Arrowhead Pharmaceuticals, Inc. (ARWR) Earnings & Analysis

Latest quarter

Arrowhead reported Q3 FY2026 revenue of $75.3 million, above the consensus estimate of $57.2 million. Adjusted earnings per share were −$1.36, below the consensus estimate of −$1.23.

Revenue rose from $27.8 million a year earlier. The filing attributed the change primarily to revenue recognition under collaboration and licensing agreements with Sarepta, Novartis, Madrigal and Sanofi, and partly to commercial revenue from REDEMPLO. CFO Dan Apel said commercial revenue was approximately $2.4 million for the quarter.

The filing shows that candidate costs rose $31.6 million from a year earlier as pipeline progression increased outsourced clinical trial and manufacturing costs. Arrowhead’s operating margin was −226.0%, compared with −596.2% a year earlier, while diluted earnings per share were −$1.36, compared with −$1.26.

Arrowhead recorded free cash flow of −$181.3 million, compared with −$157.1 million a year earlier. The filing shows cash, cash equivalents and restricted cash of $54.8 million as of June 30, 2026, alongside $1,547.2 million invested in available-for-sale securities.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CFO Dan Apel said commercial revenue was approximately $2.4 million in the fiscal third quarter, more than double the approximately $1 million recorded in the preceding quarter. He said Arrowhead was not intending to highlight specific REDEMPLO product sales until they became a meaningful driver of its financial results.

Apel said Arrowhead had expanded and was continuing to expand its commercial footprint for the current FCS launch. He said those capabilities were also designed to support potential future indications. Vincent Anzalone said Sanofi leads REDEMPLO commercialization in Greater China while Arrowhead works through country-specific reimbursement and launch processes.

On collaboration revenue, Apel said Arrowhead recognized approximately $26 million from Sarepta and approximately $20 million from Novartis during the quarter. He said approximately $125 million of the Novartis upfront consideration remained in deferred revenue as of June 30 and would be recognized as Arrowhead fulfilled its preclinical research and development obligations. Apel also said Arrowhead recognized the $25 million Madrigal upfront payment after completing a license and technology transfer.

Apel attributed higher research and development spending primarily to candidate costs, including clinical development and manufacturing activity. He said quarterly R&D expense would remain highly influenced by program timing and clinical activity. He also attributed higher selling, general and administrative spending primarily to REDEMPLO commercialization, including headcount, marketing and launch support.

Arrowhead plans to use an FDA priority review voucher with an upcoming submission for plozasiran in severe hypertriglyceridemia, Apel said. He said the company expects to pay $215 million at closing in its fiscal fourth quarter, following HSR clearance. Apel said Arrowhead’s projections assumed that the voucher could bring its launch and uptake forward by four months if approval is granted.

Guidance

CFO Dan Apel said Arrowhead expects costs associated with active execution of the Shasta 3 and Shasta 4 studies to begin moderating over time starting in fiscal 2027. He said Arrowhead would continue investing in regulatory activities, commercial supply readiness and its broader pipeline.