Yahoo Finance Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) Q2 2024 Earnings Call Transcript
Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) Q2 2024 Earnings Call Transcript May 9, 2024
Arrowhead Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $-1.01634 EPS, expectations were $-0.06. Arrowhead Pharmaceuticals, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] I will now hand the conference call over to Vince Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.
Vince Anzalone: Thank you. Good afternoon, everyone and thank you for joining us today to discuss Arrowhead's results for its fiscal 2024 second quarter ended March 31, 2024. With us today from management are President and CEO, Dr. Chris Anzalone, who will provide an overview of the quarter. Dr. Bruce Given, our Interim Chief Medical Scientist who will provide an update on our cardiometabolic pipeline. Dr. James Hamilton, our Chief of Discovery & Translational Medicine, will provide an update on our earlier stage programs. And Ken Myszkowski, our Chief Financial Officer, will give a review of the financials. Before we begin, I would like to remind you that comments made during today's call contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
All statements other than statements of historical fact are forward-looking statements 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 report on Form 10-K and our quarterly reports on Form 10-Q. I'd now like to turn the call over to Chris Anzalone, President and CEO of the company. Chris?
Chris Anzalone: Thanks, Vince. Good afternoon, everyone, and thank you for joining us today. As we discussed in our last conference call, Arrowhead has reached a point where our business requires a greater degree of focus. We are in the process of building out our expertise within the cardiometabolic space and focusing more of our spend in that area. These are wholly appropriate actions because our cardiometabolic programs represent a substantial amount of potential near, mid, and long-term value. We need to ensure that they are properly resourced, both from a financial and human capital standpoint, and that they are at the center of investor analysis of our business. This is a good thing for Arrowhead. We have two late-stage drug candidates with data across diverse populations, from ultra-rare to highly prevalent, spanning over 1,000 human subjects.
We see a train of potential value creation with plozasiran and zodasiran and expect to file NDAs or supplements to expand those labels almost every year over the next five to six years. This is a pipeline within just two drugs, and I believe we will start unlocking value in the very near term. Further, we expect to expand our cardiometabolic reach into obesity and metabolic disease with two additional drug candidates reaching the clinic this year. The plozasiran PALISADE Phase 3 study in patients with familial chylomicronemia syndrome or FCS, is clinically complete. The last patient's last visit occurred last week. The database should be locked over the next two weeks, and I expect to disclose top-line data at our cardiometabolic webinar in June with a fuller dataset hopefully presented this year at an appropriate medical conference.
We believe that plozasiran will become our first commercial product, and we are preparing for an NDA submission for use in FCS patients by the end of the year with a potential launch in 2025. To this end, our commercial preparations are well underway. We have begun building our commercial team including people with deep expertise in cardiometabolic marketing, commercial operations and market access. We're also in the later stages of solidifying a specialty pharmacy and patient hub system that will be ready to help ensure FCS patients get plozasiran soon after its anticipated approval. Beyond our commercial infrastructure, we have begun building out our medical affairs team with a focus on field support to help clinicians better understand APOC3 inhibition.
Additionally, we have begun helping physicians who request early access to plozasiran to do so for appropriate FCS patients prior to approval. We are also studying plozasiran in the broader severe hypertriglyceridemia or SHTG population. Toward that end, we have begun screening patients in two Phase 3 studies, SHASTA-3 and SHASTA-4, and are preparing a third Phase 3 in SHASTA-5. Of course, it is early, but our aggressive goal is to complete enrollment of those studies in 2025. SHASTA-3 and SHASTA-4 are 52-week studies, and SHASTA-5 is an acute pancreatitis study that will follow patients until a set number of pancreatitis events is reached. Turning to the zodasiran, we submitted briefing documents including Phase 3 study designs for patients with homozygous familial hypercholesterolemia or HOFH, to the FDA and expect an end of Phase 2 meeting this month.
We hope to initiate Phase 3 soon after we receive regulatory feedback. We have also completed our analysis of how to move forward in the large mixed dyslipidemia population with a cardiovascular outcomes trial or CVOT. We have submitted our proposal to the FDA and expect feedback over the next month, and then will seek input from the EMA and other regulatory authorities. We will provide detailed information about our plans, expected timing and costs once we know we have regulatory alignment on design. Plozasiran and zodasiran are important candidates for us because they offer new and expanding commercial opportunities over the next several years, and because clinical data have suggested that they have a high probability of success. Bruce will talk more specifically about results, but a lot of data have been presented recently, and we have been encouraged by the safety and tolerability, target engagement, and downstream changes in lipids and lipoproteins across multiple patient populations.
As I mentioned, over 1,000 people have enrolled in a plozasiran and zodasiran clinical studies. Safety and tolerability data have given us confidence that these could be appropriate therapeutics not only for small and medium-sized populations, but also importantly, broad mixed dyslipidemia populations. Target engagement measured by circulating protein knockdown of APOC3for plozasiran and ANGPTL3 for zodasiran have been impressive and consistent. The exact numbers will vary a bit depending on the study population, duration of treatment, dose level, and measurement time point. However, we are consistently seeing mean max knockdown exceeding 75% to 90% with a long duration of effect that supports a quarterly dosing interval for plozasiran and zodasiran.
This is what we designed the programs to achieve, so we are very encouraged to see clinical results consistent with our expectations. The downstream change in various lipids and lipoproteins have been favorable and consistent with published genetic data in APOC3 and ANGPTL3 deficient humans and consistent with experimental data in animals receiving APOC3 and ANGPTL3 inhibitors. Similar to target engagement, the exact changes varied a bit between different study populations, but generally speaking, subjects treated with plozasiran and or zodasiran showed improvements in multiple atherogenic lipid and lipoprotein levels, including remnant cholesterol, which is increasingly viewed as an important target for new therapies to address atherosclerotic cardiovascular disease, or ASCVD.
Numerous epidemiologic studies have shown an association between higher triglyceride-rich lipoproteins or TRLs, and an increased risk of ASCVD. Despite potent LDL cholesterol-lowering therapies, residual ASCVD risk persists due in part to high levels of atherogenic TRLs. Remnant cholesterol is also believed to be a major contributor to the residual risk of atherosclerotic cardiovascular disease after LDL is well controlled. We believe plozasiran and zodasiran represent significant opportunities to help a lot of patients. For all the reasons I mentioned, we are moving as quickly as possible toward treatments in FCS, HOFH, SHTG, and the very large population of patients with ASCVD due to mixed dyslipidemia. We believe we can help a large number of patients and create a substantial amount of value with plozasiran and zodasiran alone.
However, it makes sense to leverage our growing cardiometabolic capabilities by expanding the vertical. We expect to introduce two new candidates into the clinic in the fourth quarter aimed at obesity and metabolic disease. These are ARO-INHBE, a liver-directed candidate targeting inhibin βE, and an undisclosed candidate targeting adipose directly. We will discuss those in more depth during a focused webinar in the summer. We continue to make progress beyond the cardiometabolic vertical as well. Within pulmonary, the ARO-MMP7 and ARO-MUC5AC Phase 1 studies continue to enroll patients, and the ARO-RAGE Phase 1 study is enrolling high FeNO patients with moderate to severe asthma. The FeNO cohorts have been slow to enroll because the high baseline FeNO required of the study has led to a high screen fail rate.
We believe in the candidate, and the target engagement data has been what we had hoped for, so we are not going to wait for that to read out before progressing to a Phase 2 study. We have designed a Phase 2 study in asthma patients and are moving toward launching that in the fourth quarter. ARO-RAGE tolerability has been good in the Phase 1 study. We have seen clear evidence of substantial target engagement in the Phase 1, and data in animal models were very encouraging. The RAGE pathway has also generated a good amount of KOL interest, so we are excited to move forward as quickly as we can. Moving toward new programs, during the last quarter we began dosing in two new clinical programs, AROCFB for the treatment of diseases associated with activation of the complement pathway, and ARO-DM1 for the treatment of type 1 myotonic dystrophy or DM1.
These programs split well with ARO-C3 and ARO-DUX4 respectively. The former is enrolling the patient portion of a Phase 1/2 study, and together with AROCFB, provides a focused portfolio in complement-mediated diseases. ARO-DUX4 is enrolling FSHD patients in a Phase 1/2 study, and together with ARO-DM1, creates a focused skeletal muscle portfolio. We now have 14 clinical stage programs, 10 of which are wholly owned. I expect we could have 18 clinical programs by the end of the year. This is a lot, and they certainly can be difficult to track and properly value by investors. We think of our wholly owned assets in a series of verticals. As we have discussed, the cardiometabolic vertical is our primary focus. But beyond that, we have a pulmonary vertical, a complement vertical, a muscular disease vertical, and by the end of the year, a CNS vertical.
We expect to partner within these four verticals in order to limit our spend and bring in capital to properly fund our cardiometabolic vertical and our other research programs. But we believe this is the way investors should look at our pipeline. Understanding and properly valuing these assets can still be difficult, so we recently announced the upcoming 2024 Summer Series of R&D webinars to highlight some of our work. Starting this month and continuing each month through September, we will host five webcast events. Each event will feature presentations by Arrowhead team members and external key opinion leaders who will discuss disease areas and treatment landscapes. We will talk about Arrowhead's candidates, the biological rationale and preclinical data supporting each candidate, and our clinical development strategy for each pipeline program.
The series is designed to highlight important value drivers in a focused way. The Summer Series schedule is as follows. May 23 is Muscle Vertical Day, where we will cover ARO-DM1 and ARODUX4. June 25 is Cardiometabolic Day, where we will give an overview of both plozasiran and zodasiran data to date, including Phase 3 PALISADE FCS data, and talk about the future of the programs and the diseases we aim to treat. July 16 is Pulmonary Day, which includes ARO-RAGE,ARO-MUC5AC, and ARO-MMP7. August 15 is Obesity and Metabolic Disease Day, where we will talk about ARO-INHBE and the undisclosed adipose candidate; and September 25 is CNS Day, where we will highlight our central nervous system programs, including updates on the platform and on a specific undisclosed candidate planned to enter clinical development later this year.
In addition to the Summer Series, we also recently announced a busy month of presentations at medical and scientific meetings. These include presentations at TIDES USA, the American Thoracic Society 2024 International Conference, the International Conference on Antiviral Research, European Atherosclerosis Society Congress, and the National Lipid Association Scientific Sessions. These are all planned for May. In addition, we plan to present on many of our programs at several medical meetings throughout the year. We have a lot going on, including a lot of exciting results to talk about. During the last few months, we also strengthened our balance sheet with two inflows. The first was done in January when we announced an equity financing with gross proceeds of $450 million.
The second was just announced last week. That was a $50 million milestone payment that we received from Royalty Pharma following the completion of enrollment of the Phase 3 OCEAN(a) Outcomes Trial of olpasiran, being conducted by Amgen. We originally licensed olpasiran, previously called AROLPA, to Amgen in 2016 and then monetized our future royalty stream in a transaction with Royalty Pharma in 2022. Arrowhead is further eligible to receive up to an additional $375 million from Amgen and $110 million from Royalty Pharma in aggregate development, regulatory, and sales milestone payments associated with olpasiran. This is a good example of how we use partnering and creative financing structures as important parts of our long-term financing strategy.
We are always working on potential future deals and now is no exception. We are confident that we can complete additional transactions this year to further strengthen our balance sheet to support future clinical development and commercialization of our wholly owned programs. With that overview, I'd now like to turn the call over to Bruce. Bruce?
Bruce Given: Thank you, Chris. Good afternoon everyone. As Chris discussed plozasiran and zodasiran at a high level, but I want to spend some time going over a few specific things: First, the data on the SHASTA-2 study of plozasiran that we presented at ACC and simultaneously published in JAMA Cardiology. Second, the design and status of SHASTA-3, 4, and 5. Third, expectations for our upcoming EAS and NLA presentations; and lastly, a review of the soon to report PALISADE study of plozasiran in familial chylomicronemia syndrome or FCS. Let's jump right in with the SHASTA-2 study of plozasiran. To review, plozasiran is designed to reduce production of apolipoprotein C-III, or APOC3, a component of triglyceride rich lipoproteins, or TRLs, and a key regulator of triglyceride metabolism.
APOC3 increases plasma TG levels by inhibiting breakdown of TRLs by lipoprotein lipase. It also inhibits uptake of remnant cholesterols, derived from TRLs, by hepatic receptors in the liver. The SHASTA-2 study was a double-blind, placebo-controlled Phase 2b study in adults with severe hypertriglyceridemia, or SHTG. Three dose levels of plozasiran 10 mg, 25 mg and 50 mg were evaluated against placebo in 229 participants with fasting triglycerides of greater than or equal to 500 mg/dL at screening. Each participant received subcutaneous injections on day 1 and week 12 with subjects then followed all the way out to week 48. The primary objective of the study was to evaluate the safety and efficacy of plozasiran in adults with SHTG and to select a dosing regimen for later stage clinical studies in this patient population.
SHTG is characterized by triglycerides levels greater than 500 mg/dL and is known to significantly increase the risk of ASCVD and acute pancreatitis, often with recurrent attacks requiring repeat hospital admissions and worsening outcomes. Pancreatitis risk is proportional to the number, characteristics, and concentrations of TRLs and increases as triglycerides increase. Currently available drug therapies generally don't sustainably reduce triglycerides below the pancreatitis risk threshold. In addition to SHASTA-2, there is also an open label extension study that is ongoing. So final data from the double-blind treatment period of SHASTA-2 were presented at ACC and published in JAMA Cardiology. These were exciting data, which received a lot of attention and were well-received at ACC and in subsequent discussions with physicians.
With respect to pharmacologic activity, treatment with plozasiran led to dose-dependent placebo-adjusted reductions in triglycerides at 24 weeks, which was the primary endpoint. The reductions observed were minus 49%, minus 53%, and minus 57% for the 10, 25, and 50 milligram doses respectively. For perspective, currently available drugs usually would be expected to produce reductions of maybe 20% or so. As expected, these triglyceride reductions were driven by corresponding placebo-adjusted reductions in APOC3 of minus 68%, minus 72%, minus 70% at week 24. All these measures were highly statistically significant. Week 24 measurements represent the point of minimal efficacy, referred to as trough measurements, just prior to the next planned quarterly dose.
Mean maximum non-placebo-adjusted reductions from baseline in triglycerides in APOC3 were up to 86% and 90% respectively, and typically occurred around week 16 or week 20. Importantly, we also looked at the percentage of patients who met the goal of reducing triglyceride levels below 500 milligrams per deciliter, a level above which the risk of acute pancreatitis meaningfully increases. Among subjects treated with plozasiran at the week 24 trough time point, greater than 90% receiving the 25 or 50 milligram doses, achieved a triglyceride level less than 500 milligrams per deciliter. In addition, around half of the subjects at these doses achieved normal triglyceride levels of less than 150 milligrams per deciliter at week 24, which is surprising given the mean starting levels of almost 900 milligrams per deciliter.
In addition to reductions in triglycerides, subjects treated with plozasiran also showed improvements in multiple atherogenic lipid and lipoprotein levels, including remnant cholesterol, HDL cholesterol, and non-HDL cholesterol. Plozasiran demonstrated a favorable safety profile in SHASTA-2. Observed adverse events generally reflected the comorbidities, and underlying conditions of the study population. The adverse event and serious adverse event profiles, were generally similar across treatment groups, although worsening of diabetes did appear more frequently in the 50 milligram dose. All serious treatment emergent adverse effects, were deemed not related to plozasiran. Overall, then, the deep, consistent, and sustained reductions in APOC3 and triglycerides and improvement in multiple atherogenic lipoprotein levels, gives us a level of confidence as we initiate Phase 3 studies in patients with SHTG.
These 3 Phase 3studies are called SHASTA-3, SHASTA-4, and SHASTA-5. I will start with descriptions of SHASTA-3 and 4 since they are very similar to each other, and are being initiated now. Both studies are global, randomized, double-blind, placebo-controlled Phase 3 studies to evaluate the efficacy and safety of plozasiran in adult subjects with SHTG. Eligible subjects will be randomized to receive either plozasiran at 25 milligrams or placebo. The double-blind treatment period duration will be one year, where subjects receive a total of four quarterly doses. After month 12, eligible subjects will be referred, I'm sorry, will be offered an opportunity, to continue in an optional open-label extension. The primary endpoint for the studies is placebo-adjusted percent change in fasting triglyceride levels at month 12.
SHASTA-3 is planned to include approximately 400 subjects, and SHASTA-4 is planned to include approximately 300 subjects. We've begun activating sites for these studies and will activate others as quickly as possible. There are already patients in screening, so we expect to have the first patient's dose soon. This has moved very rapidly, and I'm proud of the work done, by all of the Arrowhead teams involved, our CRO, and the investigators and institutions that are participating in the studies. I also want to give a quick update on SHASTA-5. We are still finalizing some details about the study, but it is currently planned as a multicenter, randomized, double-blind, placebo-controlled Phase 3 study to evaluate plozasiran versus placebo in approximately 140 adult subjects with SHTG at high risk of pancreatitis.
Subjects must have triglyceride levels greater than 880 milligrams per deciliter and a history of acute pancreatitis events. It will be randomized in a one-to-one ratio to receive either plozasiran 25 milligrams or placebo dosed quarterly. The primary endpoint of the study is incidence of adjudicated acute pancreatitis events, compared with placebo. Now that SHASTA-3 and SHASTA-4 have been initiated, the plozasiran clinical development team is finalizing the SHASTA-5 design and working to initiate the study as soon as possible. We think performing a dedicated study in this high-risk population, if successful, will be useful for payers on a global basis. Next, I want to highlight some upcoming presentations on plozasiran and zodasiran. At the European Atherosclerosis Society, or EAS, on May 28 and 29, we will be presenting final results from the MUIR study of plozasiran and the ARCHES-2 study of zodasiran.
Both of these studies are in mixed hyperlipidemia populations recruited with identical enrollment criteria. For clarity, this field is moving away from the term mixed dyslipidemia, to the term mixed hyperlipidemia. So, expect to see and hear the two terms used synonymously in the short-term, but in the longer term, expect to hear mixed hyperlipidemia used more frequently. I already described plozasiran mechanistically, but to review, zodasiran is designed to reduce production of angiopoietin-like protein 3, or ANGPTL3, which, like APOC3, is a hepatocyte-expressed regulator of triglyceride metabolism. However, ANGPTL3, while similar to APOC3 in having an effect on lipoprotein lipase, also impacts endothelial lipase and non-LDL receptor-mediated uptake of LDL.
As such, by reducing ANGPTL3, zodasiran causes some downstream changes in atherogenic lipids and lipoproteins that are different than those produced by plozasiran. These include additional reductions in LDL-C and apolipoprotein B, while also driving similar reductions in triglycerides, remnant cholesterol, and non-HDL cholesterol as those seen with plozasiran. This is why we are taking a very close look at the various options for Phase 3 clinical development in an ASCVD population with mixed hyperlipidemia, a population of patients estimated to be around 20 million in the U.S. alone. We have engaged with external advisors and have completed an exhaustive analysis of the potential designs and studies. We have recently completed a submission to the FDA on a potential study design, and will have additional interactions on the specifics over the coming 30 to 60 days.
We will talk more about our plans after we receive feedback from FDA, and other key agencies. Upstream of that, the coming EAS presentations will be a good way, for folks outside the company to see some of the data that have gone into our thinking. We and our KOL advisors believe that there really is not a bad choice between the two. As you will see, results from both MUIR and ARCHES-2 look compelling. Now moving to the PALISADE study of plozasiran in patients with FCS. PALISADE included FCS patients who were genetically confirmed, and somewhere around half who were clinically diagnosed. FCS is a severe and ultra-rare genetic condition, often caused by various monogenic mutations. FCS leads to extremely high triglyceride levels, which can lead to various serious signs and symptoms, most notably including acute and potentially fatal pancreatitis.
Currently, the available therapeutic options leave most FCS patients persistently vulnerable to pancreatitis. The PALISADE study is a Phase 3 placebo-controlled study to evaluate the efficacy and safety of plozasiran in adults with FCS. The primary endpoint of the study is percent change from baseline in fasting to triglycerides at month 10. A total of 75 subjects were randomized to receive 25 milligrams of plozasiran, 50 milligrams of plozasiran, or matching placebo once every 3 months. Participants who completed the randomized period, are eligible to continue in a two-part extension period where all participants are receiving plozasiran. The last study visit for the last patient enrolled in PALISADE occurred about a week ago. This will be Arrowhead's first completed Phase 3 study and represents a significant milestone for the company.
Importantly, it brings plozasiran potentially closer to the FCS patients that may benefit. Our goal now is to work efficiently to generate initial study results and provide a top-line data readout as soon as our Cardiometabolic Webinar next month, and subsequently present a fuller data set at an appropriate medical meeting. This is an exciting time at Arrowhead as we eagerly await these results. I'll now turn the call over to James.
James Hamilton: Thank you, Bruce. The discovery and early development teams made some notable progress over the last quarter, and we also have a busy several months ahead with the Summer Series of R&D webinars that Chris mentioned earlier. We do an enormous amount of work in seeking to innovate new medicines that is, often only recognized once there is a clinical candidate. So I wanted to talk for a moment, about how we see our priorities and the goals of the team. Number one, is to push the TRiMTM platform to new cell types and continually seek to optimize the safety, and activity of each construct. Number two, is to develop new candidates against attractive gene targets where using RNA interference, is the only or best method to inhibit the target.
Number three, is to conduct IND-enabling non-clinical studies and first in human clinical studies in the most efficient manner possible, to get meaningful readouts that accelerate mid and late stage development. And number four, is to develop assets which can be readily partnered and support business development activities which remains a key strategic focus as our pipeline has continued to grow. I think, we've made good strides in these areas recently, so let's talk about a few examples. We've continued to expand the reach of the TRiMTM platform. We now have clinical programs and three different tissue types including liver, lung and muscle. We also expect in the very near future, to have clinical programs and two additional tissues specifically CNS and adipose.
Each one of these expands the universe of diseases we can address and the number of patients that we can potentially help. During the CNS R&D webinar scheduled for September, we plan on giving an update on a specific candidate that is currently undisclosed and highlight the significant progress we're making on a subcutaneously administered construct designed to deliver siRNA across the blood-brain barrier to the CNS without the need for intrathecal administration. This is a much more patient-friendly mode of administration and may be able to access tissues in the deep brain that, have been difficult to access with IT injections. This is potentially a big step forward for us, and the field overall and we are excited about the progress. During the obesity and Metabolic R&D Webinar currently scheduled for August, we will also talk about platform advancements and pipeline expansion.
The pipeline is expanding by two programs and we will talk about the addition of adipocytes as a new cell type we can access with the TRiMTM platform. As you all know the obesity space has recently gained a lot of attention with the success of GLP-1 agents. However, we see a clear areas that remain underserved. We have not disclosed much publicly about the development of our two obesity programs. So this event will be a good opportunity to get people up to speed on where we are and where we see the clinical development programs going. Moving on to current clinical development programs, during the last quarter we brought two new agents into the clinic. First, AROCFB is designed to reduce hepatic expression of complement factor B which plays an important regulatory role, in amplifying complement alternative pathway activation, and has been identified as a promising therapeutic target.
AROCFB is being developed as a potential treatment, for complement mediated kidney diseases such as IgA nephropathy which is the most common glomerular disease worldwide, and carries a high lifetime risk, of progression to end-stage renal disease. Additionally, AROCFB may have clinical applications in non-renal diseases, involving complement activation. Last month, we announced that we had dosed the first subjects in a Phase 1, 2a clinical trial of AROCFB designed to enroll up to 66 healthy volunteers, and patients with complement-mediated kidney disease. A second new clinical program, ARO-DM1, is designed to reduce expression of the dystrophia myotonica protein kinase or DMPK gene in the muscle as a potential treatment for patients with type 1 myotonic dystrophy or DM1.
Pathogenesis of DM1 is driven by abnormal DMPK transcripts that, cause misregulated splicing, known as splicopathy, for certain messenger RNAs, which are directly linked to the clinical manifestations of DM1. In March, we announced that we had initiated and dosed the first subjects in a Phase 1, 2a double-blinded placebo-controlled dose escalating study, to evaluate single and multiple ascending doses of ARO-DM1 in up to 48 subjects with DM1. Moving on to our clinical stage pulmonary programs, ARO-RAGE, ARO-MUC5AC and ARO-MMP7. We continue to enroll patients across all three programs, and are confident that we will have multiple opportunities for clinical readouts this year. The first of these will occur at ATS later this month. We are scheduled to present a poster on ARO-RAGE which will include data from mild-to-moderate asthma patient cohorts that, we have not reported on previously.
To review, ARO-RAGE is designed to reduce expression of the receptor for Advanced Glycation End products or RAGE as a potential treatment for inflammatory pulmonary diseases. We are currently enrolling asthma patients with high baseline levels of fractional exhaled nitric oxide or FeNO, which is a biomarker of IL-13 driven type 2 inflammation in the lung. We are expecting to have high FeNO cohorts enrolled and dosed late this year. The next programs are ARO-MUC5AC, which is designed to reduce production of Mucin 5AC or MUC5AC as a potential treatment for muco-obstructive pulmonary diseases, and ARO-MMP7, which is designed to reduce the expression of matrix metalloproteinase 7 or MMP7 as a potential treatment for idiopathic pulmonary fibrosis or IPF.
Both ARO-MUC5AC and ARO-MMP7 have already enrolled and dosed healthy volunteers, and we anticipate the patient cohorts will be enrolled and dosed in time to enable initial clinical readouts in the second half of this year. Our pulmonary R&D Webinar scheduled for July will review these programs in more detail. I will now turn the call over to Ken.
Ken Myszkowski: Thank you, James, and good afternoon, everyone. As we reported today, our net loss for the quarter ended March 31, 2024, was $125.3 million or $1.02 per share based on $123.3 million fully diluted weighted average shares outstanding. This compares with net income of $48.7 million or $0.45 per share based on $108.1 million fully diluted weighted average shares outstanding, for the quarter ended March 31, 2023. No revenue was recorded in the quarter and the quarter ended March 31, 2024. Revenue of $146.3 million, was recorded in the quarter ended March 31, 2023. Revenue is recognized as we complete our performance obligations, or key developmental milestones are reached. Revenue in the prior period primarily related to the recognition of payments received, from our license and collaboration agreements with Takeda and GSK.
Total operating expenses for the quarter ended March 31, 2024 were $126.2 million, compared to $98.1 million for the quarter ended March 31, 2023. The key drivers of this change were increased research and development costs, primarily compensation costs, and candidate costs as the company's pipeline of clinical candidates, has increased and advanced into later stages of development. Net cash used in operating activities during the quarter ended March 31, 2024 was $92.4 million, compared with $31.7 million during the quarter ended March 31, 2023. The increase in cash used in operating activities is primarily driven by higher R&D expenses as well as the prior period including $40 million cash receipt of revenue milestones. Construction of our Verona facility is effectively complete.
We are currently undertaking commissioning and qualification activities which puts us on track for manufacturing drug material to support our clinical trials later this year. We expect final payments to be made over the next several months totaling $50 million after which we expect capital expenditures to be nominal. Turning to our balance sheet, our cash and investments totaled $523.1 million at March 31, 2024, compared to $403.6 million at September 30, 2023. The increase in our cash and cash and excuse me the increase in our cash and investments was primarily related to the $450 million equity issuance, partially offset by our ongoing cash burn. Our common shares outstanding at March 31, 2024 were $124.1 million. With that brief overview I will now turn the call back to Chris.
Chris Anzalone: Thanks Ken. This has been another quarter of solid execution for Arrowhead. Our Phase 3 PALISADE study of plozasiran is clinically complete, which sets us up to take the next step in growth for Arrowhead, as we make the transition into a commercial organization provided we receive regulatory approval. We also initiated that the SHASTA-3 and 4 Phase 3 studies of plozasiran in patients with SHTG and are finalizing the design and preparations to initiate SHASTA-5 in patients with SHTG at high risk of acute pancreatitis. We are waiting for FDA feedback on a Phase 3 program to address ASCVD, which we will discuss after we reach regulatory alignment. In addition to progress in cardiometabolic, we have been very productive in platform development and pipeline expansion.
Our TRiMTM platform can now deliver to CNS and adipose tissue, and we will soon have new clinical programs targeting those tissues. We also initiated clinical studies during the quarter for two new candidates ARO-DM1 and AROCFB. Thank you for joining us today and I would now like to open the call to your questions. Operator.
Operator: Thank you. [Operator Instructions] Our first question comes from the line of Luca Issi from RBC Capital. Your line is now open.
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