10-Q – 2026-05-07 – arwr-20260331.htm

During the six months ended March 31, 2026, cash flow provided by operating activities was $97.9 million, which was primarily due to $200.0 million of cash received as part of the Novartis agreement, $200.0 million of the second DM1 milestone payment and a $50.0 million payment for the first installment of the annual fee received as part of the Sarepta agreement, partially offset by increase in ongoing expenses related to the Company's research and development programs and selling, general and administrative expenses. Cash used in investing activities amounted to $918.0 million, which was primarily attributable to investment purchases of $1,061.6 million, and capital expenditures of $4.7 million, partially offset by proceeds from maturities of investments of $124.5 million and proceeds from sales of investments of $23.7 million. Cash provided by financing activities of $781.0 million was primarily due to $681.3 million net proceeds from the issuance of convertible note, $116.6 million in net proceeds from a follow-on common stock offering, $46.8 million in net proceeds from the issuance of common stock under the Company's at-the-market equity offering program, $100.0 million proceeds from issuance of pre-funded warrants and $10.1 million proceeds from the exercise of stock options, partially offset by partial repayment of the credit facility of $84.5 million, purchase of the Capped Calls of $47.9 million, and dividends paid to noncontrolling shareholders of $41.5 million (See Note 6 — Stockholders’ Equity of Notes to Consolidated Financial Statements of Part I, “Item 1. Financial Statements”).
During the six months ended March 31, 2025, cash flow provided by operating activities was $313.8 million, which was primarily due to $500.0 million of cash received as part of the Sarepta agreement, partially offset by ongoing expenses related to the Company's research and development programs and selling, general and administrative expenses. Cash used in investing activities was $343.3 million, which was primarily attributable to capital expenditures of $12.8 million and investment purchases of $677.9 million, partially offset by proceeds from sales and maturities of investments of $347.4 million. Cash provided by financing activities of $113.0 million was primarily related to cash received from the issuance of common stock as well as stock option exercises.
Contractual Obligations
The Company entered into a global licensing and collaboration agreement with Novartis on August 29, 2025, which closed on October 17, 2025 (see Note 2). There has been no other material change in the Company’s contractual obligations from that described in Item 7 of its Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no material change in the Company ’ s exposure to market risk from that described in Item 7A of its Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

ITEM 4.    CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in its reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in
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evaluating the cost benefit relationship of possible controls and procedures.
As required by Rule 13a-15(b) of the Exchange Act, the Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the quarter covered by this Quarterly Report on Form 10-Q. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company regularly evaluates its controls and procedures and makes improvements in the design and effectiveness of established controls and procedures and the remediation of any deficiencies which may be identified during this process.

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PART II—OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS
From time to time, the Company may be involved in routine legal proceedings, as well as demands, claims and threatened litigation, which arise in the normal course of its business. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of legal proceedings, particularly complex legal proceedings, cannot be predicted with any certainty.
Except as described in Note 7 - Commitments and Contingencies, there have been no other material developments in the legal proceedings that the Company disclosed in Part I, Item 3 of its Annual Report on Form 10-K for the year ended September 30, 2025.

ITEM 1A.    RISK FACTORS
The Company ’ s business, results of operations and financial conditions are subject to various risks. These risks are described elsewhere in this Quarterly Report on Form 10-Q and in the Company ’ s other filings with the SEC, including the Company ’ s Annual Report on Form 10-K for the fiscal year ended September 30, 2025. There have been no material changes from the risk factors identified in the Company ’ s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
None.

ITEM 4.    MINE SAFETY DISCLOSURES
Not Applicable.

ITEM 5.    OTHER INFORMATION

(c) Trading Plans
During the quarter ended March 31, 2026, the following directors and officers (as defined in Exchange Act Rule 16a-1(f)) adopted certain trading plans intended to satisfy Rule 10b5-1(c):

Name Title Adoption or Termination Date Plan End Date Shares Vesting and Subject to Sell-To-Cover (1)
Other Shares Being Sold (Subject to Certain Conditions)

Victoria Vakiener Board Member 01/12/2026 12/31/2026 4,300
Adeoye Olukotun Board Member 01/14/2026 12/31/2026 7,819
Hongbo Lu Board Member 01/14/2026 12/31/2026 7,449
William Waddill Board Member 02/25/2026 12/31/2026 3,910
Daniel Apel Chief Financial Officer 03/29/2026 04/27/2027 43,750

(1) This column indicates the total number of shares vesting, but the 10b5-1 Plan provides for the sale of only those shares necessary to satisfy payment of applicable withholding taxes.
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ITEM 6.    EXHIBITS

Exhibit
Number Document Description

3.1 Amended and Restated Certificate of Incorporation (incorporated by reference from Exhibit 3.3 of the Company’s Form 8-K filed on April 6, 2016)

3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Arrowhead Pharmaceuticals, Inc. (incorporated by reference from Exhibit 3.2 of the Company’s Form 10-Q filed on May 2, 2023)

3.3
Second Amended and Restated Bylaws of Arrowhead Pharmaceuticals, Inc., as amended January 24, 2023 (incorporated by reference from Exhibit 3.3 of the Company's Form 10-Q filed on February 5, 2026)

4.1.
Form of Pre-Funded Warrant (incorporated by reference from Exhibit 4.1 of the Company’s Form 8-K filed on January 9, 2026)

4.2
Indenture, dated as of January 12, 2026, between Arrowhead Pharmaceuticals, Inc. and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference from Exhibit 4.1 of the Company’s Form 8-K filed on January 12, 2026)

4.3
First Supplemental Indenture, dated as of January 12, 2026, between Arrowhead Pharmaceuticals, Inc. and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference from Exhibit 4.2 of the Company’s Form 8-K filed on January 12, 2026)

4.4
Form of certificate representing the 0.00% Convertible Senior Notes due 2032 (incorporated by reference from Exhibit 4.3 of the Company’s Form 8-K filed on January 12, 2026)

10.1*#
Arrowhead Pharmaceuticals, Inc. Amended and Restated 2021 Incentive Plan

10.2*#
Arrowhead Pharmaceuticals, Inc. Amended and Restated Inducement Plan

31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1** Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2** Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS* Inline XBRL Instance Document

101.SCH* Inline XBRL Taxonomy Extension Schema Document

101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document

104* The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL (included as Exhibit 101)

_________________
* Filed herewith.
** Furnished herewith.
#    Indicates compensation plan, contract or arrangement.
† Certain portions of this exhibit were redacted by means of marking such portions with asterisks because the identified portions are (i) not material and (ii) treated as private or confidential by the Company.

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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: May 7, 2026

ARROWHEAD PHARMACEUTICALS, INC.

By: /s/ Daniel Apel
Daniel Apel
Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)

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