intent and undertakes no duty to update any of the forward-looking statements discussed on today's call. With that said, I'd like to turn the call over to Chris Anzalone, President and CEO of the company. Chris?

On form 10-K, and subsequent quarterly reports on form 10-Q, Arrowhead disclaims any intent and undertakes no duty to update any other forward looking statements discussed on today's call with that said I'd like to turn the call over to Christine's Aloni, President and CEO of the company Chris.

Christopher R. Anzalone: Thanks, Vince. Good afternoon, everyone, and thank you for joining us today. As we discussed in the past, our driving focus has always been to bring our technology to patients who can benefit from it. This means treating all types of diseases, both common and rare, and getting to any part of the body. Put simply, it means going to where the disease is, from a population standpoint and a physiological and anatomical standpoint.

Thanks Vince.

Afternoon, everyone and thank you for joining us today.

As we discussed in the past our driving focus has always been to bring our technology to patients who can benefit from it.

It's been treating all types of diseases, both common and rare and getting to any part of the body.

Put simply it means going to where disease is for a population standpoint, and physiological and anatomical standpoint.

Christopher R. Anzalone: As such, we are constantly working to expand the reach of our products to address various populations by scaling our production capabilities, improving administration convenience, and optimizing dosing schedules. We are also constantly striving to expand our proprietary TRMM platform to reach new cell types and address new disease areas without adequate treatment options. By the third quarter of this year, we expect to have clinical candidates targeting four distinct cell types addressing high-prevalence indications such as chronic HPV and cardiovascular disease to rare conditions such as cystic fibrosis and AAT liver disease.

As such we are constantly working to expand the reach of our products to address various populations by scaling our production capabilities, improving administration convenience and optimizing dosing schedule.

We're also constantly striving to expand our proprietary trim platform to reach new cell types and address new disease areas without adequate treatment options.

By the third quarter of this year, we expect to have clinical candidates targeting for distinct cell types addressing high prevalent indications such as chronic HBV and cardiovascular disease to rare condition, such as cystic fibrosis and <unk> liver disease.

It was not that long ago that many thought R&M and may only be relevant to conditions with liver express proteins and even then only for rare diseases. We at Arrowhead have always been committed to reaching different diseases throughout the body and have devoted considerable resources and many years of innovation and effort to strive to make that a reality.

Christopher R. Anzalone: It was not that long ago that many thought RNAi may only be relevant to conditions with liver-expressed proteins and even then only for rare diseases. We at Arrowhead have always been committed to reaching different diseases throughout the body and have devoted considerable resources and many years of innovation and effort to strive to make that a reality. We believe that we are now on the cusp of potentially gaining clinical validation and showing the world that RNAi can reach and silence gene targets in the lung, tumor, and skeletal muscle.

We believe that we are now on the cusp of potentially gaining clinical validation and showing the world that aren't AI can reach in silence gene targets in the lung tumor and skeletal muscle.

We expect a data rich next couple of months, including Aero HSV data in Nash and Nash patients as well as those at risk of having Nash Arrow a T data in patients with <unk> liver disease.

Aero enact data in healthy volunteers in a small number of CF patients.

Arrowhead two data in patients with renal cell carcinoma, and Aero decks for data in animal models for Fsh D. <unk>.

Three of these expected data readouts relate to three cell types that to our knowledge have not been successfully addressed by our NII in humans.

Christopher R. Anzalone: We expect a data-rich next couple months, including Arrow HSD data in NASH and NASH patients as well as those at risk of having NASH, Arrow AAT data in patients with AAT liver disease, and Arrow ENAC data in healthy volunteers and a small number of CF patients.

It is not big pharma with tens of thousands of employees and hundreds of billions in market value that may be on the cusp of a breakthrough on one of these areas and as arrowhead with less than 300 employees and a market value of approximately $7 billion that may be nearing a breakthrough in all three.

Christopher R. Anzalone: Arrow has two data in patients with renal cell carcinoma and Arrow ducts for data in animal models for FSHD. Three of these expected data readouts relate to three cell types that, to our knowledge, have not been successfully addressed by RNAi in humans. It is not big pharma with tens of thousands of employees and hundreds of billions in market value that may be on the cusp of a breakthrough in one of these areas.

Think about how that positions us for potential value creation over the near mid and long term and what it says about our ability to innovate on our potential to lead in this field.

Our liver directed pipeline already has six candidates in clinical studies with additional undisclosed programs in preclinical development.

As you've seen over the last couple of years once we achieve clinical validation each successive candidate in the same cell type builds on learnings from each program that went before it.

We believe this provides a higher probability of success and lower risk profile than other modalities.

We expect our pipeline to potentially double in size over the next few years.

Christopher R. Anzalone: It is Arrowhead, with less than 300 employees and a market value of approximately $7 billion, that may be nearing a breakthrough in all three. Think about how that positions us for potential value creation over the near, mid, and long term and what it says about our ability to innovate and our potential to lead in this field.

We also hope to access a new cell type every 18 to 24 months. So we believe our potential for growth will continue to expand dramatically.

This leverage that gives us confidence about the future of our company our rapidly expanding pipeline on the patients we hope to share.

We believe this represents the future of Arrowhead and for the R&D I feel broadly we're also making substantial progress on our current pipeline programs with the potential with the potential for key value drivers in the near term, let's talk about a few of these.

Christopher R. Anzalone: Our liver-directed pipeline already has six candidates in clinical studies, with additional undisclosed programs in preclinical development. In addition, as you've seen over the last couple of years, once we achieve clinical validation, each successive candidate in the same cell type builds on learnings from each program that went before it. We believe this provides a higher probability of success and a lower risk profile than other modalities. We expect our pipeline to potentially double in size over the next few years. We also hope to access a new cell type every 18 to 24 months. Thus, we believe our potential for growth will continue to expand dramatically.

First we announced some of the 12 month biopsy results from the 2002 open label study for <unk> last week.

We intend to present, a fuller data set at an upcoming medical meeting pending abstract acceptance, but I want to provide some context. These results.

We're incredibly exciting to us our partners at Takeda the investigators in the study and to the patient community.

To review the results demonstrated that <unk> treatment led to a consistent and substantial reduction in interest paddock mutant <unk>.

Protein, both monomer and polymer.

Consistent decrease in histologic, histological globule burden improvements in fibrosis and improvements in other relevant biomarkers of liver health spin.

Specifically after 48 weeks of treatment with.

With <unk> in cohort two the following results were observed.

For the five patients achieved a one or greater stage improvement in net of beer fibrosis stage with no worsening of fibrosis in the fifth patient.

Christopher R. Anzalone: It's this leverage that gives us confidence about the future of our company, our rapidly expanding pipeline, and the patients we hope to serve. We believe this represents the future of Arrowhead and for the R&EI field broadly. We're also making substantial progress on our current pipeline programs, so let's talk about a few.

All five patients demonstrated reductions in histological globular assessment scores and total intrahepatic Z <unk> decreased by 77% to 97%.

After only 24 weeks of treatment. The following results were observed to have the for patients achieved a one or greater stage improvement in the metivier fibrosis stage with no worsening of fibrosis and the other two patients.

For two patients who improved fibrosis stages during treatment had cirrhosis at baseline.

Christopher R. Anzalone: First, we announced some of the 12-month biopsy results from the 2002 open-label study for Arrow AAT last week. We intend to present a fuller data set at an upcoming medical meeting pending abstract acceptance, but I want to provide some context. These results were incredibly exciting to us, our partners at Takeda, the investigators in the study, and to the patient community. To review, the results demonstrated that Arrow AAT treatment led to a consistent and substantial reduction in intrahepatic mutant ZAAT proteins, both monomer and polymer, a consistent decrease in histological globular burden, improvements in fibrosis, and improvements in other relevant biomarkers of liver health.

All four patients demonstrated reductions in histological globular assessment scores and total intrahepatic <unk> decreased by 72% to 95% on.

On a highlight a few important points about these results.

First the results for a mark will be consistent we are seeing 100% response rate in terms of deeply reducing expression, indicating that <unk> is doing what it is designed to do and all patients that have been studied.

Secondly, we saw that as new Z <unk> protein silenced deliver has an amazing ability to rapidly heal as I mentioned, 50% of patients who received only six months of treatment. So a regression in fibrosis and this grew to 80% of patients when they receive 12 months of treatment.

This is faster and more dramatic than we expected for this disease and I believe it is faster healing and has been shown for other liver diseases, such as Nash and viral hepatitis.

The third important point is that even patients with cirrhosis, which is advanced liver stage, which is advanced late stage liver disease.

Have the potential to heal rapidly.

Two patients we studied who started the trial with cirrhosis or F for Medicare fibrosis stage improves to F. Three and F. Two after only six months of treatment.

Christopher R. Anzalone: Specifically, after 48 weeks of treatment with Arrow AAT and Cohort 2, the following results were observed. Four of the five patients achieved a one or greater stage improvement in metivir fibrosis, with no worsening of fibrosis in the fifth patient. All five patients demonstrated reductions in histological globular assessment scores, and total intraepatic ZAAT decreased by 77 to 97 percent.

I believe that this type of rescue from cirrhosis has rarely been demonstrated in any in any liver disease. This rapidly.

Based on our extensive work in animal models, we believe that <unk> could improve outcomes, regardless of stage of disease.

These are the first data in humans with late stage disease that support that belief.

In addition, the safety assessments continue to be positive and consistent with previous reports, we have not had any discontinuation due to drug no clinically meaningful changes in measures of lung function and no patients have required augmentation therapy other than those that entered the study already on a regular augmentation therapy.

Christopher R. Anzalone: After only 24 weeks in treatment, the following results were... Two of the four patients achieved a one or greater stage improvement in the metivir fibrosis stage with no worsening of fibrosis in the other two patients. The two patients who improved fibrosis stages during treatment had cirrhosis at baseline; all four patients demonstrated reductions in histological globular assessment scores, and total intraepatic ZAT decreased by 72 to I want to highlight a few important points about these results.

<unk> appears to be generally well tolerated in those patients studied to date.

Which was our expectation and is consistent with our other liver directed programs.

<unk> is a great example of a smart target selection for an <unk> based intervention.

Alpha one liver disease is caused by the accumulation of the mutant Z <unk> protein that cannot efficiently get out of hepatocytes.

This leads to aggregation of the protein into polymers, the form globules liver inflammation and ultimately fibrosis.

This cascade is well understood. It is a monogenic disease, whose biology is crystal clear.

What arrowhead, what <unk> seeks to do is cause that cascade to reverse by removing the insult.

Christopher R. Anzalone: First, the results were remarkable because we are seeing a 100% response rate in terms of deeply reducing ZAT expression, indicating that Arrow AAT is doing what it is designed to do in all patients that have been studied. Second, we saw that as new ZAAT protein is silenced, the liver has an amazing ability to rapidly heal. As I mentioned, 50% of patients who received only six months of treatment saw a regression in fibrosis, and this grew to 80% of patients when they received 12 months.

Our data indicate that the liver is a resilient, oregon with a strong ability to heal and Aero 80 appears to improve every step in this cascade.

These are encouraging results and we believe they could help support our goal is to seek a potential accelerated path to approval. We look forward to interacting with regulatory authorities later this year.

In addition to Arrowhead. We've also made good progress on our cardio metabolic programs. These are Aero Apoc, III and arrow and three which are wholly owned and will pass or in formerly called AMG 890, which is licensed to Amgen.

On the latter program Amgen recently disclosed that enrollment in our phase II study in patients with elevated lipoprotein a is expected to be complete this quarter with data expected in the first half of 2022.

For Aero Apoc, III and Arrow and <unk> III, we completed IND filings in the United States, which were reviewed by the FDA and are now active and we intend to initiate four or more studies across the two programs, we will give more detail on the designs when each study gets up and running but here are the patient populations that were targeted.

For Aero Apoc, III, which is focused on patients with hypercholesterolemia, we intend to start three studies a phase <unk> study in patients with triglycerides over 500 milligrams per deciliter.

Christopher R. Anzalone: This is faster and more dramatic than we expected for this disease, and I believe it is faster healing than has been shown for other diseases such as NASH and viral hepatitis. The third important point is that even patients with cirrhosis, which is advanced late stage liver disease, have the potential to heal rapidly. The two patients we studied who started the trial with cirrhosis, or the F4 metavir fibrosis stage, improved to F3 and F2 after only six months of treatment. I believe that this type of rescue from cirrhosis has rarely been demonstrated in any liver disease this rapid.

Phase <unk> study in patients with triglycerides between $150 and 500 milligrams per deciliter and a phase III study in patients with familial color Micronesia syndrome or Fcs for.

For <unk>, III, which is focused on patients with mixed dyslipidemia characterized by elevated triglycerides and elevated LDL cholesterol, we intend to start a phase <unk> study for.

For both programs. We are also exploring additional smaller studies to answer specific questions about the compounds, but the for just mentioned on the primary studies, we are focused on initiating first.

Christopher R. Anzalone: Based on our extensive work in animal models, we believe that Arrow AAT could improve outcomes regardless of the stage of disease. These are the first data in humans with late-stage disease that support that belief. In addition, the safety assessments continue to be positive and consistent with previous reports.

Before I discuss expectations on timing of key near term events across our pipeline I want to highlight an announcement, we made a few weeks ago.

We announced arrow dux for his arrowheads first muscle targeted candidates built on the trim platform.

<unk> for is designed to target the gene that encodes human double hull meal box for protein or dumps for as a potential treatment for patients with fascia, scapulohumeral muscular dystrophy or F. S. HD FPV HD is a genetic disease associated with the failure to to maintain complete epigenetics depression of ducks for.

Christopher R. Anzalone: We have not had any discontinuations due to drug, no clinically meaningful changes in measures of lung function, and no patients have required augmentation therapy other than those that entered the study already on regular augmentation therapy. Arrow AAT appears to be generally well tolerated in those patients studied to date, which was our expectation and is consistent with our other liver-directed program. Arrow AAT is a great example of smart target selection for an RNAi-based intervention.

Expression in muscle.

This leads to overexpression index for which is the <unk>, which is in Myotoxic, which is excuse me, which is myotoxic and can lead to muscle degeneration.

There are currently no effective treatments for specifically for <unk> HD.

<unk> for fits perfectly with our strategy not only to bring <unk> outside the liver, but also to select gene targets that we believe are clear causes of specific diseases and for which there is a strong biologic and genetic validation.

Christopher R. Anzalone: Alpha-1 liver disease is caused by the accumulation of the mutant ZAAT protein that cannot efficiently get out of the parasite. This leads to aggregation of the protein into polymers that form globules, liver inflammation, and ultimately fibrosis. This cascade is well understood.

We intend to file for regulatory clearance in the third quarter of 2021 to begin clinical studies of Aero Docs for.

Let's move on to our expectations for the near and midterm.

Going to be a busy time with several potentially important events and readouts.

This is especially true for the next few months, so I'm going to focus on events planned for June and July we expect to do the following in roughly disorder one day.

Christopher R. Anzalone: It is a monogenic disease whose biology is crystal clear. What Arrow AAT seeks to do is cause that cascade to reverse by removing the insult. Our data indicate that the liver is a resilient organ with a strong ability to heal, and Arrow AAT appears to improve every step in this cascade. These are encouraging results, and we believe they could help support our goal to seek a potential accelerated path to approval. We look forward to interacting with regulatory authorities later this year.

The first patients in the first <unk> three phase <unk> study with a second phase <unk> and phase III study in patients with FCS planned for shortly thereafter.

To dose the first patients in the in the <unk> three 2001 phase <unk> study.

Three report initial interim results from the <unk> first in human study. This will likely include the single ascending dose safety results in healthy volunteers gene knockdown data in the cohort of healthy volunteers that received bronchial brushing and lavage.

Christopher R. Anzalone: In addition to ArrowHE, we've also made good progress on our cardiometabolic program. These are Arrow A plus C 3 and Arrow Ang 3, which are wholly owned and will pass around, formerly called AMG 890, which was licensed to AMGEN.

On the data from and data from the first cohort of patients with cystic fibrosis.

For report full 12 month biopsy results from the 2002 open label study of Arrowhead.

Sure.

<unk> reported initial interim results for.

The Arrow HST first in human study.

Six present preclinical data on Aero Dux for at the FX HD Society International Research Congress.

Christopher R. Anzalone: On the latter program, Amgen recently disclosed that enrollment in a phase two study in patients with elevated lipoprotein A is expected to be complete this quarter, with data expected in the first half of 2022. For Arrow ApoC3 and Arrow ANZ3, we completed IND filings in the United States, which were reviewed by the FDA, and are now active. And we intend to initiate four or more studies across the two programs. We will give more detail on the designs when each study gets up and running.

<unk> reported initial interim results from the Arrowhead two first in human study.

File a cta for Aero dux for potentially host of Kols webinar to discuss the disease the market opportunity and the potential development path and nine announced additional programs in the pulmonary space that are already deep into preclinical development and in IND, enabling stage.

These are just the events that we expect over the next couple of months, we clearly have a very full plate in the near term and we expect continued regular important catalysts going forward.

We have been expanding in R&D to support this growing pipeline and are thrilled to see that we can still execute efficiently even as a larger organization.

Christopher R. Anzalone: But here are the patient populations that we are targeting. For Arrow ApoC 3, which is focused on patients with hypertriglyceridemia, we intend to start three studies, a Phase IIb study in patients with triglycerides over 500 mg per deciliter, a phase 2b study in patients with triglycerides between 150 and 500 milligrams per deciliter, and a phase 3 study in patients with familial chylomicronemia syndrome or FCS. For Arrowhand For both programs, we are also exploring additional smaller studies to answer specific questions about the compound.

Innovation speed precision and capital efficiency have been hallmarks of the Arrowhead culture from beginning and these principles will continue to be part of our DNA as a company.

With that overview I'd now like to turn the call over to Dr. Javier San Martin.

Yeah.

Thank you Kris and good afternoon, everyone.

And we've just reported top line was tough on the 12 month biopsy of the <unk> 2002 open label study and we.

Plan on reporting for data on the first five patients shortly I want to talk about that program for us.

As Chris mentioned, the consistent fibrosis progression at this early time for us was unexpected and very exciting.

Constantly within they must pay the clear biological relationship between entire path you can see AAP and the balance team cascade of events that lead to leave at inflammation and fibrosis.

The relationship between <unk> and fibrosis Keeling day.

Idea, if that's a substantial reduction in accumulated Z <unk> protein may allow the liver even at the pitches have cirrhosis reverse discuss COVID-19 and ultimately heel on remote itself.

Christopher R. Anzalone: But the four I just mentioned are the primary studies we are focused on initiating first. Before we discuss expectations for the timing of key near-term events across our pipeline, I want to highlight an announcement we made a few weeks ago. We announced Arrow Ducks 4 as Arrowhead's first muscle-targeted candidate built on the Trim platform. AeroDUX4 is designed to target the gene that encodes human double homeobox-4 protein, or DUX4, as a potential treatment for patients with fascioscapulohumeral muscular dystrophy, or FSHD.

So what is mix if you recall the original eight the other Sequoia study with an adaptive design phase III study with the dose escalation stage and then two years of treatment at the selected dose inhibition on patients.

Given the encouraging data we had seen in 2002 open label study, we felt it potentially faster route to MDA would be to make sequoia into a more traditional phase II study then discuss approvable endpoint with regulators in the context of all the data we had generated.

We are nearing completion of enrollment of the 36 patients in the Sequoia phase II and expect to have 12 month payout IOC for.

Them next year.

Christopher R. Anzalone: FSHD is a genetic disease associated with the failure to maintain complete epigenetic suppression of DUX4 expression in muscle. This leads to overexpression of DUX4, which is myotoxic, which is, sorry, which is myotoxic and can lead to muscle degeneration. There are currently no effective treatments specifically for FSH.

We expect to have data from the 16 patients in the 2002 open label study, which gives us a per.

<unk> 50 patients we'd pay on biopsies.

We'll also be able to compare data for multiple time points with different dose levels for an orphan disease. This is a substantial amount of data we look forward for discussing the rich data set with regulators.

We feel very strongly debt.

We'll have a comprehensive picture of how <unk> performs.

Christopher R. Anzalone: DUX4 fits perfectly with our strategy not only to bring RNAi outside the liver but also to select gene targets that we believe are clear causes of specific diseases and for which there is strong biologic and genetic validation. We intend to file for regulatory clearance in the third quarter of 2021 to begin clinical studies of AeroDUX4. Let's move on to our expectations for the near and mid-term. It's going to be a busy time with several potentially important events and readouts. This is especially true for the next few months, so I'm going to focus on events planned for June and July.

I cannot say that this would be enough to file an NDA, but we believe that data continue to support some form of accelerated path to approval.

It is being co developed with Takeda, we're still lithium development without putting in production at this time the credit for the AMD on game day lead to the team at <unk> that was the phase II studies are complete.

As Chris mentioned earlier, we expect <unk> and <unk> have to have initial interim data readouts over the next couple of months.

On a preliminary result from ongoing study will likely provide highlights in the press release, and then percentage of Fuller data sales in an appropriate medical meeting.

Let's talk about what made that might be included in <unk>.

Christopher R. Anzalone: We expect to do the following in roughly this order. One, dose the first patients in the first Arrow ApoC3 Phase 2B study, with a second Phase 2B and a Phase 3 study in patients with FGS planned for shortly thereafter. 2 dose the first patients in the Arrowhands 3, 2001 phase 2b study. 3.

Each cohort at available for each program.

I will start with <unk>.

Our inhaled <unk> candidate designed to target the epithelial sodium channel.

Fibrosis or CF.

It's a rare disease caused by a genetic mutation that leads to mucus buildup in the lab. It is correct.

These are patient and reduced Mucociliary transport patient, if we see if cash difficulty breathing on expertly and frequent persistent lung infections.

Christopher R. Anzalone: Report initial interim results from the Arrow-ENAC First in Human Study. This will likely include the single ascending dose safety results in healthy volunteers, gene knockdown data in the cohort of healthy volunteers that received bronchial brushings and lavage, and data from the first cohort of patients with cystic fibrosis. 4 report full 12-month biopsy results from the 2002 Open Label Study of Arrow AAT, and 5 report initial interim results from the Arrow HSD First in Human Study.

The current strategy is to administer <unk> in what we call those cycles.

Those cycles three consecutive days of receiving a naval lies the dose of <unk> or placebo repeat those cycles.

Three weeks later so for example, if a patient receives through those cycles. They will receive it nevertheless dose on day, one to one three and then again on day 'twenty two 'twenty three 'twenty for it.

<unk> is in phase two dose escalating study we have on administer <unk> 16 normal healthy volunteers, who received a single dose cycle for different dose levels for us is safety and Tolerability. We have also on Easter AOE 19 ambition for us.

Christopher R. Anzalone: 6 present preclinical data on Arrow Ducts 4 at the FSHD Society International Research Congress and 7 report initial interim results from the Arrowhead 2 First in Human Study. 8. File a CTA for Arrow Ducts 4 and potentially host a KOL webinar to discuss the disease, the market opportunity, and the potential development path. And 9. Announce additional programs in the pulmonary space that are already deep into preclinical development and in IND-enabling states. These are just the events that we expect over the next couple of months.

Not much help people on TFS undergo a bronchoscopy, we bronchial brushing and Bronchoalveolar lavage or Bal.

On the 18th to evaluate Aynak note down in the lab the subjects, we see when those cycle for 180 milligrams.

For placebo.

The CF patient portion of the study includes vehicle for us to with six patient each on one week 12 page.

Patients in this cohort received two those types of us and it is placebo controlled the first cohort of six patients photo of which will be seen and we knock on the dose of 40 milligrams and to receive placebo is complete and we're still in the blinded photo upstage.

Javier San Martin: We clearly have a very full plate in the near term, and we expect continued regular important catalysts going forward. We have been expanding in R&D to support this growing pipeline and are thrilled to see that we can still execute efficiently, even as a larger organization. Innovation, speed, precision, and capital efficiency have been hallmarks of the Arrowhead culture from the beginning, and these principles will continue to be part of our DNA as a company. With that introduction, I'd now like to turn the call over to Dr. Javier San Martin. Javier?

Second cohort will receive a dose of 65 milligram on the political hole will receive it also for one highly on AT&T.

We will be reported interim results of the for single ascending dose healthy volunteer cohorts in the one healthy volunteer bronchoscopy cohort at the first cohort and the first cohort of the CF patients.

What we'll be watching most closely is safety and tolerability across the cohort of the <unk>.

Note down from the bronchoscopy cohort for the CF patient cohort will also be measuring F&B. One however at the slowest stores only for patients on that day. So we do not expect to be able to detect changes in lung function.

Javier San Martin: Thank you, Chris, and good afternoon, everyone. Although we just reported top-line results from the 12-month biopsy of the Arrow AAT-2002 Open-Level Study and we plan on reporting full data on the first five patients shortly, I want to talk about that program. As Chris mentioned, the consistent fibrosis regression at this early time pause was unexpected and very exciting. Importantly, we think they demonstrate a clear biological relationship between intrahepatic CAAT and the downstream cascade of events.

I forget the higher doses longer exposures for a larger sample size on are able to select a more homogeneous patient population. It is our hope that Enoch innovation will lead to improvements in severity kids on lung function.

The next program, we plan on Readouts over the coming months is <unk>, our investigational candidate for the potential treatment of alcohol are known alcohol related liver disease, we think that genetic data supporting <unk> 17, beta athene asset target for Nash non alcoholic <unk> is strong.

We're conducting a phase one study in normal healthy volunteers as well as in patients with Nash or suspected Nash. We have completed the single dose portion of the study in healthy volunteers completed dosing in two of the for multiple dose cohort in patients with Nash or suspected Nash.

Javier San Martin: of events that lead to liver inflammation and

Javier San Martin: The relationship between C.A.T. and fibrosis is a key link The idea is that substantial reduction in accumulated ZAT protein may allow the liver, even at the stages of cirrhosis, to reverse this cascade and ultimately heal and remold itself. If you recall, the original idea of the Sequoia study was an adaptive design, phase two, three study with a dose selection stage and then two years of treatment at the selected dose in additional patients.

Kind of going on mainly engagement in patients in the form of HFC 17 meter <unk> mrna and protein that will be assessed with liver biopsy.

This study the purpose on anybody else is to obtain tissue wherever they Jean Tiger and no doubt.

The study is short in duration were now assessing changes in histology.

Megan this is intended to reduce liver fat. So we don't expect to see any change in <unk>.

Javier San Martin: Given the encouraging data we had seen in the 2002 Open Lab study, we thought a potentially faster route to MDA would be to make Sequoia into a more traditional Phase II study, then discuss a provable endpoint with regulators in the context of all the data we had generated.

Looking at other Biomarkers of labor cost to see if there any early encouraging signs, but we're most focused on <unk> ability to reduce expression of this gene target defend those.

<unk> has been difficult area for drug developers, but <unk> 17, because athene as a novel target and we believe there is a very strong genetic validation. If we can show good knockdown on safety, we have confidence in moving towards the phase II study to assess efficacy.

Javier San Martin: all the data that we had generated, and we are nearing completion of enrolment of the 36 patients in the Sequoia Phase II and expect to have 12-month paired biopsy for them next year. In addition, we expect to have data from the 16 patients in the 2002 open-level study,

The last program for which we expect to have a clinical readout in the near term.

Phase two which is designed to inhibit the potion of Heath to answer to be clear cell renal cell carcinoma or RCC.

Currently conducting a phase <unk> dose finding study in three cohorts with advanced clear cell RCC.

<unk> is designed to evaluate the safety of Arrowhead.

Javier San Martin: We will also be able to compare data from multiple time points and at different dose levels.

Two to determine the recommended phase II dose unprocessed pharmacokinetics preliminary efficacy based on braces on post dose cumulative patient on <unk>, two alpha and here associated genes.

Javier San Martin: for an Orphan Disease, substantial amount of data. We look forward to discussing the rich data set with regular patients. We feel very strongly that we will have a comprehensive picture of how Arrowhead performs. I can't say that this will be enough to file an NDA, but we believe that data continues to support some form of accelerated path to a better future. Arrowhead is being co-developed with Takeda, who are still leading development and regulatory interaction at this time.

We have completed dosing in two of the three cohorts and should be able to report on those two cohorts in the coming two months. We've made a protocol amendment last quarter to other patients to the study. These are heavily pretreated patients with metastatic lesions in different locations. So by up simulation is challenging they knew.

Patients were added to give us a better chance of having tumor samples that can be processed evaluated and analyze we'll be looking for data, suggesting functional delivery to tumors as well as measured on level two note though.

Javier San Martin: to transfer the IMD and give the lead to them.

Javier San Martin: team at Takeda once the Phase II studies are completed. As Chris mentioned earlier, we expect Arrow Enoch, Arrow HST, and Arrow HIF-2

I will now turn the call over to 10 East Coast Arrowhead.

Chief Financial Officer, Ken Thank you Javier and good afternoon, everyone.

As we reported today, our net loss for the quarter ended March 31, 2021 was 26 8 million or 26 cents per share based on $103 9 million fully weighted fully diluted weighted average shares outstanding.

Javier San Martin: Since these are preliminary results from ongoing studies, we will likely provide highlights in the press release and then present a fuller data set and an appropriate medical Let's talk about what data might be included and which cohorts are available for each program. I will start with Arrow-Enac, our inhale RNAi therapeutic candidate designed to target the epithelial sodium channel to treat cystic fibrosis or cystic fibrosis. CF is a rare disease caused by a genetic mutation that leads to mucus buildup in the lung. It is characterized by airway dehydration and reduced mucociliary transfer. Patients with CF can have difficulty breathing and experience frequent and persistent lung infections.

This compares with a net loss of $19 8 million or <unk> 20 per share based on $101 7 million fully diluted weighted average shares outstanding for the quarter ended March 31 2020.

Revenue for the quarter ended March 31, 2021 was $32 8 million compared to $23 5 million for the quarter ended March 31 2020.

Revenue in both periods related to the recognition of a portion of the upfront payments and milestones received from our license and collaboration agreements with Janssen and our revenue in the current period also includes the recognition of a portion of the $300 million upfront payment due upon the signing of our collaboration agreement with Takeda.

This payment was received in January.

Revenue for the Takeda agreement will be recognized as we continue to work toward completing our performance obligations of managing clinical trials in process.

Certain manufacturing related services the.

The remaining $266 million of revenue associated with the Takeda collaboration is anticipated to be recognized over approximately two years.

Javier San Martin: The current strategy is to administer 80-INAG in what we call dose cycles.

Our performance on revenue recognition on.

Javier San Martin: Each dose cycle involves three consecutive days of receiving a nebulized dose of Arrow Enac or placebo. Repeat dose cycles occur three weeks later. So, for example, if a patient receives two dose cycles, they will receive a nebulized dose on...

Under the Janssen agreement is substantially complete.

Any additional milestones achieved with our collaboration partners will be additive to this projection.

Total operating expenses for the quarter ended March 31, 2021 were $61 million compared to $45 8 million for the quarter ended March 31 2020.

This increase was primarily due to increased personnel costs non.

Noncash stock compensation in the current and R&D as our head count continues to grow.

Javier San Martin: We will analyze those on day 1, 2, and 3, and then again on days 22, 23, and 24.

The increase was also due to increased candidate specific and discovery R&D costs.

Net cash provided by operating activities. During the quarter ended March 31, 2021 was $263 9 million compared with net cash used by operating activities of $27 6 million during the quarter ended March 31 2020 for.

Javier San Martin: Arrow INAC is in a Phase I-II dose escalated study. We have administered Arrow INAC to 16 normal healthy volunteers who

Javier San Martin: who received a single-dose cycle at four different dose levels.

The key driver of this change was the upfront payment received from Takeda in January.

Javier San Martin: Safety and Tolerability, as they can on day 18 to evaluate ENAG note down in the lab. Patients, we see one dose cycle of 180 milligrams of Aroenacol. The CF patient portion of the study includes three cohorts, two with six patients each and one with 12 patients. Patients in this cohort received

We estimate our cash burn rate to be $50 million to $60 million per quarter.

Turning to our balance sheet, our cash and investments totaled $674 8 million at March 31, 2021, compared to $453 million at September 32020.

The increase on our cash and investments was primarily due to the upfront payment received from Takeda offset by cash used for operating activities.

Javier San Martin: to those ciphers, and it is placebo control.

Javier San Martin: The first cohort of six patients, four of whom received Heroin-Ag at a dose of 40 milligrams and two received placebo, is complete, and we're still in the blinded follow-up stage. The second cohort will receive a dose of 65mg, and the third cohort will receive a dose of 180mg.

Our cash or excuse me our common shares outstanding at March 31, 2021 for $104 million.

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

Thanks, Ken.

Clearly theres a lot of progress being made on our pipeline is becoming broader and more advanced.

The upcoming data readouts on exciting on their own because they potentially represent progress towards new therapies for patients without adequate treatment options.

Javier San Martin: We will be reporting interim results of the four single-ascending dose healthy volunteer cohorts during the one-year period.

These are people with serious diseases and this is important to remember what is also exciting to us as a company is that these data readouts in new tissue types potentially represent clinical validation for our expanding <unk> platform. This is the future of Arrowhead and holds the promise of initiating our next phase of rapid pipeline growth and value creation.

Javier San Martin: in those healthy volunteer cohorts in the one healthy volunteer bronchoscopy cohort at the first cohort and the first cohort of the CFA. What we'll be watching most closely is safety and tolerability across the cohorts and the enacted knockdown from the bronchoscopy cohort. For the CF patient cohort, we'll also be measuring FEV1. However, at the slowest dose and with only four patients on active drug, we do not expect to be able to detect changes in LAMP function.

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

As a reminder to all participants you may ask questions over the phone by pressing the star key followed by the number one.

You may all.

Perhaps you withdraw your request.

Again, Thats star one to ask a question.

For the pound key to withdraw your request.

Speakers. Our first question is from the line of Maury Raycroft of Jefferies. Your line is now open.

Javier San Martin: As we get higher doses, longer exposures, larger sample sizes, and are able to select a more homogeneous patient population, it is our hope that ENAC innovation will lead to improvements in conciliary clearance and lung function. The next program we plan to readout over the coming month is Arrow HSC, our investigational candidate for the...

Hi, everyone. Congrats on all the progress and thanks for taking my questions.

First question is on <unk>.

So for the cystic fibrosis patients in cohort one and the patients you plan on enrolling in the next two cohorts can you provide any more specifics on baseline FPV, one or patient histories, and then where the 65 and 180 make doses pre determined or informed by the healthy volunteer data and can you talk about your degree of confidence.

And maximizing potential with cohorts two and three.

Sure. Thanks for thanks Laurie.

I can give you sort of broad answers there.

Javier San Martin: Potential Treatment of Alcohol and Non-Alcohol Related Illnesses

Ill leave it to Javier for the for the more granular ones.

Javier San Martin: We think the genetic data supporting HSD1713 as a target...

So.

The doses were chosen.

Before we saw any data from healthy volunteers and so and so those big news. These initial doses are based solely on our on our GOP talks.

Javier San Martin: We are conducting phase one to study normal healthy volunteers as well as patients with NASH or suspected NASH. We have completed the single dose portion of the study in healthy volunteers and have completed dosing in two of the four multiple dose cohorts in patients with NASH or suspected NASH. Targeted Engagement in Patients in the Form of HSD-17 Beta-13 mRNA and Protein Knockdown will be Assessed with Liver Biotics. In this study, the purpose of the biopsy is to obtain tissue to evaluate gene-target knockdown.

On studies.

Ladies and other animal models.

I think I think we mentioned in the past we've gone through all of the various doses in healthy volunteers.

And so far at least on those in those.

Individuals' its been well tolerated. So we are cautiously optimistic that that will that that will continue to be the case and we're looking forward to seeing if we if we see any any changes in <unk> as we escalate the dose.

So I had a question about about <unk> parameters as they came into the study and what I'm sorry, what was the third question.

Javier San Martin: As the study is short in duration, we are not assessing changes in histology. This mechanism is not intended to reduce liver fat, so we don't expect to see any change in MRI, PD. We will be looking at other biomarkers of liver health to see if there are any early encouraging signs, but we're most focused on AOHSD's ability to reduce the expression of each gene target at different doses. NASH has been a difficult area for drug development.

And then.

I guess, yeah, that'd be one parameters or patient histories, if he can comment on that.

Okay.

Yes, so generally speaking.

Give you a sense of inclusion criteria, which was similar to the vantiv carries on.

One 4% to <unk> baseline so that's kind of the range for patients in this study.

For the most part of this fiscal forward relatively young patients on the average 51 with close to about 70 or so in this study.

Javier San Martin: but HFC-17 beta-13 is a novel target, and we believe there is very strong genetic validation. If we can show good knockdown and safety, we're...

One interesting feature which is those patients who have more than 70% will be coming on to the LCI sub study, but so did it other decided relatively young patient population and all from Australia, and New Zealand on if you want in an average is about 17.

Javier San Martin: Safety will have confidence in moving towards a Phase II study to assess F1. The last program for which we expect to have a clinical readout in the near term is Arrowhead Pharmacy, which is designed to inhibit the production of HIF-2 alpha to treat clear cell renal cell carcinoma or RCA, who are currently conducting a phase 1b dose finding clinical study in three cohorts with advanced clear cell R, The study is designed to evaluate the safety of ArrowHIF-2 to determine the recommended phase two dose and to assess pharmacokinetics and preliminary efficacy based on resists and post-dose tumor expression of HIF-2-alpha and HIF-associated genes.

And let me also I mentioned this in the prepared remarks.

So let me tell you what we're really looking for here and were looking for for good knockdown in the healthy volunteer cohort.

Debt are undergoing.

The bronc analysis.

We think we think that's the most important take home right now, let's see if we're getting good knockdown I think that with just this first cohort only have is for patients and the first cohort of CF patients only have is for individuals on active drug.

It's a low dose of course, and so it feels to us like it is it can be very difficult at those small numbers too to see small changes net VB. One. So again, we're really focused on on good knockdown I think that if we can see 50% knockdown.

I think we're in good shape, there because as we've talked about in the past if you look at the heterozygous.

In the genetic analysis that those patients with CF, but are essentially heterozygous knockouts <unk>.

Javier San Martin: We have completed dosing in two of the three cohorts and should be able to report on those two cohorts in the coming weeks.

They did have a they.

They did show a clinical.

Benefit so that's really our bogie right now.

Got it that's really helpful and maybe one last follow up and then I'll hop back in the queue, but for the cohorts two and three for cystic fibrosis patients could we expect data from from those cohorts at the end of the year and do you have if you can comment on potential to see enact knockdown in the CF patients if theres any strategy in place.

Javier San Martin: We made a protocol amendment last quarter to add patient...

Javier San Martin: These are heavily pretreated patients with metastatic lesions in different locations.

For that.

Yes, so that's a good question. So so yes on the first part of the question, Yes, I would expect for us to have those data.

Javier San Martin: locations. So biopsy collection is challenging. The new patients were added to give us a better chance of having tumor samples that can be processed, evaluated, and analyzed.

The next few cohorts in CF patients that we can present at some point.

This year, we look we havent dose those patients yet and so and so on.

We're not holding us back, but I do expect that we will have those by the end of the year.

Javier San Martin: We will be looking for data suggesting functional delivery to tumors as well as neurons.

James do you want to do you want to address the <unk>.

Question about.

Javier San Martin: as well as measure the level of HIF-2; note that

About doing Bronx on CF patients.

Yes, so we've.

We've right now opted not to Braun for CF patients more just because that.

Kenneth A. Myszkowski: I will now turn the call over to Kenneth Myszkowski, Arrowhead's Chief Financial Officer.

Kenneth A. Myszkowski: Chief Financial Officer, Ken. Thank you, Javier, and good afternoon, everyone.

Resents potential hindrance to enrollment and it's a rare disease population already so the intent currently is to do the Bronx in the healthy volunteers obtained knockdown data from those subjects.

Kenneth A. Myszkowski: As we reported today, our net loss for the quarter ended March 31, 2021 was $26.8 million, or 26 cents per share based on 103.9 million fully weighted, fully diluted weighted average shares outstanding. This compares with a net loss of $19.8 million, or $0.20 per share based on 101.7 million fully diluted weighted average shares outstanding for the quarter ended March 31, 2020. Revenue for the quarter ended March 31, 2021 was $32.8 million, compared to $23.5 million for the quarter ended March 31, 2020.

And then does the CF patients without Bronx at the same dose levels.

Okay.

Makes sense. Thank you very much for taking my questions.

Thanks Mark.

Okay.

Next question is from the line of Alicia Young of Cantor. Your line is now open.

I think we've lost lithia.

Can you hear me was back can you hear me okay, yes.

Oh, sorry, My first question. My first question on was just like when this 50% knockdown on enact like or is that kind of vertex level F&B level when you're at the right those or is it kind of lower how do you think about that and then just.

Also on Nash I mean, with this particular target do you think there is a certain group of Nash patients where it will.

Work on the more severe or less severe and I just wanted to confirm that.

We'll get some biopsy data that looks at like kind of you know histology.

I seem to like liver enzymes things.

Sure. So so we are not looking at <unk> in this in this first study it's too short exposure, we're really just looking at knockdown because because this study is really just designed to pick a dose and will be picking that based on on knockdown levels.

Kenneth A. Myszkowski: Revenue in both periods related to the recognition of a portion of the upfront payments and milestones received from our license and collaboration agreements with Janssen, and our revenue in the current period also includes the recognition of a portion of the $300 million upfront payment due upon the signing of our collaboration agreement with Takeda, although this payment was received in January.

Your your other question is a really good one about about whether or not there are certain patient populations that will be building more.

More amenable to this sort of therapy.

Let James and Javier answer that the answer is I think no. We don't know I think it's too early to tell at this point the genetic validation has been quite good day.

Studies have been quite good on this does.

Kenneth A. Myszkowski: Revenue for the Takeda Agreement will be recognized as we continue to work toward completing our performance obligations of managing clinical trials in process and certain manufacturing-related services. The remaining $266 million of revenue associated with the Decatur collaboration is anticipated to be recognized over approximately two years. Our performance and revenue recognition under the Janssen Agreement is substantially complete.

Silencing of this of this gene product does appear to confer a protective effect I don't know if it's known.

If that would be more pronounced in certain patient populations either yeah.

I can make a couple of comment this is javier and pretty good question and it's something that we've been thinking a lot about it because as you know nausea.

<unk>.

On this show we many of the first stages in different clusters and there is many many drugs in development with different making for <unk>. So it is important to start to narrow down and say what will be the best patient population. So it would need to be a lot more work to really start to think about that with HFC for what we'll say is we've not we don't believe that is tab on metabolic.

Kenneth A. Myszkowski: Any additional milestones achieved with our collaboration partners would be additive to this project. Total operating expenses for the quarter ended March 31, 2021 were $61 million, compared to $45.8 million for the quarter ended March 31, 2020. This increase is primarily due to increased personnel costs, non-cash stock compensation, and R&D as our headcount continues to grow. The increase is also due to increased candidate-specific and discovery R&D costs.

Any price about liver fats that are dropping development for NAFTA has that focus so it's likely to be more genetic because debate that as Chris said was positive chest for Nash also for alcoholic liver disease. So that tells you at least above the underlying make any simple nuts.

That is at hand, it's an initial haynes to start to think about clinically. The next day from development phase two on phase III. So more work needs to be done, but right now that's how I think about it and we're working with experts in the field to really fine tune. This again. This is I think a key question for the next net.

Kenneth A. Myszkowski: Net cash provided by operating activities during the quarter ended March 31, 2021 was $263.9 million compared with net cash used by operating activities of $27.6 million during the quarter ended March 31, 2020. The key driver of this change was the upfront payment received from Takeda in January. We estimate our cash burn rate to be $50 to $60 million per quarter. Turning to our balance sheet, our cash and investments totaled $674.8 million at March 31, 2021, compared to $453 million at September 30, 2020.

And the development of this drug.

On your question around <unk> neck about about what sort of knock on percentage would could translate into certain F&B. One improvement. The answer is that's a great question.

We don't have any idea at this point.

I will say, though however.

I'll remind you on others and I think he noticed lead the other.

We're not the success of this drug is not dependent upon putting vertex net business rather our initial patient our initial patient target patient.

Patients here are those who know who are who are not indicated for track. After for instance, you have these are the non us perhaps that have no 10% on the population of ourselves and have no charge no see FTR to correct. It will be those patients who are who are who are not able to take track after et cetera, and so we think that given that given those parameters.

Kenneth A. Myszkowski: The increase in our cash and investments was primarily due to the upfront payment received from Takeda offset by cash used for operating activities. Our cash, excuse me, our common share is outstanding at March 31st 2021. We're 104 million.

Look if we can just show a 5% improvement in F&B, one that's a win for the stocks because again they don't have any other real therapeutic options right now going forward. We can see if we can extend that but at least initially thats the target patient population.

Christopher R. Anzalone: With that brief overview, I will now turn the call back to Chris. Thanks again. Clearly, there is a lot of progress being made, and our pipeline is becoming broader and more advanced. The upcoming data readouts are exciting on their own because they potentially represent progress towards new therapies for patients without adequate treatment options. These are people with serious diseases, and this is important to remember. What is also exciting to us as a company is that these data readouts in new tissue types potentially represent clinical validation for our expanding trim platform.

That's fair and just wanted to follow up on the on the Nash.

Do you think you need like a really deep knockdown.

Drive benefit or is it kind of like that 50% level I'm just trying to get a feel for this particular.

Well I think.

I think for that more knockdown is better I think if we if we show only 50% knockdown I'd be disappointed because as you know I think we're generally pretty good at knocking down liver transcripts.

I would expect better than that.

And I think again.

As high as you can get is probably is probably better there does not appear to be negative phenotype.

With financing that gene product. So it's not like we're trying to titrate to some level, but not go above somewhat.

Okay Cool that's very helpful. Thank you very much.

Welcome.

Christopher R. Anzalone: This is the future of Arrowhead and holds the promise of initiating our next phase of rapid pipeline growth and value creation. Thanks again for joining us today. I would now like to open the call to your questions. As a reminder to all participants, you may ask questions over the phone by pressing the star key followed by the number one. You may also press to withdraw your request. Again, that's star one to ask a question or the pound key to withdraw your request. Ladies and gentlemen, our first question is from the line of Maurice Raycroft of Jeffries.

Next question is from the line of Esther Roger value of UBS. Your line is now open.

Hey, Thank you for the question in net congrats on all the progress this year.

For me the first is on the Apoc III trial strategy.

It sounds like you've decided to go with the broader patient population for triglyceride management that can you talk about enrolled.

Enrolment on timing expectations, and the three different patient segments and how progress on each of those trials may offset.

That filing timelines and kind of broader strategy around COVID-19.

Maurice Thomas Raycroft: Hi everyone, congrats on all the progress and thanks for taking my questions. The first question is on ENAC. So for the system...

<unk> loans.

Sure.

Look we are.

Our primary focus here really is is on those.

Christopher R. Anzalone: So for the cystic fibrosis patients in Cohort 1 and the patients you plan on enrolling in the next two cohorts, can you provide any more specifics on baseline FEV1 or patient histories? And then were the 65 and 180 mg doses predetermined or informed by the Healthy Volunteer data? And can you talk about your degree of confidence in maximizing potential with Cohorts 2 and 3? Sure, thanks, Maury. I can give you sort of broad answers there, and I'll leave it to Javier for the more granular ones.

As severe hypercholesterolemia patients those patients with <unk> above 500, and we think there is probably a bit more than $4 million of though is the United States alone.

We believe that an approval endpoint there simply lowering triglycerides. We know we can we can lower triglycerides substantially given the data in our phase <unk> study and so that just seems to be a.

Pretty straightforward market for us having said that we also are interested in the STS market because we believe that we can get to market much more quickly there as we've talked about we think we can initiate a phase III study shortly.

Christopher R. Anzalone: So the doses were chosen before we saw any data from Healthy Volunteers, and so these initial doses were based solely on our GLB tox data, studies, and studies, and other animal models. As we mentioned in the past, we've gone through all the various doses and healthy volunteers. And so far, at least in those individuals, it's been well tolerated. So we are, you know, cautiously optimistic that that will continue to be the case.

That's a year long study once everyone's enrolled.

It will allow us to get to market quickly and start to just to be in the market.

But now the reason you mentioned the broader the broader population. The reason that we're going there. We're also doing a phase <unk> study in those patients for them.

200 to 500.

On one thinking about 100, I'm, sorry, 150 to 500 is just to really retain optionality.

It could be that debt, we're going to want to to do a broader phase III study in that population that would be I believe probably an outcome study I don't know that we'll get we're going to want to do it now, but I want the optionality.

Christopher R. Anzalone: And we're looking forward to seeing if we see any changes in FEV1 as we escalate the dose. So you had a question about the FEV1 parameters as they came into the study? And what, sorry, what was the third question?

I said, if we do decide to go on there we can we can go there quickly.

You don't have timing on such yeah, I would say another comment about this.

Christopher R. Anzalone: And then, I guess, yeah, that would be one parameter or patient histories, if you can comment on that, have you? Yeah. So, generally speaking.

Throughout population on why it was when the phase III study one for Kris just sales, but the other is because we're really focused on the first filing will be fca's, followed by CEVA hypothetically say in India, and we wanted to have a pool of patients to really these kind of safety profile on being able to facilitate the approval on the phase III for <unk>.

Christopher R. Anzalone: I'll give you a sense of inclusion criteria, which were similar to the VERTIS study, so FE 140 to 90 at baseline, so that's kind of the range for patients in this study. For the most part, these first cohort were relatively young patients, and the average...

EBITDA hypercholesterolemia patients. So I wouldn't go I wouldn't be very concrete about the timing other than where the.

Christopher R. Anzalone: And I mentioned this in my prepared remarks, so let me tell you what we're really looking for here. We're looking for a good knockdown in the healthy volunteer cohort that is undergoing the bronc analysis. We think that's the most important take-home right now.

The screening process for the April to see severe hypercholesterolemia patients.

As we speak we got the A&D in West Chester and meeting the FCS protocols for the entire.

On April <unk> program is testing kind of at the same time all about amongst other one.

Because the other.

And I think we're planning to do.

Christopher R. Anzalone: Let's see if we're getting good knockdown. I think that with just this first cohort, all we have is four patients, the first cohort of CF patients, all we have are four individuals on active drug, and it's a low dose, of course, and so it feels to us like it is. It's gonna be very difficult at those small numbers to see small changes in FEV1. So again, we're really focused on good

Three things get ready for the broad population clinical outcome study.

Phase II data that will enable debt ratio stations studying for severe hypothermia city of India, which we believe will be at about one year study and its not require clinical outcomes of Biomarkers. In this case I guess is sufficient on west.

Starting a phase III study for the ultra rare FCS indication also in the next couple of months. So it's a very broad program with these three measure.

Christopher R. Anzalone: I think that if we can see 50% knockdown, I think we're in good shape there because, as we've talked about in the past, if you look at the heterozygotes in the genetic analysis, those patients with CF but are essentially heterozygote knockouts of ENAC, they did have a, they showed a clinical,

Uh huh.

Got it. Thank you and then another one really quickly is this latest program that the muscle targeting agent that you have that you are planning to file the <unk> Expo and I ask that can you talk about that in the contactless NFC other preclinical agents.

Unknown Executive: Got it. That's really helpful. And maybe one last follow-up, and then I'll hop back in the queue. But for cohorts two and three for cystic fibrosis patients, could we expect data from those cohorts at all?

That are being considered by others.

Sure James to withdraw on address that.

Yeah sure so.

I'm, assuming that you're referring to some of the other.

On the goes that are preclinical.

Unknown Executive: Unknown Executive, Mani Foroohar, Javier Martin, Vincent Anzalone, William Pickering, Yes, that's a good question. So, on the first part of the question, yes, I would expect us to have those data in the next two cohorts of CF patients that we can present at some point this year. We haven't dosed those patients yet, and so we're not holding those back, but I do expect that we'll have those by the end of the year.

Our targeting that I have not seen.

Data within any of those preclinical compounds I think.

Our approach.

Is a little different.

Given that the targeting approach that we're using we use a small molecule targeting approach with <unk> mediated mechanism of action versus antisense targeted with transferring or or.

Assai RNA targeted with the transfer on turning wagon.

Unknown Executive: James, do you want to address the question about..., about doing broncs on CF patients? Yeah, so we've right now opted not to bronc for CF patients more just because that presents a potential hindrance to enrollment and it's a rare disease population already. So the intent currently used to do the Bronx and the Healthy Volunteers.

Again, I think so.

So there's other compounds are still early preclinical and as Chris mentioned, we should be filing them.

And the next quarter or so.

And as we mentioned in the prepared remarks, we will be presenting on.

Animal data in June at the S. H D conferences. So we look forward to share on that with you in and we're excited about the data. We think those are good data. We're excited about the drug candidate.

Unknown Executive: [inaudible] That makes sense. Thank you very much for taking my questions. Thanks, Mark. The next question is from the line of Alethea Young of Cantor. Your line is now open.

Okay. Thank you.

Youre welcome.

Next question is from the line of 10 10 off of Piper Sandler Sir Your line is now open.

Unknown Executive: We've lost Aletheia. Can you hear me? Can you hear me? Can you hear me?

Alright, Thank you very much.

I saw the other questions have been asked for the system.

Unknown Executive: Yeah, we got you. Cool. Sorry.

On what's going on.

Unknown Executive: My first question was, like, with this 50% knockdown on ENAC, like, is that kind of vertex level, FEV level, when you're at the right dose, or is it kind of lower? What do you think about that? And then just, you know, also on NASH. I mean, with this particular target, do you think there's a certain group of NASH patients where it'll work in the more severe or, you know, less severe?

Maybe with respect to duct for and I apologize. If this was asked but with respect to some other competitive programs out there.

How do you delivered for the muscle and what are you sort of see as the market opportunity. Thank you.

Yes.

Sure. So stay tuned on those I expect that we'll have a webinar to go to go into the market dynamics are that a bit.

The way, we the way we view the market look it is a substantial muscular dystrophy.

Unknown Executive: And I just wanted to confirm that, you know, we'll get some biopsy data that looks at, like, kind of, you know, histology in addition to, like, liver enzymes, things. Sure. So we are not looking at histology in this first study because it's too short an exposure.

We think it's a substantial opportunity there there are no good.

Therapies that are designed directly for interest HD.

The biology here is crystal clear we know it is the continued expression of this protein that causes this disease and and and look we believe we can knock it down at least in animal models, we have and so and so.

Christopher R. Anzalone: We're really just looking at knockdown because this study is really just designed to pick a dose, and we'll be picking that based on knockdown levels. Your other question is a really good one about whether or not there are certain patient populations that will be more amenable to this sort of therapy. I'll let James and Javier answer that. But the answer is, I think, no. We don't know, but I think it's too early to tell at this point.

Youll see youll see some some non clinical data in June I expect sometime thereafter, we'll have a webinar, we will talk about the way, we see the market as such and with respect to competitors.

As James mentioned, there's not a ton of data out there people.

People have talked about the day to day, they've generated but we haven't seen very much of it and so we are hanging our head on the on the fact that we're pretty good at R&D I, we're pretty good at getting outside the liver.

<unk> will be the first.

I think.

We will be the first of this type of molecule to the clinic and so we'll just we'll see how we stack up.

Christopher R. Anzalone: The genetic validation has been quite good. The genetic studies have been quite good. This does, a silent thing about this gene product does appear to confer a protective effect. I don't know if it's known if that would be more pronounced in certain patient populations.

Perfect I appreciate it.

All the data coming out.

Yes, Thanks Ed.

Okay.

Next question is from the line of Luke <unk> of RBC capital markets. Your line is now open.

Fantastic. Thanks, so much for taking my question Congrats on on the progress maybe one quick one on <unk>.

Can you give us some directional color on the ongoing dialogue with the FDA here is there a scenario where at impressive data from the 2002 trial plus the first 36 patients from Sequoia is actually sufficient for an accelerated approval. If so what gives you confidence that that could be the case, maybe if there is any comps that we should think about it.

Christopher R. Anzalone: Do either of you know that? Yeah. I can make a couple of comments. This is Javier with a really good question.

Javier San Martin: On this show, we have many different stages and different causes, and there are many, many drugs in development.

Javier San Martin: with different mechanical functions. So it is important to start to narrow down and say what would be the best patient population. So it will need to be a lot more work to really start to think about that with HST. But what we'll say is we don't believe that it's about metabolism. We don't believe that it's about liver fat, but there are drugs in development for NASH that have that focus. So it's likely to be more genetic because the data, as Chris said, was positive not just for NASH but also for alcoholic liver disease.

And then the second one on <unk>, maybe for Javier here I think we've seen are you on is showing an improvement in activity one of four five percentage at the highest dose wondering if you believe that you can actually show something better here given the cellular uptake for your molecule as receptor mediated via integrate well.

It is not the case for our units you got any color there that'd be great. Thanks, so much.

Yeah, So I'll address the <unk>.

Javier San Martin: So that tells you that it's above the underlying mechanism of NASH. That is the hint. It's an initial hint to start to think about clinically the next step in development phase two and phase three. So more work needs to be done, but right now, that's how I think about it, and we're working with experts.

It's a great question and it's one that I, just don't want to tackle it.

We will have those discussions with the FDA.

We've had a good collaborative relationship with the FDA in the past and we expect that to continue and so we've got an awful lot of data to unpack and and and see how we can move forward as quickly as possible to get to patients look I think that we are aligned on this the FDA and other regulators recognize this as a real unmet medical need.

Javier San Martin: [inaudible]

Christopher R. Anzalone: And your question around ENAC, about what sort of knockout percentage could translate into a certain FEV1 improvement, the answer is, that's a great question. We don't have any idea.

On.

We offer I think.

Opportunity to help an awful lot of people with liver disease, and so I think we all want to see regulators on and off course, and the patient groups. We all want to see a drug to market as quickly as possible. We will just see what that went that route is as Javier mentioned.

Christopher R. Anzalone: I will say, though, however, and I'll, you know, I'll remind you and others, and I think you know this, Alethea, that we're not, you know, the success of this drug is not dependent upon putting Virtex out of business. Rather, our initial patient, our initial patient, target patient populations here are those who, you know, who are not indicated for Trikafta, for instance. You know, these are the null nulls, you know, that have no, 10% of the population or so that have no CF charge, and no CFTR to correct.

Our prepared remarks, we're going to have paired biopsies for around 50, 50 people, which is a lot.

For an orphan indication. So we think there is an awful lot of data there and then we will just have to see how if that if that that could be enough for the FDA, but we just we just can't opine on that at this point.

You want to talk about Oh.

Oh, yes, so to your question on when we got to ANAC.

Within four or five per se on we can do more than that was certainly that's our expectation that we would like to see.

Whether that will be related to the level of knockdown with us for we see it in other R&D.

Our experience with other target tissues for past expectation that we may see 50 or more percent of they don't count on that should translate into improvement in MCC on mucociliary clearance that eventually will translate into an improvement and if any one so we do believe based on our previous experience with past is likely to happen.

Christopher R. Anzalone: It'll be those patients, you know, who are, who aren't able to take Trikafta, et cetera. And so we think that given that, given those parameters, look, if we can just show a 5% improvement in FEV1, that's a win for these folks, because again, they don't have any other real therapeutic options right now. Going forward, we can see if we can expand that, but at least initially, that's the target patient population.

We believe that would be very successful.

Have to get into the every day to yourselves and therefore knockdown gene for a point that we'll see the clinical benefit. So that's I believe that's where we believe that we're going to see it.

There is significant knockdown on the consequent improvement in the clinic, Alaska season, which is MCC unexciting commodity.

Yeah.

Again.

We are cautiously optimistic that we can that we can and we can achieve that.

Christopher R. Anzalone: That's fair. And just one follow-up on NASH. Do you think you need a really deep knockdown to drive benefit, or is it kind of like that 50% level? I'm just trying to get a feel for this particular process.

And maybe beat it at some point.

The reason why.

I'm trying to I'm trying to manage our expectations here on this first day to read out is because not only it's a low dose, but it's only for patients in <unk>. One as you know can be on awfully noisy measure.

Christopher R. Anzalone: I think for that purpose, more knockdown is better. I think if we showed only 50% knockdown, I'd be disappointed because, as you know, we're generally pretty good at knocking down liver transcripts. So I would expect better than that. And I think, again, that as high as you can get is probably better. There does not appear to be a negative phenotype with silencing that gene product. So it's not like we're trying to titrate to some level but not go above it.

So and so.

Just feels like like such a small sample size that you expect.

To see changes in F&B one.

At that point is asking a bit margin. So, let's just wait and we are cautiously optimistic that we have something that can help some of these patients.

Got you Super helpful. Maybe just a super quick follow up little over their Javier on what to make sure you capture your question. So.

It's my understanding that you guys are our current you're getting your SA RNA wouldn't integrin receptors right in a ligand that binds integrin receptor will that matter will that drive better potentially better seller uptake versus yeah, you're honest approach that does not have a conjugation integrin receptor has been a factor we should think about it or any color there would be great. Thank you.

Unknown Executive: Okay, cool. That's very helpful. Thank you very much.

Esther Rogivello: The next question is from the line of Esther Rogivello of UBS. Your line is now open.

Tim Sweeney later I'm sure I can take that one and based on our animal data.

Esther Rogivello: Hey, thank you for the question and congratulations on all the progress this year. So, two for me: the first is on the APOC3 trial strategy here. It sounds like you've decided to go with a broader patient population for triglyceride management. So can you talk about enrollment and timing expectations for the three different patient movements and how progress in each of those trials may offset filing timelines and some kind of broader strategy around commercialization there?

Turning to <unk> matters.

Better knockdown with the targeting ligand then when we don't use the targeting ligand.

Of course Thats net.

Sorry, RNA in animals, we haven't looked at antisense, but that's our experience.

Got you Super helpful. Thanks, so much.

Okay.

Sure.

Yeah.

Next question is from the line of Patrick Tokyo of H C. Wainwright. Your line is now open.

Okay.

Hi, Thanks. Good afternoon, just a couple of questions for my follow up questions on capital allocation on the development strategy.

Christopher R. Anzalone: Sure. So, look, our primary focus here really is, you know, on those severe hypertriglyceridium patients, those patients with trigs above 500. You know, we think there are probably a bit more than 4 million of those in the United States alone. And we believe that an approval endpoint there is simply lowering triglycerides. We know we can lower triglycerides substantially given the data in our Phase 1-2 study. And so that just seems to be a, you know, a pretty straightforward market for us.

I'm wondering how we should think about the pipeline build out on strategy, particularly if we see evidence with the extra hepatic programs at the trim platform is capable of successful target knockdown in tissue beyond the liver specifically, how many programs could you build out in the lung muscle and other tissue with you based on your current capital position on.

And then secondly, im wondering if the requirement is for moving forward in a particular indication specifically are you evaluating potential programs in these extra conduct issues based on genetically validated targets or would you be looking for clinically validated targets and additional tissue and how we should think about that and then lastly, I think you've mentioned on past intention of partner.

Two and possibly other program. So I'm wondering what the latest thinking is on potential partnering for liver targeted programs and the extra powder programs.

Christopher R. Anzalone: Having said that, we also are interested in the FCS market because we believe that we can get to market much more quickly there. As we talked about, we think we can initiate a Phase 3 study, you know, shortly. We think that's a year-long study once everyone's enrolled, so that'll allow us to get to market quickly and start to, you know, just be in the market. But now the reason you mentioned the broader population, the reason that we're going to do a Phase 2b study in those patients, you know, from 200 to 500 or 150 to 500, I'm sorry, 150 to 500, is just to really retain optionality.

Boy, there's a lot to unpack there.

So let's see.

How many targets can we go after.

The answer is I don't know the answer to that.

Look we I think we are well capitalized right now you've got access to.

I don't know.

600, and change more potential millions of dollars in Amgen milestone payments something around that.

Several billion dollars of possible milestone payments from from Janssen seven.

700, and change or so million dollars of possible milestone payments from Takeda. So we've got access to to a fair amount of additional capital.

Put it this way we're look we're not slowing anything down right now.

Because of the capital conservation, we have enough capital to push all of these programs forward.

If you look at our burn compared to some of our competitors I think we do it in a pretty capital efficient manner.

Christopher R. Anzalone: It could be that we're going to want to do a broader Phase 3 study in that population that would probably be, I believe, probably an outcome study. I don't know that we're going to want to do it now, but I want the option so that if we do decide to go there, we can go there quickly. Javier, do you want to talk about timing and such? Yeah, I would say another comment about these... throughout the population and why we're doing the phase to be studied one in four.

So we're not at a point, where we are capital constrained.

And I can frankly, I sort of don't see that in the near term at least we've got we've got good bandwidth and capital for a number of programs on the question. Then is what do we hold on to and what do we partner and that's that's a dynamic question as we've talked about in the past.

Our pipeline is going to be so large that debt no company much less company our size can't commercialize all of that and so we will do some targeted.

Javier San Martin: Christia said, but the other reason is because we're really focused on the first filing will be FCS followed by severe hyperplasia edema, and we want to have a good pool of patients to really describe the safety profile.

Upon intended.

Partnerships you saw that with Takeda you saw that with Amgen, you've seen that with J&J will continue to do some of that but but an important part of our value creation model here is to hold onto to a fair number of.

Javier San Martin: and the second one is the second one, the third one is the last one, the fourth one is the fifth one, and the last one is

Molecules and commercialized drug that's why Jim hazardous here in this room.

He is he is going to be developing our commercial infrastructure. When we look at where we make our we place our bets here or what we're going to be looking to do is is to create some synergy and some leverage among among our various products. We've talked about in the past the idea of of.

Javier San Martin: for ApoC-3 severe hyperplaselinear patients.

Javier San Martin: This is a presentation as we speak. We got the IMD in. We're just submitting the FCS protocol, so the entire APOC3 program is starting kind of at the same time, or about a month after one study after the other.

Some synergy around around cardio metabolic assets want Apoc III <unk> III, we see you see we like the idea of building commercial infrastructure to sell both of those drugs into into lipid clinics and cardiologists et cetera. Similarly, we like that for Pulmonologists, there are somewhere between 14 and 16.

Javier San Martin: And I think we're planning to do these three things, get ready for a broad population clinical outcome study, and have

Javier San Martin: We are looking for a broad population clinical outcome study and have phase 2 data that will enable the registration study for severe hypertriglyceridemia, which we believe will be about a one-year study and does not require clinical outcomes, so biomarkers, in this case triglycerides, are sufficient. And we are starting a phase 3 study for the ultra-rare FCS indication also in the next couple of months.

Pulmonologists in the U S and the lung is a target rich environment.

Got one lung candidate in the clinic right now on Aero enact but we've got several that we're developing.

And in addition.

So we like the idea of packing our pipeline and addressing those large markets with the commercial.

Javier San Martin: [inaudible]

James C. Hamilton: Got it. Thank you. And then another one really quickly is this latest program, the muscle targeting agent that you have, that you're planning to file, the DUX-4 asset. Can you talk about that in the context of some of the other preclinical agents that are being considered by others?

Infrastructure.

Got it that's helpful. And then just another if I may just a quick follow up on the opposite on them helps a little.

So I mentioned that the next phase II data set is expected in the first half for 2022. So I'm just wondering what what are the expectations on how does that data and what are the relative advantages as compared to the ASO approach and.

James C. Hamilton: Sure, James, would you like to address that? Yeah, sure.

James C. Hamilton: So I'm assuming that you're referring to some of the other oligos that are preclinical that target that I have not seen data for any of those preclinical compounds. I think, you know, our approach is a little different. Given that the targeting approach that we're using, we use a small molecule targeting approach with the sRNA mediated mechanism of action versus antisense targeted with transferrin or sRNA targeted with transferrin targeting ligand. Again, I think that those other compounds are still early preclinical.

What if any milestones or payments are expected to arrowhead at that time.

We can't give you any guidance on on what that data will look like or even frankly when it when it when it is going to come out.

Amgen has said publicly I've said publicly that they expect.

To have data in the first half of 'twenty, two and I can't I can't get any more granular Matt.

Look we're excited about that we think is a great drug given the data that we've seen that day. They have presented publicly on that.

It looks like a very potent drug with good durability and we're excited to see what this phase two study looks like in terms of really blowing out how durable that is but I think I think that's going to be a key advantage to ASO I think I think generally speaking when you look at <unk> versus <unk> at least as it relates to two.

James C. Hamilton: And as Chris mentioned, we should be filing in the next quarter or so. And as we mentioned in the prepared remarks, we will be presenting animal data in June at the FSHD conference. And so we look forward to sharing that with you. And We're excited about the data. We think those are good data. We're excited about the drug campaign. Thank you. The next question is from the line of Kent Tenthoff of Piper Sandler. Sir, your line is now open.

And Pat of site directed contracts.

I think that debt, we will beat aso's in in in durability.

Theoretical basis, as well as clinical basis, we know that debt that arent AI as a catalytic process squares antisense oligos work on a consultative process and then that has been borne out in clinical data were generally just substantially more durable.

Then any sense of how it goes with respect to safety. If you look back at that the safety profile of various antisense Oligos, we think that there that debt.

Edward Andrew Tenthoff: Thanks, thank you very much. I see a lot of questions have been asked, and there's just so much going on. Maybe with respect to DUX4, and I apologize if this was asked, but with respect to some of the competitive programs out there, how do you deliver to the muscle, and what do you sort of see as the market opportunity? Thank you.

That will have an advantage. There also there is no for instance, there is there's been no class effect. It's been it's been seen in in <unk> with respect to 1000 opinion, but we have seen that in antisense oligos. So so we'll look for look we're excited for Amgen, we think for the right partner and we think they've got the right drug.

Got it that's helpful. Thank you very much.

Next question is from the line of solving Richter of Goldman Sachs. Your line is now open.

Christopher R. Anzalone: So, stay tuned on those. I expect that we'll have a webinar to go into the market dynamics of that a bit, the way we view the market. Look, it is a substantial muscular dystrophy. We think there is a substantial opportunity there. There are no good therapies that are designed directly for FSHD.

Alright. Thank you so much for taking our question. This is tonya on for Zalviso could you provide the rationale for why you chose etsy as HD as the first indication for your skeletal muscle at that.

Sure. Thanks for that question and we think that's I think because it is it is.

Christopher R. Anzalone: The biology here is crystal clear. We know it is the continued expression of this protein that causes this disease. And look, we believe we can knock it down, at least in the animal models we have. And so, you'll see some non-clinical data in June. I expect sometime thereafter we'll have a webinar where we'll talk about the way we see the market and such. And with respect to competitors, as James mentioned, there's not a ton of data out there.

Perfect or close to perfect as you can get I think.

Our target for this.

It is the biology is clear we know that the continued expression of ducks for.

Causes this disease.

You on I shouldnt be expressing that right now on somebody with this condition does you know if we can just turn that off then that should alleviate.

Uh huh.

So color around that disease.

Christopher R. Anzalone: People have talked about the data that they've generated, but we haven't seen very much of it. And so, you know, we are hanging our hat on the fact that we're pretty good at RNAi. We're pretty good at getting outside the liver. We'll be the first of the, I think, we will be the first of this type of molecule to the clinic.

We also don't run the risk of of oversight on thing. If you will as I mentioned, I think more and more knockdown is better than less and so it's not like we have to get to a certain level of knockdown and go no. Further so that's helpful to us.

The only thing that is that is that is troublesome about the targeted debt is that theres no debt I know theres, no known circulating biomarker and so when determining.

Christopher R. Anzalone: And so, we'll just, you know, we'll see how we stack up. Perfect. I appreciate it. Try to follow the data coming back.

What our doses going forward when determining our knockdown levels or likely going to have to do biopsies.

That's not a deal breaker, that's just a little bit more cumbersome, but this is a patient population that is in desperate need of new therapies and so we think we really have something that could be helpful for them.

Christopher R. Anzalone: Perfect. I appreciate it. Try to follow the data coming in.

Luca Issi: The next question is from the line of Luca Issi of RBC Capital Markets. Your line is now open.

Thanks.

Youre welcome.

Yes.

Next question is from the line of Cana King of short on your lines now open.

Luca Issi: Oh, fantastic. Thanks so much for coming.

Thanks, Chris you mentioned your other.

Pulmonary targets that are under development.

I'm wondering when we get the initial.

Luca Issi: Thank you for taking my question; congratulations on all the progress. Maybe one quick one on A180. Can you give us some directional color on the ongoing dialogue with the FDA here? Is there a scenario where the impressive data from the 2002...

Knockdown data for.

For CF patients.

What kind of read across.

Provide to your other pulmonary program. So in other words are you using.

Same inhaled route of administration <unk> conjugate it like am for epithelium cells and is this just a different SA RNA pay book.

Luca Issi: The trial, plus the first 36 patients from Sequoia, is actually sufficient for acceptance.

Yes, that's a great question.

So, yes, we expect to be able to read through.

Luca Issi: Celebrating Approval. If so, what gives you confidence?

These data to read to read gosh, maybe even for that better we do expect this to read through to our potential other programs here in pulmonary and we're using the same targeting ligand.

Luca Issi: about it. And then the second one on ENAC, maybe for Javier here.

Luca Issi: I think we've seen Ionis showing an improvement in FEV1 of 4.5% at the highest dose. I'm wondering if you believe that you can actually show something better here, given that the cellular uptake for your molecule is receptor-mediated via integrins, while that is not the case for Ionis. Again, any comment there would be great. Thanks so much.

We're targeting alpha beta six immigrants.

And so to the extent that we see knockdown.

In <unk>, we would expect that that would suggest we should see knockdown in the other ones as you point out just given sequence the modified even though of course as well, but if we can knock down on one.

I would expect good knockdown in the other and so that's why this data readout is so important to us.

Christopher R. Anzalone: Yeah, so I'll address the AAT question. It's a great question, and it's one that I just don't want to tackle. You know, we'll have those discussions with the FDA. We've had a good collaborative relationship with the FDA in the past, and we expect that to continue. And so, you know, we've got an awful lot of data to unpack and see how we can move forward as quickly as possible to get to patients. Look, I think that we are aligned on this.

It reads on our ability to create.

A real pulmonary franchise, if we can do that there is a ton of value that we can create and there is a ton of of a of.

Our product candidates that we can create a ton of drugs I think we can bring to various diseases.

Okay, great. Thanks.

Youre welcome.

Next question is from the line of my on Tani.

Riley Securities. Your line is now open.

Good afternoon, and thanks for taking my question. So maybe just a quick follow up on that.

And other one could you maybe comment on the safety profile when they see EBITDA with and the reason I ask is how much do you think you can push the envelope on efficacy beyond double whether thats staying in.

And.

Patients that are non Mel Wesley Basel function and basically like at what point you can kind of make that determination that you can quickly move to the next phase III study.

Yes, sorry that debt.

Christopher R. Anzalone: The FDA and other regulators recognize this as a real unmet medical need. You know, we offer, I think, you know, a good opportunity to help an awful lot of people with this liver disease. And so I think we all want to see regulators, and us, of course, and patient groups. We all want to see a drug market as quickly as possible. We'll just see what that route is. As Javier mentioned, Paradermarx.

The line was not great, but what I, what I think I heard you asked was about the safety profile that we've seen so far and and we can't go into detail of course until we present the data, but we have said publicly.

Debt that we have seen a good day to profile. So far we've had no discontinuation to drug.

We have been we have been.

Really pleased with what we saw and look we didn't we didn't expect problems in the safety.

In safety for this but you just never know when you're bringing on new a new class of drugs into into a new cell type of particularly loans and we've been we've been we've been.

Christopher R. Anzalone: We're going to have paired biopsies for around 50 people, which is a lot for an ORBIT indication. And so we think there's an awful lot of data there. And then we'll just have to see if that could be enough for the FDA. We just can't plan, and Javier, you want to talk about it, you know.

Quite thrilled that say for robust good I think a follow on question here is again I apologize that the connection wasn't great was was could you go higher if you needed to go higher and I'll defer to two.

James on this but but but I believe that there has been no.

And how do you balance.

Christopher R. Anzalone: Oh, yeah. So your question with regard to ENAC...

Going into a phase II <unk> study and then on that.

Javier San Martin: [inaudible]

Javier San Martin: and our experience with other target tissues.

Patients versus those with partial function.

Javier San Martin: So that's the expectation that we may see 50 or more percent of the knockdown, and that should translate into

I Hope you can hear me.

You can find them.

Yeah I can cover the question on on.

Safety and dose escalation, we have not seen any safety findings in the clinical studies that would prevent us from.

Javier San Martin: Based on our previous experience, those responses are likely to happen. We believe that it will be very successful and have the ENAC get into the epithelial cells and therefore knock down the gene to the point that we'll see a clinical benefit. So that's the belief, that's what we believe, that we're going to see, you know, a very significant knockdown and consequent improvement in the clinical aspect of the disease, which is MCC and FEV1. Yeah, you know, I, again, you know, of course, we're costing.

From increasing the dose.

And what was the other question you were talking about considerations for phase three.

And again right.

Crackling on on the line so I'm not sure. What you said are we limited in the background patients that we can enroll.

Do they have to have a lung function about something some sort of level.

No I don't I don't think I mean at this point.

Christopher R. Anzalone: The reason that I'm trying to manage our expectations here on this first data readout is because not only is it a low dose, but it's only for patients, and FEV1 as you know can be an awfully noisy measure, and so that just feels like such a small sample size that to expect to see changes in FEV1 at that point is asking a bit much, and so let's just wait and we are cautiously optimistic that we have something that can help some of these patients.

As Chris mentioned early on were very interested in the Knowles just because they don't have any other options, but we are certainly looking at and enrolling patients now that are on the <unk> modulators and Theres. No reason, we can't study that population down the road.

Okay.

Just a quick follow up on.

The HPV.

Out debt is expected later in the year.

It's run by J&J, but just given the deep and durable HBV S antigen knockdown debt you had.

Luca Issi: Gotcha, super helpful. Maybe just a super quick follow-up over there, Javier. I want to make sure you capture the question. So, from my understanding, you guys are

And maybe just also touch on the differences between brief one on too.

And then what.

Luca Issi: [inaudible]

Learnings, we could have somebody two different studies.

Luca Issi: Potentially Better Cellular Uptake Versus the Ionis approach that does not have a conjugation with an integrative receptor

Yeah, I can't give you any guidance on when those might readout and I certainly can't give any guidance on what on what might be in there on when I haven't seen anything of course.

James C. Hamilton: Is that a factor we should think about it or not? Any call would be great. James, would you like to respond? Sure. Sure. Yeah, I can take that one.

<unk>, one is 450 patients as I recall.

It's a triple combination or various permutations of three different comp.

Compounds, a nuke one of janssens capsid inhibitors, and then or are on the eye drug again, it's very various permutations of that in the end points have to do with with S. Antigen as I recall after 12 months of therapy, and then a six months follow up as well <unk> is similar but it also has some stopping criteria.

James C. Hamilton: And based on our animal data, the targeting ligand matters. We get better knockdown with the targeting ligand than when we don't use the targeting ligand. Of course, that's with sRNA in animals. We haven't looked at antisense, but that's our experience. Gotcha, super helpful, thanks so much.

If S antigen.

Or if other parameters reached certain criteria then it's my understanding that debt that.

Patrick Ralph Trucchio: The next question is from the line of Patrick Trucchio of HC Wainwright.

<unk> therapy could be withdrawn.

Is gonna be interesting I think just given the the nuc stoppage studies that have been done over the last several years. So so look I'm excited to see those data as you are.

Patrick Ralph Trucchio: Hi, thanks. Good afternoon. Just a couple of follow-up questions on capital allocation and the development strategy. So I'm wondering how we should think about

And I can't give you any better guidance on when those data will come out.

Great and final question, which new cell type should we expect to hear from you given.

Patrick Ralph Trucchio: Transcription by Transcription Outsourcing, LLC.

Patrick Ralph Trucchio: on the liver. Specifically, how many programs could you build out in the lung, muscle, and other tissues?

I think we're getting closer to that 18 to 24 month window. Since you said that you'll be going after myself.

Sorry, you were breaking up I Couldnt I couldnt get that question.

Patrick Ralph Trucchio: And then secondly, I'm wondering what the requirement is for moving forward in a particular indication. Specifically, are you evaluating potential programs in these extra product tissues based?

I'm joking.

I can't.

We are we are of course for working on other cell types and I can't give you any guidance on what's going on what's going to pop there.

There are several other work that we're working on.

Patrick Ralph Trucchio: Genetically Validated Targets, or would you be looking for clinically validated targets in additional tissues, and how we should think about that. And then lastly, I think you've mentioned in the past the intention to partner HIF-2 and possibly other programs. So I'm wondering what the latest thinking is on potential partnering for liver-targeted programs and extrahepatic programs.

Stay tuned for everybody.

Thanks for taking my questions Youre.

Youre welcome.

Last question is from the line of money for our SBB Leerink. Your line is now open.

Thanks, guys a couple of quick ones.

First when you think about programming here youre talking about a much more heterogeneous.

For full of cells within the within a single patient.

Christopher R. Anzalone: How many targets can we go after? The answer is, I don't know the answer to that.

And most of a heterogeneous disease between patients than in other inherited journey for defined diseases. Other mechanisms in terms of biopsy approach patient selection et cetera that you can pursue to try and get a better sample and more accurate.

Christopher R. Anzalone: Look, I think we're well capitalized right now. We've got access to, I don't know, 600 and change, more potential millions of dollars in Amgen milestone payments, something around that. Several billion dollars in possible milestone payments from Janssen, 700 and change or so million dollars in possible milestone payments from Takeda. We've got access to a fair amount of additional capital. Put it this way, we're not slowing anything down right now because of capital conservation.

That's been on how effectively you are targeting the target tissue, where youre knockdown in across the population of cells.

And then I have a follow up kind of boring financial planning for Boston.

Yeah, that's a good question.

So the answer is is at least in the first part of the study, we're just seeing or we're going to see and then and then follow on questions. Paul on studies will be.

Christopher R. Anzalone: We have enough capital to push all these programs forward, and if you look at our burden compared to some of our competitors, I think we do it in a pretty capital efficient manner. So we're not at a point where we are capital constrained. And frankly, I sort of don't see that in the near term, at least.

Wed like to see if we can find patients that are enriched James do you want to is there anything you can do you want to add to that with respect to what we're looking for now on what we in.

In the biopsy, what can we see and what can we might.

It might be.

Sure sure yes.

Christopher R. Anzalone: We've got good bandwidth and capital for a number of programs. The question then is, what do we hold on to, and with whom do we partner? And that's a dynamic question.

They are critical aspect of this study, it's all about target knockdown.

Of course.

No.

Two targets really drives a large percentage of RCC tumors. So we think this is.

Christopher R. Anzalone: As we've talked about in the past, you know, our pipeline is going to be so large that no company, much less a company our size, can't commercialize all that. And so we will do some targeted, no pun intended, partnerships. You know, you saw that with Takeda, you saw that with Amgen, you saw that with J&J.

A critical target.

For this disease.

In terms of.

New ways to maximize biopsy yield I think they are.

Tissue types.

We have.

Asked sites to preferentially biopsy over others that just Q higher yields in terms of number of tumors.

Christopher R. Anzalone: We'll continue to do some of that, but an important part of our value creation model here is to hold on to a fair number of molecules in commercialized drugs. That's why Jim Hazard is here in this room.

Number of tumor cells and improve our ability to measure knockdown.

I'm not sure if that addresses your question on and maybe maybe also what you're getting at and we don't we don't really answer on this point would be nice if we can tell if those better responders and if we see a difference in response rates better responders and they are hiring pressures of of immigrants versus below responders I don't know.

Christopher R. Anzalone: You know, he's going to be developing our commercial infrastructure. When we look at where we make our... We've talked about in the past the idea of some synergy around cardiometabolic assets. We'll have ApoC-3 and Ang-3.

How much we can tease that out in the study, but that would be something that would be helpful going forward I think.

Great that's helpful.

Financials question as you guys moving towards Big we are running more mid and late stage studies across the broader pipeline.

Christopher R. Anzalone: We like the idea of building commercial infrastructure to sell both of those drugs to lipid clinics and cardiologists, etc. Similarly, we like that for pulmonologists. There are somewhere between 14,000 and 16,000 pulmonologists in the U.S., and the lung is a target-rich environment. We've got one lung candidate in the clinic right now, Arrow Emac, but we've got several that we're developing in addition. We like the idea of packing our pipeline and addressing those large markets with a commercial approach. Infrastructure. Thank you.

Across many different tissue types different types of clinicians that youre addressing cardiologist pulmonologists oncologist.

How should we think about modeling growth in R&D expense and then and then a proportionate stock based comp from expenses do you expect that to say that the linear on a percentage basis become a larger or smaller personal comp as the company scales in terms of absolute head count in future years like how should we think about those trends.

So we haven't I'll answer the first question sort of we haven't given any guidance on on an increase in R&D spend.

Patrick Ralph Trucchio: Got it. That's helpful.

Patrick Ralph Trucchio: And then, if I may, just a quick follow-up on Alpacerin and LTa, I mention that the next phase two data set is expected in the first half of 2022. So I'm just wondering, what are the expectations ahead of that data and what are the relative advantages as compared to the ASO approach? And what, if any, milestones or payments are expected from Arrowhead at that time?

We're not we're not prepared to do that quite yet to give us a bit of time for but we haven't we haven't given any guidance there.

Ken you want to address the share.

Stock compensation is for it really hard to estimate because it's really based upon the value of our stock when we issue our or equity.

It is a noncash expense.

So.

I would sort of use that as a guide and leave that out.

Christopher R. Anzalone: You know, we can't give you any guidance on what the data will look like or even frankly when it's going to come out. Amgen has said publicly that they expect to have data in the first half of 2022, and I can't get any more granular than that. Look, we're excited about that. We think it's a great drug. You know, given the data that we've seen that they have presented publicly, that looks like a very potent drug with good durability, and we're excited to see what this phase two study looks like in terms of really blowing out how durable that is.

But we really can't give you better guidance on sort of the growth of what that expenses will be.

Alright, thanks for taking the question guys.

Thank you.

Thank you participants I'll now hand, the call back over to Chris Anzalone for closing remarks, Sir you May proceed.

Thank you all for joining us today, and we look forward to.

You're talking to you again soon.

And enjoy the rest of your week.

And that concludes today's conference.

Thank you all for participating.

Christopher R. Anzalone: But I think that's going to be a key advantage to ASOs. You know, I think generally speaking, when you look at ASOs versus siRNAs, at least as it relates to hepatocyte-directed constructs, I think that we will beat ASOs in durability. That has a theoretical basis as well as a clinical basis.

You may now disconnect.

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Christopher R. Anzalone: You know, we know that RNAi is a catalytic process, whereas antisense oligos work on a consumptive process, and that has been borne out in clinical data. We're generally just substantially more durable than antisense oligos. With respect to safety, if you look back at the safety profiles of various antisense oligos, we think that we'll have an advantage there also. For instance, there's been no class effect seen in siRNAs with respect to thrombocytopenia, but we have seen that in antisense oligos. So, look, we're excited for Amgen. We think they're the right partner, and we think they have the right drug.

Patrick Ralph Trucchio: Got it. That's helpful. Thank you.

Salveen Richter: Got it. That's helpful. Thank you very much. You're welcome. Next question.

Salveen Richter: The next question is from the line of Salveen Richter of Goldman Sachs. Your line is now open.

Salveen Richter: Hi, thank you so much for taking our question. This is Sonia on behalf of Salveen. Could you provide the rationale for why you chose FSHD as the first indication for your skeletal muscle asset? Sure, thanks for that question. We think FFHD is... is a perfect, or as close to perfect as you can get, I think, target for this. The biology is clear. We know that the continued expression of DUX4 causes this disease, but you and I shouldn't be expressing that right now. Somebody with this condition does. If we can just turn that off, then that should alleviate the problem. Aquilae is around that disease.

Christopher R. Anzalone: We also don't run the risk of over silencing, if you will. As I mentioned, I think more knockdown is better than less. And so it's not like we have to get to a certain level of knockdown and go no further. So that's helpful to us. The only thing that is troublesome about the target is that there's no known circulating biomarker. And so when determining what our dose is going forward, when determining our knockdown levels, we're likely going to have to do biopsies.

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Christopher R. Anzalone: Look, that's not a deal breaker. That's just a little bit more cumbersome. But this is a patient population that is in desperate need of new therapies. And so we think we really have something that could be helpful to them. Thanks. Next question is from the line of Keay Nakae of Shardan. Your line is now open.

Keay Thomas Nakae: Thanks, Chris, you mentioned your other pulmonary targets that are under development. I'm wondering when we get the initial knockdown data for CF patients. What kind of read-across could that provide for your other pulmonary programs? So in other words, are you using the same inhaled route of administration, the same conjugated ligand for epithelial cells, and it's just a different siRNA payload?

Christopher R. Anzalone: Yeah, that's a great question. So, so yes, we expect to be able to read through these data to read to read, gosh, let me put that better. We do expect this to read through to our potential other programs here in pulmonary. And we are using the same targeting ligand. You know, we're targeting alpha B, beta 6 integrin.

Christopher R. Anzalone: And so to the extent that we see knockdown in the Arrow Lean Act, we would expect that that would suggest we should see knockdown in the other ones. As you point out, it's just a different sequence. Yeah, they're modified differently, of course, as well. But if we get knocked down in one, we, I would expect to get knocked down in the other.

Christopher R. Anzalone: And so that's why this data readout is so important to us. It reads on our ability to create, you know, a real lung franchise. If we can do that, there is a ton of value that we can create. And there are a ton of product candidates that we can create, and a ton of drugs, I think we can bring to various Okay, great. Thanks. You're welcome. The next question is from the line of Mayank Mamtani of B. Riley Securities. Your line is now open.

Mayank Mamtani: Good afternoon, team. Thanks for taking our question. So maybe just a quick follow up on ENAC. Yes, another one.

Mayank Mamtani: Could you maybe comment on the safety profile given the history of the target? And the reason I ask is, how much do you think you can push the envelope on efficacy beyond the doses that you're testing and, you know, patients that are null null versus those with partial function? And basically, like at what point can you kind of make that determination that you can quickly move to the next, you know, phase two or three study?

Mayank Mamtani: Yes, sorry.

Christopher R. Anzalone: Sorry, that line was not great, but what I think I heard you ask was about the safety profile that we've seen so far. And we can't go into detail, of course, until we present the data.

Christopher R. Anzalone: But we have said publicly that we've seen a good safety profile so far, and we've had no discontinuations of the drug. We have been really pleased with what we saw. Look, we didn't expect problems with safety for this, but you just never know when you're bringing a new class of drugs into a new cell type, particularly the lungs. And we've been really quite thrilled that the safety profile has been good. I think the following question here is, again, I apologize that the connection wasn't great, was could you go higher if you needed to go higher? And I'll defer to James on this, but I believe that there has been no reason for it.

James C. Hamilton: And how do you balance it, you know, going into a phase 2, phase 3 study, and then, you know, notations versus those with partial functions? I hope you can hear me fine now.

James C. Hamilton: I can cover the question on safety in dose escalation, and we have not seen any safety findings in the clinical studies that would prevent us from increasing the dose, the other question yeah you're talking about considerations for phase 2-3 and again right the you're getting we had crackling on the lines I'm not sure what you said are we limited in the background patients that we can enroll in this so then do they have to have a lung function above something some sort No, I don't think it, I mean at this point, as Chris mentioned early on, we're very interested in the nulls, just because they don't have any other options, but we are certainly looking at and enrolling patients now that are on CFTR modulators and there's no reason we can't study that population down the road.

Mayank Mamtani: Okay, and maybe just a quick follow-up on the HPV readout that you know is expected later in the year. I understand, you know, it's run by J&J, but just given the deep and durable HPV, this antigen knockdown that you had, and maybe just also touch on, you know, the differences between REEF1 and REEF2, and what learnings we could have from the two different studies.

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Mayank Mamtani: Yeah, I can't give you any guidance on when those might come out. I certainly can't give you any guidance on what might be in there. I haven't seen anything, of course.

Christopher R. Anzalone: REEF1 is 450 patients, as I recall, and it's a triple combination, or it's various permutations of three different compounds, a nuke, one of Janssen's capsid inhibitors, and then our RNAi drug. Again, various permutations of that, and the endpoints have to do with F-antigen, as I recall. So, 12 months of therapy, and then a six-month follow-up, as well. REEF2 is similar, but it also has some stopping criteria, you know, if F-antigen or other parameters reach certain criteria, then it's my understanding that therapy could be withdrawn.

Christopher R. Anzalone: That's going to be interesting, I think, just given the nuke stoppage studies that have been done over the last several years. So look, I'm as excited to see the data as you are, and I can't give you any better guidance on when those data will come out.

Mayank Mamtani: And final question, which new cell type should we expect to hear from you, given I think we're getting close to that 18 to 24?

Christopher R. Anzalone: I'm sorry, you were breaking up. I couldn't get that question. I'm joking. I can't answer that. We are, of course, working on other cell types, and I can't give you any guidance on what's going to pop. There are several that we are working on. But, you know, stay tuned. We'll hear about it. Thanks for taking my question. You're welcome.

Mani Foroohar: Last question is from the line of Mani Foroohar of SVB Lee Rink. Your line is now open. Thanks, guys. A couple quick ones. First, when you think about targeting HIF, you're talking about a much more heterogeneous pool of cells within a single patient and a much more heterogeneous disease between patients than in other inherited genetically defined diseases. Are there mechanisms in terms of biopsy approach, patient selection, et cetera that you can pursue to try and get a better sample and a more accurate assessment of how effectively you're targeting the target tissues and where your knockdown is across the population of cells? And then I have a follow-up, kind of boring, financial question. Yeah, that's a good question.

Christopher R. Anzalone: So the answer is, at least in the first part of the study, we're just seeing what we're going to see. And then follow-on questions, follow-on studies will be, you know, we'd like to see if we can find, you know, patients that are enriched. James, do you want to, is there anything you can, you want to add to that with respect to what we're looking for now and what we might see in the biopsy, what can we see and what might people... Sure.

Christopher R. Anzalone: Sure. Yeah. The critical aspect of this study is all about target knockdown, and of course, you know, HIF really drives a large percentage of RCC tumors. So, you know, we think this is Critical Target, for this disease, in terms of ways to maximize biopsy yield. I think there are certain tissue types that we have asked sites to preferentially biopsy over others that just give higher yield in terms of a number of tumors and a number of tumor cells and improve our ability to measure not whether or not. I'm not sure if that addresses your question or not.

Christopher R. Anzalone: Yeah, and maybe, you know, maybe also what you're getting at, and we don't really answer this, is, it would be nice if we could tell if those, you know, better responders, and if we see a difference in response rates, those better responders, if they are higher expressors of integrins versus the lower responders. I don't know how much we can tease that out in Great, that's very helpful.

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Kenneth A. Myszkowski: And on the financial question, as you guys move into a state where you're running more mid- and late-stage studies across a broader pipeline, across many different tissue types, different types of clinicians that you're addressing, cardiologists, pulmonologists, oncologists, how should we think about modeling growth in R&D expense? And then, as a proportion of stock-based comp from expense, do you expect that to stay linear on a percentage basis, or become a larger or smaller portion of comp as the company scales in terms of absolute headcount in future years?

Kenneth A. Myszkowski: How should we think about those trends? So we haven't, I'll answer the first question, sort of. We haven't given any guidance on an increase in R&D spend. We're not prepared to do that quite yet. Give us a bit of time, but we haven't given any guidance there. Ken, you want to address the...

Kenneth A. Myszkowski: So stock compensation is really hard to estimate because it's really based upon the value of our stock when we issue our equity. You know, it is a non-cash expense. So, you know, I would sort of use that as a guide and leave that out. But we really can't give you better guidance on sort of the growth of what that expense will be. Alright, thanks for taking the question, you guys.

Mani Foroohar: Thank you participants. I'll now hand the call back over to Chris Anzalone for closing remarks. Sir, you may proceed. I thank you all for joining us today and we look forward to talking to you again soon. And that concludes today's conference. Thank you all for participating. You may now disconnect.

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