0001564590-20-054893 | 10-K | XBRL Viewer | Arrowhead Pharmaceuticals INC

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Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Sep. 30, 2020	Nov. 16, 2020	Mar. 31, 2020
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Trading Symbol	ARWR
Entity Registrant Name	ARROWHEAD PHARMACEUTICALS, INC.
Entity Central Index Key	0000879407
Current Fiscal Year End Date	--09-30
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock Shares Outstanding		102,756,771
Entity Public Float			$ 2.9
Entity Interactive Data Current	Yes
Security12b Title	Common Stock, $0.001 par value
Security Exchange Name	NASDAQ
Entity File Number	001-38042
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	46-0408024
Entity Address, Address Line One	177 E. Colorado Blvd
Entity Address, Address Line Two	Suite 700
Entity Address, City or Town	Pasadena
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91105
City Area Code	626
Local Phone Number	304-3400
Document Annual Report	true
Document Transition Report	false
Documents Incorporated by Reference	Portions of the Definitive Proxy Statement to be filed for Arrowhead Pharmaceuticals Inc.’s 2021 Annual Meeting of Stockholders are incorporated by reference into Part III hereof.

Consolidated Balance Sheets - USD ($)	Sep. 30, 2020	Sep. 30, 2019
CURRENT ASSETS
Cash and cash equivalents	$ 143,582,667	$ 221,804,128
Accounts receivable	845,673	661,361
Prepaid expenses	4,250,896	3,317,999
Other current assets	1,781,691	2,563,435
Marketable securities	85,019,719
Short term investments	86,889,751	36,899,894
TOTAL CURRENT ASSETS	322,370,397	265,246,817
Property and equipment, net	30,880,868	23,214,899
Intangible assets, net	15,363,151	17,063,580
Long term investments	137,486,883	44,175,993
Right-of-use assets	16,137,085
Other assets	265,359	144,148
TOTAL ASSETS	522,503,743	349,845,437
CURRENT LIABILITIES
Accounts payable	6,828,909	7,649,921
Accrued expenses	5,388,556	6,504,729
Accrued payroll and benefits	8,060,854	4,955,887
Lease liabilities	1,094,777
Deferred rent		173,952
Deferred revenue	19,291,075	77,769,629
Other current liabilities	17,262	16,561
TOTAL CURRENT LIABILITIES	40,681,433	97,070,679
LONG-TERM LIABILITIES
Lease liabilities, net of current portion	20,043,178
Deferred rent, net of current portion		3,703,364
Deferred revenue, net of current portion		5,035,142
TOTAL LONG-TERM LIABILITIES	20,043,178	8,738,506
Commitments and contingencies (Note 7)
Arrowhead Pharmaceuticals, Inc. stockholders' equity:
Common stock, $0.001 par value; 145,000,000 shares authorized; 102,376,303 and 95,506,271 shares issued and outstanding as of September 30, 2020 and September 30, 2019, respectively	194,746	187,876
Additional paid-in capital	965,410,146	664,086,155
Accumulated other comprehensive income (loss)	18,433	(391,624)
Accumulated deficit	(503,844,193)	(419,290,967)
Total Arrowhead Pharmaceuticals, Inc. stockholders' equity	461,779,132	244,591,440
Noncontrolling interest		(555,188)
TOTAL STOCKHOLDERS’ EQUITY	461,779,132	244,036,252
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 522,503,743	$ 349,845,437

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Sep. 30, 2019
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	145,000,000	145,000,000
Common stock, shares issued	102,376,303	95,506,271
Common stock, shares outstanding	102,376,303	95,506,271

Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
REVENUE	$ 87,992,066	$ 168,795,577	$ 16,142,321
Type of Revenue [Extensible List]	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember
OPERATING EXPENSES
Research and development	$ 128,874,979	$ 81,048,686	$ 52,968,505
General and administrative expenses	52,275,890	26,556,257	19,110,051
TOTAL OPERATING EXPENSES	181,150,869	107,604,943	72,078,556
OPERATING INCOME (LOSS)	(93,158,803)	61,190,634	(55,936,235)
OTHER INCOME (EXPENSE)
Interest income (expense), net	9,190,501	6,957,768	1,048,523
Change in value of derivatives			432,141
Other Income (expense)	(582,524)		7,493
TOTAL OTHER INCOME (EXPENSE)	8,607,977	6,957,768	1,488,157
INCOME (LOSS) BEFORE INCOME TAXES	(84,550,826)	68,148,402	(54,448,078)
Provision for income taxes	(2,400)	(173,553)	(2,400)
NET INCOME (LOSS)	$ (84,553,226)	$ 67,974,849	$ (54,450,478)
NET INCOME (LOSS) PER SHARE - BASIC	$ (0.84)	$ 0.72	$ (0.65)
NET INCOME (LOSS) PER SHARE - DILUTED	$ (0.84)	$ 0.69	$ (0.65)
Weighted average shares outstanding - basic	100,722,224	93,858,857	83,638,469
Weighted average shares outstanding - diluted	100,722,224	98,607,815	83,638,469
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Foreign currency translation adjustments	$ 410,057	$ (370,060)	$ (54,796)
COMPREHENSIVE INCOME (LOSS)	$ (84,143,169)	$ 67,604,789	$ (54,505,274)

Consolidated Statement of Stockholders' Equity - USD ($)	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Non-controlling Interest
Beginning Balance, Amount at Sep. 30, 2017	$ 80,867,162	$ 167,155	$ 514,037,301	$ 33,232	$ (432,815,338)	$ (555,188)
Beginning Balance, Shares at Sep. 30, 2017		74,785,426
Stock-based compensation	8,454,607		8,454,607
Exercise of stock options, Amount	2,656,710	$ 605	2,656,105
Exercise of stock options, Shares		604,611
Exercise of warrants, Amount	1,237,429	$ 288	1,237,141
Exercise of warrants, Shares		288,473
Common stock - restricted stock units vesting, Amount	(54,668)	$ 1,327	(55,995)
Common stock - restricted stock units vesting, Shares		1,326,792
Common stock - issued for cash, Amount	56,585,035	$ 11,500	56,573,535
Common stock - issued for cash, Shares		11,500,000
Foreign currency translation adjustments	(54,796)			(54,796)
Net income (loss)	(54,450,478)				(54,450,478)
Ending Balance, Amount at Sep. 30, 2018	95,241,001	$ 180,875	582,902,694	(21,564)	(487,265,816)	(555,188)
Ending Balance, Shares at Sep. 30, 2018		88,505,302
Stock-based compensation	12,393,323		12,393,323
Exercise of stock options, Amount	8,275,410	$ 1,543	8,273,867
Exercise of stock options, Shares		1,542,795
Common stock - restricted stock units vesting, Amount		$ 2,197	(2,197)
Common stock - restricted stock units vesting, Shares		2,197,305
Common stock - issued for cash, Amount	60,521,729	$ 3,261	60,518,468
Common stock - issued for cash, Shares		3,260,869
Foreign currency translation adjustments	(370,060)			(370,060)
Net income (loss)	67,974,849				67,974,849
Ending Balance, Amount at Sep. 30, 2019	244,036,252	$ 187,876	664,086,155	(391,624)	(419,290,967)	(555,188)
Ending Balance, Shares at Sep. 30, 2019		95,506,271
Stock-based compensation	43,382,988		43,382,988
Exercise of stock options, Amount	$ 7,468,899	$ 1,111	7,467,788
Exercise of stock options, Shares	1,111,128	1,111,128
Common stock - restricted stock units vesting, Amount		$ 1,159	(1,159)
Common stock - restricted stock units vesting, Shares		1,158,904
Common stock - issued for cash, Amount	$ 250,478,974	$ 4,600	250,474,374
Common stock - issued for cash, Shares		4,600,000
Foreign currency translation adjustments	410,057			410,057
Deconsolidation of Ablaris Therapeutics, Inc.	555,188					$ 555,188
Net income (loss)	(84,553,226)				(84,553,226)
Ending Balance, Amount at Sep. 30, 2020	$ 461,779,132	$ 194,746	$ 965,410,146	$ 18,433	$ (503,844,193)
Ending Balance, Shares at Sep. 30, 2020		102,376,303

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (84,553,226)	$ 67,974,849	$ (54,450,478)
Change in value of derivatives			(432,141)
Stock-based compensation	43,382,988	12,393,323	8,454,607
Depreciation and amortization	5,942,264	4,439,144	4,699,275
Amortization/(accretion) of note premiums	525,305	1,069,070	383,075
Changes in operating assets and liabilities:
Accounts receivable	(184,312)	(333,986)	(259,578)
Prepaid expenses and other current assets	(387,464)	(3,710,515)	319,166
Deferred revenue	(63,513,696)	82,804,171	(5,269,140)
Accounts payable	(821,012)	4,843,825	(1,270,416)
Accrued expenses	1,989,496	2,450,079	1,016,506
Other	2,228,087	1,104,963	(414,293)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(95,391,570)	173,034,923	(47,223,417)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(11,951,712)	(12,001,225)	(1,421,252)
Purchases of investments	(278,964,290)	(90,266,001)	(52,083,131)
Proceeds from sale of investments	50,138,238	54,521,219	46,069,420
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(240,777,764)	(47,746,007)	(7,434,963)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable		(2,415,150)	(208,506)
Payment of taxes for net share settled restricted stock unit issuances			(54,667)
Proceeds from the exercises of stock options	7,468,899	8,275,410	3,631,164
Proceeds from the issuance of common stock	250,478,974	60,521,739	56,585,035
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	257,947,873	66,381,999	59,953,026
NET INCREASE (DECREASE) IN CASH	(78,221,461)	191,670,915	5,294,646
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	221,804,128	30,133,213	24,838,567
CASH AND CASH EQUIVALENTS AT END OF PERIOD	143,582,667	221,804,128	30,133,213
Supplementary disclosures:
Interest paid		(27,437)	(173,381)
Income Taxes (Paid) Refunded	$ 103,437	$ (302,400)	$ (2,400)

Organization and Significant Accounting Policies

12 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Organization and Significant Accounting Policies

NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business and Recent Developments

Arrowhead Pharmaceuticals, Inc. develops medicines that treat intractable diseases by silencing the genes that cause them. Using a broad portfolio of RNA chemistries and efficient modes of delivery, Arrowhead therapies trigger the RNA interference mechanism to induce rapid, deep and durable knockdown of target genes. RNA interference, or RNAi, is a mechanism present in living cells that inhibits the expression of a specific gene, thereby affecting the production of a specific protein. Arrowhead’s RNAi-based therapeutics leverage this natural pathway of gene silencing. The Company's pipeline includes ARO-APOC3 for hypertriglyceridemia, ARO-ANG3 for dyslipidemia, ARO-HSD for liver disease, ARO-ENaC for cystic fibrosis, ARO-HIF2 for renal cell carcinoma, ARO-LUNG2 as a candidate to treat chronic obstructive pulmonary disorder (“COPD”) and ARO-COV for treatment for the current novel coronavirus that causes COVID-19 and other possible future pulmonary-borne pathogens. ARO-JNJ1, ARO-JNJ2 and ARO-JNJ3 are being developed for undisclosed liver-expressed targets under a collaboration agreement with Janssen Pharmaceuticals, Inc. (“Janssen”). ARO-AAT for liver disease associated with alpha-1 antitrypsin deficiency (“AATD”) was out-licensed to Takeda Pharmaceuticals U.S.A., Inc. (“Takeda”) in October 2020. ARO-HBV (JNJ-3989) for chronic hepatitis B virus was out-licensed to Janssen in October 2018. ARO-LPA (AMG 890)for cardiovascular disease was out-licensed to Amgen Inc. (“Amgen”) in 2016.

Arrowhead operates a lab facility in Madison, Wisconsin, where the Company’s research and development activities, including the development of RNAi therapeutics, are based. The Company’s principal executive offices are located in Pasadena, California. In March 2020, the Company entered into a sublease for additional research and development facility space in San Diego, California as discussed further in Note 8 below.

During fiscal year 2020, the Company has continued to develop its pipeline and partnered candidates. Regarding the Company’s wholly-owned pipeline candidates, the Company dosed its first patients in three of its pipeline candidate studies: ARO-HSD1001, a phase 1/2 clinical study of ARO-HSD; ARO-ENaC1001, a phase 1/2 clinical study of ARO-ENaC and ARO-HIF21001, a phase 1b study of ARO-HIF2. The Company also presented new clinical data on its two cardiometabolic candidates, ARO-APOC3 and ARO-ANG3, at multiple medical meetings, including the European Society of Cardiology Congress and the American Heart Association Scientific Sessions. Finally, the Company is also progressing ARO-LUNG2 toward entering clinical trials and is continuing to perform discovery work to identify new candidates.

The Company’s partnered candidates under its collaboration agreements also continue to progress. Janssen began dosing patients in a phase 2b triple combination study called REEF-1, designed to enroll up to 450 patients with chronic hepatitis B infection, and in connection with the start of this study Arrowhead earned a $25.0 million milestone payment under the License Agreement (“Janssen License Agreement”). The Company is currently performing discovery, optimization and preclinical research and development for ARO-JNJ1, ARO-JNJ2 and ARO-JNJ3 for Janssen as part of the Research Collaboration and Option Agreement (“Janssen Collaboration Agreement”). Under the terms of the Janssen agreements taken together, the Company has received $175.0 million as an upfront payment, $75.0 million in the form of an equity investment by JJDC in Arrowhead Common Stock, two $25.0 million milestone payments and may receive up to $1.6 billion in development and sales milestones payments for the Janssen License Agreement, and up to $1.9 billion in development and sales milestone payments for the three additional targets covered under the Janssen Collaboration Agreement. The Company is further eligible to receive tiered royalties up to mid-teens under the Janssen License Agreement and up to low teens under the Janssen Collaboration Agreement on product sales.

The Company’s collaboration agreement with Amgen for Olpasiran (previously referred to as AMG 890 or ARO-LPA), (the “Second Collaboration and License Agreement” or “Olpasiran Agreement”), continues to progress. In July 2020, Amgen initiated a Phase 2 clinical study, which resulted in a $20.0 million milestone payment to the Company. The Company has received $35.0 million in upfront payments, $21.5 million in the form of an equity investment by Amgen in the Company’s Common Stock, $30.0 million in milestone payments, and may receive up to an additional $400.0 million in remaining development, regulatory and sales milestone payments. The Company is eligible to receive up to low double-digit royalties for sales of products under the Olpasiran Agreement. On October 7, 2020, the Company entered into an Exclusive License and Co-Funding Agreement (the “Takeda License Agreement”) with Takeda. Under the Takeda License Agreement, Takeda and the Company will co-develop the Company’s ARO-AAT program. Within the United States, ARO-AAT, if approved, will be co-commercialized under a 50/50 profit sharing structure. Outside the United States, Takeda will lead the global commercialization strategy and receive an exclusive license to

commercialize ARO-AAT with the Company eligible to receive tiered royalties of 20% to 25% on net sales. The Company will receive $300.0 million as an upfront payment and is eligible to receive potential development, regulatory and commercial milestones of up to $740.0 million.

The revenue recognition for these collaboration agreements is discussed further in Note 2 below.

The Company is actively monitoring the ongoing COVID-19 pandemic. The financial results for the year ended September 30, 2020 were not significantly impacted by COVID-19. The Company temporarily paused enrollment in its two ARO-AAT studies, SEQUOIA and the ARO-AAT 2002 study, but resumed the process of screening and enrolling patients during the three months ended June 30, 2020. During the pause in enrollment, patients already enrolled in these studies continued to be dosed per protocol and continued to come in for their follow up visits. Additional delays have occurred in the Company’s earlier stage programs, but the Company does not expect a material impact to any program’s anticipated timelines. Several of the Company’s other clinical candidates are in the start-up stage (ARO-HSD, ARO-HIF2 and ARO-ENaC), during which significant clinical costs will continue to be incurred. Additionally, the Company’s operations at its research and development facilities in Madison, Wisconsin and San Diego, California, and its corporate headquarters in Pasadena, California have continued to operate with limited impact, other than for enhanced safety measures, including work from home policies. However, the Company cannot predict the impact of the progression of COVID-19 will have on future financial results due to a variety of factors including the ability of the Company’s clinical sites to continue to enroll subjects, the ability of the Company’s suppliers to continue to operate, the continued good health and safety of the Company’s employees, and ultimately the length of the COVID-19 pandemic.

Liquidity

The Consolidated Financial Statements have been prepared in conformity with the accounting principles generally accepted in the United States of America (“GAAP”), which contemplate the continuation of the Company as a going concern. Historically, the Company’s primary source of financing has been through the sale of its securities. Research and development activities have required significant capital investment since the Company’s inception. The Company expects its operations to continue to require cash investment to pursue its research and development goals, including clinical trials and related drug manufacturing.

At September 30, 2020, the Company had $143.6 million in cash and cash equivalents (including $1.8 million in restricted cash), $86.9 million in short-term investments and $85.0 million in marketable securities, and $137.5 million in long-term investments to fund operations. During the year ended September 30, 2020, the Company’s cash and investments balance increased by $150.1 million, which was primarily the result of purchases of investments and marketable securities of $279.0 million and cash outflow primarily related to operations of $95.4 million, partially offset by the December 2019 securities offering that generated $250.5 million in net cash proceeds for the Company, as discussed further in Note 6 below, as well as maturities of investments of $50.1 million.

Summary of Significant Accounting Policies

Principles of Consolidation—The Consolidated Financial Statements include the accounts of Arrowhead and its Subsidiaries. Arrowhead’s primary operating subsidiary is Arrowhead Madison, which is located in Madison, Wisconsin, where the Company’s research and development facility is located. All significant intercompany accounts and transactions are eliminated in consolidation.

Basis of Presentation and Use of Estimates—The preparation of financial statements in conformity GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Additionally, certain reclassifications have been made to prior period financial statements to conform to the current period presentation.

Cash and Cash Equivalents—The Company considers all liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Included within Cash and cash equivalents on the Consolidated Balance Sheets is $1.8 million and $1.0 restricted cash at September 30, 2020 and September 30, 2019, respectively. Amounts included in restricted cash are primarily held as collateral associated with a letter of credit for the Company’s lease for its corporate headquarters in Pasadena, California.

Concentration of Credit Risk—The Company maintains several bank accounts primarily at two financial institutions for its operations. These accounts are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per institution. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held.

Investments—The Company may invest excess cash balances in short-term and long-term marketable debt and equity securities. Investments may consist of certificates of deposit, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its investment in marketable securities in accordance with Financial Accounting Standards Board (“FASB”) ASC 320, Investments – Debt and Equity Securities and ASC 321, Investments in Equity Securities. ASC 320-Investments-Debt and Equity Securities requires debt securities to be classified into three categories:

Held-to-Maturity—Debt securities that the entity has the positive intent and ability to hold to maturity are reported at amortized cost.

Trading Securities—Debt securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings.

Available-for-Sale—Debt securities not classified as either securities held-to-maturity or trading securities are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity.

The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. During the years ended September 30, 2020, 2019 and 2018, all of the Company’s debt securities were classified as held-to-maturity.

Held-to-maturity investments are measured and recorded at amortized cost on the Company’s Consolidated Balance Sheet. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary.

During the year ended September 30, 2020, the Company purchased shares of mutual funds that invest in marketable debt securities such as U.S. government bonds, U.S. government agency bonds, corporate bonds, and other asset backed debt securities. The Company accounts for these securities using the guidance from FASB ASC 321, Investments-Equity Securities. These securities are recorded on the Company’s Consolidated Balance Sheet as “marketable securities” and recorded at fair value. All unrealized gains/losses associated with these securities are recorded in the Company’s Consolidated Statement of Operations and Comprehensive Income (Loss).

Property and Equipment—Property and equipment are recorded at cost, which may equal fair market value in the case of property and equipment acquired in conjunction with a business acquisition. Depreciation of property and equipment is recorded using the straight-line method over the respective useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized over the lesser of the expected useful life or the remaining lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.

Intangible Assets Subject to Amortization—Intangible assets subject to amortization include certain patents and license agreements. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable and are also reviewed annually to determine whether any impairment is necessary.

Contingent Consideration—The consideration for the Company’s acquisitions may include future payments that are contingent upon the occurrence of a particular event. For example, milestone payments might be based on the achievement of various regulatory approvals or future sales milestones, and royalty payments might be based on drug product sales levels. The Company records a contingent consideration obligation for such contingent payments at fair value on the acquisition date. The Company estimates the fair value of contingent consideration obligations through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at an estimated fair value at the balance sheet date. Changes in the fair value of the contingent consideration obligations are recognized within the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flows from products upon commercialization, changes in the assumed achievement or timing of any development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. These fair value measurements are based on significant inputs not observable in the market. Substantial judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense the Company records in any given period. The Company determined the fair value of its contingent consideration obligation to be $0 at September 30, 2020 and September 30, 2019.

Revenue Recognition— On October 1, 2018, the Company adopted FASB Topic 606 – Revenue for Contracts from Customers which amended revenue recognition principles and provides a single, comprehensive set of criteria for revenue recognition within and across all industries. The Company’s adoption of the new revenue standard did not have a material impact on its Consolidated Financial Statements. The Company has not yet achieved commercial sales of its drug candidates to date, however, the new standard is applicable to the Company’s ongoing licensing and collaboration agreements, including those with Amgen, Janssen, and Takeda and the analysis of the impact of this guidance on those agreements is discussed further in Note 2 below.

The new revenue standard provides a five-step framework for recognizing revenue as control of promised goods or services is transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of the new revenue standard, the Company performs the following five steps: (i) identify the contract; (ii) identify the performance obligations; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. At contract inception, the Company assesses whether the goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation, or whether they are not distinct and are combined with other goods and services until a distinct bundle is identified. The Company then determines the transaction price, which typically includes upfront payments and any variable consideration that the Company determines is probable to not cause a significant reversal in the amount of cumulative revenue recognized when the uncertainty associated with the variable consideration is resolved. The Company then allocates the transaction price to each performance obligation and recognizes the associated revenue when (or as) each performance obligation is satisfied.

The Company recognizes the transaction price allocated to upfront license payments as revenue upon delivery of the license to the customer and resulting ability of the customer to use and benefit from the license, if the license is determined to be distinct from the other performance obligations identified in the contract. These other performance obligations are typically to perform research and development services for the customer, often times relating to the candidate that the customer is licensing. If the license is not considered to be distinct from other performance obligations, the Company assesses the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied at a point in time or over time. If the performance obligation is satisfied over time, the Company then determines the appropriate method of measuring progress for purposes of recognizing revenue from license payments. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the related revenue recognition.

Typically, the Company’s collaboration agreements entitle it to additional payments upon the achievement of milestones or royalties on sales. The milestones are generally categorized into three types: development milestones, generally based on the initiation of toxicity studies or clinical trials; regulatory milestones, generally based on the submission, filing or approval of regulatory applications such as a Clinical Trial Application (“CTA”) or a New Drug Application (“NDA”) in the United States; and sales-based milestones, generally based on meeting specific thresholds of sales in certain geographic areas. The Company evaluates whether it is probable that the consideration associated with each milestone or royalty will not be subject to a significant reversal in the cumulative amount of revenue recognized. Amounts that meet this threshold are included in the transaction price using the most likely amount method, whereas amounts that do not meet this threshold are excluded from the transaction price until they meet this threshold. At the end of each subsequent reporting period, the Company re-evaluates the probability of a significant reversal of the cumulative revenue recognized for our milestones and royalties, and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and net income in the Company’s Consolidated Statement of Operations and Comprehensive Income (Loss). Typically, milestone payments and royalties are achieved after the Company’s performance obligations associated with the collaboration agreements have been completed and after the customer has assumed responsibility for the respective clinical or pre-clinical program. Milestones or royalties achieved after the Company’s performance obligations have been completed are recognized as revenue in the period the milestone or royalty was achieved. If a milestone payment is achieved during the performance period, the milestone payment would be recognized as revenue to the extent performance had been completed at that point, and the remaining balance would be recorded as deferred revenue.

The new revenue standard requires the Company to assess whether a significant financing component exists in determining the transaction price. The Company performs this assessment at the onset of its licensing or collaboration agreements. Typically, a significant financing component does not exist because the customer is paying for a license or services in advance with an upfront payment. Additionally, future royalty payments are not substantially within the control of the Company or the customer.

The new revenue standard requires the Company to allocate the arrangement consideration on a relative standalone selling price basis for each performance obligation after determining the transaction price of the contract and identifying the performance obligations to which that amount should be allocated. The relative standalone selling price is defined in the new revenue standard as the price at which an entity would sell a promised good or service separately to a customer. If other observable transactions in which the Company has sold the same performance obligation separately are not available, the Company estimates the standalone selling price of each performance obligation. Key assumptions to determine the standalone selling price may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

Whenever the Company determines that goods or services promised in a contract should be accounted for as a combined performance obligation over time, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. Revenue is recognized using the proportional performance method. Labor hours or costs incurred are typically used as the measure of performance. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations. If the Company determines that the performance obligation is satisfied over time, any upfront payment received is initially recorded as deferred revenue on the Company’s Consolidated Balance Sheets.

Certain judgments affect the application of the Company’s revenue recognition policy. For example, the Company records short-term and long-term deferred revenue based on its best estimate of when such revenue will be recognized. Short-term deferred revenue consists of amounts that are expected to be recognized as revenue in the next 12 months, and long-term deferred revenue consists of amounts that the Company does not expect will be recognized in the next 12 months. This estimate is based on the Company’s current operating plan and, if the Company’s operating plan should change in the future, the Company may recognize a different amount of deferred revenue over the next 12-month period.

Allowance for Doubtful Accounts—The Company accrues an allowance for doubtful accounts based on estimates of uncollectible revenues by analyzing historical collections, accounts receivable aging and other factors. Accounts receivable are written off when all collection attempts have failed.

Research and Development—Costs and expenses that can be clearly identified as research and development are charged to expense as incurred in accordance with FASB ASC 730-10. Included in research and development costs are operating costs, facilities, supplies, external services, clinical trial and manufacturing costs, overhead directly related to the Company’s research and development operations, and costs to acquire technology licenses.

Net Income (Loss) per Share—Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share are computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares primarily consist of stock options and restricted stock units issued to employees. During the years ended September 30, 2020, 2019 and 2018, the calculation of the effect of dilutive stock options and restricted stock units was 0 shares, 4,748,958 shares, and 0 shares, respectively. During the year ended September 30, 2020, the calculation of the effect of dilutive stock options and restricted stock units excluded all stock options and restricted stock units granted and outstanding during the period due to their anti-dilutive effect. During the year ended September 30, 2019, the calculation of the effect of dilutive stock options and restricted stock units excluded 1,007,500 stock options and 11,500 restricted stock units granted and outstanding during the period due to their anti-dilutive effect. During the year ended September 30, 2018, the calculation of the effect of dilutive stock options and restricted stock units excluded all stock options and restricted stock units granted and outstanding during the period due to their anti-dilutive effect.

Stock-Based Compensation—The Company accounts for share-based compensation arrangements in accordance with FASB ASC 718, which requires the measurement and recognition of compensation expense for all share-based payment awards to be based on estimated fair values. The Company uses the Black-Scholes option valuation model to estimate the fair value of its stock options at the date of grant. The Black-Scholes option valuation model requires the input of subjective assumptions to calculate the value of stock options. For restricted stock units, the value of the award is based on the Company’s stock price at the grant date. For performance-based restricted stock unit awards, the value of the award is based on the Company’s stock price at the grant date, with consideration given to the probability of the performance condition being achieved. The Company uses historical data and other information to estimate the expected price volatility for stock option awards and the expected forfeiture rate for all awards. Expense is recognized over the vesting period for all awards and commences at the grant date for time-based awards and upon the Company’s determination that the achievement of such performance conditions is probable for performance-based awards. This determination requires significant judgment by management.

Income Taxes—The Company accounts for income taxes under the liability method, which requires the recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. The provision for income taxes, if any, represents the tax payable for the period and the change in deferred income tax assets and liabilities during the period.

Leases—The Company determines whether a contract is, or contains, a lease at inception. The Company classifies each of its leases as operating or financing considering factors such as the length of the lease term, the present value of the lease payments, the nature of the asset being leased, and the potential for ownership of the asset to transfer during the lease term. Leases with terms greater than one-year are recognized on the Consolidated Balance Sheets as Right-of-use assets and Lease liabilities and are measured at the present value of the fixed payments due over the expected lease term minus the present value of any incentives, rebates or abatements expected to be received from the lessor. Options to extend a lease are typically excluded from the expected lease term as the exercise of the option is typically not reasonably certain. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis an amount equal to the lease payments over a similar term and in a similar economic environment. The Company records expense to recognize fixed lease payments on a straight-line basis over the expected lease term. Costs determined to be variable and not based on an index or rate are not included in the measurement of the lease liability and are expensed as incurred.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606), which will supersede nearly all existing revenue recognition guidance under GAAP. ASU No. 2014-09 provides that an entity recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption and became effective for the Company in the first quarter of fiscal 2019. In April 2016, the FASB issued an amendment to ASU No. 2014-09 with update ASU 2016-10 which provided more specific guidance around the identification of performance obligations and licensing arrangements. On October 1, 2018, the Company adopted this standard using the modified retrospective method. The Company’s implementation approach included reviewing the status of each of its ongoing license agreements and collaboration agreements and designing appropriate internal controls to enable the preparation of financial information. The Company completed its assessment of the impact of the new revenue recognition guidance and determined that there will be no material impact. The Company’s existing performance obligations under its ongoing license and collaboration agreements as of October 1, 2018 and prior were substantially completed prior to September 30, 2018. For these agreements that were ongoing as of October 1, 2018, any future option, milestone or royalty payments received will be accounted for under the sales-based royalty exception provided for under this new revenue recognition guidance. Additionally, there will be no impact to cash from or used in operating, financing or investing activities on the Company’s Consolidated Statement of Cash Flows as a result of the adoption of the new standard.

In March 2016, the FASB issued ASU No. 2016-02, Leases (Topic ASC 842). Under ASC 842, lessees are required to recognize a right-of-use asset and a right-of-use lease liability for virtually all leases other than those that meet the definition of a short-term lease. For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern (similar to current capital leases). The Company adopted this standard effective October 1, 2019 and elected the package of three practical expedients that permits an entity to i) not reassess whether expired or existing contracts contain leases, ii) not reassess lease classification for existing or expired leases, and iii) not consider whether previously capitalized initial direct costs would be appropriate under the new standard. At September 30, 2020, the Company has recorded right-of-use assets of $16.1 million and right-of-use liabilities of $21.1 million on its Consolidated Balance Sheets for its research and development facility leases in Madison, Wisconsin and San Diego, California, as well as its corporate headquarters lease in Pasadena, California, as discussed further in Note 8 below. The adoption of this standard did not have a material impact on the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) and the Company’s Consolidated Statements of Cash Flows.

In November 2018, the FASB issued ASU No. 2018-18 Collaborative Arrangements (Topic 808). This update provides clarification on the interaction between Revenue Recognition (Topic 606) and Collaborative Arrangements (Topic 808) including the alignment of unit of account guidance between the two topics. ASU 2018-18 becomes effective for the Company in the first quarter of fiscal 2021 with early adoption permitted. The Company does not expect the adoption of this update to have a material effect on its Consolidated Financial Statements.

Collaboration and License Agreements

12 Months Ended

Sep. 30, 2020

Collaboration And License Agreements [Abstract]

Collaboration and License Agreements

NOTE 2. COLLABORATION AND LICENSE AGREEMENTS

Amgen Inc.

On September 28, 2016, the Company entered into two Collaboration and License Agreements, and a Common Stock Purchase Agreement with Amgen Inc., a Delaware corporation (“Amgen”). Under one of the collaboration and license agreements (the “Second Collaboration and License Agreement” or “Olpasiran Agreement”), Amgen has received a worldwide, exclusive license to Arrowhead’s novel, RNAi Olpasiran (previously referred to as AMG 890 or ARO-LPA) program. These RNAi molecules are designed to reduce elevated lipoprotein(a), which is a genetically validated, independent risk factor for atherosclerotic cardiovascular disease. Under the other collaboration and license agreement (the “First Collaboration and License Agreement” or the “ARO-AMG1 Agreement”), Amgen received an option to a worldwide, exclusive license for ARO-AMG1, an RNAi therapy for an undisclosed genetically validated cardiovascular target. In both agreements, Amgen is wholly responsible for clinical development and commercialization. Under the terms of the agreements taken together, the Company has received $35.0 million in upfront payments, $21.5 million in the form of an equity investment by Amgen in the Company’s Common Stock, and $30.0 million in milestone payments, and may receive up to an additional $400.0 million in remaining development, regulatory and sales milestone payments. The Company is further eligible to receive up to low double-digit royalties for sales of products under the Olpasiran Agreement. In July 2019, Amgen informed the Company that it would not be exercising its option for an exclusive license for ARO-AMG1, and as such, there will be no further milestone or royalty payments under the ARO-AMG1 Agreement.

The Company substantially completed its performance obligations under the Olpasiran Agreement and the ARO-AMG1 Agreement. Future milestones and royalties achieved will be recognized in their entirety when earned. In July 2020, Amgen initiated a Phase 2 clinical study, which resulted in a $20 million milestone payment to the Company. During the years ended September 30, 2020, 2019 and 2018, the Company recognized $20.1 million, $0.3 million, and $16.1 million of Revenue associated with its agreements with Amgen, respectively. As of September 30, 2020, there were $0 million in contract assets recorded as accounts receivable and $0 contract liabilities recorded as current deferred revenue on the Company’s Consolidated Balance Sheets.

Janssen Pharmaceuticals, Inc.

On October 3, 2018, the Company entered into a License Agreement (“Janssen License Agreement”) and a Research Collaboration and Option Agreement (“Janssen Collaboration Agreement”) with Janssen Pharmaceuticals, Inc. (“Janssen”) part of the Janssen Pharmaceutical Companies of Johnson & Johnson. The Company also entered into a Stock Purchase Agreement (“JJDC Stock Purchase Agreement”) with Johnson & Johnson Innovation-JJDC, Inc. (“JJDC”), a New Jersey corporation. Under the Janssen License Agreement, Janssen has received a worldwide, exclusive license to the Company’s JNJ-3989 (ARO-HBV) program, the Company’s third-generation subcutaneously administered RNAi therapeutic candidate being developed as a potential therapy for patients with chronic hepatitis B virus infection. Beyond the Company’s Phase 1/2 study of JNJ-3989 (ARO-HBV), Janssen is also wholly responsible for clinical development and commercialization of JNJ-3989. Under the Janssen Collaboration Agreement, Janssen will be able to select three new targets against which Arrowhead will develop clinical candidates. These candidates are subject to certain restrictions and do not include candidates that already were in the Company’s pipeline. The Company will perform discovery, optimization and preclinical research and development, entirely funded by Janssen, which on its own or in combination with Janssen development work, is sufficient to allow the filing of a U.S. Investigational New Drug application or equivalent, at which time Janssen will have the option to take an exclusive license. If the option is exercised, Janssen will be wholly responsible for clinical development and commercialization of each optioned candidate. Under the terms of the agreements taken together, the Company has received $175.0 million as an upfront payment, $75.0 million in the form of an equity investment by JJDC in Arrowhead Common Stock under the JJDC Stock Purchase Agreement, and two $25.0 million milestone payments, and may receive up to $1.6 billion in development and sales milestones payments for the Janssen License Agreement, and up to $1.9 billion in development and sales milestone payments for the three additional targets covered under the Janssen Collaboration Agreement. The Company is further eligible to receive tiered royalties up to mid-teens under the Janssen License Agreement and up to low teens under the Janssen Collaboration Agreement on product sales.

The Company has evaluated these agreements in accordance with the new revenue recognition standard that became effective for the Company on October 1, 2018. The adoption of the new revenue standard did not have a material impact on the balances reported when evaluated under the superseded revenue standard. At the inception of these agreements, the Company has identified one distinct performance obligation. Regarding the Janssen License Agreement, the Company determined that the key deliverables included the license and certain R&D services including the Company’s responsibility to complete the Phase 1/2 study of JNJ-3989 (ARO-HBV) and the Company’s responsibility to ensure certain manufacturing of JNJ-3989 (ARO-HBV) drug product is completed and delivered to Janssen (the “Janssen R&D Services”). Due to the specialized and unique nature of these Janssen R&D Services, and their direct relationship with the license, the Company determined that these deliverables represent one distinct bundle and thus, one performance obligation. The Company also determined that Janssen’s option to require the Company to develop up to three new targets is not a material right, and thus, not a performance obligation at the onset of the agreement. The consideration for this option will be accounted for if and when it is exercised.

The Company determined the transaction price totaled approximately $252.6 million which includes the upfront payment, the premium paid by JJDC for its equity investment in the Company, the two $25.0 million milestone payments earned and estimated payments for reimbursable Janssen R&D services to be performed. The Company has allocated the total $252.6 million initial transaction price to its one distinct performance obligation for the JNJ-3989 (ARO-HBV) license and the associated Janssen R&D Services. This revenue will be recognized using a proportional performance method (based on actual labor hours versus estimated total labor hours) beginning in October 2018 and ending as the Company’s efforts in overseeing the phase 1/2 clinical trial are completed. During the years ended September 30, 2020 and 2019, the Company recognized approximately $65.0 million and $167.5 million of Revenue associated with this performance obligation, respectively. As of September 30, 2020, there were $0 in contract assets recorded as accounts receivable, and $19.3 million of contract liabilities recorded as current deferred revenue on the Company’s Consolidated Balance Sheets. The $19.3 million of current deferred revenue is driven by the upfront payment, the premium paid by JJDC for its equity investment in the Company, and the two $25.0 million milestone payments earned, net of revenue recognized to date.

The Company has begun to conduct its discovery, optimization and preclinical research and development of ARO-JNJ1, ARO-JNJ2 and ARO-JNJ3 under the Janssen Collaboration Agreement. All costs and labor hours spent by the Company will be entirely funded by Janssen. During the years ended September 30, 2020 and 2019, the Company recognized $2.9 million and $1.0 million of Revenue associated with these efforts, respectively. As of September 30, 2020, there were $0.8 million of contract assets recorded as accounts receivable, and $0 of contract liabilities recorded as current deferred revenue on the Company’s Consolidated Balance Sheets.

Takeda Pharmaceuticals U.S.A., Inc.

On October 7, 2020, the Company entered into an Exclusive License and Co-Funding Agreement (the “Takeda License Agreement”) with Takeda Pharmaceuticals U.S.A., Inc. (“Takeda”). Under the Takeda License Agreement, Takeda and the Company will co-develop the Company’s ARO-AAT program, the Company’s second-generation subcutaneously administered RNAi therapeutic candidate being developed as a treatment for liver disease associated with alpha-1 antitrypsin deficiency. Within the United States, ARO-AAT, if approved, will be co-commercialized under a 50/50 profit sharing structure. Outside the United States, Takeda will lead the global commercialization strategy and receive an exclusive license to commercialize ARO-AAT with the Company eligible to receive tiered royalties of 20% to 25% on net sales. The Company will receive $300.0 million as an upfront payment and is eligible to receive potential development, regulatory and commercial milestones of up to $740.0 million.

The Company has evaluated the Takeda License Agreement in accordance with the new revenue recognition requirements that became effective for the Company on October 1, 2018. The adoption of the new revenue standard will not have a material impact on the balances reported when evaluated under the superseded revenue standard. At the inception of the Takeda License Agreement, the Company has identified one distinct performance obligation. The Company determined that the key deliverables included the license and certain R&D services including the Company’s responsibilities to complete the initial portion of the SEQUOIA study, to complete the ongoing phase 2 AROAAT2002 study and to ensure certain manufacturing of ARO-AAT drug product is completed and delivered to Takeda (the “Takeda R&D Services”). Due to the specialized and unique nature of these Takeda R&D services, and their direct relationship with the license, the Company determined that these deliverables represent one distinct bundle and thus, one performance obligation. Beyond the Takeda R&D Services, Takeda will be responsible for managing future clinical development and commercialization. The Company will co-fund certain of the development and commercialization costs that Takeda manages, and these co-funding amounts will be offset against amounts owed to Arrowhead, either from milestones or royalties earned, or profits earned under the 50/50 profit sharing structure for U.S. commercialization.

The Company determined the initial transaction price totaled approximately $300.0 million which includes the upfront payment. The Company will exclude any future estimated milestones, royalties or profit-sharing payments from this transaction price to date. The Company will allocate the total $300.0 million initial transaction price to its one distinct performance obligation for the ARO-AAT license and the associated Takeda R&D Services. This revenue will be recognized using a proportional performance method (based on actual costs incurred versus estimated total estimated costs incurred for the Takeda R&D Services) beginning in the Company’s first fiscal quarter of fiscal 2021 and ending as the Takeda R&D Services are completed.

Property and Equipment

12 Months Ended

Sep. 30, 2020

Property Plant And Equipment [Abstract]

Property and Equipment

NOTE 3. PROPERTY AND EQUIPMENT

The following table summarizes the Company’s major classes of property and equipment:

	September 30, 2020			September 30, 2019
Computers, office equipment and furniture	$	661,927		$	637,577
Research equipment		20,654,323			12,932,304
Software		631,204			147,254
Leasehold improvements		25,237,851			21,579,415
Total gross fixed assets		47,185,305			35,296,550
Less: Accumulated depreciation and amortization		(16,304,437	)		(12,081,651	)
Property and equipment, net	$	30,880,868		$	23,214,899

Depreciation and amortization expense for property and equipment for the years ended September 30, 2020, 2019, and 2018 was $4,241,834 and $2,738,715, and $2,998,846 respectively.

Investments

12 Months Ended

Sep. 30, 2020

Held To Maturity Securities Classified [Abstract]

Investments

NOTE 4. INVESTMENTS

Investments at September 30, 2020 primarily consist of corporate bonds that have maturities of less than 36 months and marketable equity securities. The Company’s corporate bonds consists of both short-term and long-term bonds and are classified as “held-to-maturity” on the Company’s Consolidated Balance Sheets. The Company’s marketable equity securities consist of mutual funds that invests in U.S. government bonds, U.S. government agency bonds, corporate bonds, and other asset backed debt securities. Dividends from these three funds are automatically reinvested. The Company may also invest excess cash balances in certificates of deposits, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its held to maturity investments in accordance with FASB ASC 320, Investments – Debt and Equity Securities and its marketable equity securities in accordance with ASC 321, Investments – Equity Securities.

The following tables summarize the Company’s short-term, long-term investments and marketable securities as of September 30, 2020 and September 30, 2019 by measurement category.

Held to Maturity	As of September 30, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial notes (due within one year)	$	86,889,751	$	1,589,873	$	-		$	88,479,624
Commercial notes (due within one through three years)	$	137,486,883	$	4,573,964	$	(79,471	)	$	141,981,376
Total	$	224,376,634	$	6,163,837	$	(79,471	)	$	230,461,000

	As of September 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial notes (due within one year)	$	36,899,894	$	222,584	$	-		$	37,122,478
Commercial notes (due within one through three years)	$	44,175,993	$	875,258	$	-		$	45,051,251
Total	$	81,075,887	$	1,097,842	$	-		$	82,173,729


Fair Value	As of September 30, 2020
	Amortized Cost		Realized Gains/(Losses)		Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Marketable securities	$	85,000,000	$	94,734	$	-		$	(75,015	)	$	85,019,719
Total	$	85,000,000	$	94,734	$	-		$	(75,015	)	$	85,019,719

Intangible Assets

12 Months Ended

Sep. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets

NOTE 5. INTANGIBLE ASSETS

Intangible assets subject to amortization include patents and a license agreement capitalized as part of the Novartis RNAi asset acquisition in March 2015. The license agreement associated with the Novartis RNAi asset acquisition is being amortized over the estimated life remaining at the time of acquisition, which was 21 years, and the accumulated amortization of the asset is $828,596. The patents associated with the Novartis RNAi asset acquisition are being amortized over the estimated life remaining at the time of acquisition, which was 14 years, and the accumulated amortization of the assets is $8,665,466. Amortization expense for the years ended September 30, 2020, 2019, and 2018 was $1,700,429, $1,700,430, and $1,700,429, respectively. Amortization expense is expected to be $1,700,429 in 2021, $1,700,429 in 2022, $1,700,429 in 2023, $1,700,429 in 2024, $1,700,429 in 2025 and $6,861,006 thereafter.

The following table provides details on the Company’s intangible asset balances:

	Intangible assets subject to amortization
Balance at September 30, 2019	$	17,063,580
Impairment		-
Amortization		(1,700,429	)
Balance at September 30, 2020	$	15,363,151

Stockholders' Equity

12 Months Ended

Sep. 30, 2020

Equity [Abstract]

Stockholders' Equity

NOTE 6. STOCKHOLDERS’ EQUITY

At September 30, 2020, the Company had a total of 150,000,000 shares of capital stock authorized for issuance, consisting of 145,000,000 shares of Common Stock, par value $0.001 per share, and 5,000,000 shares of Preferred Stock, par value $0.001 per share.

At September 30, 2020, 102,376,303 shares of Common Stock were outstanding. At September 30, 2020, 8,462,148 shares of Common Stock were reserved for issuance upon exercise of options and vesting of restricted stock units granted or available for grant under Arrowhead’s 2004 Equity Incentive Plan and 2013 Incentive Plan, as well as for inducement grants made to new employees.

In December 2019, the Company sold 4,600,000 shares of its Common Stock in a public offering at a price of $58.00 per share. The aggregate purchase price paid by the investors for the Common Stock was $266.8 million, and the Company received net proceeds of $250.5 million after deducting advisory fees and offering expenses.

In August 2020, the Company entered into an Open Market Sale Agreement (the “ATM Agreement”), pursuant to which the Company may, from time to time, sell up to $250,000,000 in shares of the Company’s Common Stock through Jefferies LLC, acting as the sales agent and/or principal, in an at-the-market offering (“ATM Offering”). The Company is not required to sell shares under the ATM Agreement. The Company will pay Jefferies LLC a commission of up to 3.0% of the aggregate gross proceeds received from all sales of the common stock under the ATM Agreement. Unless otherwise terminated, the ATM Agreement continues until the earlier of selling all shares available under the ATM Agreement or December 2, 2022. At September 30, 2020, no shares have been issued under the ATM Agreement.

Commitments and Contingencies

12 Months Ended

Sep. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 7. COMMITMENTS AND CONTINGENCIES

Litigation

From time to time, the Company may be subject to various claims and legal proceedings in the ordinary course of business. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount is reasonably estimable, the Company will accrue a liability for the estimated loss. There were no contingent liabilities recorded as of the year ended September 30, 2020.

Purchase Commitments

In the normal course of business, the Company enters into various purchase commitments for the manufacture of drug components, for toxicology studies and for clinical studies. As of September 30, 2020, these future commitments were estimated at approximately $78.0 million, of which approximately $60.2 million is expected to be incurred in fiscal 2021, and $17.8 million is expected to be incurred beyond fiscal 2021.

Technology License Commitments

The Company has licensed from third parties the rights to use certain technologies for its research and development activities, as well as in any products the Company may develop using these licensed technologies. These agreements and other similar agreements often require milestone and royalty payments. Milestone payments, for example, may be required as the research and development process progresses through various stages of development, such as when clinical candidates enter or progress through clinical trials, upon NDA and upon certain sales level milestones. These milestone payments could amount to the mid to upper double-digit millions of dollars. During the year ended September 30, 2020, the Company incurred $2.4 million of milestone payments related to the progression of the ARO-ENaC and ARO-HIF2 candidates. During the years ended September 30, 2019 and 2018, the Company did not trigger any milestone payments. In certain agreements, the Company may be required to make mid to high single-digit percentage royalty payments based on a percentage of the sales of the relevant products.

Leases

12 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

NOTE 8. LEASES

Leases

In April 2019, the Company entered into a lease for its corporate headquarters in Pasadena, California. The 91 month office building lease between the Company and 177 Colorado Owner, LLC is for approximately 24,000 square feet of office space located at 177 E. Colorado Blvd, Pasadena, California. The increased capacity of this new office space compared to the Company’s prior corporate headquarters will accommodate increased personnel as the Company’s pipeline of drug candidates expands and moves closer to market. Lease payments began on September 30, 2019 and are estimated to total approximately $8.7 million over the term. The lease expires on April 30, 2027. The Company has paid approximately $3.5 million for leasehold improvements, net of tenant improvement allowances. The lease contains an option to renew for one term of five years. The exercise of this option was not determined to be reasonably certain and thus was not included in lease liabilities on the Company’s Consolidated Balance Sheet at September 30, 2020.

In January 2016, the Company entered into a lease for its research facility in Madison, Wisconsin. The lease was for approximately 60,000 square feet of office and laboratory space and had an expiration date of September 30, 2026. The lease was amended in January 2019 to expand the rentable square feet by an additional 14,000 square feet and to extend the lease expiration date to September 2029. In May 2020, the Company further amended the lease to increase the rentable square feet by an additional 26,000 square feet and extended the lease expiration date to September 30, 2031. Lease payments are estimated to total approximately $26.2 million for the term. The lease contains two options to renew for two terms of five years. The exercise of these options were not determined to be reasonably certain and thus was not included in lease liabilities on the Company’s Consolidated Balance Sheet at September 30, 2020.

In March 2020, the Company entered into a sublease agreement (the “Sublease”) with Halozyme, Inc. for additional research and development facility space in San Diego, California. The Sublease provides additional space needed to accommodate the recent growth of the Company’s personnel and discovery efforts. The sublease is for approximately 21,000 rentable square feet. The term of the Sublease commenced on April 1, 2020 and will end on January 14, 2023. Sublease payments are estimated to total approximately $2.0 million over the term.

Operating lease cost during the years ended September 30, 2020, 2019, and 2018 was $2.4 million, $1.3 million and $1.3 million respectively. Variable lease costs during the year ended September 30, 2020 were $0.8 million. There was no short-term lease cost during the years ended September 30, 2020, 2019 and 2018.

The following table presents maturities of operating lease liabilities on an undiscounted basis as of September 30, 2020:

2021	$	3,091,901
2022		3,853,290
2023		3,406,754
2024		3,269,674
2025		3,358,292
2025 and thereafter		15,331,296
Total	$	32,311,207
Less imputed interest	$	(11,173,252	)
Total operating lease liabilities (includes current portion)	$	21,137,955

Cash paid for the amounts included in the measurement of the operating lease liabilities on the Company’s Consolidated Balance Sheet and included in Other changes in operating assets and liabilities within cash flows from operating activities on the Company’s Consolidated Statement of Cash Flow for the years ended September 30, 2020, 2019 and 2018 were $1.8 million, $1.3 million and $1.3 million, respectively. The weighted-average remaining lease term and weighted-average discount rate for all leases as of September 30, 2020 was 9.4 years and 8.4%, respectively.

As of September 30, 2019, future minimum lease payments due in fiscal years under operating leases were as follows:

2020	$	1,521,451
2021		2,256,379
2022		2,521,446
2023		2,590,558
2024		2,661,512
2025 and thereafter		10,834,206
Total	$	22,385,552

Stock-Based Compensation

12 Months Ended

Sep. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

NOTE 9. STOCK-BASED COMPENSATION

Arrowhead has two plans that provide for equity-based compensation. Under the 2004 Equity Incentive Plan and 2013 Incentive Plan, as of September 30, 2020, 673,262 and 5,598,345 shares, respectively, of Arrowhead’s Common Stock are reserved for the grant of stock options, stock appreciation rights, restricted stock awards and performance unit/share awards to employees, consultants and others. No further grants may be made under the 2004 Equity Incentive Plan. As of September 30, 2020, there were options granted and outstanding to purchase 673,262 and 2,611,625 shares of Common Stock under the 2004 Equity Incentive Plan and the 2013 Incentive Plan, respectively, and there were 2,588,000 restricted stock units granted and outstanding under the 2013 Incentive Plan. Also, as of September 30, 2020, there were 1,254,516 shares reserved for options and 936,025 shares reserved for restricted stock units issued as inducement grants to new employees outside of equity compensation plans.

The following table summarizes information about stock options:

	Number of Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Balance At September 30, 2019		4,773,670		$	8.16
Granted		951,500		48.19
Cancelled		(74,639	)	22.38
Exercised		(1,111,128	)	6.72
Balance At September 30, 2020		4,539,403		$	16.67	6.2 years	$	129,100,277
Exercisable At September 30, 2020		2,924,744		$	8.30	4.8 years	$	102,698,309

Stock-based compensation expense related to stock options for the years ended September 30, 2020, 2019, and 2018 was $9,719,116, $3,955,216, and $3,265,348, respectively. For non-qualified stock options, the expense creates a timing difference, resulting in a deferred tax asset, which is fully reserved by a valuation allowance.

The grant date fair value of the options granted by the Company for the years ended September 30, 2020, 2019, and 2018 was $34,582,743, $12,137,250, and $4,141,318, respectively.

The intrinsic value of the options exercised during the years ended September 30, 2020, 2019 and 2018 was $44,082,294, $24,561,189, and $5,805,317, respectively.

As of September 30, 2020, the pre-tax compensation expense for all outstanding unvested stock options in the amount of $36,355,846 will be recognized in the Company’s results of operations over a weighted average period of 3.1 years.

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which do not have vesting restrictions and are fully transferable. The determination of the fair value of each stock option is affected by the Company’s stock price on the date of grant, as well as assumptions regarding a number of highly complex and subjective variables. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

The assumptions used to value stock options are as follows:

	Years ended September 30,
	2020		2019			2018
Dividend yield		-		-			-
Risk-free interest rate	0.4 – 1.8%		1.50-3.11%			2.05-2.99%
Volatility	90-92%			115	%		110	%
Expected life (in years)		6.25		6.25			6.25
Weighted average grant date fair value per share of options granted	$	36.35	$	13.80		$	5.04

The dividend yield is zero as the Company currently does not pay a dividend.

The risk-free interest rate is based on that of the U.S. Treasury bond.

Volatility is estimated based on volatility average of the Company’s Common Stock price.

Restricted Stock Units

Restricted stock units (“RSUs”), including time-based and performance-based awards, were granted under the Company’s 2013 Incentive Plan and as inducements grants granted outside of the Plan. During the year ended September 30, 2020, the Company issued 1,754,071 RSUs under the 2013 Incentive Plan and 933,025 RSUs as inducement awards. At vesting, each outstanding RSU will be exchanged for one share of the Company’s Common Stock. RSU recipients may elect to net share settle upon vesting, in which case the Company pays the employee’s income taxes due upon vesting and withholds a number of shares of Common Stock of equal value. RSU awards generally vest subject to the satisfaction of service requirements or the satisfaction of both service requirements and achievement of certain performance targets.

The following table summarizes the activity of the Company’s RSUs:

	Number of RSUs			Weighted- Average Grant Date Fair Value
Unvested at September 30, 2019		2,062,833		$	9.43
Granted		2,687,096			55.59
Vested		(1,158,904	)		9.71
Forfeited		(67,000	)		31.78
Unvested at September 30, 2020		3,524,025		$	44.11

During the years ended September 30, 2020, 2019, and 2018, the Company recorded $33,663,871, $8,438,107 and $5,189,259 of expense related to RSUs, respectively. Such expense is included in stock-based compensation expense in the Company’s Consolidated Statement of Operations and Comprehensive Income (Loss). For RSUs, the expense creates a timing difference, resulting in a deferred tax asset, which is fully reserved by a valuation allowance.

For RSUs, the grant date fair value of the award is based on the Company’s closing stock price at the grant date, with consideration given to the probability of achieving performance conditions for performance-based awards.

As of September 30, 2020, the pre-tax compensation expense for all unvested RSUs in the amount of $88,548,649 will be recognized in the Company’s results of operations over a weighted average period of 3.1 years. Unvested RSUs that we have deemed not probable of vesting as of September 30, 2020, have the potential of generating an additional $38.0 million of pre-tax compensation expense if we deem them probable of vesting in a future reporting period.

Fair Value Measurements

12 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 10. FAIR VALUE MEASUREMENTS

The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, the Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The fair value hierarchy is defined as follows:

Level 1—Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.

Level 3—Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.

The following table summarizes fair value measurements at September 30, 2020 and September 30, 2019 for assets and liabilities measured at fair value on a recurring basis. Certain amounts have been reclassed to conform with current year presentation.

September 30, 2020:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	143,582,667	$	-	$	-	$	143,582,667
Marketable securities	$	85,019,719	$	-	$	-	$	85,019,719
Short-term investments (held to maturity)	$	-	$	88,479,624	$	-	$	88,479,624
Long-term investments (held to maturity)	$	-	$	141,981,376	$	-	$	141,981,376
Contingent Consideration	$	-	$	-	$	-	$	-

September 30, 2019:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	221,804,128	$	-	$	-	$	221,804,128
Short-term investments	$	-	$	37,122,478	$	-	$	37,122,478
Long-term investments	$	-	$	45,051,251	$	-	$	45,051,251
Contingent Consideration	$	-	$	-	$	-	$	-

The Company had a liability for contingent consideration related to its acquisition of the Roche RNAi business completed in 2011. The fair value measurement of the contingent consideration obligations is determined using Level 3 inputs. The fair value of contingent consideration obligations is based on a discounted cash flow model using a probability-weighted income approach. The measurement is based upon unobservable inputs supported by little or no market activity based on the Company’s assumptions and experience. Estimating timing to complete the development and obtain approval of products is difficult, and there are inherent uncertainties in developing a product candidate, such as obtaining FDA and other regulatory approvals. In determining the probability of regulatory approval and commercial success, the Company utilizes data regarding similar milestone events from several sources, including industry studies and its own experience. These fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense the Company records in any given period. In November 2016, the Company announced the discontinuation of its clinical trial efforts for ARC-520, ARC-AAT and ARC-521. Given this development, the Company assessed the fair value of its contingent consideration obligation to be $0 at September 30, 2020 and September 30, 2019.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Income Taxes

12 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 11. INCOME TAXES

The Company utilizes the guidance issued by the FASB for accounting for income taxes which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and

statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities.

Components of the net deferred tax asset (liability) at September 30, 2020 and 2019 are as follows:

	September 30,
	2020			2019
Deferred Tax Assets
Accrued Compensation	$	2,086,396		$	1,310,466
Stock Compensation		10,936,819			3,609,756
Capitalized Research & Development		624,915			926,026
California Alternative Minimum Tax		178,652			173,553
Fixed Assets		-			438,882
Net Operating Losses		151,007,113			105,372,571
Intangible Assets		2,818,002			3,590,090
Deferred Revenue		1,702,357			-
Right of Use Assets/Lease Liabilities		1,015,626			-
Deferred Rent		-			821,317
Capital Loss		709,779			709,779
Total deferred tax assets		171,079,659			116,952,440
Valuation allowance		(156,603,859	)		(108,232,402	)
Deferred tax liabilities:
Fixed Assets		(2,546,968	)		-
State taxes		(11,928,832	)		(8,720,038	)
Total deferred tax liability		(14,475,800	)		(8,720,038	)
Net deferred tax assets (liabilities)	$	-		$	-

The Company has concluded, in accordance with the applicable accounting standards, that it is more likely than not that the Company may not realize the benefit of all of its deferred tax assets. Accordingly, management has provided a 100% valuation allowance against its deferred tax assets until such time as management believes that its projections of future profits as well as expected future tax rates make the realization of these deferred tax assets more-likely-than-not. Significant judgment is required in the evaluation of deferred tax benefits and differences in future results from our estimates could result in material differences in the realization of these assets. The Company has performed an assessment of positive and negative evidence regarding the realization of the net deferred tax asset in accordance with FASB ASC 740-10, “Accounting for Income Taxes.” This assessment included the evaluation of scheduled reversals of deferred tax liabilities, the availability of carry forwards and estimates of projected future taxable income.

As of September 30, 2020, the Company had available gross federal net operating loss (“NOL”) carry forwards of approximately $473.0 million and gross state NOL carry forwards of $497.0 million. The NOLs expire at various dates through 2040.

The provisions for income taxes for the years ended September 30, 2020 and 2019 are as follows:

	September 30,
	2020		2019
Federal:
Current		—		—
Deferred		—		—
Total Federal		—		—
State:
Current	$	2,400		173,553
Deferred		—		—
Total State		2,400		173,553
Provision from income taxes	$	2,400	$	173,553

The Company’s effective income tax rate differs from the statutory federal income tax rate as follows for the years ended September 30, 2020 and 2019:

	September 30,
	2020			2019
At U.S. federal statutory rate		-21.0	%		21.0	%
State taxes, net of federal effect		-7.0	%		7.3	%
Stock compensation		-29.4	%		-15.0	%
Mark-to-market adjustments		0.0	%		0.0	%
Valuation allowance		57.4	%		-13.0	%
Other		0.0	%		0.0	%
True-up on deferred taxes		0.0	%		0.0	%
Tax rate change		0.0	%		0.0	%
Effective income tax rate		0.0	%		0.3	%

The Company has adopted guidance issued by the FASB that clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. The Company’s policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. The Company has not recognized any unrecognized tax benefits and does not have any interest or penalties related to uncertain tax positions as of September 30, 2020 and 2019.

The Company files income tax returns with the Internal Revenue Service (“IRS”), the state of California and certain other taxing jurisdictions. The Company is subject to income tax examinations by the IRS and by state tax authorities until the net operating losses are settled.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Employee Benefit Plans

12 Months Ended

Sep. 30, 2020

Compensation And Retirement Disclosure [Abstract]

Employee Benefit Plans

NOTE 12. EMPLOYEE BENEFIT PLANS

In January 2005, the Company adopted a defined contribution 401(k) retirement savings plan covering substantially all of its employees. The Plan is administered under the “safe harbor” provision of ERISA. Under the terms of the plan, an eligible employee may elect to contribute a portion of their salary on a pre-tax basis, subject to federal statutory limitations. The plan allows for a discretionary match in an amount up to 100% of each participant’s first 3% of compensation contributed plus 50% of each participant’s next 2% of compensation contributed.

For the years ended September 30, 2020, 2019, and 2018, the Company recorded expenses under this plan of $863,080, $545,698 and $451,623, respectively.

In addition to the employee benefit plans described above, the Company provides certain employee benefit plans, including those which provide health and life insurance benefits to employees.

Unaudited Quarterly Financial Data

12 Months Ended

Sep. 30, 2020

Quarterly Financial Information Disclosure [Abstract]

Unaudited Quarterly Financial Data

NOTE 13. UNAUDITED QUARTERLY FINANCIAL DATA

The following table presents selected unaudited quarterly financial data for each full quarterly period of the years ended September 30, 2020 and 2019:

	First			Second			Third			Fourth
Year ended September 30, 2020	Quarter			Quarter			Quarter			Quarter
Revenues	$	29,454,579		$	23,528,853		$	27,375,778		$	7,632,856
Operating Income (Loss)	$	(4,853,594	)	$	(22,240,255	)	$	(15,945,862	)	$	(50,119,092	)
Net Income (Loss)	$	(2,673,728	)	$	(19,835,570	)	$	(13,611,213	)	$	(48,432,715	)
Net Income (Loss) per share-Basic	$	(0.03	)	$	(0.20	)	$	(0.13	)	$	(0.48	)
Net Income (Loss) per share-Diluted	$	(0.03	)	$	(0.20	)	$	(0.13	)	$	(0.48	)

F-25

	First		Second		Third		Fourth
Year ended September 30, 2019	Quarter		Quarter		Quarter		Quarter
Revenues	$	34,657,896	$	48,148,275	$	42,696,636	$	43,292,770
Operating Income (Loss)	$	10,946,144	$	22,010,692	$	18,595,749	$	9,638,049
Net Income (Loss)	$	12,037,253	$	23,896,982	$	20,335,708	$	11,704,906
Net Income (Loss) per share-Basic	$	0.13	$	0.25	$	0.21	$	0.12
Net Income (Loss) per share-Diluted	$	0.13	$	0.24	$	0.21	$	0.12

Subsequent Events

12 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

NOTE 14. SUBSEQUENT EVENTS

Exclusive License and Co-Funding Agreement with Takeda Pharmaceuticals U.S.A., Inc.

Corporate Headquarters Lease Expansion

On October 23, 2020, the Company signed a lease expansion to add an additional 24,434 square feet of office space for the Company’s corporate headquarters in Pasadena, CA. The lease commencement date is expected to be July 2021, after certain leasehold improvements are completed, and the lease expires in April 2027. The lease payments over the life of lease total $7.3 million. The Company anticipates paying approximately $4.0 million of leasehold improvements, net of tenant improvement allowances. The increased capacity of this additional office space compared to the Company’s current corporate headquarters will accommodate increased personnel as the Company’s pipeline of drug candidates expands and moves closer to market.

Organization and Significant Accounting Policies (Policies)	12 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation—The Consolidated Financial Statements include the accounts of Arrowhead and its Subsidiaries. Arrowhead’s primary operating subsidiary is Arrowhead Madison, which is located in Madison, Wisconsin, where the Company’s research and development facility is located. All significant intercompany accounts and transactions are eliminated in consolidation.
Basis of Presentation and Use of Estimates	Basis of Presentation and Use of Estimates—The preparation of financial statements in conformity GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Additionally, certain reclassifications have been made to prior period financial statements to conform to the current period presentation.
Cash and Cash Equivalents	Cash and Cash Equivalents—The Company considers all liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Included within Cash and cash equivalents on the Consolidated Balance Sheets is $1.8 million and $1.0 restricted cash at September 30, 2020 and September 30, 2019, respectively. Amounts included in restricted cash are primarily held as collateral associated with a letter of credit for the Company’s lease for its corporate headquarters in Pasadena, California.
Concentration of Credit Risk	Concentration of Credit Risk—The Company maintains several bank accounts primarily at two financial institutions for its operations. These accounts are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per institution. Management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which these deposits are held.
Investments	Investments—The Company may invest excess cash balances in short-term and long-term marketable debt and equity securities. Investments may consist of certificates of deposit, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its investment in marketable securities in accordance with Financial Accounting Standards Board (“FASB”) ASC 320, Investments – Debt and Equity Securities and ASC 321, Investments in Equity Securities. ASC 320-Investments-Debt and Equity Securities requires debt securities to be classified into three categories: Held-to-Maturity—Debt securities that the entity has the positive intent and ability to hold to maturity are reported at amortized cost. Trading Securities—Debt securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings. Available-for-Sale—Debt securities not classified as either securities held-to-maturity or trading securities are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity. The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. During the years ended September 30, 2020, 2019 and 2018, all of the Company’s debt securities were classified as held-to-maturity. Held-to-maturity investments are measured and recorded at amortized cost on the Company’s Consolidated Balance Sheet. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary. During the year ended September 30, 2020, the Company purchased shares of mutual funds that invest in marketable debt securities such as U.S. government bonds, U.S. government agency bonds, corporate bonds, and other asset backed debt securities. The Company accounts for these securities using the guidance from FASB ASC 321, Investments-Equity Securities. These securities are recorded on the Company’s Consolidated Balance Sheet as “marketable securities” and recorded at fair value. All unrealized gains/losses associated with these securities are recorded in the Company’s Consolidated Statement of Operations and Comprehensive Income (Loss).
Property and Equipment	Property and Equipment—Property and equipment are recorded at cost, which may equal fair market value in the case of property and equipment acquired in conjunction with a business acquisition. Depreciation of property and equipment is recorded using the straight-line method over the respective useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized over the lesser of the expected useful life or the remaining lease term. Long-lived assets, including property and equipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable.
Intangible Assets subject to amortization	Intangible Assets Subject to Amortization—Intangible assets subject to amortization include certain patents and license agreements. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable and are also reviewed annually to determine whether any impairment is necessary.
Contingent Consideration	Contingent Consideration—The consideration for the Company’s acquisitions may include future payments that are contingent upon the occurrence of a particular event. For example, milestone payments might be based on the achievement of various regulatory approvals or future sales milestones, and royalty payments might be based on drug product sales levels. The Company records a contingent consideration obligation for such contingent payments at fair value on the acquisition date. The Company estimates the fair value of contingent consideration obligations through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at an estimated fair value at the balance sheet date. Changes in the fair value of the contingent consideration obligations are recognized within the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flows from products upon commercialization, changes in the assumed achievement or timing of any development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. These fair value measurements are based on significant inputs not observable in the market. Substantial judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense the Company records in any given period. The Company determined the fair value of its contingent consideration obligation to be $0 at September 30, 2020 and September 30, 2019.
Revenue Recognition	Revenue Recognition— On October 1, 2018, the Company adopted FASB Topic 606 – Revenue for Contracts from Customers which amended revenue recognition principles and provides a single, comprehensive set of criteria for revenue recognition within and across all industries. The Company’s adoption of the new revenue standard did not have a material impact on its Consolidated Financial Statements. The Company has not yet achieved commercial sales of its drug candidates to date, however, the new standard is applicable to the Company’s ongoing licensing and collaboration agreements, including those with Amgen, Janssen, and Takeda and the analysis of the impact of this guidance on those agreements is discussed further in Note 2 below. The new revenue standard provides a five-step framework for recognizing revenue as control of promised goods or services is transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of the new revenue standard, the Company performs the following five steps: (i) identify the contract; (ii) identify the performance obligations; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. At contract inception, the Company assesses whether the goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation, or whether they are not distinct and are combined with other goods and services until a distinct bundle is identified. The Company then determines the transaction price, which typically includes upfront payments and any variable consideration that the Company determines is probable to not cause a significant reversal in the amount of cumulative revenue recognized when the uncertainty associated with the variable consideration is resolved. The Company then allocates the transaction price to each performance obligation and recognizes the associated revenue when (or as) each performance obligation is satisfied. The Company recognizes the transaction price allocated to upfront license payments as revenue upon delivery of the license to the customer and resulting ability of the customer to use and benefit from the license, if the license is determined to be distinct from the other performance obligations identified in the contract. These other performance obligations are typically to perform research and development services for the customer, often times relating to the candidate that the customer is licensing. If the license is not considered to be distinct from other performance obligations, the Company assesses the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied at a point in time or over time. If the performance obligation is satisfied over time, the Company then determines the appropriate method of measuring progress for purposes of recognizing revenue from license payments. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the related revenue recognition. Typically, the Company’s collaboration agreements entitle it to additional payments upon the achievement of milestones or royalties on sales. The milestones are generally categorized into three types: development milestones, generally based on the initiation of toxicity studies or clinical trials; regulatory milestones, generally based on the submission, filing or approval of regulatory applications such as a Clinical Trial Application (“CTA”) or a New Drug Application (“NDA”) in the United States; and sales-based milestones, generally based on meeting specific thresholds of sales in certain geographic areas. The Company evaluates whether it is probable that the consideration associated with each milestone or royalty will not be subject to a significant reversal in the cumulative amount of revenue recognized. Amounts that meet this threshold are included in the transaction price using the most likely amount method, whereas amounts that do not meet this threshold are excluded from the transaction price until they meet this threshold. At the end of each subsequent reporting period, the Company re-evaluates the probability of a significant reversal of the cumulative revenue recognized for our milestones and royalties, and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and net income in the Company’s Consolidated Statement of Operations and Comprehensive Income (Loss). Typically, milestone payments and royalties are achieved after the Company’s performance obligations associated with the collaboration agreements have been completed and after the customer has assumed responsibility for the respective clinical or pre-clinical program. Milestones or royalties achieved after the Company’s performance obligations have been completed are recognized as revenue in the period the milestone or royalty was achieved. If a milestone payment is achieved during the performance period, the milestone payment would be recognized as revenue to the extent performance had been completed at that point, and the remaining balance would be recorded as deferred revenue. The new revenue standard requires the Company to assess whether a significant financing component exists in determining the transaction price. The Company performs this assessment at the onset of its licensing or collaboration agreements. Typically, a significant financing component does not exist because the customer is paying for a license or services in advance with an upfront payment. Additionally, future royalty payments are not substantially within the control of the Company or the customer. The new revenue standard requires the Company to allocate the arrangement consideration on a relative standalone selling price basis for each performance obligation after determining the transaction price of the contract and identifying the performance obligations to which that amount should be allocated. The relative standalone selling price is defined in the new revenue standard as the price at which an entity would sell a promised good or service separately to a customer. If other observable transactions in which the Company has sold the same performance obligation separately are not available, the Company estimates the standalone selling price of each performance obligation. Key assumptions to determine the standalone selling price may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. Whenever the Company determines that goods or services promised in a contract should be accounted for as a combined performance obligation over time, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. Revenue is recognized using the proportional performance method. Labor hours or costs incurred are typically used as the measure of performance. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations. If the Company determines that the performance obligation is satisfied over time, any upfront payment received is initially recorded as deferred revenue on the Company’s Consolidated Balance Sheets. Certain judgments affect the application of the Company’s revenue recognition policy. For example, the Company records short-term and long-term deferred revenue based on its best estimate of when such revenue will be recognized. Short-term deferred revenue consists of amounts that are expected to be recognized as revenue in the next 12 months, and long-term deferred revenue consists of amounts that the Company does not expect will be recognized in the next 12 months. This estimate is based on the Company’s current operating plan and, if the Company’s operating plan should change in the future, the Company may recognize a different amount of deferred revenue over the next 12-month period.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts—The Company accrues an allowance for doubtful accounts based on estimates of uncollectible revenues by analyzing historical collections, accounts receivable aging and other factors. Accounts receivable are written off when all collection attempts have failed.
Research and Development	Research and Development—Costs and expenses that can be clearly identified as research and development are charged to expense as incurred in accordance with FASB ASC 730-10. Included in research and development costs are operating costs, facilities, supplies, external services, clinical trial and manufacturing costs, overhead directly related to the Company’s research and development operations, and costs to acquire technology licenses.
Net Income (Loss) per Share	Net Income (Loss) per Share—Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share are computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares primarily consist of stock options and restricted stock units issued to employees. During the years ended September 30, 2020, 2019 and 2018, the calculation of the effect of dilutive stock options and restricted stock units was 0 shares, 4,748,958 shares, and 0 shares, respectively. During the year ended September 30, 2020, the calculation of the effect of dilutive stock options and restricted stock units excluded all stock options and restricted stock units granted and outstanding during the period due to their anti-dilutive effect. During the year ended September 30, 2019, the calculation of the effect of dilutive stock options and restricted stock units excluded 1,007,500 stock options and 11,500 restricted stock units granted and outstanding during the period due to their anti-dilutive effect. During the year ended September 30, 2018, the calculation of the effect of dilutive stock options and restricted stock units excluded all stock options and restricted stock units granted and outstanding during the period due to their anti-dilutive effect.
Stock-Based Compensation	Stock-Based Compensation—The Company accounts for share-based compensation arrangements in accordance with FASB ASC 718, which requires the measurement and recognition of compensation expense for all share-based payment awards to be based on estimated fair values. The Company uses the Black-Scholes option valuation model to estimate the fair value of its stock options at the date of grant. The Black-Scholes option valuation model requires the input of subjective assumptions to calculate the value of stock options. For restricted stock units, the value of the award is based on the Company’s stock price at the grant date. For performance-based restricted stock unit awards, the value of the award is based on the Company’s stock price at the grant date, with consideration given to the probability of the performance condition being achieved. The Company uses historical data and other information to estimate the expected price volatility for stock option awards and the expected forfeiture rate for all awards. Expense is recognized over the vesting period for all awards and commences at the grant date for time-based awards and upon the Company’s determination that the achievement of such performance conditions is probable for performance-based awards. This determination requires significant judgment by management.
Income Taxes	Income Taxes—The Company accounts for income taxes under the liability method, which requires the recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. The provision for income taxes, if any, represents the tax payable for the period and the change in deferred income tax assets and liabilities during the period.
Leases	Leases—The Company determines whether a contract is, or contains, a lease at inception. The Company classifies each of its leases as operating or financing considering factors such as the length of the lease term, the present value of the lease payments, the nature of the asset being leased, and the potential for ownership of the asset to transfer during the lease term. Leases with terms greater than one-year are recognized on the Consolidated Balance Sheets as Right-of-use assets and Lease liabilities and are measured at the present value of the fixed payments due over the expected lease term minus the present value of any incentives, rebates or abatements expected to be received from the lessor. Options to extend a lease are typically excluded from the expected lease term as the exercise of the option is typically not reasonably certain. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis an amount equal to the lease payments over a similar term and in a similar economic environment. The Company records expense to recognize fixed lease payments on a straight-line basis over the expected lease term. Costs determined to be variable and not based on an index or rate are not included in the measurement of the lease liability and are expensed as incurred.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606), which will supersede nearly all existing revenue recognition guidance under GAAP. ASU No. 2014-09 provides that an entity recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption and became effective for the Company in the first quarter of fiscal 2019. In April 2016, the FASB issued an amendment to ASU No. 2014-09 with update ASU 2016-10 which provided more specific guidance around the identification of performance obligations and licensing arrangements. On October 1, 2018, the Company adopted this standard using the modified retrospective method. The Company’s implementation approach included reviewing the status of each of its ongoing license agreements and collaboration agreements and designing appropriate internal controls to enable the preparation of financial information. The Company completed its assessment of the impact of the new revenue recognition guidance and determined that there will be no material impact. The Company’s existing performance obligations under its ongoing license and collaboration agreements as of October 1, 2018 and prior were substantially completed prior to September 30, 2018. For these agreements that were ongoing as of October 1, 2018, any future option, milestone or royalty payments received will be accounted for under the sales-based royalty exception provided for under this new revenue recognition guidance. Additionally, there will be no impact to cash from or used in operating, financing or investing activities on the Company’s Consolidated Statement of Cash Flows as a result of the adoption of the new standard. In March 2016, the FASB issued ASU No. 2016-02, Leases (Topic ASC 842). Under ASC 842, lessees are required to recognize a right-of-use asset and a right-of-use lease liability for virtually all leases other than those that meet the definition of a short-term lease. For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern (similar to current capital leases). The Company adopted this standard effective October 1, 2019 and elected the package of three practical expedients that permits an entity to i) not reassess whether expired or existing contracts contain leases, ii) not reassess lease classification for existing or expired leases, and iii) not consider whether previously capitalized initial direct costs would be appropriate under the new standard. At September 30, 2020, the Company has recorded right-of-use assets of $16.1 million and right-of-use liabilities of $21.1 million on its Consolidated Balance Sheets for its research and development facility leases in Madison, Wisconsin and San Diego, California, as well as its corporate headquarters lease in Pasadena, California, as discussed further in Note 8 below. The adoption of this standard did not have a material impact on the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) and the Company’s Consolidated Statements of Cash Flows. In November 2018, the FASB issued ASU No. 2018-18 Collaborative Arrangements (Topic 808). This update provides clarification on the interaction between Revenue Recognition (Topic 606) and Collaborative Arrangements (Topic 808) including the alignment of unit of account guidance between the two topics. ASU 2018-18 becomes effective for the Company in the first quarter of fiscal 2021 with early adoption permitted. The Company does not expect the adoption of this update to have a material effect on its Consolidated Financial Statements.

Property and Equipment (Tables)

12 Months Ended

Sep. 30, 2020

Property Plant And Equipment [Abstract]

Summary of Property and Equipment

The following table summarizes the Company’s major classes of property and equipment:

	September 30, 2020			September 30, 2019
Computers, office equipment and furniture	$	661,927		$	637,577
Research equipment		20,654,323			12,932,304
Software		631,204			147,254
Leasehold improvements		25,237,851			21,579,415
Total gross fixed assets		47,185,305			35,296,550
Less: Accumulated depreciation and amortization		(16,304,437	)		(12,081,651	)
Property and equipment, net	$	30,880,868		$	23,214,899

Investments (Tables)

12 Months Ended

Sep. 30, 2020

Held To Maturity Securities Classified [Abstract]

Summary of Short-term, Long-term Investments and Marketable Securities

The following tables summarize the Company’s short-term, long-term investments and marketable securities as of September 30, 2020 and September 30, 2019 by measurement category.

Held to Maturity	As of September 30, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial notes (due within one year)	$	86,889,751	$	1,589,873	$	-		$	88,479,624
Commercial notes (due within one through three years)	$	137,486,883	$	4,573,964	$	(79,471	)	$	141,981,376
Total	$	224,376,634	$	6,163,837	$	(79,471	)	$	230,461,000

	As of September 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial notes (due within one year)	$	36,899,894	$	222,584	$	-		$	37,122,478
Commercial notes (due within one through three years)	$	44,175,993	$	875,258	$	-		$	45,051,251
Total	$	81,075,887	$	1,097,842	$	-		$	82,173,729


Fair Value	As of September 30, 2020
	Amortized Cost		Realized Gains/(Losses)		Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Marketable securities	$	85,000,000	$	94,734	$	-		$	(75,015	)	$	85,019,719
Total	$	85,000,000	$	94,734	$	-		$	(75,015	)	$	85,019,719

Intangible Assets (Tables)

12 Months Ended

Sep. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

The following table provides details on the Company’s intangible asset balances:

	Intangible assets subject to amortization
Balance at September 30, 2019	$	17,063,580
Impairment		-
Amortization		(1,700,429	)
Balance at September 30, 2020	$	15,363,151

Leases (Tables)

12 Months Ended

Sep. 30, 2020

Leases [Abstract]

Summary of Maturities of Operating Lease Liabilities on an Undiscounted Basis

The following table presents maturities of operating lease liabilities on an undiscounted basis as of September 30, 2020:

2021	$	3,091,901
2022		3,853,290
2023		3,406,754
2024		3,269,674
2025		3,358,292
2025 and thereafter		15,331,296
Total	$	32,311,207
Less imputed interest	$	(11,173,252	)
Total operating lease liabilities (includes current portion)	$	21,137,955

Future Minimum Lease Payments Under Operating Leases

As of September 30, 2019, future minimum lease payments due in fiscal years under operating leases were as follows:

2020	$	1,521,451
2021		2,256,379
2022		2,521,446
2023		2,590,558
2024		2,661,512
2025 and thereafter		10,834,206
Total	$	22,385,552

Stock-Based Compensation (Tables)

12 Months Ended

Sep. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summarized Information about Stock Options

The following table summarizes information about stock options:

	Number of Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value
Balance At September 30, 2019		4,773,670		$	8.16
Granted		951,500		48.19
Cancelled		(74,639	)	22.38
Exercised		(1,111,128	)	6.72
Balance At September 30, 2020		4,539,403		$	16.67	6.2 years	$	129,100,277
Exercisable At September 30, 2020		2,924,744		$	8.30	4.8 years	$	102,698,309

Assumptions Used to Value Stock Options

The assumptions used to value stock options are as follows:

	Years ended September 30,
	2020		2019			2018
Dividend yield		-		-			-
Risk-free interest rate	0.4 – 1.8%		1.50-3.11%			2.05-2.99%
Volatility	90-92%			115	%		110	%
Expected life (in years)		6.25		6.25			6.25
Weighted average grant date fair value per share of options granted	$	36.35	$	13.80		$	5.04

Summary of Share Activity Related to RSUs

The following table summarizes the activity of the Company’s RSUs:

	Number of RSUs			Weighted- Average Grant Date Fair Value
Unvested at September 30, 2019		2,062,833		$	9.43
Granted		2,687,096			55.59
Vested		(1,158,904	)		9.71
Forfeited		(67,000	)		31.78
Unvested at September 30, 2020		3,524,025		$	44.11

Fair Value Measurements (Tables)

12 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements for Assets and Liabilities Measured at Fair Value on Recurring Basis

September 30, 2020:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	143,582,667	$	-	$	-	$	143,582,667
Marketable securities	$	85,019,719	$	-	$	-	$	85,019,719
Short-term investments (held to maturity)	$	-	$	88,479,624	$	-	$	88,479,624
Long-term investments (held to maturity)	$	-	$	141,981,376	$	-	$	141,981,376
Contingent Consideration	$	-	$	-	$	-	$	-

September 30, 2019:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	221,804,128	$	-	$	-	$	221,804,128
Short-term investments	$	-	$	37,122,478	$	-	$	37,122,478
Long-term investments	$	-	$	45,051,251	$	-	$	45,051,251
Contingent Consideration	$	-	$	-	$	-	$	-

Income Taxes (Tables)

12 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Components of the Net Deferred Tax (Liability)

Components of the net deferred tax asset (liability) at September 30, 2020 and 2019 are as follows:

	September 30,
	2020			2019
Deferred Tax Assets
Accrued Compensation	$	2,086,396		$	1,310,466
Stock Compensation		10,936,819			3,609,756
Capitalized Research & Development		624,915			926,026
California Alternative Minimum Tax		178,652			173,553
Fixed Assets		-			438,882
Net Operating Losses		151,007,113			105,372,571
Intangible Assets		2,818,002			3,590,090
Deferred Revenue		1,702,357			-
Right of Use Assets/Lease Liabilities		1,015,626			-
Deferred Rent		-			821,317
Capital Loss		709,779			709,779
Total deferred tax assets		171,079,659			116,952,440
Valuation allowance		(156,603,859	)		(108,232,402	)
Deferred tax liabilities:
Fixed Assets		(2,546,968	)		-
State taxes		(11,928,832	)		(8,720,038	)
Total deferred tax liability		(14,475,800	)		(8,720,038	)
Net deferred tax assets (liabilities)	$	-		$	-

Provisions for Income Taxes

The provisions for income taxes for the years ended September 30, 2020 and 2019 are as follows:

	September 30,
	2020		2019
Federal:
Current		—		—
Deferred		—		—
Total Federal		—		—
State:
Current	$	2,400		173,553
Deferred		—		—
Total State		2,400		173,553
Provision from income taxes	$	2,400	$	173,553

Summary of Effective Income Tax Rate Reconciliation

The Company’s effective income tax rate differs from the statutory federal income tax rate as follows for the years ended September 30, 2020 and 2019:

	September 30,
	2020			2019
At U.S. federal statutory rate		-21.0	%		21.0	%
State taxes, net of federal effect		-7.0	%		7.3	%
Stock compensation		-29.4	%		-15.0	%
Mark-to-market adjustments		0.0	%		0.0	%
Valuation allowance		57.4	%		-13.0	%
Other		0.0	%		0.0	%
True-up on deferred taxes		0.0	%		0.0	%
Tax rate change		0.0	%		0.0	%
Effective income tax rate		0.0	%		0.3	%

Unaudited Quarterly Financial Data (Tables)

12 Months Ended

Sep. 30, 2020

Quarterly Financial Information Disclosure [Abstract]

Schedule of Unaudited Quarterly Financial Data

The following table presents selected unaudited quarterly financial data for each full quarterly period of the years ended September 30, 2020 and 2019:

	First			Second			Third			Fourth
Year ended September 30, 2020	Quarter			Quarter			Quarter			Quarter
Revenues	$	29,454,579		$	23,528,853		$	27,375,778		$	7,632,856
Operating Income (Loss)	$	(4,853,594	)	$	(22,240,255	)	$	(15,945,862	)	$	(50,119,092	)
Net Income (Loss)	$	(2,673,728	)	$	(19,835,570	)	$	(13,611,213	)	$	(48,432,715	)
Net Income (Loss) per share-Basic	$	(0.03	)	$	(0.20	)	$	(0.13	)	$	(0.48	)
Net Income (Loss) per share-Diluted	$	(0.03	)	$	(0.20	)	$	(0.13	)	$	(0.48	)

F-25

	First		Second		Third		Fourth
Year ended September 30, 2019	Quarter		Quarter		Quarter		Quarter
Revenues	$	34,657,896	$	48,148,275	$	42,696,636	$	43,292,770
Operating Income (Loss)	$	10,946,144	$	22,010,692	$	18,595,749	$	9,638,049
Net Income (Loss)	$	12,037,253	$	23,896,982	$	20,335,708	$	11,704,906
Net Income (Loss) per share-Basic	$	0.13	$	0.25	$	0.21	$	0.12
Net Income (Loss) per share-Diluted	$	0.13	$	0.24	$	0.21	$	0.12

Organization and Significant Accounting Policies - Additional Information (Detail)				1 Months Ended	12 Months Ended
	Oct. 07, 2020 USD ($)	Oct. 03, 2018 USD ($) Target	Sep. 28, 2016 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($) shares	Dec. 31, 2018 shares	Sep. 30, 2018 USD ($)	Jul. 31, 2020 USD ($)
Organization And Significant Accounting Policies [Line Items]
Proceeds from the issuance of common stock				$ 250,500,000	$ 250,478,974	$ 60,521,739		$ 56,585,035
Cash and cash equivalents					143,582,667	221,804,128
Restricted Cash					1,800,000	1,000,000.0
Short term investments					86,889,751	36,899,894
Marketable securities					85,000,000.0
Long term investments					137,486,883	44,175,993
Net increase (decrease) in cash and investments					150,100,000
Purchases of investments and marketable securities					278,964,290	90,266,001		52,083,131
Cash outflow primarily related to operations					95,391,570	(173,034,923)		$ 47,223,417
Maturities of investments					50,100,000
Fair value of contingent consideration obligation due to discontinuation of clinical trials					$ 0	$ 0
Calculation of effect of dilutive stock options and restricted stock units \| shares					0	4,748,958	0
Right-of-use assets					$ 16,137,085
Right-of-use liabilities					$ 21,137,955
ASU No. 2014-09
Organization And Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted [true false]					true
Change in accounting principle, accounting standards update, adoption date					Oct. 01, 2018
Change in accounting principle, accounting standards update, immaterial effect [true false]					true
ASU No. 2016-02
Organization And Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted [true false]					true
Change in accounting principle, accounting standards update, adoption date					Oct. 01, 2019
Change in accounting principle, accounting standards update, immaterial effect [true false]					true
ASU No. 2018-18
Organization And Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, immaterial effect [true false]					true
Change in accounting principle, accounting standards update, early adoption [true false]					true
Stock Options
Organization And Significant Accounting Policies [Line Items]
Anti-dilutive excluded for calculation of effect of dilutive stock options and restricted stock units \| shares						1,007,500
Restricted Stock Units
Organization And Significant Accounting Policies [Line Items]
Anti-dilutive excluded for calculation of effect of dilutive stock options and restricted stock units \| shares						11,500
Takeda License Agreement
Organization And Significant Accounting Policies [Line Items]
Cash received as due under agreement	$ 300,000,000.0
Profit sharing structure ratio	50.00%
Development regulatory and commercial milestones payments	$ 740,000,000.0
Janssen \| JNJ-3989 (ARO-HBV) Agreement
Organization And Significant Accounting Policies [Line Items]
Milestone payment		$ 25,000,000.0			$ 25,000,000.0
Janssen \| Collaboration Agreement
Organization And Significant Accounting Policies [Line Items]
Number of additional targets for development and sales milestone payments \| Target		3
Janssen and JJDC \| Collaboration and License agreements
Organization And Significant Accounting Policies [Line Items]
Cash received as due under agreement		$ 175,000,000.0
JJDC \| Common Stock Purchase Agreement
Organization And Significant Accounting Policies [Line Items]
Proceeds from the issuance of common stock		75,000,000.0
Amgen Incorporated \| Olpasiran Agreement
Organization And Significant Accounting Policies [Line Items]
Milestone payment									$ 20,000,000.0
Milestone payments			$ 30,000,000.0
Amgen Incorporated \| License Collaboration and Stock Purchase Agreement
Organization And Significant Accounting Policies [Line Items]
Cash received as due under agreement			35,000,000.0
Proceeds from the issuance of common stock			$ 21,500,000
Maximum
Organization And Significant Accounting Policies [Line Items]
Amount insured in FDIC per account					$ 250,000
Property and equipment, useful life					7 years
Maximum \| Takeda License Agreement
Organization And Significant Accounting Policies [Line Items]
Tiered royalties received percentage	25.00%
Maximum \| Janssen \| License Agreement
Organization And Significant Accounting Policies [Line Items]
Development regulatory and sales milestones payments		1,600,000,000
Maximum \| Janssen \| Collaboration Agreement
Organization And Significant Accounting Policies [Line Items]
Development regulatory and sales milestones payments		$ 1,900,000,000
Maximum \| Amgen Incorporated \| Olpasiran Agreement
Organization And Significant Accounting Policies [Line Items]
Development regulatory and sales milestones payments					$ 400,000,000.0
Minimum
Organization And Significant Accounting Policies [Line Items]
Property and equipment, useful life					3 years
Minimum \| Takeda License Agreement
Organization And Significant Accounting Policies [Line Items]
Tiered royalties received percentage	20.00%

Collaboration and License Agreements - Amgen, Inc - Additional Information (Detail)		1 Months Ended	3 Months Ended								12 Months Ended
	Sep. 28, 2016 USD ($) Agreement	Dec. 31, 2019 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jul. 31, 2020 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Proceeds from the issuance of common stock		$ 250,500,000									$ 250,478,974	$ 60,521,739		$ 56,585,035
Revenues			$ 7,632,856	$ 27,375,778	$ 23,528,853	$ 29,454,579	$ 43,292,770	$ 42,696,636	$ 48,148,275	$ 34,657,896	$ 87,992,066	$ 168,795,577		$ 16,142,321
Type of Revenue [Extensible List]			arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember		arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember
Contract liabilities			$ 19,291,075				$ 77,769,629				$ 19,291,075	$ 77,769,629
Collaboration and License agreements \| Amgen Incorporated
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Agreement date	Sep. 28, 2016
Number of agreements \| Agreement	2
Cash received as due under collaboration agreement	$ 35,000,000.0
Olpasiran Agreement \| Amgen Incorporated
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payments	30,000,000.0
Olpasiran Agreement \| Amgen Incorporated \| Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Additional remaining development regulatory and sales milestones payments			400,000,000.0								400,000,000.0
License Collaboration and Stock Purchase Agreement \| Amgen Incorporated
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Proceeds from the issuance of common stock	$ 21,500,000
Olpasiran and ARO-AMG1 Agreement \| Amgen Incorporated
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payments															$ 20,000,000
Revenues											$ 20,100,000	$ 300,000	$ 16,100,000
Type of Revenue [Extensible List]											us-gaap:LicenseAndServiceMember	us-gaap:LicenseAndServiceMember	us-gaap:LicenseAndServiceMember
Contract liabilities			0								$ 0
Contract assets			$ 0								$ 0

Collaboration and License Agreements - Janssen Pharmaceuticals, Inc - Additional Information (Detail)		1 Months Ended	3 Months Ended								12 Months Ended
	Oct. 03, 2018 USD ($) Target Obligation	Dec. 31, 2019 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Proceeds from the issuance of common stock		$ 250,500,000									$ 250,478,974	$ 60,521,739	$ 56,585,035
Revenues			$ 7,632,856	$ 27,375,778	$ 23,528,853	$ 29,454,579	$ 43,292,770	$ 42,696,636	$ 48,148,275	$ 34,657,896	87,992,066	168,795,577	$ 16,142,321
Deferred revenue			19,291,075				$ 77,769,629				19,291,075	77,769,629
Collaboration and License agreements
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Initial transaction price	$ 252,600,000
Janssen \| License Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Agreement date	Oct. 03, 2018
Janssen \| License Agreement \| Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Development, regulatory and sales milestones payments	$ 1,600,000,000
Janssen \| Research Collaboration and Option Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Agreement date	Oct. 03, 2018
Number of additional targets for development, regulatory and sales milestone payments \| Target	3
Janssen \| Collaboration Agreement \| Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Development, regulatory and sales milestones payments	$ 1,900,000,000
Janssen \| JNJ-3989 (ARO-HBV) Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payment	$ 25,000,000.0		25,000,000.0								25,000,000.0
Number of distinct performance obligations \| Obligation	1
Revenues											65,000,000.0	167,500,000
Contract assets			0								0
Deferred revenue			19,300,000								19,300,000
Janssen \| ARO-JNJ1
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenues											2,900,000	$ 1,000,000.0
Contract assets			800,000								800,000
Deferred revenue			$ 0								$ 0
JJDC \| Common Stock Purchase Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Agreement date	Oct. 03, 2018
Proceeds from the issuance of common stock	$ 75,000,000.0
Janssen and JJDC \| Collaboration and License agreements
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Cash received as due under collaboration agreement	$ 175,000,000.0

Collaboration and License Agreements - Takeda Pharmaceuticals U.S.A., Inc - Additional Information (Detail) - Takeda License Agreement - License and Co-Funding Agreement - Subsequent Event $ in Millions	Oct. 07, 2020 USD ($) Obligation Bundle
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Agreement date	Oct. 07, 2020
Ratio of Profit Sharing Structure for United States Commercialization	50/50 profit sharing
Cash received as due under collaboration agreement	$ 300.0
Development regulatory and sales milestones payments	$ 740.0
Number of distinct bundle \| Bundle	1
Number of distinct performance obligations \| Obligation	1
Initial transaction price	$ 300.0
Minimum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Percentage of eligible to receive tiered royalties on net sales	20.00%
Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Percentage of eligible to receive tiered royalties on net sales	25.00%
Development regulatory and sales milestones payments	$ 740.0

Property and Equipment - Summary of Property and Equipment (Detail) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Property Plant And Equipment [Abstract]
Computers, office equipment and furniture	$ 661,927	$ 637,577
Research equipment	20,654,323	12,932,304
Software	631,204	147,254
Leasehold improvements	25,237,851	21,579,415
Total gross fixed assets	47,185,305	35,296,550
Less: Accumulated depreciation and amortization	(16,304,437)	(12,081,651)
Property and equipment, net	$ 30,880,868	$ 23,214,899

Property and Equipment - Additional Information (Detail) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Property Plant And Equipment [Abstract]
Depreciation and amortization expense for property and equipment	$ 4,241,834	$ 2,738,715	$ 2,998,846

Investments - Summary of Short-term, Long-term Investments and Marketable Securities (Detail) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Schedule Of Held To Maturity Securities And Marketable Securities [Line Items]
Held to Maturity, Amortized Cost	$ 224,376,634	$ 81,075,887
Held to Maturity, Gross Unrealized Gains	6,163,837	1,097,842
Held to Maturity, Gross Unrealized Losses	(79,471)
Held to Maturity, Fair Value	230,461,000	82,173,729
Marketable Securities, Amortized Cost	85,000,000
Marketable Securities, Realized Gains/(Losses)	94,734
Marketable Securities, Gross Unrealized Losses	(75,015)
Marketable Securities, Fair Value	85,019,719
Commercial Notes Due Within One Year
Schedule Of Held To Maturity Securities And Marketable Securities [Line Items]
Held to Maturity, Amortized Cost	86,889,751	36,899,894
Held to Maturity, Gross Unrealized Gains	1,589,873	222,584
Held to Maturity, Fair Value	88,479,624	37,122,478
Commercial Notes Due Within One Through Three Years
Schedule Of Held To Maturity Securities And Marketable Securities [Line Items]
Held to Maturity, Amortized Cost	137,486,883	44,175,993
Held to Maturity, Gross Unrealized Gains	4,573,964	875,258
Held to Maturity, Gross Unrealized Losses	(79,471)
Held to Maturity, Fair Value	141,981,376	$ 45,051,251
Marketable Securities
Schedule Of Held To Maturity Securities And Marketable Securities [Line Items]
Marketable Securities, Amortized Cost	85,000,000
Marketable Securities, Realized Gains/(Losses)	94,734
Marketable Securities, Gross Unrealized Losses	(75,015)
Marketable Securities, Fair Value	$ 85,019,719

Intangible Assets - Additional Information (Detail) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Finite Lived Intangible Assets [Line Items]
Amortization expense	$ 1,700,429	$ 1,700,430	$ 1,700,429
Amortization of license agreements remainder of fiscal year 2021	1,700,429
Amortization of license agreements in 2022	1,700,429
Amortization of license agreements in 2023	1,700,429
Amortization of license agreements in 2024	1,700,429
Amortization of license agreements in 2025	1,700,429
Amortization of license agreements, thereafter	$ 6,861,006
Novartis \| Licensing Agreement
Finite Lived Intangible Assets [Line Items]
Amortization period of intangible assets	21 years
Finite-lived intangible assets, accumulated amortization	$ 828,596
Novartis \| Patents
Finite Lived Intangible Assets [Line Items]
Amortization period of intangible assets	14 years
Finite-lived intangible assets, accumulated amortization	$ 8,665,466

Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Intangible Assets Net Excluding Goodwill [Abstract]
Intangible assets subject to amortization, beginning balance	$ 17,063,580
Intangible assets subject to amortization, Amortization	(1,700,429)	$ (1,700,430)	$ (1,700,429)
Intangible assets subject to amortization, ending balance	$ 15,363,151	$ 17,063,580

Stockholders' Equity - Additional Information (Detail) - USD ($)	1 Months Ended		12 Months Ended
	Aug. 31, 2020	Dec. 31, 2019	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Class Of Stock [Line Items]
Capital stock authorized for issuance			150,000,000
Common stock, shares authorized			145,000,000	145,000,000
Common stock, par value			$ 0.001	$ 0.001
Preferred stock, shares authorized			5,000,000
Preferred stock, par value			$ 0.001
Common stock, shares outstanding			102,376,303	95,506,271
Net proceeds from common stock after deducting advisory fees and offering expenses		$ 250,500,000	$ 250,478,974	$ 60,521,739	$ 56,585,035
Public Offering
Class Of Stock [Line Items]
Shares issued to institutional investors		4,600,000
Aggregate purchase price paid by investors		$ 266,800,000
Net proceeds from common stock after deducting advisory fees and offering expenses		$ 250,500,000
Stock issued, price per share		$ 58.00
ATM Agreement
Class Of Stock [Line Items]
Shares issued to institutional investors			0
ATM Agreement \| Maximum
Class Of Stock [Line Items]
Common stock shares value reserved for future issuance	$ 250,000,000
Percentage of commission to sales agent	3.00%
2004 Equity Incentive Plan, 2013 Equity Incentive Plan, and Inducement Grants
Class Of Stock [Line Items]
Common Stock, Share reserve for issuance			8,462,148

Commitments and Contingencies - Additional Information (Detail) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Other Commitments [Line Items]
Contingent liabilities	$ 0
Future commitments	78,000,000.0
Commitments expected to be incurred in fiscal 2021	60,200,000
Commitments expected to be incurred beyond fiscal 2021	17,800,000
Technology License Commitments
Other Commitments [Line Items]
Milestone payments		$ 0	$ 0
Technology License Commitments \| ARO-ENaC and ARO-HIF2 Candidates
Other Commitments [Line Items]
Milestone payments	$ 2,400,000

Leases - Additional Information (Detail)	1 Months Ended					12 Months Ended
Leases - Additional Information (Detail)	May 31, 2020 ft²	Mar. 31, 2020 USD ($) ft²	Apr. 30, 2019 USD ($) ft² Option	Jan. 31, 2019 ft²	Jan. 31, 2016 ft²	Sep. 30, 2020 USD ($) Option	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Lessee Lease Description [Line Items]
Estimated lease payments							$ 22,385,552
Estimated lease payments						$ 32,311,207
Operating lease cost						2,400,000	1,300,000	$ 1,300,000
Variable lease cost						800,000
Short-term lease cost						0	0	0
Operating lease cash payments						$ 1,800,000	$ 1,300,000	$ 1,300,000
Weighted-average remaining lease term						9 years 4 months 24 days
Weighted-average discount rate						8.40%
Research Facility in Madison \| Wisconsin
Lessee Lease Description [Line Items]
Office space leases, in square feet \| ft²					60,000
Lease expiration date	Sep. 30, 2031				Sep. 30, 2026
Operating lease renewal term						5 years
Number of options to renew \| Option						2
Additional office space for lease \| ft²	26,000			14,000
Operating lease expiration month and year				2029-09
Estimated lease payments						$ 26,200,000
Colorado Owner, LLC \| Corporate Headquarters In Pasadena \| California
Lessee Lease Description [Line Items]
Lease term			91 months
Office space leases, in square feet \| ft²			24,000
Lease payments, commencement date			Sep. 30, 2019
Estimated lease payments			$ 8,700,000
Lease expiration date			Apr. 30, 2027
Payments for leasehold improvements, net of tenant improvement allowances			$ 3,500,000
Operating lease renewal term			5 years
Number of options to renew \| Option			1
Halozyme, Inc. \| California \| Sublease Agreement
Lessee Lease Description [Line Items]
Office space leases, in square feet \| ft²		21,000
Lease expiration date		Jan. 14, 2023
Estimated lease payments		$ 2,000,000.0
Sublease commencement date		Apr. 01, 2020

Leases - Summary of Maturities of Operating Lease Liabilities on an Undiscounted Basis (Detail)	Sep. 30, 2020 USD ($)
Leases [Abstract]
2021	$ 3,091,901
2022	3,853,290
2023	3,406,754
2024	3,269,674
2025	3,358,292
2025 and thereafter	15,331,296
Total	32,311,207
Less imputed interest	(11,173,252)
Total operating lease liabilities (includes current portion)	$ 21,137,955

Leases - Future Minimum Lease Payments Under Operating Leases (Detail)	Sep. 30, 2019 USD ($)
Leases [Abstract]
2020	$ 1,521,451
2021	2,256,379
2022	2,521,446
2023	2,590,558
2024	2,661,512
2025 and thereafter	10,834,206
Total	$ 22,385,552

Stock-Based Compensation - Additional Information (Detail) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of options outstanding	4,539,403	4,773,670
RSU awards vesting, description	At vesting, each outstanding RSU will be exchanged for one share of the Company’s Common Stock. RSU recipients may elect to net share settle upon vesting, in which case the Company pays the employee’s income taxes due upon vesting and withholds a number of shares of Common Stock of equal value. RSU awards generally vest subject to the satisfaction of service requirements or the satisfaction of both service requirements and achievement of certain performance targets.
Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 9,719,116	$ 3,955,216	$ 3,265,348
Grant date fair value of the options granted	34,582,743	12,137,250	4,141,318
Intrinsic value of options exercised	44,082,294	24,561,189	5,805,317
Unrecognized pre-tax compensation expense	$ 36,355,846
Weighted average period to recognize pre-tax compensation expense	3 years 1 month 6 days
Dividend yield	0.00%
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 33,663,871	$ 8,438,107	$ 5,189,259
Weighted average period to recognize pre-tax compensation expense	3 years 1 month 6 days
Number of restricted stock units outstanding, granted	2,687,096
Unrecognized pre-tax compensation expense	$ 88,548,649
Additional unrecognized pre-tax compensation expense	$ 38,000,000.0
2004 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserve for issuance	673,262
2004 Equity Incentive Plan \| Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of options outstanding	673,262
2013 Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserve for issuance	5,598,345
2013 Incentive Plan \| Employee Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of options outstanding	2,611,625
2013 Incentive Plan \| Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of restricted stock units outstanding	2,588,000
Number of restricted stock units outstanding, granted	1,754,071
Outside Of Equity Compensation Plans
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserve for issuance	1,254,516
Outside Of Equity Compensation Plans \| Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserve for issuance	936,025
Number of restricted stock units outstanding, granted	933,025

Stock-Based Compensation - Summarize Information about Stock Options (Detail)	12 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Options Outstanding, beginning balance \| shares	4,773,670
Number of Options Outstanding, Granted \| shares	951,500
Number of Options Outstanding, Cancelled \| shares	(74,639)
Number of Options Outstanding, Exercised \| shares	(1,111,128)
Number of Options Outstanding, ending balance \| shares	4,539,403
Number of Options Outstanding, Exercisable \| shares	2,924,744
Weighted-Average Exercise Price Per Share, beginning balance \| $ / shares	$ 8.16
Weighted-Average Exercise Price Per Share, Granted \| $ / shares	48.19
Weighted-Average Exercise Price Per Share, Cancelled \| $ / shares	22.38
Weighted-Average Exercise Price Per Share, Exercised \| $ / shares	6.72
Weighted-Average Exercise Price Per Share, ending balance \| $ / shares	16.67
Weighted-Average Exercise Price Per Share, Exercisable \| $ / shares	$ 8.30
Weighted-Average Remaining Contractual Term	6 years 2 months 12 days
Weighted-Average Remaining Contractual Term, Exercisable	4 years 9 months 18 days
Aggregate Intrinsic Value \| $	$ 129,100,277
Aggregate Intrinsic Value, Exercisable \| $	$ 102,698,309

Stock-Based Compensation - Assumptions Used to Value Stock Options (Detail) - $ / shares	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions And Methodology [Abstract]
Risk-free interest rate, minimum	0.40%	1.50%	2.05%
Risk-free interest rate, maximum	1.80%	3.11%	2.99%
Volatility		115.00%	110.00%
Volatility, minimum	90.00%
Volatility, maximum	92.00%
Expected life (in years)	6 years 3 months	6 years 3 months	6 years 3 months
Weighted average grant date fair value per share of options granted	$ 36.35	$ 13.80	$ 5.04

Stock-Based Compensation - Summary of RSUs Activity (Detail) - Restricted Stock Units (RSUs)	12 Months Ended
	Sep. 30, 2020 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of RSUs, Unvested, beginning of period \| shares	2,062,833
Number of RSUs, Granted \| shares	2,687,096
Number of RSUs, Vested \| shares	(1,158,904)
Number of RSUs, Forfeited \| shares	(67,000)
Number of RSUs, Unvested, End of period \| shares	3,524,025
Weighted-Average Grant Date Fair Value, beginning balance \| $ / shares	$ 9.43
Weighted-Average Grant Date Fair Value, Granted \| $ / shares	55.59
Weighted-Average Grant Date Fair Value, Vested \| $ / shares	9.71
Weighted-Average Grant Date Fair Value, Forfeited \| $ / shares	31.78
Weighted-Average Grant Date Fair Value, ending balance \| $ / shares	$ 44.11

Fair Value Measurements - Fair Value Measurements for Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Short-term investments (held to maturity)	$ 230,461,000	$ 82,173,729
Contingent Consideration	0	0
Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash and cash equivalents	143,582,667	221,804,128
Marketable securities	85,019,719
Short-term investments (held to maturity)	88,479,624	37,122,478
Long-term investments (held to maturity)	141,981,376	45,051,251
Fair Value, Measurements, Recurring \| Level 1
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Cash and cash equivalents	143,582,667	221,804,128
Marketable securities	85,019,719
Fair Value, Measurements, Recurring \| Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Short-term investments (held to maturity)	88,479,624	37,122,478
Long-term investments (held to maturity)	$ 141,981,376	$ 45,051,251

Fair Value Measurements - Additional Information (Detail) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Fair Value Disclosures [Abstract]
Contingent consideration obligations	$ 0	$ 0

Income Taxes - Components of the Net Deferred Tax (Liability) and Asset (Detail) - USD ($)	Sep. 30, 2020	Sep. 30, 2019
Deferred Tax Assets
Accrued Compensation	$ 2,086,396	$ 1,310,466
Stock Compensation	10,936,819	3,609,756
Capitalized Research & Development	624,915	926,026
California Alternative Minimum Tax	178,652	173,553
Fixed Assets		438,882
Net Operating Losses	151,007,113	105,372,571
Intangible Assets	2,818,002	3,590,090
Deferred Revenue	1,702,357
Right of Use Assets/Lease Liabilities	1,015,626
Deferred Rent		821,317
Capital Loss	709,779	709,779
Total deferred tax assets	171,079,659	116,952,440
Valuation allowance	(156,603,859)	(108,232,402)
Deferred tax liabilities:
Fixed Assets	(2,546,968)
State taxes	(11,928,832)	(8,720,038)
Total deferred tax liability	$ (14,475,800)	$ (8,720,038)

Income Taxes - Additional Information (Detail) $ in Millions	Sep. 30, 2020 USD ($)
Income Tax Disclosure [Abstract]
Valuation allowance against deferred tax assets	100.00%
Gross federal net operating loss carry forwards	$ 473.0
Gross state net operating loss carry forwards	$ 497.0

Income Taxes - Provisions for Income Taxes (Detail) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
State:
Current	$ 2,400	$ 173,553
Total State	2,400	173,553
Provision from income taxes	$ 2,400	$ 173,553	$ 2,400

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Summary of Effective Income Tax Rate Reconciliation (Detail)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
At U.S. federal statutory rate	21.00%	21.00%
State taxes, net of federal effect	7.00%	7.30%
Stock compensation	29.40%	(15.00%)
Mark-to-market adjustments	0.00%	0.00%
Valuation allowance	(57.40%)	(13.00%)
Other	0.00%	0.00%
True-up on deferred taxes	0.00%	0.00%
Tax rate change	0.00%	0.00%
Effective income tax rate	0.00%	0.30%

Employee Benefit Plans - Additional Information (Detail) - USD ($)	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Defined Benefit Plan Disclosure [Line Items]
Employee benefits costs	$ 863,080	$ 545,698	$ 451,623
Employee Contributions up to 3%
Defined Benefit Plan Disclosure [Line Items]
Discretionary match percentage	100.00%
Percentage of compensation	3.00%
Employee Contributions Next 2%
Defined Benefit Plan Disclosure [Line Items]
Discretionary match percentage	50.00%
Percentage of compensation	2.00%

Unaudited Quarterly Financial Data - Summary of Unaudited Quarterly Financial Data (Detail) - USD ($)	3 Months Ended								12 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Quarterly Financial Information Disclosure [Abstract]
Revenues	$ 7,632,856	$ 27,375,778	$ 23,528,853	$ 29,454,579	$ 43,292,770	$ 42,696,636	$ 48,148,275	$ 34,657,896	$ 87,992,066	$ 168,795,577	$ 16,142,321
Type of Revenue [Extensible List]	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember	arwr:TechnologyLicensesCollaborativeResearchAndDevelopmentArrangementsResearchGrantsAndProductSalesMember
Operating Income (Loss)	$ (50,119,092)	$ (15,945,862)	$ (22,240,255)	$ (4,853,594)	$ 9,638,049	$ 18,595,749	$ 22,010,692	$ 10,946,144	$ (93,158,803)	$ 61,190,634	$ (55,936,235)
Net Income (Loss)	$ (48,432,715)	$ (13,611,213)	$ (19,835,570)	$ (2,673,728)	$ 11,704,906	$ 20,335,708	$ 23,896,982	$ 12,037,253	$ (84,553,226)	$ 67,974,849	$ (54,450,478)
Net Income (Loss) per share-Basic	$ (0.48)	$ (0.13)	$ (0.20)	$ (0.03)	$ 0.12	$ 0.21	$ 0.25	$ 0.13	$ (0.84)	$ 0.72	$ (0.65)
Net Income (Loss) per share-Diluted	$ (0.48)	$ (0.13)	$ (0.20)	$ (0.03)	$ 0.12	$ 0.21	$ 0.24	$ 0.13	$ (0.84)	$ 0.69	$ (0.65)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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Subsequent Events - Additional Information (Detail)	Oct. 23, 2020 USD ($) ft²	Oct. 07, 2020 USD ($)	Sep. 30, 2019 USD ($)
Subsequent Event [Line Items]
Estimated lease payments			$ 22,385,552
Subsequent Event \| Corporate Headquarters In Pasadena \| California
Subsequent Event [Line Items]
Office space leases, in square feet \| ft²	24,434
Lease commencement period	2021-07
Lease expiration month and year	2027-04
Estimated lease payments	$ 7,300,000
Expected leasehold improvements, net of tenant improvement allowances	$ 4,000,000.0
Takeda License Agreement \| License and Co-Funding Agreement \| Subsequent Event
Subsequent Event [Line Items]
Agreement date		Oct. 07, 2020
Ratio of Profit Sharing Structure for United States Commercialization		50/50 profit sharing
Cash received as due under collaboration agreement		$ 300,000,000.0
Development regulatory and sales milestones payments		$ 740,000,000.0
Takeda License Agreement \| Minimum \| License and Co-Funding Agreement \| Subsequent Event
Subsequent Event [Line Items]
Percentage of eligible to receive tiered royalties on net sales		20.00%
Takeda License Agreement \| Maximum \| License and Co-Funding Agreement \| Subsequent Event
Subsequent Event [Line Items]
Percentage of eligible to receive tiered royalties on net sales		25.00%
Development regulatory and sales milestones payments		$ 740,000,000.0