Arrowhead Research Corporation (ARWR) Q4 2014 Results Earnings Call Transcript

Edited Transcript of Arrowhead Research Corporation (ARWR) Q4 2014 Earnings Conference Call…

Arrowhead Research Corporation (NASDAQ:ARWR)hosted a conference call with investors and analysts to discuss Q4 2014 earnings results on November 25, 2014 at 4:30 p.m. ET. The following are the webcast audio and the associated transcript of the event…


Arrowhead Research Corporation (ARWR) Q4 2014 Results Earnings Call – Webcast Audio



Operator: Ladies and gentlemen, welcome to the Arrowhead Research fiscal 2014 fourth quarter year end financial results conference call. Throughout today’s recorded presentation all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions.

I will now hand the conference call over to Vincent Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

Vince Anzalone – VP, IR

Thank you. Good afternoon everyone. And thank you for joining us today to discuss Arrowhead’s results for its fiscal 2014 fourth quarter and year ended September 30, 2014.

With us today from management are President and CEO, Dr. Christopher Anzalone; Chief Operating Officer and Head of R&D, Dr. Bruce Given; Chief Financial Officer, Ken Myszkowski. Management will provide a brief overview of the quarter and we’ll then open up the call to your questions.

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 facts, including without limitation those with respect to Arrowhead’s goals, plans and strategies, are forward-looking statements. These include but are not limited to statements regarding the anticipated safety and or efficacy of ARC-520 and our other clinical programs, as well as anticipated timing for study enrollment and completion, it represent management’s current expectations and are inherently uncertain. Thus actual results may differ materially.

Arrowhead undertakes no duty to update any of the forward-looking statements discussed on today’s call. You should refer to the discussions under Risk Factors in Arrowhead’s annual report on Form 10-K and the company’s quarterly reports on Form 10-Q for additional matters to be considered in this regard.

With that said, I’d like to turn the call over to Dr. Christopher Anzalone, President and CEO of the company. Chris?

Christopher Anzalone – President and CEO

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

The 2014 fiscal year was one of progress and expansion for Arrowhead. We pushed our first candidate ARC-520 into the clinic. We began rapid pipeline expansion with the introduction of our next candidate ARC-AAT and we made important corporate progress on multiple fronts, such as strengthening our balance sheet.

Let’s begin with ARC-520.

We completed a first in man Phase 1 study in nine cohorts that assessed safety and tolerability of doses ranging from 0.01 to 4 mg/kg, in a total of 54 subjects. There were no dropouts for adverse events, no serious adverse events or adverse events rated as severe.

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Neither the incidence nor severity of AEs was different between the treatment groups and placebo. And we did not see any dose limiting toxicities. ARC-520 and the underlying DPC delivery system appears to be well tolerated at all dose levels studied. This is a strong and important statement, a substantial unknown for any new candidate and platform entering clinical studies, as whether a safety signal will emerge that was not predicted in animal models. The positive safety profile we have seen represents a significant derisking event for ARC-520 and a broader DPC platform.

With confidence in the safety and tolerability of ARC-520, we moved into a Phase 2a dose finding study in order to characterize single dose activity in chronic HBV patients. Specifically, we are learning the safety profile of ARC-520 in HBV patients and how deeply various doses of ARC-520 will suppress a specific viral protein to surface antigen or s-antigen.

This study is ongoing but we have completed dosing 24 patients in three initial cohorts, 1, 2 and 3 mg/kg. We have presented data from 1 and 2 mg/kg and we are still following patients from the 3 mg/kg cohort which is still blinded. We have begun screening patients for enrollment in an additional cohort of 8 patients at 4 mg/kg.

Several important findings are emerging. First, the safety profile of ARC-520 appears to be similar in patients as in healthy volunteers. Second, ARC-520 is clearly active and decrease in production of s-antigen. And third, the duration effect is longer than we expected, which has very positive implications for upcoming multi dose Phase 2b studies. These are good data. As far as we know, this is the first reliable report demonstrating clear reduction of s-antigen in humans after its single dose.

As such and because many believe that decrease in s-antigen could lead to a functional cure of chronic HBV, physicians and HBV experts we spoke with at the recent AASLD liver meetings shared our excitement. We reported mean peak knockdown for 39% with 1 mg/kg of ARC-520 and 51% with 2 mg/kg.

Simply put, this has been a lofty and unmet goal in the HBV field for years, and we just accomplished it. With these preliminary data, let me tell you why we are so confident about the program. Our goal is not to clear s-antigen directly with ARC-520 but rather to decrease it to a level that derepresses immune system such as it may take over and control the virus. If successful, this is potentially allowed to functional cure because no drug has been able to do this consistently to precise level of reduction required to enable this process is unknown.

Before we started the single dose 2a study in patients, our goal was to find a dose in humans that peaks at 90% reduction. This somewhat arbitrary goal was set because we expected a U-shaped knockdown curve characterized by rapid reduction, followed by equally rapid release such that 30-days after dosing s-antigen levels would be approaching baseline.

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We reasoned that as long as s-antigen levels had not returned to baseline, by the time of the next dose, we might achieve an additive dynamic overtime – that overtime would give us a sustained reduction profile.

What we have seen however is a more drawn-out L-shaped knockdown curve or reduction in s-antigen is sustained over relatively long period of time. In fact, main peak knockdown at 2 mg/kg did not even occur until after 30-days post dosing. Therefore, we expect monthly dosing to produce a step-down or additive effect because subsequent dosing will be acting on top of sustained activity from prior doses.

We have seen this additive dynamic in animal models and expect to see it with repeat dosing in humans. In fact, other RNAi companies have used daily so-called loading doses in humans to create an additive step down effect on gene knockdown. Our monthly dosing could give us a similar effect but with far or less frequent dosing given our long duration of action. This provides us with the potential ability to achieve exactly what our experts believe is important, that is sustained in deep reduction of s-antigen over time.

In addition, remember that 1 and 2 mg/kg are just a first two doses of an ongoing dose escalation study. We’ve already completed dosing the 3 mg/kg cohorts and are screening for the 4 mg/kg cohort. Therefore, we have two powerful tools to achieve sustained and deep knockdown. The additive effect we expect to see upon multi dosing and deeper knockdown we expect to see as we increase dose. This may be viewed in the context of a favorable safety profile that has not produced dose limiting toxicities in any dose study. We believe this is a good position to be in.

We plan to complete the Phase 2a which we now expect to include 3 and 4 mg/kg cohorts and present a full picture of the study results when they are available. Depending upon the pace of enrollment, this may be available around the time of EASL conference in April of 2015. But that will depend on enrollments speed which we do not control.

There is much we do not know about ARC-520 and how to optimize its effectiveness as a therapy. We are just now starting to scratch the surface. The best way to begin shipping away and how to address chronic HBV is to move into multi dose studies as soon as we can. We plan to begin regulatory submissions before the end of this year in support of these studies.

We will have clinical sites in the U.S., Western Europe and Asia in order to gain access to a large number of patients and variety of HBV genotypes. Multiple parallel studies are currently contemplated including ARC-520 in combination with entecavir or tenofovir, as well as combination studies with different immunostimulatory agents and various dose regimens.

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