Arrowhead Pharmaceuticals (ARWR) risk factors, FY2025 10-K

Risks Related to Our Discovery, Development, and Commercialization of Medicines

1. 01Our prospects substantially depend on the success of our clinical-stage product candidates. If we and our licensees are unable to obtain approval for and commercialize these product candidates, or successfully commercialize REDEMPLO, our business could be materially harmed
2. 02There are substantial risks inherent in attempting to commercialize our new drugs, and, as a result, we may not be able to successfully develop additional products for commercial use31% rewritten
3. 03Our product candidates are in clinical development, which is a lengthy and expensive process with uncertain outcomes and the potential for substantial delays. There can be no assurance that our product candidates will obtain regulatory approval, which is necessary before they can be commercialized
4. 04Our clinical trials may not yield successful results for the product candidates that we may identify and pursue for their intended uses, which would prevent, delay or limit the scope of regulatory approval and commercialization
5. 05Our clinical trials may reveal significant adverse events, toxicities or other side effects and may result in a safety profile that could inhibit regulatory approval or market acceptance of any of our product candidates
6. 06Clinical trials of our product candidates may not uncover all possible adverse events that patients may experience
7. 07Topline data may not accurately reflect the complete results of a particular study or trial
8. 08Results of earlier studies or clinical trials may not be predictive of future clinical trial results, and initial studies or clinical trials may not establish an adequate safety or efficacy profile for our product candidates to justify proceeding to advanced clinical trials or an application for regulatory approval
9. 09It may take us longer than we project to complete clinical trials, and we may not be able to complete them at all
10. 10We face potential product liability exposure, and if successful claims are brought against us, we may incur substantial liability from REDEMPLO, or any other approved product candidate, and may have to limit its commercialization
11. 11The successful commercialization of REDEMPLO, or any other approved product candidates, will depend in part on the extent to which government authorities and health insurers establish adequate reimbursement levels and pricing policies28% rewritten
12. 12We may not enjoy the market exclusivity benefits of our orphan drug designations24% rewritten
13. 13Our success depends on the attraction and retention of senior management and scientists with relevant expertise
14. 14We have in the past and may again in the future enter into collaboration or license arrangements, including commercialization or collaborative arrangements, some of which may be based on less definitive agreements, such as memoranda of understanding, material transfer agreements, options or feasibility agreements

Risks Related to Regulatory Review and Approval of Our Product Candidates

1. 15Breakthrough Therapy designation for Fazirsiran (formerly ARO-AAT) and other of our current or future product candidates and other of our current or future product candidates may not lead to a faster development or review process43% rewritten
2. 16A Fast Track product designation may not lead to faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval23% rewritten
3. 17We may seek priority review designation for one or more of our product candidates, but we might not receive such designation, and even if we do, such designation may not lead to faster development or regulatory review or approval processNew
4. 18We intend to deliver some of our product candidates via drug delivery devices that will have their own regulatory, development, supply and other risks
5. 19We and our licensees conduct clinical trials for product candidates outside the United States, and the FDA and comparable foreign regulatory authorities may not accept data from such trials
6. 20Even if we obtain FDA approval for products in the United States, we may never obtain approval to commercialize any product candidates outside of the United States, which would limit our ability to realize their full market potential74% rewritten
7. 21Failure to comply with regulatory requirements or unanticipated problems with our products may result in various adverse actions such as the suspension or withdrawal of one or more of our products, closure of a facility or enforcement of substantial penalties or finesNew
8. 22Pharmaceutical and biological product marketing is subject to substantial regulation in the U.S. and any failure by us or our commercial and collaborative partners to comply with applicable statutes or regulations can adversely affect our business

Risks Related to Our Intellectual Property

1. 23Our ability to protect our patents and other proprietary rights is uncertain, exposing us to the possible loss of competitive advantage23% rewritten
2. 24We are party to technology license agreements with third parties that require us to satisfy obligations to keep them effective and, if these agreements are terminated, our technology and our business could be seriously and adversely affected
3. 25We may be and have been subject to patent infringement claims, which could result in substantial costs and liability and prevent us from commercializing our potential products35% rewritten
4. 26We are a party to a number of licenses that give us rights to third-party intellectual property that is necessary or useful for our business. We also expect to enter into additional licenses to third-party intellectual property in the future
5. 27Our technology licensed from various third parties may be subject to retained rights
6. 28Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information
7. 29We may not be able to effectively secure first-tier technologies when competing against other companies or investors
8. 30We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business

Risks Related to Our Business Model

1. 31We may need to establish additional relationships with strategic and development partners to fully develop our product candidates and market any approved products
2. 32Our ability to generate milestone and royalty payments under our current and potential future licensing and collaboration agreements is substantially controlled by our partners, and as such, we will likely need other sources of financing to continue to develop our internal product candidates
3. 33We may lose a considerable amount of control over our intellectual property and may not receive anticipated revenues in strategic transactions, particularly where the consideration is contingent on the achievement of development or sales milestones
4. 34We will need to achieve commercial acceptance of REDEMPLO and our product candidates to generate revenues and achieve profitability28% rewritten
5. 35If the market opportunities for REDEMPLO or any other approved product candidates, are smaller than we expect, it could materially adversely affect our financial condition and results of operation20% rewritten
6. 36We rely on outside sources for various components and processes for our products26% rewritten
7. 37We have limited manufacturing capability and must rely on third-party manufacturers to manufacture our clinical supplies and commercial products, if and when approved, and if they fail to meet their obligations, the development and commercialization of our products could be adversely affected46% rewritten
8. 38We rely on third parties to conduct our clinical trials, and if they fail to fulfill their obligations, the development of our products may be adversely affected
9. 39We face competition from various entities including large pharmaceutical companies, small biotech companies, private companies, and research institutions59% rewritten
10. 40We may have difficulty expanding our operations successfully as we evolve our pipeline and move toward commercializing drugs36% rewritten
11. 41Our business and operations could suffer in the event of a cybersecurity incident or other information technology system failures
12. 42Because we use biological materials, hazardous materials, chemicals and radioactive compounds, if we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected
13. 43Securities litigation claims may result in financial losses or harm our reputation and may divert management resources
14. 44The actions of distributors and specialty pharmacies could affect our ability to sell or market products profitably. Fluctuations in buying or distribution patterns by such distributors and specialty pharmacies could adversely affect our revenues, financial condition, or results of operations

Risks Related to Our Financial Condition

1. 45We have a history of net losses, and we expect to continue to incur net losses and may not achieve or maintain profitability24% rewritten
2. 46We will require substantial additional funds to complete our research and development activities46% rewritten
3. 47GSK4532990, and daplusiran/tomligisiran, subject to certain exceptions. These and other terms in the financing agreement could restrict our ability to grow our business or enter into transactions that we believe would be beneficial to our businessNew
4. 48If the estimates we make, or the assumptions on which we rely, in preparing our consolidated financial statements prove inaccurate, our actual results may vary from those reflected in our accruals
5. 49Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or our guidance
6. 50The investment of our cash, cash equivalents and fixed income securities is subject to risks which may cause losses and affect the liquidity of these investments
7. 51Our ability to utilize net operating loss carryforwards and other tax benefits may be limited
8. 52We could be subject to additional tax liabilities21% rewritten
9. 53Our business is subject to changing regulations for corporate governance and public disclosure that have increased both our costs and the risk of noncompliance

Risks Related to Investment and Securities

1. 54Our Board of Directors has the authority to issue shares of “blank check” preferred stock, which may make an acquisition of the Company by another company more difficult
2. 55If securities or industry analysts do not publish research reports about our business or if they make adverse recommendations regarding an investment in our stock, our stock price and trading volume may decline
3. 56The market for purchases and sales of our common stock may be limited, and the sale of a limited number of shares could cause the price to fall sharply
4. 57Our common stock price has fluctuated significantly over the last several years and may continue to do so in the future, without regard to our results of operations and prospects40% rewritten
5. 58Stockholder equity interest may be substantially diluted in any additional equity issuances62% rewritten
6. 59Preparing for and complying with these obligations require us to devote resources and may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf
7. 60Unfavorable global economic conditions, whether brought about by material global crises, health epidemics, military conflicts or war, geopolitical and tariffs or other trade disputes or other factors, may adversely affect our business and financial results44% rewritten
8. 61Company relies on single or limited sources for the supply and manufacture of many critical components, a business interruption affecting such sources would exacerbate any negative consequences to the CompanyNew
9. 62Drug development is time consuming, expensive and risky
10. 63The healthcare system is under significant financial pressure to reduce costs, which could reduce payment and reimbursement rates for drugs39% rewritten
11. 64Evolving regulatory standards, including as a result of changes in government leadership, make it difficult to accurately predict the likelihood of marketing approval even when clinical trials meet their endpoints80% rewritten