arwr-20230331
000087940709-302023Q2false00008794072022-10-012023-03-3100008794072023-04-24xbrli:shares00008794072023-03-31iso4217:USD00008794072022-09-30iso4217:USDxbrli:shares00008794072023-01-012023-03-3100008794072022-01-012022-03-3100008794072021-10-012022-03-310000879407us-gaap:CommonStockMember2022-09-300000879407us-gaap:AdditionalPaidInCapitalMember2022-09-300000879407us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300000879407us-gaap:RetainedEarningsMember2022-09-300000879407us-gaap:NoncontrollingInterestMember2022-09-300000879407us-gaap:AdditionalPaidInCapitalMember2022-10-012022-12-3100008794072022-10-012022-12-310000879407us-gaap:CommonStockMember2022-10-012022-12-310000879407us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-10-012022-12-310000879407us-gaap:NoncontrollingInterestMember2022-10-012022-12-310000879407us-gaap:RetainedEarningsMember2022-10-012022-12-310000879407us-gaap:CommonStockMember2022-12-310000879407us-gaap:AdditionalPaidInCapitalMember2022-12-310000879407us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310000879407us-gaap:RetainedEarningsMember2022-12-310000879407us-gaap:NoncontrollingInterestMember2022-12-3100008794072022-12-310000879407us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310000879407us-gaap:CommonStockMember2023-01-012023-03-310000879407us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310000879407us-gaap:NoncontrollingInterestMember2023-01-012023-03-310000879407us-gaap:RetainedEarningsMember2023-01-012023-03-310000879407us-gaap:CommonStockMember2023-03-310000879407us-gaap:AdditionalPaidInCapitalMember2023-03-310000879407us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310000879407us-gaap:RetainedEarningsMember2023-03-310000879407us-gaap:NoncontrollingInterestMember2023-03-310000879407us-gaap:CommonStockMember2021-09-300000879407us-gaap:AdditionalPaidInCapitalMember2021-09-300000879407us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300000879407us-gaap:RetainedEarningsMember2021-09-300000879407us-gaap:NoncontrollingInterestMember2021-09-3000008794072021-09-300000879407us-gaap:AdditionalPaidInCapitalMember2021-10-012021-12-3100008794072021-10-012021-12-310000879407us-gaap:CommonStockMember2021-10-012021-12-310000879407us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-10-012021-12-310000879407us-gaap:RetainedEarningsMember2021-10-012021-12-310000879407us-gaap:CommonStockMember2021-12-310000879407us-gaap:AdditionalPaidInCapitalMember2021-12-310000879407us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000879407us-gaap:RetainedEarningsMember2021-12-310000879407us-gaap:NoncontrollingInterestMember2021-12-3100008794072021-12-310000879407us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310000879407us-gaap:CommonStockMember2022-01-012022-03-310000879407us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000879407us-gaap:RetainedEarningsMember2022-01-012022-03-310000879407us-gaap:CommonStockMember2022-03-310000879407us-gaap:AdditionalPaidInCapitalMember2022-03-310000879407us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310000879407us-gaap:RetainedEarningsMember2022-03-310000879407us-gaap:NoncontrollingInterestMember2022-03-3100008794072022-03-310000879407arwr:LicenseAndCoFundingAgreementMemberarwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2023-03-310000879407arwr:GlaxosmithklineIntellectualPropertyLimitedMemberarwr:CollaborationAndLicenseAgreementMember2023-03-310000879407arwr:HorizonTherapeuticsIrelandDACMember2023-01-012023-03-310000879407arwr:AmgenIncorporatedMember2023-01-012023-03-310000879407arwr:RoyaltyPharmaMember2022-11-092022-11-090000879407arwr:RoyaltyPharmaMember2022-10-012023-03-310000879407arwr:HorizonTherapeuticsIrelandDACAndAmgenIncorporatedMember2022-10-012023-03-310000879407arwr:GlaxosmithklineIntellectualPropertyLimitedMember2023-01-012023-03-310000879407arwr:GlaxosmithklineIntellectualPropertyLimitedMember2022-01-012022-03-310000879407arwr:GlaxosmithklineIntellectualPropertyLimitedMember2022-10-012023-03-310000879407arwr:GlaxosmithklineIntellectualPropertyLimitedMember2021-10-012022-03-310000879407arwr:HorizonTherapeuticsIrelandDACMember2023-01-012023-03-310000879407arwr:HorizonTherapeuticsIrelandDACMember2022-01-012022-03-310000879407arwr:HorizonTherapeuticsIrelandDACMember2022-10-012023-03-310000879407arwr:HorizonTherapeuticsIrelandDACMember2021-10-012022-03-310000879407arwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2023-01-012023-03-310000879407arwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2022-01-012022-03-310000879407arwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2022-10-012023-03-310000879407arwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2021-10-012022-03-310000879407arwr:JanssenPharmaceuticalsIncorporationMember2023-01-012023-03-310000879407arwr:JanssenPharmaceuticalsIncorporationMember2022-01-012022-03-310000879407arwr:JanssenPharmaceuticalsIncorporationMember2022-10-012023-03-310000879407arwr:JanssenPharmaceuticalsIncorporationMember2021-10-012022-03-310000879407arwr:AmgenIncorporatedMember2023-01-012023-03-310000879407arwr:AmgenIncorporatedMember2022-01-012022-03-310000879407arwr:AmgenIncorporatedMember2022-10-012023-03-310000879407arwr:AmgenIncorporatedMember2021-10-012022-03-310000879407arwr:GlaxosmithklineIntellectualPropertyLimitedMemberarwr:CollaborationAndLicenseAgreementMember2021-11-220000879407arwr:GlaxosmithklineIntellectualPropertyLimitedMembersrt:MaximumMemberarwr:CollaborationAndLicenseAgreementMember2021-11-220000879407arwr:GlaxosmithklineIntellectualPropertyLimitedMemberarwr:CollaborationAndLicenseAgreementMember2021-11-222021-11-220000879407arwr:HorizonTherapeuticsIrelandDACMemberarwr:AROXDHAgreementMember2021-07-310000879407arwr:HorizonTherapeuticsIrelandDACMemberarwr:AROXDHAgreementMember2023-01-310000879407srt:MaximumMemberarwr:HorizonTherapeuticsIrelandDACMemberarwr:AROXDHAgreementMember2021-06-180000879407arwr:HorizonTherapeuticsIrelandDACMemberarwr:LicenseAgreementMember2021-06-182021-06-18arwr:bundlearwr:obligation0000879407arwr:HorizonTherapeuticsIrelandDACMemberarwr:AROXDHAgreementMember2021-06-182021-06-180000879407arwr:HorizonTherapeuticsIrelandDACMemberarwr:AROXDHAgreementMember2023-03-310000879407arwr:LicenseAndCoFundingAgreementMembersrt:MinimumMemberarwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2020-10-072020-10-07xbrli:pure0000879407arwr:LicenseAndCoFundingAgreementMembersrt:MaximumMemberarwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2020-10-072020-10-070000879407arwr:LicenseAndCoFundingAgreementMemberarwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2021-01-310000879407arwr:LicenseAndCoFundingAgreementMembersrt:MaximumMemberarwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2023-03-310000879407arwr:LicenseAndCoFundingAgreementMemberarwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2020-10-072020-10-070000879407arwr:LicenseAndCoFundingAgreementMemberarwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2023-01-012023-03-310000879407arwr:LicenseAndCoFundingAgreementMemberarwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2022-10-012023-03-310000879407arwr:DeferredRevenueMemberarwr:LicenseAndCoFundingAgreementMemberarwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMember2023-03-310000879407arwr:LicenseAndCoFundingAgreementMemberarwr:TakedaPharmaceuticalsUnitedStatesOfAmericaIncorporatedMemberus-gaap:AccruedLiabilitiesMember2023-03-310000879407arwr:CollaborationAndLicenseAgreementMemberarwr:JohnsonAndJohnsonInnovationJJDCIncorporationMember2018-10-032018-10-030000879407arwr:CommonStockPurchaseAgreementMemberarwr:JohnsonAndJohnsonInnovationJJDCIncorporationMember2018-10-032018-10-030000879407arwr:JanssenPharmaceuticalsIncorporationMember2018-10-030000879407arwr:JanssenPharmaceuticalsIncorporationMembersrt:MaximumMemberarwr:LicenseAgreementMember2018-10-030000879407arwr:JanssenPharmaceuticalsIncorporationMemberarwr:JNJ75220795AROJNJ1Member2021-05-310000879407arwr:JanssenPharmaceuticalsIncorporationMemberarwr:JNJ75220795AROJNJ1Member2021-09-300000879407arwr:JanssenPharmaceuticalsIncorporationMemberarwr:JNJ75220795AROJNJ1Member2022-01-012022-03-310000879407arwr:JanssenPharmaceuticalsIncorporationMemberarwr:JNJ75220795AROJNJ1Member2023-01-012023-03-310000879407arwr:JanssenPharmaceuticalsIncorporationMemberarwr:JNJ75220795AROJNJ1Member2023-03-310000879407arwr:CollaborationAndLicenseAgreementMember2018-10-032018-10-030000879407arwr:JanssenPharmaceuticalsIncorporationMemberarwr:JNJ3989AROHBVAgreementMember2018-10-030000879407arwr:JanssenPharmaceuticalsIncorporationMemberarwr:JNJ3989AROHBVAgreementMember2023-03-310000879407arwr:CollaborationAndLicenseAgreementMemberarwr:AmgenIncorporatedMember2016-09-28arwr:agreement0000879407arwr:OlpasiranAndAROAMG1AgreementMemberarwr:AmgenIncorporatedMember2016-09-282016-09-280000879407arwr:OlpasiranAndAROAMG1AgreementMemberarwr:AmgenIncorporatedMember2023-03-310000879407arwr:OlpasiranAndAROAMG1AgreementMemberarwr:AmgenIncorporatedMember2018-09-300000879407arwr:OlpasiranAndAROAMG1AgreementMemberarwr:AmgenIncorporatedMember2020-07-310000879407arwr:OlpasiranAndAROAMG1AgreementMemberarwr:AmgenIncorporatedMember2022-12-310000879407srt:MaximumMemberarwr:OlpasiranAgreementMemberarwr:AmgenIncorporatedMember2023-03-310000879407arwr:VisirnaTherapeuticsIncMemberarwr:VisirnaLicenseAgreementMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2022-04-252022-04-250000879407arwr:VisirnaTherapeuticsIncMemberarwr:VisirnaLicenseAgreementMember2022-10-012023-03-310000879407arwr:VisirnaTherapeuticsIncMemberarwr:VisirnaLicenseAgreementMember2023-03-310000879407us-gaap:DebtSecuritiesMember2023-03-310000879407us-gaap:CertificatesOfDepositMember2023-03-310000879407us-gaap:DebtSecuritiesMember2022-09-300000879407us-gaap:CertificatesOfDepositMember2022-09-300000879407us-gaap:PatentsMemberarwr:NovartisMember2023-03-310000879407us-gaap:PatentsMemberarwr:NovartisMember2022-10-012023-03-310000879407us-gaap:LicensingAgreementsMemberarwr:NovartisMember2023-03-310000879407us-gaap:LicensingAgreementsMemberarwr:NovartisMember2022-10-012023-03-310000879407arwr:NovartisMember2023-03-310000879407us-gaap:PatentsMemberarwr:NovartisMember2022-09-300000879407us-gaap:PatentsMemberarwr:NovartisMember2021-10-012022-09-300000879407us-gaap:LicensingAgreementsMemberarwr:NovartisMember2022-09-300000879407us-gaap:LicensingAgreementsMemberarwr:NovartisMember2021-10-012022-09-300000879407arwr:NovartisMember2022-09-300000879407us-gaap:SubsequentEventMember2023-04-260000879407us-gaap:SubsequentEventMember2023-04-270000879407arwr:TwoThousandFourEquityIncentivePlanTwoThousandThirteenEquityIncentivePlanTwoThousandTwentyOneEquityIncentivePlanAndInducementGrantsMember2023-03-310000879407arwr:TwoThousandFourEquityIncentivePlanTwoThousandThirteenEquityIncentivePlanTwoThousandTwentyOneEquityIncentivePlanAndInducementGrantsMember2022-09-300000879407srt:MaximumMemberarwr:AtTheMarketAgreementMember2022-12-020000879407srt:MaximumMemberarwr:AtTheMarketAgreementMember2022-12-022022-12-020000879407arwr:AtTheMarketAgreementMember2023-03-310000879407arwr:VeronaTechnologyParkMemberstpr:WI2021-12-202021-12-20utr:acre0000879407arwr:DrugManufacturingFacilityMemberstpr:WI2021-12-20utr:sqft0000879407arwr:LaboratoryAndOfficeFacilityMemberstpr:WI2021-12-200000879407srt:MinimumMemberarwr:FacilitiesMember2021-12-200000879407srt:MaximumMemberarwr:FacilitiesMember2021-12-2000008794072021-12-2000008794072021-12-202021-12-200000879407arwr:TechnologyLicenseCommitmentsMember2023-01-012023-03-310000879407arwr:TechnologyLicenseCommitmentsMember2022-01-012022-03-310000879407arwr:TechnologyLicenseCommitmentsMember2022-10-012023-03-310000879407arwr:TechnologyLicenseCommitmentsMember2021-10-012022-03-310000879407arwr:ResearchFacilityInSanDiegoMemberstpr:CA2021-11-190000879407arwr:ResearchFacilityInSanDiegoMemberstpr:CA2021-11-192021-11-190000879407arwr:ResearchFacilityInSanDiegoMembersrt:MaximumMemberstpr:CA2021-11-19arwr:option0000879407stpr:CAarwr:CorporateHeadquartersInPasadenaMember2021-11-190000879407arwr:ColoradoOwnerLLCMemberstpr:CAarwr:CorporateHeadquartersInPasadenaMember2019-09-300000879407arwr:ResearchFacilityInSanDiegoMemberstpr:CAarwr:SorrentoValleyOwnerDELLCMember2022-12-230000879407stpr:WIarwr:ResearchFacilityInMadisonMember2023-03-310000879407us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-03-310000879407us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-03-310000879407us-gaap:ResearchAndDevelopmentExpenseMember2022-10-012023-03-310000879407us-gaap:ResearchAndDevelopmentExpenseMember2021-10-012022-03-310000879407us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-03-310000879407us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-03-310000879407us-gaap:GeneralAndAdministrativeExpenseMember2022-10-012023-03-310000879407us-gaap:GeneralAndAdministrativeExpenseMember2021-10-012022-03-310000879407arwr:TwoThousandsFourEquityIncentivePlanMember2023-03-310000879407arwr:TwoThousandsThirteenIncentivePlanMember2023-03-310000879407arwr:TwoThousandTwentyOneIncentivePlanMember2021-03-180000879407arwr:TwoThousandTwentyOneIncentivePlanMember2023-03-310000879407arwr:TwoThousandsThirteenIncentivePlanMember2022-10-012023-03-310000879407us-gaap:EmployeeStockOptionMemberarwr:InducementAwardsMember2023-03-310000879407us-gaap:RestrictedStockUnitsRSUMemberarwr:InducementAwardsMember2023-03-310000879407arwr:InducementAwardsMember2023-03-310000879407arwr:TwoThousandsFourEquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-03-310000879407us-gaap:RestrictedStockUnitsRSUMemberarwr:TwoThousandsThirteenIncentivePlanMember2023-03-310000879407us-gaap:RestrictedStockUnitsRSUMemberarwr:TwoThousandTwentyOneIncentivePlanMember2023-03-310000879407us-gaap:RestrictedStockUnitsRSUMember2023-03-310000879407us-gaap:EmployeeStockOptionMember2023-01-012023-03-310000879407us-gaap:EmployeeStockOptionMember2022-01-012022-03-310000879407us-gaap:EmployeeStockOptionMember2022-10-012023-03-310000879407us-gaap:EmployeeStockOptionMember2021-10-012022-03-310000879407us-gaap:EmployeeStockOptionMember2023-03-310000879407us-gaap:RestrictedStockUnitsRSUMember2022-09-300000879407us-gaap:RestrictedStockUnitsRSUMember2022-10-012023-03-310000879407us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310000879407us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310000879407us-gaap:RestrictedStockUnitsRSUMember2021-10-012022-03-310000879407us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentDebtSecuritiesMember2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentDebtSecuritiesMember2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:USGovernmentDebtSecuritiesMember2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentDebtSecuritiesMember2023-03-310000879407us-gaap:MunicipalBondsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000879407us-gaap:MunicipalBondsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-03-310000879407us-gaap:MunicipalBondsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-03-310000879407us-gaap:MunicipalBondsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000879407us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberarwr:CommercialNotesMember2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberarwr:CommercialNotesMember2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberarwr:CommercialNotesMember2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberarwr:CommercialNotesMember2023-03-310000879407us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000879407us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2023-03-310000879407us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-03-310000879407us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310000879407us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel3Member2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2023-03-310000879407us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2023-03-310000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-03-310000879407us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentDebtSecuritiesMember2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentDebtSecuritiesMember2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:USGovernmentDebtSecuritiesMember2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentDebtSecuritiesMember2022-09-300000879407us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberarwr:CommercialNotesMember2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberarwr:CommercialNotesMember2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberarwr:CommercialNotesMember2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberarwr:CommercialNotesMember2022-09-300000879407us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-09-300000879407us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-09-300000879407us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-09-300000879407us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-09-300000879407us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel3Member2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CertificatesOfDepositMember2022-09-300000879407us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2022-09-300000879407us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-09-300000879407arwr:RoyaltyPharmaAgreementMembersrt:MaximumMember2022-11-092022-11-090000879407arwr:RoyaltyPharmaAgreementMember2022-11-092022-11-090000879407arwr:RoyaltyPharmaAgreementMember2022-11-090000879407arwr:RoyaltyPharmaAgreementMember2023-03-310000879407arwr:RoyaltyPharmaAgreementMember2023-01-012023-03-310000879407arwr:RoyaltyPharmaAgreementMember2022-10-012023-03-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_____________________________________
FORM 10-Q
_____________________________________
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to          .
Commission file number 001-38042
_____________________________________
ARROWHEAD PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
_____________________________________
Delaware46-0408024
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
177 E. Colorado Blvd, Suite 700
Pasadena, California 91105
(626) 304-3400
(Address and telephone number of principal executive offices)
Former name, former address, and former fiscal year, if changed since last report: N/A
_____________________________________
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per share
ARWR
The Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
xAccelerated Filer
o
Non-Accelerated Filer
o
Smaller Reporting Company
o
Emerging Growth Company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The number of shares of the registrant’s common stock outstanding as of April 24, 2023 was 106,900,421.



Page(s)
Consolidated Statements of Stockholders’ Equity



PART I. FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
Arrowhead Pharmaceuticals, Inc.
Consolidated Balance Sheets
(In thousands, except per share amounts)
March 31, 2023
September 30, 2022
(unaudited)
ASSETS
Current assets:
Cash, cash equivalents and restricted cash$134,959 $108,005 
Accounts receivable69,434 1,410 
Short term investments346,046 268,391 
Prepaid expenses9,935 7,289 
Other current assets14,436 20,204 
Total current assets574,810 405,299 
Property and equipment, net185,228 110,297 
Intangible assets, net11,112 11,962 
Long-term investments78,834 105,872 
Right-of-use assets41,114 58,291 
Other assets210 218 
Total Assets$891,308 $691,939 
LIABILITIES, NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$9,556 $2,868 
Accrued expenses39,551 46,856 
Accrued payroll and benefits5,494 12,251 
Lease liabilities2,711 2,776 
Deferred revenue29,839 74,099 
Total current liabilities87,151 138,850 
Long-term liabilities:
Lease liabilities, net of current portion80,070 78,800 
Deferred revenue, net of current portion1,075 55,950 
Liability related to the sale of future royalties257,906  
Total long-term liabilities339,051 134,750 
Commitments and contingencies (Note 7)
Noncontrolling interest and stockholders’ equity:
Common stock, $0.001 par value:
Authorized 290,000 and 145,000 shares; issued and outstanding 106,869 and 105,960 shares
199 198 
Additional paid-in capital1,260,310 1,219,213 
Accumulated other comprehensive loss(332)(136)
Accumulated deficit(813,405)(820,755)
Total Arrowhead Pharmaceuticals, Inc. stockholders’ equity446,772 398,520 
Noncontrolling interest18,334 19,819 
Total noncontrolling interest and stockholders’ equity465,106 418,339 
Total Liabilities, Noncontrolling Interest and Stockholders’ Equity$891,308 $691,939 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
1


Arrowhead Pharmaceuticals, Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(In thousands, except per share amounts)
(unaudited)
Three Months Ended March 31,Six Months Ended March 31,
2023202220232022
Revenue$146,267 $151,805 $208,813 $179,244 
Operating expenses:
Research and development74,881 75,985 158,576 141,750 
General and administrative23,221 34,267 44,206 59,262 
Total operating expenses98,102 110,252 202,782 201,012 
Operating income (loss)48,165 41,553 6,031 (21,768)
Other income (expense):
Interest income4,560 1,054 7,242 2,210 
Interest expense(5,057) (7,906) 
Other, net8 1,759 515 1,052 
Total other (loss) income(489)2,813 (149)3,262 
Income (loss) before income tax expense and noncontrolling interest47,676 44,366 5,882 (18,506)
Income tax expense  17  
Net income (loss) including noncontrolling interest47,676 44,366 5,865 (18,506)
Net loss attributable to noncontrolling interest, net of tax(999) (1,485) 
Net income (loss) attributable to Arrowhead Pharmaceuticals, Inc.$48,675 $44,366 $7,350 $(18,506)
Net income (loss) per share attributable to Arrowhead Pharmaceuticals, Inc.:
Basic$0.46 $0.42 $0.07 $(0.18)
Diluted$0.45 $0.41 $0.07 $(0.18)
Weighted-average shares used in calculating
Basic106,757 105,545 106,394 105,034 
Diluted108,143 107,929 107,893 105,034 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments(74)1 (196)(38)
Comprehensive income (loss)$47,602 $44,367 $5,669 $(18,544)
The accompanying notes are an integral part of these unaudited consolidated financial statements.
2


Arrowhead Pharmaceuticals, Inc.
Consolidated Statements of Stockholders’ Equity
(in thousands)
(unaudited)

Common
Stock
Amount ($)
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Non-
controlling Interest
Totals
Balance at September 30, 2022
105,960 $198 $1,219,213 $(136)$(820,755)$19,819 $418,339 
Stock-based compensation— — 19,390 — — — 19,390 
Exercise of stock options82 — 576 — — — 576 
Common stock - restricted stock units vesting98 1 (1)— — —  
Foreign currency translation adjustments— — — (122)— — (122)
Interest in joint venture— — — — — (486)(486)
Net loss for the three months ended December 31, 2022
— — — — (41,325)— (41,325)
Balance at December 31, 2022
106,140 $199 $1,239,178 $(258)$(862,080)$19,333 $396,372 
Stock-based compensation— — 20,612 — — — 20,612 
Exercise of stock options64 — 520 — — — 520 
Common stock - restricted stock units vesting665 — — — — — — 
Foreign currency translation adjustments— — — (74)— — (74)
Interest in joint venture— — — — — (999)(999)
Net income for the three months ended March 31, 2023
— — — — 48,675 — 48,675 
Balance at March 31, 2023
106,869 $199 $1,260,310 $(332)$(813,405)$18,334 $465,106 

Common
Stock
Amount ($)
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Non-
controlling Interest
Totals
Balance at September 30, 2021
104,327 $197 $1,053,386 $(69)$(644,692)$ $408,822 
Stock-based compensation— — 24,504 — — — 24,504 
Exercise of stock options208 — 2,145 — — — 2,145 
Common stock - restricted stock units vesting263 — — — — — — 
Foreign currency translation adjustments— — — (39)— — (39)
Net loss for the three months ended December 31, 2021
— — — — (62,872)— (62,872)
Balance at December 31, 2021
104,798 $197 $1,080,035 $(108)$(707,564)$ $372,560 
Stock-based compensation— — 33,802 — — — 33,802 
Exercise of stock options237 — 1,537 — — — 1,537 
Common stock - restricted stock units vesting667 1 (1)— — —  
Foreign currency translation adjustments— — — 1 — — 1 
Net income for the three months ended March 31, 2022
— — — — 44,366  44,366 
Balance at March 31, 2022
105,702 $198 $1,115,373 $(107)$(663,198)$ $452,266 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3


Arrowhead Pharmaceuticals, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended March 31,
20232022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)$5,865 $(18,506)
Adjustments to reconcile net income (loss) to net cash flow from operating activities
Stock-based compensation40,002 58,307 
Depreciation and amortization5,358 5,167 
(Accretion) amortization of note premiums/discounts(82)329 
Non-cash interest expense on liability related to the sale of future royalties7,906  
Changes in operating assets and liabilities:
Accounts receivable(68,024)8,938 
Prepaid expenses and other current assets20,309 (3,313)
Accounts payable6,688 1,146 
Accrued expenses(27,279)3,699 
Deferred revenue(99,135)(54,926)
Operating lease liabilities1,205 580 
Net cash (used in) provided by operating activities(107,187)1,421 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment(66,225)(10,530)
Purchases of investments(192,528)(148,391)
Proceeds from maturities of investments141,994 55,781 
Net cash used in investing activities(116,759)(103,140)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the exercises of stock options1,096 3,731 
Proceeds from the sale of future royalties250,000  
Net cash provided by financing activities251,096 3,731 
Net increase (decrease) in cash, cash equivalents and restricted cash27,150 (97,988)
Effect of exchange rate on cash, cash equivalents and restricted cash(196)(38)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
BEGINNING OF PERIOD108,005 184,434 
END OF PERIOD$134,959 $86,408 
Supplementary disclosures:
Interest paid$ $ 
Income taxes (paid) refunded$ $ 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4


Arrowhead Pharmaceuticals, Inc.
Notes to Consolidated Financial Statements
(unaudited)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
General and Recent Developments
Arrowhead Pharmaceuticals, Inc. and its subsidiaries (referred to herein collectively as the “Company”) are primarily engaged in developing medicines that treat intractable diseases by silencing the genes that cause them. Using a broad portfolio of RNA chemistries and efficient modes of delivery, the Company’s therapies trigger the RNA interference mechanism to induce rapid, deep and durable knockdown of target genes. RNA interference (“RNAi”) is a mechanism present in living cells that inhibits the expression of a specific gene, thereby affecting the production of a specific protein. The Company’s RNAi-based therapeutics may leverage this natural pathway of gene silencing to target and shut down specific disease-causing genes.
The following table presents the Company’s current pipeline:
Therapeutic AreaNameStageProduct Rights
CardiometabolicARO-APOC3Phase 2b and Phase 3Arrowhead
ARO-ANG3Phase 2bArrowhead
OlpasiranPhase 3Amgen
PulmonaryARO-ENAC2Pre-ClinicalArrowhead
ARO-RAGEPhase 1/2Arrowhead
ARO-MUC5ACPhase 1/2aArrowhead
ARO-MMP7Phase 1/2aArrowhead
Liver
GSK-4532990 (formerly ARO-HSD)
Phase 2GSK
FazirsiranPhase 3Takeda and Arrowhead
JNJ-3989Phase 2Janssen
HZN-457 (formerly ARO-XDH)Phase 1Horizon
ARO-C3Phase 1/2Arrowhead
ARO-PNPLA3 (formerly JNJ-75220795)Phase 1Arrowhead
MuscleARO-DUX4Pre-ClinicalArrowhead
CNSARO-SOD1Pre-ClinicalArrowhead
The Company operates lab facilities in San Diego, California and Madison, Wisconsin, where its research and development activities, including the development of RNAi therapeutics, take place. The Company’s principal executive offices are located in Pasadena, California.
During the first half of fiscal 2023, the Company continued to develop and advance its pipeline and partnered candidates. Several key recent developments include:
announced interim results from ARO-RAGE administration in Part 1 of the ongoing Phase 1/2 study in normal healthy volunteers which included:
reductions in soluble RAGE (sRAGE) as measured in serum after two doses on Day 1 and Day 29;
duration of pharmacologic effect persisted for at least 6 weeks after the second administration of the 92 mg does with further follow up ongoing;
reduction in sRAGE as measured in bronchoalveolar lavage fluid (BALF) at Day 31 after a single dose;
reduction in in serum sRAGE were observed after a single dose;
the pooled placebo groups experienced a mean sRAGE increase of 8% in BALF and a mean decrease of 1% serum
safety and tolerability;
expanded TRiMTM platform to include an optimized intrathecal administration for central nervous system (CNS) delivery with distribution throughout the brain and in all relevant brain cell types. The first development candidate to utilize this new delivery platform, ARO-SOD1, is anticipated to have a clinical trial
5


application (CTA) filing in the third quarter of 2023 to begin clinical studies. In preclinical studies, ARO-SOD1 achieved 95% spinal cord tissue mRNA knockdown after a single intrathecal dose in human SOD1 transgenic rats and maintained greater than 80% spinal cord tissue mRNA knockdown three months after a single intrathecal dose in non-human primates;
dosed the first patient in Takeda’s Phase 3 REDWOOD clinical study of Fazirsiran for the treatment of alpha-1 antitrypsin deficiency associated liver diseases, triggering a $40.0 million milestone payment to the Company which is expected to be paid in the third quarter of fiscal 2023;
dosed the first patient in GSK’s Phase 2b trial of GSK4532990, formerly called ARO-HSD, an investigational RNAi therapeutic for the treatment of patients with non-alcoholic steatohepatitis (NASH), triggering a $30.0 million milestone payment to the Company which is expected to be paid in the third quarter of fiscal 2023;
announced that the U.S. Food and Drug Administration (FDA) has granted Fast Track designation to ARO-APOC3 for reducing triglycerides in adult patients with familial chylomicronemia syndrome (FCS). ARO-APOC3 was previously granted Orphan Drug designation by the FDA and the European Union;
announced interim results from Part 1 of AROC3-1001, an ongoing Phase 1/2 clinical study of ARO-C3, which included;
a dose-dependent reduction in serum C3, with 88% mean reduction at highest dose tested;
a dose-dependent reduction in AH50, a marker of alternative complement pathway hemolytic activity, with 91% mean reduction at highest dose tested;
duration of pharmacologic effect supportive of quarterly or less frequent subcutaneous dose administration;
safety and tolerability;
received notice from Janssen of its decision to voluntarily terminate the Research Collaboration and Option Agreement (the “Janssen Collaboration Agreement”) between the Company and Janssen. The Company regained full rights to ARO-PNPLA3, formerly called JNJ-75220795, upon termination of the Janssen Collaboration Agreement, which took effect on April 7, 2023. ARO-PNPLA3 is in Phase 1 clinical trials that are now being developed by the Company;
initiated dosing in ARO-MMP7-1001 (NCT05537025), a Phase 1/2a single ascending dose and multiple ascending dose clinical study to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of ARO-MMP7, an investigational RNAi therapeutic designed to reduce expression of matrix metalloproteinase 7 (MMP7) as a potential treatment for idiopathic pulmonary fibrosis (IPF), in up to 56 healthy volunteers and in up to 21 patients with IPF;
enrolled the first subject in a Phase 1 randomized, placebo-controlled trial to assess the safety tolerability, pharmacokinetics and pharmacodynamics of a development-stage medicine, HZN-457 (formerly ARO-XDH), which is out-licensed to Horizon, triggering a $15.0 million milestone payment to the Company which was paid in the second quarter of fiscal 2023;
enrolled the first subject in Amgen’s Phase 3 trial of Olpasiran, triggering a $25.0 million milestone payment to the Company which was paid in the second quarter of fiscal 2023;
entered into a Royalty Purchase Agreement (the “Royalty Pharma Agreement”) with Royalty Pharma Investments 2019 ICAV (“Royalty Pharma”) on November 9, 2022, pursuant to which Royalty Pharma paid $250.0 million upfront (See Note 11 — Liability Related to the Sale of Future Royalties of Notes to Consolidated Financial Statements of Part I, “Item 1. Financial Statements.”);
announced Topline Results from SEQUOIA Phase 2 Study of Fazirsiran (formerly ARO-AAT) in patients with Alpha-1 Antitrypsin Deficiency-Associated Liver Disease in which;
fibrosis regression was observed in 50% of patients receiving Fazirsiran;
median reductions of 94% of Z-AAT accumulation in the liver and mean reductions of 68% in histologic globule burden were observed;
treatment emergent adverse events were generally well balanced between Fazirsiran and placebo groups;
results were consistent with AROAAT-2002 open-label study previously published in The New England Journal of Medicine.
6


Consolidation and Basis of Presentation
The interim Consolidated Financial Statements include the accounts of Arrowhead Pharmaceuticals, Inc. and its subsidiaries (wholly-owned subsidiaries and a variable interest entity for which the Company is the primary beneficiary). Subsidiaries refer to Arrowhead Madison, Inc., Visirna Therapeutics, Inc. (“Visirna”), and Arrowhead Australia Pty Ltd. For subsidiaries in which the Company owns or is exposed to less than 100% of the economics, the Company records net loss attributable to noncontrolling interests in its consolidated statements of operations equal to the percentage of the economic or ownership interests retained in such entity by the respective noncontrolling party.
The interim Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). The financial data of the Company included herein are unaudited. In the opinion of management, all material adjustments of a normal recurring nature have been made to present fairly the Company’s financial position at March 31, 2023 and the results of operations and cash flows for the periods presented. All intercompany transactions and balances have been eliminated. Certain prior period amounts have been reclassified to conform with the current period presentation.
Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted from the accompanying interim consolidated financial statements and related notes. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended September 30, 2022 for more complete descriptions and discussions. Operating results and cash flows for the six months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2023.
Liquidity
The Company’s primary sources of financing have been through the sale of its securities, revenue from its licensing and collaboration agreements and the sale of certain future royalties. Research and development activities have required significant capital investment since the Company’s inception and are expected to continue to require significant cash expenditure in the future, particularly as the Company’s pipeline of drug candidates and its headcount have both expanded significantly. Additionally, significant capital investment will be required as the Company’s pipeline matures into later stage clinical trials and as the Company plans to increase its internal manufacturing capabilities.
At March 31, 2023, the Company had $135.0 million in cash and cash equivalents (including $7.3 million in restricted cash), $346.0 million in short-term investments and $78.8 million in long-term investments to fund operations. During the six months ended March 31, 2023, the Company’s cash and cash equivalents and investments balance increased by $77.6 million which was primarily due to the $250.0 million upfront payment received from Royalty Pharma (Note 11) and $40.0 million in milestone payments from Horizon and Amgen, partially offset by cash used to fund its operations.
In total, the Company is eligible to receive up to $3.6 billion in developmental, regulatory and sales milestones, and may receive various royalties on net sales from its licensing and collaboration agreements, subject to the terms and conditions of those agreements. The revenue recognition for these collaboration agreements is discussed further in Note 2.
Summary of Significant Accounting Policies
There have been no changes to the significant accounting policies disclosed in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2022.
Recent Accounting Pronouncements
There have been no recent accounting pronouncements that have significantly impacted this Quarterly Report on Form 10-Q, beyond those disclosed in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2022.
7


NOTE 2. COLLABORATION AND LICENSE AGREEMENTS
The following table provides a summary of revenue recognized:
Three Months Ended March 31,Six Months Ended March 31,
2023202220232022
(in thousands)
GSK$30,000 $120,000 $29,323 $120,000 
Horizon 7,918 21,667 14,585 
Takeda116,156 20,821 132,468 41,593 
Janssen111 3,066 355 3,066 
Amgen  25,000  
Total$146,267 $151,805 $208,813 $179,244 
The following table summarizes the balance of receivables and contract liabilities related to the Company’s collaboration and license agreements:
March 31, 2023September 30, 2022
(in thousands)
Receivables included in accounts receivable$70,000 $6,174 
Contract liabilities included in deferred revenue$30,914 $130,049 
Glaxosmithkline Intellectual Property (No. 3) Limited (“GSK”)
On November 22, 2021, GSK and the Company entered into an Exclusive License Agreement (the “GSK License Agreement”). Under the GSK License Agreement, GSK has received an exclusive license for GSK-4532990 (formerly ARO-HSD). The exclusive license is worldwide with the exception of greater China, for which the Company retained rights to develop and commercialize GSK-4532990. The Company completed its Phase 1/2 study of GSK-4532990, and GSK is wholly responsible for all clinical development and commercialization of GSK-4532990 in its territory. Under the terms of the agreement, the Company has received an upfront payment of $120.0 million and recognized an additional $30.0 million at the start of a Phase 2 trial. The Company is also eligible for an additional payment of $100.0 million upon achieving a successful Phase 2 trial readout and the first patient dosed in a Phase 3 trial. Furthermore, should the Phase 3 trial read out positively, and the potential new medicine receives regulatory approval in major markets, the deal provides for commercial milestone payments to the Company of up to $190.0 million at first commercial sale, and up to $590.0 million in sales-related milestone payments. The Company is further eligible to receive tiered royalties on net product sales in a range of mid-teens to twenty percent.
At the inception of the GSK License Agreement, the Company identified one distinct performance obligation. 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 (the “GSK R&D Services”). Due to the specialized and unique nature of the GSK R&D Services and their direct relationship with the license, the Company determined that these deliverables represented one distinct bundle and, thus, one performance obligation. Beyond the GSK R&D Services, which are the responsibility of the Company, GSK will be responsible for managing future clinical development and commercialization in its territory.
The Company determined the initial transaction price totaled $120.0 million, including the upfront payment, which was collected in January 2022. The Company has excluded any future estimated milestones or royalties from this transaction price to date. The Company has allocated the total $120.0 million initial transaction price to its one distinct performance obligation for the GSK-4532990 license and the associated GSK R&D Services. As the Company has completed its performance obligation related to this agreement, the upfront payment of $120.0 million was fully recognized during the six months ended March 31, 2022. Further, GSK dosed the first patient in a Phase 2 trial in March 2023, triggering a $30.0 million milestone payment to the Company which is expected to be paid in the third quarter of fiscal 2023. There were no contract assets and liabilities recorded as of March 31, 2023.
Horizon Therapeutics Ireland DAC (“Horizon”)
On June 18, 2021, Horizon and the Company entered into a collaboration and license agreement (the “Horizon License Agreement”). Under the terms of the Horizon License Agreement, Horizon received a worldwide exclusive license for HZN-457, a clinical-stage medicine being developed by Horizon as a potential treatment for people with uncontrolled gout. The Company conducted all activities through the preclinical stages of development of, and Horizon is now wholly
8


responsible for clinical development and commercialization of, HZN-457. The Company received $40.0 million as an upfront payment in July 2021 and an additional $15.0 million upon Horizon’s initiation of a Phase 1 clinical trial in January 2023, and is eligible to receive up to $645.0 million in additional potential development, regulatory and sales milestones. The Company is also eligible to receive royalties in the low- to mid-teens range on net product sales.
At the inception of the Horizon License Agreement, the Company 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 conduct all activities through the preclinical stages of development of HZN-457 (the “Horizon R&D Services”). Due to the specialized and unique nature of these Horizon R&D Services and their direct relationship with the license, the Company determined that these deliverables represented one distinct bundle and, thus, one performance obligation. Beyond the Horizon R&D Services, which are the responsibility of the Company, Horizon is responsible for managing future clinical development and commercialization of HZN-457.
The Company determined the initial transaction price totaled $40.0 million, including the upfront payment. The Company has excluded any future estimated milestones or royalties from this transaction price to date. The Company allocated the total $40.0 million initial transaction price to its one distinct performance obligation for the HZN-457 license and the associated Horizon R&D Services. Revenue was recognized on a straight-line basis over the timeframe for completing the Horizon R&D Services. The Company determined that the straight-line basis was appropriate as its efforts were expended evenly over the course of completing its performance obligation. Further, Horizon enrolled the first subject in December 2022 in a Phase 1 randomized, placebo-controlled trial to assess the safety, tolerability, pharmacokinetics and pharmacodynamics of HZN-457, triggering a $15.0 million milestone payment to the Company which was paid in the second quarter of fiscal 2023. There were no contract assets and liabilities recorded as of March 31, 2023.
Takeda Pharmaceutical Company Limited (“Takeda”)
On October 7, 2020, Takeda and the Company entered into an Exclusive License and Co-Funding Agreement (the “Takeda License Agreement”). Under the Takeda License Agreement, Takeda and the Company will co-develop its Fazirsiran 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, Fazirsiran, 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 will receive an exclusive license to commercialize Fazirsiran, while the Company will be eligible to receive tiered royalties of 20% to 25% on net sales. The Company received $300.0 million as an upfront payment in January 2021, recognized an additional $40.0 million upon Takeda’s initiation of a Phase 3 clinical study in March 2023, and is eligible to receive potential development, regulatory and commercial milestones of up to $527.5 million.
At the inception of the Takeda License Agreement, the Company 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 Fazirsiran 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, which are the responsibility of the Company, Takeda will be responsible for managing future clinical development and commercialization outside the United States. Within the United States, the Company will also participate in co-development and co-commercialization efforts and will co-fund these efforts with Takeda as part of the 50/50 profit sharing structure within the United States. The Company considers the collaborative activities, including the co-development and co-commercialization, to be a separate unit of account within Topic 808, and as such, these co-funding amounts are recorded as research and development expenses or general and administrative expenses, as appropriate.
The Company has allocated the total $300.0 million initial transaction price to its one distinct performance obligation for the Fazirsiran license and the associated Takeda R&D Services. Revenue is recognized using a proportional performance method (based on actual patient visits completed versus total estimated visits completed for the ongoing SEQUOIA and AROAAT2002 clinical studies). The Company previously expected these clinical trials to extend to September 2025 in order to demonstrate long term safety and efficacy in the open label extension part of the studies; however, Takeda now intends to initiate a new open label extension (OLE) study available to patients participating in these Phase 2 studies that will initiate as early as July 2023. Based on this new information, patients enrolled in the SEQUOIA and AROAAT2002 studies are expected to complete their Phase 2 study visits between June 2023 and June 2024, shortening the Company’s performance obligation. As a result, effective the second quarter of fiscal 2023, the Company changed its estimates of the revenue recognition to better reflect these newly estimated proportional performance periods. The effect of these changes in estimates resulted in accelerated revenue by $61.4 million, or $0.57 per share (diluted) for
9


each of the three and six months ended March 31, 2023. There were $30.9 million of contract liabilities recorded as deferred revenue, of which $29.8 million was classified as current as of March 31, 2023.
In March 2023, Takeda dosed the first patient in the Phase 3 REDWOOD clinical study of Fazirsiran, triggering a $40.0 million milestone payment to the Company which is expected to be paid in the third quarter of fiscal 2023. The Company also recorded $9.4 million as accrued expenses as of March 31, 2023 that was primarily driven by co-development and co-commercialization activities.
Janssen Pharmaceuticals, Inc. (“Janssen”)
On October 3, 2018, Janssen, part of the Janssen Pharmaceutical Companies of Johnson & Johnson, and the Company entered into a License Agreement (the “Janssen License Agreement”) and the Janssen Collaboration Agreement. The Company also entered into a stock purchase agreement with JJDC, Inc. (“JJDC”), Johnson & Johnson’s venture capital arm (the “JJDC Stock Purchase Agreement”). Under the Janssen License Agreement, Janssen 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), which the Company was responsible for completing, Janssen is wholly responsible for clinical development and commercialization of JNJ-3989 (ARO-HBV).
Under the terms of the Janssen License Agreement, the Company has received $175.0 million as an upfront payment, $75.0 million in the form of an equity investment by JJDC in the Company’s common stock under the JJDC Stock Purchase Agreement, and milestone and option payments totaling $73.0 million, and the Company may receive up to $0.8 billion in development and sales milestone payments for the Janssen License Agreement. The Company is further eligible to receive tiered royalties on product sales up to mid-teens under the Janssen License Agreement.
On April 7, 2023, Janssen voluntarily terminated the Janssen Collaboration Agreement. Upon termination, the Company regained full rights to ARO-PNPLA3, formerly called JNJ-75220795, the only candidate for which Janssen had exercised its option.
In May 2021, Janssen exercised its option right for JNJ-75220795 (ARO-JNJ1), which resulted in a $10.0 million milestone payment to the Company. This $10.0 million milestone payment was recognized entirely as of September 30, 2021. The Company conducted its discovery, optimization and preclinical research and development of JNJ-75220795 (ARO-JNJ1), ARO-JNJ2, and ARO-JNJ3 under the Janssen Collaboration Agreement. All costs and labor hours spent by the Company have been entirely funded by Janssen. There was no revenue recorded associated with the Company’s agreement with Janssen for the six months ended March 31, 2023 and 2022. There were no contract assets and liabilities recorded as of March 31, 2023.
At the inception of 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 determined the transaction price totaled approximately $252.7 million, which includes the upfront payment, the premium paid by JJDC for its equity investment in the Company, two $25.0 million milestone payments related to JNJ-3989 (ARO-HBV), and estimated payments for reimbursable Janssen R&D Services to be performed. The Company has allocated the total $252.7 million initial transaction price to its one distinct performance obligation for the JNJ-3989 (ARO-HBV) license and the associated Janssen R&D Services. The Company recognized this transaction price in its entirety as of September 30, 2021, as its performance obligations were substantially completed. Future milestones and royalties achieved will be recognized in their entirety when earned. There were no contract assets and liabilities recorded as of March 31, 2023.
Amgen Inc. (“Amgen”)
On September 28, 2016, Amgen and the Company entered into two collaboration and license agreements and a common stock purchase agreement. Under the Second Collaboration and License Agreement (the “Olpasiran Agreement”), Amgen received a worldwide, exclusive license to the Company’s novel RNAi Olpasiran 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 first collaboration and license agreement (the “First Collaboration and License Agreement” or the “ARO-AMG1 Agreement”), Amgen received an option to a worldwide, exclusive license to ARO-AMG1, an RNAi therapy for an undisclosed genetically validated cardiovascular target. Under both agreements, Amgen is wholly responsible for clinical development and commercialization.
10


Under the Olpasiran Agreement and the ARO-AMG1 Agreement, the Company has received $35.0 million in upfront payments and $21.5 million in the form of an equity investment by Amgen in the Company’s common stock. Further, the Company received additional an $55.0 million in milestone payments; $10.0 million upon Amgen’s initiation of Phase 1 study in September 2018, $20.0 million upon its initiation of a Phase 2 clinical study in July 2020, and $25.0 million upon its first subject enrollment in a Phase 3 trial in December 2022. The Company has substantially completed its performance obligations under the Olpasiran Agreement and the ARO-AMG1 Agreement. There were no contract assets and liabilities recorded as of March 31, 2023.
In November 2022, Royalty Pharma and the Company entered into the Royalty Pharma Agreement. In consideration for the payments under the Royalty Pharma Agreement, Royalty Pharma is entitled to receive all royalties otherwise payable by Amgen to the Company under the Olpasiran Agreement. The Company remains eligible to receive up to an additional $535.0 million in remaining development, regulatory and sales milestone payments payable from Amgen and Royalty Pharma. See Note 11.
Joint Venture and License Agreement with Visirna Therapeutics, Inc. (“Visirna”)
On April 25, 2022, Visirna and the Company entered into a License Agreement (the “Visirna License Agreement”), pursuant to which Visirna received an exclusive license to develop, manufacture and commercialize four of the Company’s RNAi-based investigational cardiometabolic medicines in Greater China (including the People’s Republic of China, Hong Kong, Macau and Taiwan). Pursuant to a Share Purchase Agreement (the “Visirna SPA”) entered into simultaneously with the Visirna License Agreement, the Company acquired a majority stake in Visirna as partial consideration for the Visirna License Agreement. Under the Visirna SPA, entities affiliated with Vivo Capital also acquired a minority stake in Visirna in exchange for $60.0 million in upfront capital to support the operations of Visirna. As further consideration under the Visirna License Agreement, the Company is also eligible to receive potential royalties on commercial sales.
During the six months ended March 31, 2023, the Company performed manufacturing and development work pursuant to a Clinical Supply Agreement between the parties contemplated by the Visirna License Agreement. The Company received $0.9 million as consideration for this manufacturing and development work, and there were no contract assets and liabilities recorded as of March 31, 2023.
11


NOTE 3. PROPERTY AND EQUIPMENT
The following table summarizes the Company’s major classes of property and equipment:
March 31, 2023September 30, 2022
(in thousands)
Computers, software, office equipment and furniture$2,198 $2,182 
Land2,996 2,996 
Research equipment46,873 38,283 
Leasehold improvements42,017 42,017 
Construction in progress127,216 56,373 
221,300 141,851 
Less: Accumulated depreciation and amortization(36,072)(31,554)
Property and equipment, net$185,228 $110,297 
Depreciation and amortization expense for property and equipment for each of the three months ended March 31, 2023 and 2022 was $2.2 million. Depreciation and amortization expense for property and equipment for the six months ended March 31, 2023 and 2022 was $4.5 million and $4.3 million, respectively.
The increase in the construction in progress during the six months ended March 31, 2023 was mainly due to the continuing developments of manufacturing, laboratory and office facilities in Verona, Wisconsin as well as a new laboratory and office facility in San Diego, California. See Note 7.

12


NOTE 4. INVESTMENTS
The Company’s investments consisted of the following:
As of March 31, 2023
(In thousands)
Adjusted BasisGross
Unrealized Gains
Gross
Unrealized Losses
Fair Value
Short-term investments (due within one year)
Held to maturity debt securities$346,046 $ $(3,755)$342,291 
Held to maturity certificate of deposit    
Total short-term investments$346,046 $ $(3,755)$342,291 
Long-term investments (due within one through three years)
Held to maturity debt securities$78,834 $ $(1,709)$77,125 
Total long-term investments$78,834 $ $(1,709)$77,125 
As of September 30, 2022
(In thousands)
Adjusted BasisGross
Unrealized Gains
Gross
Unrealized Losses
Fair Value
Short-term investments (due within one year)
Held to maturity debt securities$218,391 $ $(3,661)$214,730 
Held to maturity certificate of deposit50,000   50,000 
Total short-term investments$268,391 $ $(3,661)$264,730 
Long-term investments (due within one through three years)
Held to maturity debt securities$105,872 $ $(5,569)$100,303 
Total long-term investments$105,872 $ $(5,569)$100,303 
13


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 following table presents the components of intangible assets:
Gross Carrying AmountAccumulated AmortizationImpairmentNet Carrying AmountUseful Lives
(amounts in thousands)(in years)
As of March 31, 2023
Patents$21,728 $12,545 $ $9,183 14
License3,129 1,200  1,929 21
Total intangible assets, net$24,857 $13,745 $ $11,112 
As of September 30, 2022
Patents$21,728 $11,770 $ $9,958 14
License3,129 1,125  2,004 21
Total intangible assets, net$24,857 $12,895 $ $11,962 
Intangible assets are reviewed annually for impairment and more frequently if potential impairment indicators exist. No impairment indicators were identified during the six months ended March 31, 2023 and 2022.
Intangible assets with definite useful lives are amortized on a straight-line basis over their useful lives. Intangible assets amortization expense was $0.4 million for each of the three months ended March 31, 2023 and 2022, and $0.9 million and for each of the six months ended March 31, 2023 and 2022. None of the intangible assets with definite useful lives are anticipated to have a residual value.
The following table presents the estimated future amortization expense related to intangible assets as of March 31, 2023:
Amortization Expense
Year Ending September 30, (in thousands)
2023 (remainder)$850 
20241,700 
20251,700 
20261,700 
20271,700 
Thereafter3,462 
Total$11,112 

14


NOTE 6. STOCKHOLDERS’ EQUITY
The following table summarizes the Company’s shares of common stock and preferred stock:
Shares
Par ValueAuthorizedIssuedOutstanding
(in thousands)
As of March 31, 2023
Common stock$0.001 290,000 106,869 106,869 
Preferred stock$0.001 5,000   
As of September 30, 2022
Common stock$0.001 145,000 105,960 105,960 
Preferred stock$0.001 5,000   
On March 16, 2023, the Company’s stockholders approved an increase in authorized common shares, par value $0.001 per share, from 145,000,000 to 290,000,000. The amendment to the Amended and Restated Certificate of Incorporation was filed on April 27, 2023. The Company does not have any current intention to issue shares in connection with acquisitions or pursuant to any equity financing outside of its existing equity compensation plans.
As of March 31, 2023 and September 30, 2022, respectively, 13,075,198 and 14,000,392 shares of common stock were reserved for issuance upon exercise of options and vesting of restricted stock units granted or available for grant under the Company’s 2004 Equity Incentive Plan, 2013 Incentive Plan, and 2021 Incentive Plan, as well as for inducement grants made to new employees under Rule 5635(c)(4) of the Nasdaq Listing Rules.
On December 2, 2022, the Company entered into an open market sale agreement (the “Open Market Sale 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 Open Market Sale 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 Open Market Sale Agreement. Unless otherwise terminated, the ATM Offering shall terminate upon the earlier of (i) the sale of all shares of common stock subject to the Sales Agreement and (ii) the termination of the Sales Agreement as permitted therein. The Company and Jefferies may each terminate the Open Market Sale Agreement at any time upon prior notice. As of March 31, 2023, no shares have been issued under the Open Market Sale Agreement.
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 March 31, 2023.
Commitments
On December 20, 2021, the Company completed a purchase of 13 acres of land in the Verona Technology Park in Verona, Wisconsin, which is being developed into an approximately 160,000 square foot drug manufacturing facility and an approximately 140,000 square foot laboratory and office facility which will support the Company’s process development and analytical activities. The Company intends to invest between $200.0 million and $260.0 million into the build-out of the facilities. As part of this acquisition, the Company entered into a development agreement with the City of Verona to construct certain infrastructure improvements within the tax incremental district and will be reimbursed up to $16.0 million by the City of Verona by future tax increment revenue generated from the developed property. The total amount of funding that the City of Verona will pay under the Tax Incremental Financing program is not guaranteed and will depend on future tax revenues generated from the developed property. The Company will also receive up to $2.5 million of refundable Wisconsin state income tax credits from the Wisconsin Economic Development Corporation (WEDC) as incentives to invest in the local community and create new jobs.
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 it may develop using these licensed technologies. These agreements and other similar
15


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/or certain sales level milestones. During the three and six months ended March 31, 2023 and 2022, the Company did not reach any milestones.
NOTE 8. LEASES
On November 19, 2021, the Company entered into a 15-year lease for approximately 144,000 square feet of office and research and development laboratory space in San Diego, California. This facility replaces the Company’s current office and research facility located in San Diego, California. The increased capacity of this new facility compared to the Company’s current research facility in San Diego will accommodate increased personnel for its expanding pipeline of current and future drug candidates. The lease payments which began on April 19, 2023, the rent commencement date, will be approximately $119.0 million over the initial 15-year term. The Company also estimates payments for operating expenses to be approximately $3.0 million for the first year of the lease, and these payments will continue throughout the initial 15-year term. The Company expects to pay approximately $32.0 million for leasehold improvements, net of tenant improvement allowances. Pursuant to the lease, within twelve months of the expiration of the initial 15-year term, the Company has the option to extend the lease for up to one additional ten-year term, with certain annual increases in base rent.
Other Significant Leases
Pasadena, California: The Company leases 49,000 square feet of office space located at 177 Colorado Blvd. for its corporate headquarters from 177 Colorado Owner, LLC, which lease expires on April 30, 2027. The lease contains an option to renew for one term of five years.
San Diego, California: The Company subleased space from Halozyme, Inc. for additional research and development facility in San Diego, California. The term of this sublease commenced on April 1, 2020 and ended on January 14, 2023. On December 23, 2022, the Company entered into a new six-month lease agreement with 11404 & 11408 Sorrento Valley Owner (DE) LLC, effective January 15, 2023. The lease will end on July 15, 2023.
Madison, Wisconsin: The Company leases space for office and laboratory facilities, which expires on September 30, 2031. The lease contains options to renew for two terms of five years. After accounting for additional rental square feet added pursuant to amendments to the lease agreement in 2019 and 2020, the Company currently leases a total of 111,000 square feet.
The components of lease assets and liabilities along with their classification on the Company’s consolidated balance sheets were as follows:
Lease Assets and LiabilitiesClassificationMarch 31, 2023September 30, 2022
(in thousands)
Operating lease assetsRight-of-use assets$41,114 $58,291 
Current operating lease liabilitiesLease liabilities2,711 2,776 
Non-current operating lease liabilitiesLease liabilities, net of current portion80,070 78,800 
Three Months Ended March 31,Six Months Ended March 31,
Lease CostClassification2023202220232022
(in thousands)
Operating lease costResearch and development$2,343 $905 $4,412 $1,783 
General and administrative expense500 420 1,033 840 
Variable lease costResearch and development160 182 370 340 
General and administrative expense    
Total $3,003 $1,507 $5,815 $2,963 
Variable lease cost primarily related to operating expenses associated with the Company’s operating leases. There was $0.4 million and $0.3 million short-term lease cost during the three months ended March 31, 2023, and 2022, respectively. There was $0.7 million and $0.5 million short-term lease cost during the six months ended March 31, 2023, and 2022, respectively.
16


The following table presents payments of operating lease liabilities on an undiscounted basis as of March 31, 2023:
YearAmounts
(in thousands)
2023 (remainder of fiscal year)$3,070 
20248,094 
202511,800 
202612,138 
202711,297 
2028 and thereafter102,813 
Total$149,212 
Less imputed interest(66,431)
Total operating lease liabilities (includes current portion)$82,781 
Supplemental cash flow and other information related to leases was as follows:
Six Months Ended March 31,
20232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)$2,503 $2,171 
March 31, 2023
20232022
Weighted-average remaining lease term (in years)6.67.6
Weighted-average discount rate8.5 %8.5 %
17


NOTE 9. STOCK-BASED COMPENSATION
The Company has three plans that provide for equity-based compensation. Under the 2004 Equity Incentive Plan (the “2004 Plan”) and 2013 Incentive Plan (the “2013 Plan”), 173,983 and 3,518,957 shares, respectively, of the Company’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 as of March 31, 2023.
On March 18, 2021, the Company’s Board of Directors approved the Arrowhead Pharmaceuticals, Inc. 2021 Incentive Plan (the “2021 Plan”), which authorizes 8,000,000 shares (subject to certain adjustments) to be awarded for grants of stock options, stock appreciation rights, restricted and unrestricted stock and stock units, performance awards, cash awards and other awards convertible into or otherwise based on shares of the Company’s common stock. The maximum number of shares authorized under the 2021 Plan will be (i) reduced by any shares subject to awards made under the 2013 Plan after January 1, 2021, and (ii) increased by any shares subject to outstanding awards under the 2013 Plan as of January 1, 2021 that, after January 1, 2021, are canceled, expired, forfeited or otherwise not issued under such awards (other than as a result of being tendered or withheld to pay the exercise price or withholding taxes in connection with any such awards) or settled in cash. As of March 31, 2023, the total number of shares reserved for issuance under the 2021 Incentive Plan was 6,126,788 shares, which includes 139,053 shares that were forfeited under the 2013 Plan.
In addition, there were 743,726 shares reserved for options and 738,875 shares reserved for restricted stock units issued as inducement grants to new employees granted outside of the Company’s equity-based compensation plans under Rule 5635(c)(4) of the Nasdaq Listing Rules.
The following table presents a summary of awards outstanding:
As of March 31, 2023
2004 Plan2013 Plan2021 PlanInducement AwardsTotal
Granted and outstanding awards:
Options173,983 1,629,457 35,151 743,726 2,582,317 
Restricted stock units 1,889,500