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Arrowhead Research Corporation (NASDAQ:ARWR)

F3Q 2013 Earnings Call

August 7, 2013 4:30 PM ET

Executives

Vincent Anzalone – Director, Finance and IR

Christopher Anzalone – President and CEO

Bruce Given – COO

Ken Myszkowski – CFO

Analysts

Bob Wasserman – Dawson James Securities

Operator

Ladies and gentlemen welcome to the Arrowhead Research fiscal 2013 third quarter financial results conference call. Throughout today’s recorded presentation all participants will be in a listen-only mode. After the presentation there will be an opportunity for you to ask questions.

I would now like to hand the conference call over to Vincent Anzalone, Director of Finance and Investor Relations for Arrowhead. Please go ahead.

Vincent Anzalone

Thank you, operator and good afternoon everyone. Thank you for joining us today to discuss Arrowhead’s results for its fiscal 2013 third quarter ended June 30, 2013.

With us today from management are President and CEO, Dr. Christopher Anzalone; Chief Operating Officer and Head of R&D, Dr. Bruce Given; and Chief Financial Officer, Ken Myszkowski. Management will provide a brief overview of the quarter and will then open the call up to your questions.

Before we begin I would like to remind you that comments made during today’s call may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact, including without limitation those with respect to Arrowhead’s goals, plans, and strategies are forward-looking statements. They represent management’s current expectations and are inherently uncertain. Thus actual results may differ materially. Arrowhead undertakes no duty to update any of the forward-looking statements discussed on today’s call.

You should refer to the discussions under Risk Factors in Arrowhead’s annual report on Form 10-K and the company’s quarterly reports on Form 10-Q for additional matters to be considered in this regard.

With that said I’d like to turn the call over to Dr. Christopher Anzalone, President and CEO of the company. Chris?

Christopher Anzalone

Thanks, Vince. Good afternoon everyone and thank you for joining us today. We have many new shareholders. So I’d like to take a moment and review key events that shaped our capabilities, business model and priorities. In October of 2011 we acquired Roche’s RNAi Therapeutics business, which included the Dynamic PolyConjugate or DPC delivery system that we use in our Hepatitis B drug candidate ARC-520.

As many of you know Roche invested over half billion dollars to create this unit. They built it in a manner that only a large pharmaceutical is capable of. They invested a very large amount of capital and systematically acquired technologies, licensed expanse of IP, attracted leading scientists, developed new technologies internally and built state-of-the-art facilities.

At a time when markets were questioning whether RNAi could ever become a viable therapeutic modality we saw great promise in the technology broadly and the quality of what Roche built specifically. The acquisition provided us with three primary silos of value. One, brought room to operate within three siRNAs formats. They are canonical, meroduplex and dicer substrate siRNA structures.

Two, what we believe to be the best-in-class small RNA delivery system, the targetable DPC platform. And three a state-of-the-art R&D facility in Madison, Wisconsin and a large team of scientists who are experienced in RNAi and siRNA delivery. This was and is a powerful combination indeed.

It provided us with the tools we need to build an independent and broad RNAi company. We believe we are the only company with access to all three siRNA structures. And this enables us to optimize the RNAi trigger on a target-by-target basis.

Our DPC delivery system enables us to deliver siRNA efficiently to hepatocytes and non-hepatic tissue in a highly specific manner. Our R&D team and facility enabled rapid innovation and drive to the clinic as evidenced by ARC-520. As we look at the RNAi space we do not see any company with as powerful and complete a combination of assets and capabilities as ours.

We have made great strides since the acquisition. We brought ARC-520 into the clinic and made important advances in the DPC delivery technology. This includes new generations of DPCs capable of inducing deep and durable gene knock-down with various constructs designed for both IV and subcutaneous administration. The key to DPC is potency and one of its differentiating qualities is a polymer backbone designed to induce efficient endosomal escape. This allows more of the siRNA to get into the cytosol where it can engage the cells RNAi machinery.

We have also taken advantage of the fact that DPCs are targetable and made substantial progress towards extra hepatic delivery. Delivering outside of liver is important for maximizing the value of DPCs and to continue to differentiate Arrowhead from other RNAi players. For those ends we have active programs to identify and evaluate targeting ligands that may be used with DPCs.

As part of this initiative in April 2012 we acquired Alvos Therapeutics, a privately held company that licensed a large platform of proprietary human-derived homing peptides from MD Anderson Cancer Center. This library contains peptides discovered through screening in human patients and we were interested in determining whether we could use them to target DPCs.

As our DPC platform continued to develop and to push ARC-520 toward the clinic it became clear that these would be our primary near and long-term value drivers. As such we have lined up our resources behind them and our focus is entirely on pushing ARC-520 through the clinic and developing additional DPC enabled RNAi therapeutics.

It has been said that for a biotech company to succeed it needs to be number one or number two in the world in some things. We believe that DPCs are the most efficient and flexible siRNA delivery system in the industry and clinical data from ARC-520 will make this platform tangible. Of course it is still early but we believe that ARC-520 has a potential to represent a true paradigm shift in the treatment of hepatitis B.

We look at our priorities from the perspective of ARC-520 outward. In other words think of a set of concentric circles, with our near term opportunities represented by the inter circles and longer term opportunities represented by outer circles. ARC-520 is bulls eye and our top priority is to ensure that it moves forward and is properly resourced. Just outside that are IV-administered, liver-targeted therapeutics. These could use the same DPC formulations as ARC-520 and could be straightforward to develop and substantially de-risk, particularly once we have human safety data later this year from ARC-520.

The next circle is subcutaneous administered liver targeted therapeutics. We presented data from this program last fall and continue to make good progress. The outer circle is extra hepatic targets including oncology. We are comfortable that all of these areas are now properly resourced and hope to provide guidance on time in later this year.

Sharpening our focus on DPC enabled RNAi therapeutics also means making difficult decisions about closing some programs and de-emphasize another. We have taken multiple disciplined steps to ensure that our capital is allocated to maximize shareholder value. These include the following:

First, we are now pursuing internal development of peptide drug conjugates with the Alvos targeting library. As you may recall these peptides could be potentially be used to target traditional drugs in addition to DPCs. But our only interest for internal development revolves around possible DCP targeting to extra-hepatic tissues. We still see potential value in other drug conjugates but any development and commercialization outside of RNAi will be via partnerships such as the one we have with Shire.

Second we have decided not pursue additional candidates based on the RONDEL delivery platform. In our 10-Q today we disclosed IP and licenses related to the cyclodextrin-based polymer system have been returned to Caltech the licensor. Out data indicates that DPC delivery is a far superior solution so we can no longer justify the expense of further development in maintaining the RONDEL patent portfolio. For this reason we have also decided not to advance the CALAA-01 candidate into Phase II.

Arrowhead still maintains a financial interest in the Cyclosert delivery platform, the CRLX-101 drug candidates and follow-on candidates through our out license agreement with Cerulean Pharma.

Third, while the Adipotide preclinical data in rodents and non-human primates across multiple laboratories and published in high quality peer reviewed journals were compelling the program is now outside Arrowhead’s core focus. As you may recall MD Anderson is conducting and fully funding the Phase I trial which began last year. Arrowhead will continue to monitor progress of the trial but we are not currently expending any internal resources to the program. Patients continue to be recruited and treated and as results come in we can assess whether internal development resources are warranted or may be an attractive licensing candidate.

I’d now like to turn the call over to our COO, and Head of R&D, Dr. Bruce Given to discuss the ARC-520 clinical program. Bruce?

Bruce Given

Thanks, Chris and hello to everyone on the call today. As you know ARC-520 is our clinical candidate against chronic Hepatitis B infection. HBV is world’s most common serious liver infection with an estimated 350 million patients worldwide that are chronically infected. The goal of ARC-520 is to provide a functional cure which is an immune clearance stage characterized by hepatitis B surface antigen negative serum with or without sero-conversion.

In March we hosted an event to discuss the hepatitis B treatment landscape and our ARC-520 program in more detail. An archive of the webcast is available on the Arrowhead website. And I would recommend viewing it if you more information about HBV. We recently initiated a Phase I study of ARC-520 following successful competition of the clinical trial notification regulatory process in Australia. The objectives of the study are to characterize the safety profile of ARC-520, determine the maximum tolerated dose and evaluate pharmacokinetics.

It is the single centered randomized and double blind placebo controlled single dose escalation first in human study of ARC-520 administered intravenously to healthy adult volunteers that’s being conducted in Melbourne, Australia.

Each does cohort includes six subjects randomized at a ratio of one to two to receive a single intravenous injection of either placebo or ARC-520 respectively. We have completed dosing of eight volunteers and expect four additional subjects to be treated today. Therefore by the end of today we expect to complete the dosing in the first two of six planned cohorts. The trial is moving quickly and we are on schedule to meet our stated goal of completing the trial in the fourth quarter.

Following competition of the Phase I we plan to apply for ethics and regulatory permissions to initiate a Phase IIa study in chronic HBV patients in Hong Kong. Many experts in the field believe that addressing circulating s-antigen is required to obtain a functional cure of chronic HBV. So we have been working on finalizing the design of this trial that will provide a read out of ARC-520’s ability to reduce the production of s-antigen.

We will provide more guidance on trial design in the future but our current thinking is that it will include patients that are currently being treated with the nucleotide or nucleoside analogue. We believe a patient population with adequately controlled viral load but uncontrolled antigenemia may provide us with the clear signal of ARC-520’s activity.

We will follow not only the depth of the antigen reduction but also the duration of effect. The final trial design has been developed with guidance from our Clinical Advisory Board chaired by Dr. Robert Gish, and including doctors, Stephen [Lockenini, COY and Johnson Wild].

Following the Phase IIa we are planning to conduct a multi dose Phase IIb study. This will be a multinational study including the planned U.S. IND filing. We are currently working on scale up of manufacturing to produce the clinical drug supply and we are initiating the nine month multi dose GLP toxicology study to support our goal of initiating the Phase IIb in the second half of 2014.

Moving beyond ARC-520 as Chris mentioned previously we are actively working on designing our next clinical candidate that will use DPC delivery. We have consulted with our expert advisors and targets of interest and will convene a meeting with the full Board next week. We will provide more guidance on what the targets are as we move forward and intend to have at least one candidate nominated next year.

One of the attractive features of RNAi and of DPC specifically is once we have established a safety profile in man for delivery system additional targets in candidates can be studied rapidly. We believe the Phase I trial of ARC-520 will provide us with the data we need to accelerate the development of our pipeline and bring additional candidates into the clinic.

With that update I would like to turn the call over to our CFO, Ken Myszkowski to review our financials for the period. Ken?

Ken Myszkowski

Thanks, Bruce and good afternoon everyone. As we reported today our net loss attributable to Arrowhead for the three months ended June 30, 2013 was $6.1 million or $0.23 per share, based on 26.1 million weighted average shares outstanding. This compares with the net loss attributable to Arrowhead of $8 million or $0.71 per share based on 11.2 million weighted average shares outstanding for the three months ended June 30, 2012.

Total operating expenses for the three months ended June 30, 2013 were $6.4 million compared to $6.9 million for the three months ended June 30, 2012.

Net cash used in operating activities for the first nine months of fiscal 2013 were $13.6 million compared with $10.8 million in the prior year period. Increasing cash used in operating activities reflects final pre-clinical requirements including GMP manufacturing and GLP toxicology to enable our HBV candidate, ARC-520 to enter clinical trials.

Turning to our balance sheet, our cash and short-term investments were $33.1 million at June 30, 2013 compared with $3.4 million at September 30, 2012. The increase in our cash balance reflects the $36 million offering closed in May 2013.

During the first nine months of fiscal year cash outlays for R&D were $10.1 million and cash used in G&A were $4.4 million. Cash inflows during the first nine months of the fiscal year included $42.5 million from the sale of equity securities, $500,000 in revenue and $1.2 million in proceeds related to the sale of our former subsidiary Unidym.

Our shares outstanding at June 30, 2013 were $31.3 million, up $17.7 million from $13.6 million at September 30, 2012. Common shares outstanding include the conversion of our preferred shares which would be $36.7 million.

With that brief overview I will turn the call back to Chris.

Christopher Anzalone

Thanks, Ken. We have made substantial progress in recent months. As I mentioned we have streamlined our business behind the DPC platform and our first candidate built on it ARC-520 a number of accomplishments speak to that progress and serve to fuel future developments including the following. One, we strengthened our balance sheet with $36 million financing from a syndicate of high quality biotech investors. This provided sufficient capital to fund development into 2015.

Two, we presented DPC and ARC-520 data at several scientific and investor conferences. Three, we completed the clinical trial notification regulatory process in Australia for ARC-520. Four, we initiated a Phase 1 trial of ARC-520 and by the end of today we will completed dosing of the first two of six planned cohorts. And five, we have assembled and consulted with an advisory board on additional liver targets.

So does it mean for the future? We have several near-term milestones. We anticipate data from the ARC-520 Phase 1 in Q4 establishing a safety profile for the candidate and representing the first human data with the DPC delivery platform.

This important derisking event for ARC-520 and also represents a broader derisking of the entire DPC platform. We will present a full data set from our chimpanzee study at the 64th annual meeting of the American Association for the Study of Liver Diseases in November. Dr. Robert Landford who conducted the study at the Texas Biomedical Research Institute will present the data. We are on schedule for regulatory filing in Hong Kong in Q4 for single dose Phase 2A with ARC-520 in chronic HPV patients. This will be a dose escalation study and we believe that we may start at an effective dose level and therefore begin to generate meaningful data immediately.

Our goal is to complete the Phase 2A study in the first half of 2014. As Bruce mentioned completion of long-term GLP toxicology studies and initiation of a multi dose Phase 2B study of ARC-520 are planned for the second half of 2014.

And lastly we intend to complete pre-clinical work to designate at one new RNAi clinical candidate in 2014. I spoke in the past about 2012 being a building year when we focused inward on the assets acquired from Roche. And 2013 being a demonstration year where we show evidence of the great potential of our RNAi platforms and pipeline. I believe the past several months have borne that out and the following key points describe where we are today as a company.

We have a world class team that has demonstrated its ability to rapidly innovate and meet aggressive development timelines. Our set of proprietary technologies enable us to address a wide variety of indications in a uniquely powerful way and we have published data demonstrating a level of gene knock-down not seen before.

We have a first candidate in ARC-520 that addresses the disease that infects approximately 1 in 20 people on the planet and has no cure. The preclinical data with this candidate in multiple animal models including a chimpanzee has surpassed anything we are aware of and has fundamentally derisk the first candidate and underlying platform.

We have a market that is now accepting of RNAi as a therapeutic modality where once it doubted its viability. And lastly we have sufficient resources to enable us to push our platform in candidates forward quickly. We are now focused on accelerating this demonstration phase and pushing it into clinical demonstration. We expect to have regular clinical read outs over the next several quarters designed to further derisk our programs and demonstrate substantial shareholder value.

We firmly believe that we are becoming a recognized leader in RNAi therapeutics and thank all of our shareholder for supporting Arrowhead Research. I’d now like to open the call up to questions. Operator?

Question-And-Answer Session

Operator

(Operator Instructions). And our first question comes from Bob Wasserman with Dawson James. Please go ahead with your question.

Bob Wasserman – Dawson James Securities

Hey thanks. Congratulations on the accomplishments in the quarter. Just a couple of questions. You mentioned about ARC-520 in the Phase 1 trial completing in Q4 is that calendar Q4 or our fiscal Q4?

Christopher Anzalone

Sorry calendar Q4.

Bob Wasserman – Dawson James Securities

Okay good. Fiscal Q4 is coming to a close pretty quickly here. So it sounds like it’s going to be a busy fourth quarter, completed the dosing trial and also filing for the Phase 2a and also publishing this data is that feasible, is that your plan for the year?

Christopher Anzalone

Yeah so the short answer is yes. The longer answer is it depends on how you define publish. It is our goal to release the data. I assume that we would like to release a full dataset in conjunction with a conference or some or a meeting or some of the peer review publication but we would certainly – we had certainly discussed the major findings as we are finished in the fourth quarter.

And you are right. It will be busy because then we hope to then move directly into filing at Hong Kong. We are as one can imagine we are assembling what we need for that filing now such that when the Phase 1 is over we drop in the data and get that finalized fairly quickly.

Bob Wasserman – Dawson James Securities

Okay, great. I didn’t mean to put words in your mouth there. Also little bit changing the subject on to Madison facility. Now that you have increased funding, probably more funding you have in a while, are you going to, any plans to expand the operations there either in terms of staffing or capital equipment?

Christopher Anzalone

That’s a great question. Thanks very much. We have no plans to really expand capital equipment. We have what we inherited from Roche was a fully functional well laid out, well designed laboratory. And so we really don’t need any new major equipment.

On a personnel side we are well staffed, there are a few positions here and there that we are bringing on, but our core staff, our leaders within that group are the same ones that were there at Roche and they are the same ones with Mirus Bio before Roche acquired them. And so our core staff remains the same. We will have a few positions that we would likely bring in such that we can move quickly but I would not say any – don’t expect any wholesale changes in expenditure there.

Bob Wasserman – Dawson James Securities

Okay once again congratulations on the quarter and thanks for answering the questions.

Christopher Anzalone

Thanks very much.

Operator

Our next question comes from Derek Tang from Cormorant Management. Please go ahead with your question.

Unidentified Analyst

Hi thanks for taking my question. Can you tell us what was the dose that’s being used in the healthy volunteer study?

Christopher Anzalone

Not sure, Bruce do you want to guess that?

Bruce Given

Yeah Dirk you are trying to understand the starting dose or where we will start to ending up kind of what we think the clinical dose range is just so I understand little more specifically what you want.

Unidentified Analyst

I mean for the study in Australia which dose are you starting at and when would you end, it’s a single dose study right?

Bruce Given

Yeah we started at that 0.01 mg per kg and the current ending point is 2 mgs per kg It’s possible that depending on what we see we may even decide to amend and go a bit higher but the current ending dosage will be 2 mgs per kg.

Unidentified Analyst

So each group is six patients right. Four – two…

Bruce Given

Four active, two placebo.

Unidentified Analyst

Two placebo, so how many groups would it take for you to go from 0.01 to 2 mg?

Bruce Given

It’s six.

Unidentified Analyst

Six groups, okay. And then I am assuming the Hong Kong study dose will be based on the findings of the Australian study.

Bruce Given

Correct and you first-in-man study you always start very low, especially when you are dealing with a new technology. But a part of the advantage of starting with the normal volunteer study rather than going straight into patients is that we will plan to start the Hong Kong study at a dose that we project may actually be efficacious. We don’t know for certain what the efficacious dose will be but we have ideas and we will probably start that Hong Kong study somewhere in the vicinity of a 0.5 mg per kg or 1 mg per kg something like that.

Unidentified Analyst

And can you also comment on why you incorporated placebo control in the healthy volunteer SAD study.

Christopher Anzalone

Yeah, it’s an interesting question, Derek we have been getting that question occasionally and I started out in Phase I work inside a big pharma, 25 years ago and we always did placebo control and that’s been the tradition for first in man, except in oncology. And maybe it’s just because you have such a high percentage of biotech workers in oncology.

I am not sure but apparently quite a few people in the investment community are not used to having placebo controlled Phase I studies. But from big pharma perspective we always placebo control. And the biggest reason for that was just adverse events, for instance you find a normal volunteer trials, a lot of patients will have things like headaches, I mean outside of lot of placebo. Subjects will have things like headaches, nausea, vomiting et cetera, it’s just a weird thing but part of it’s probably caffeine withdrawal because we don’t let them have caffeine and a lot of people get caffeine withdrawal, headaches et cetera.

And we just found over the years inside big pharma that having a placebo group really allowed you to interpret any adverse events that occur or any changes in laboratories or anything else. From the perspective of where they are really different from the placebo population. So in my mind it’s traditional but I understand that for the investor community not everybody has actually seen it

Unidentified Analyst

Got it. Thanks so much for the clarification.

Christopher Anzalone

You are welcome.

Operator

Our next question comes from James Gash. Please go ahead with your question.

Unidentified Analyst

Yes, congratulations and excellent call so far. I have a quick question on what is the current cap on common shares outstanding?

Christopher Anzalone

Ken?

Ken Myszkowski

So at June 30th we had 31.3 million shares outstanding. It was our common shares. We also have 9,900 preferred shares outstanding which would convert into 5.4 million shares outstanding.

Unidentified Analyst

And is it fair then to assume that the preferred have not converted?

Ken Myszkowski

None of the preferred have been converted yet.

Christopher Anzalone

And keep in mind the preferred has no coupon. It’s just a non-voting it’s almost like a common share that does not vote.

Unidentified Analyst

Yes. On the scientific front, considering the Holy Grail of functional cure for Hep B I wonder if you might discuss the possible distinction between sero conversion versus sero clearing?

Christopher Anzalone

That’s a great question. Bruce do you want to address that?

Bruce Given

Yeah. I am not sure it’s really much of a distinction. It’s probably a function of whether there is antibody in excess versus a relative equilibrium between antibody and antigen. So even patients that are sero negative many of them do produce antibody and there are immune complexes but the antigen is just wildly in access. And it’s just been found that some patients who have a functional cure will become antigen negative but in reality what that antigen negative usually means is just that there is still are circulating immune complexes but there is not in excess of antigen.

That’s a relatively rare event. By far the more common thing for functional cure is patients that have seroconverted and that hepatitis surface antibody positive antigen negative.

Unidentified Analyst

Okay. I think I get it. Thank you very much, congratulations again.

Christopher Anzalone

Thank you very much.

Operator

Our next question comes from Steven Shire. Please go ahead with your question.

Unidentified Analyst

Good afternoon gentlemen. Congratulations on a good quarter. My question was first related to the financials. The comparison of last year under a different set of – basically I would like to know if we are comparing apples-to-apples. Was it broken down the number of shares available last year versus this year and that we are actually comparing it year-over-year better performance?

Ken Myszkowski

Well when you look at the operating expenses they are comparable. The reason they are increasing because we stepped up our efforts on the cost of the clinical beginning in a pre-clinical requirements for that.

Unidentified Analyst

I was talking about the earnings per share differential for those.

Ken Myszkowski

So the shares, they would have increased significantly since last year due to the financing that took place. So that’s what driving the change in the shares outstanding and the effect on the EPS.

Unidentified Analyst

Okay that’s good to know. And my other question is regarding the using that DPC platforms for the obesity thing. Is that now off the table I didn’t hear anything about that today. I thought they started Phase 1 trial last year.

Christopher Anzalone

Right. So the obesity drug is not DPC related. That came from…

Unidentified Analyst

Oh, it isn’t.

Christopher Anzalone

Right, right. And that’s not RNAi based. That came from MD Anderson. So we view that almost as a free look. We are watching that Phase 1 trial. As I mentioned it doesn’t cost us anything MD Anderson is conducting it and assuming all the direct cost. And so we are going to sit back and watch what those data look like. Once that Phase 1 is done we can make a decision on how to move forward with that. But because it’s not within our focus now it’s not DPC enabled RNAi therapeutic. We are not spending any development cost on it.

Unidentified Analyst

The only reason I mentioned that is because given the nature of the world, the U.S. population both therapeutically and financially it seems like a win-win to develop that.

Christopher Anzalone

Yeah, and so I think we are in a really good position actually. We have, we own the rights to that. As I mentioned in the prepared statements the pre-clinical data looked quite good in multiple species and so we will see how it goes in humans. Again assuming you are exactly right that’s a huge potential market.

Unidentified Analyst

As a scientist myself I’d just let you know the business of doing a placebo is pretty constant. It’s a historical fact. I don’t understand our investors wouldn’t see that, that’s not my understanding.

I have one last final question gentlemen. Regarding the basically the nice build-up of the stock, the price of the stock in the last month I haven’t been able to find any catalyst anywhere, whether I do the research on the web or through various search engines that I have access to there was nothing that I saw that was a catalyst. So maybe I am asking something that you can’t answer but I was just curious.

Christopher Anzalone

Yeah so the short answer is I can’t answer that because who knows what drives stocks. Here is what I can tell you, we spend a lot of time speaking with institutions. We have for some time now and I believe that we are now at a point in our development where it makes sense for some of these institutions to come in and we are not raising their money right now. And so the only way they can build a position in Arrowhead is to buy in the open market. And I think that’s what we are seeing that it is a culmination of those two events.

Our development programs being at a point where in the eyes of institutions they are enough derisked that they want to build the position the markets are large enough. So the upside in their eyes could outstrip the downside potential and the fact that we continue to talk to these people. So we want to keep ourselves or we want to put ourselves in our radar screen and keep ourselves in front of the right investors.

Unidentified Analyst

And also would enhance the company’s position on being able to have capital because of the stock price I would assume right?

Christopher Anzalone

Well again we are not raising any capital right now so.

Unidentified Analyst

I am just saying just from your I guess from your – I guess you have corporate shares and you have individual anyway I think it’s a good thing for the company obviously and it’s obviously a good for investors out there to see almost a radical shift. I mean the slope of the curve is something like 60 to 70 degrees if you look at it depending on certain points.

Anyways thanks very much gentlemen and I wish us good luck. I wish you gentlemen good luck. I still this stock has a lot of place to go should you get the ARC-520 and also obesity drug I think will just I suspect that a big company would want to buy us out, buy you guys out at that point but that’s not something to comment on. Thank you very much and congratulations on your quarter.

Christopher Anzalone

Thank you very much.

Operator

(Operator Instructions). And ladies and gentlemen at this time I am showing no additional questions. I would like to turn the conference call back over for any closing remarks.

Christopher Anzalone

Thank you all very much for your attention and your interest in Arrowhead Research and we look forward to talking to you next quarter.

Operator

Ladies and gentlemen that concludes today’s conference call. We do thank you for attending. You may now disconnect your telephone lines.

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