Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR) stock rose 0.45% (As on Nov 23, 11:45:44 AM UTC-4, Source: Google Finance) after the company agreed to develop and commercialize ARO-HSD, Arrowhead’s investigational RNA interference therapeutic in a phase 1/2 trial being developed as a treatment for nonalcoholic steatohepatitis. Arrowhead will receive a $120 million upfront payment and is eligible for $30 million in additional payments at the start of phase 2 and $100 million upon achieving a successful phase 2 trial readout and the first patient dosed in a phase 3 trial. Arrowhead said it will be eligible for up to $190 million at first commercial sale and up to $590 million in sales-related milestone payments. The company will also be eligible to receive tiered royalties on net product sales. GSK will receive an exclusive license to develop and commercialize ARO-HSD in all territories except Greater China, which will be retained by Arrowhead. The deal is expected to close in Q1 2022. The cash and investments totaled $613.4 million at September 30, 2021, compared to $453 million at September 30, 2020. The increase in the cash and investments was mainly due to the $340 million in total upfront payments received from Takeda and Horizon, offset by cash used for operations.

ARWR in the fourth quarter of FY 21 has reported the adjusted loss per share of $1.36, missing the analysts’ estimates for the adjusted loss per share of 59 cents. The company had reported the adjusted revenue of $138.3 million in the fourth quarter of FY 21, beating the analysts’ estimates for revenue of $173.9 million. The revenue in the current period mainly relates to the recognition of a portion of the $300 million upfront payment received under the collaboration agreement with Takeda. Revenue for the Takeda agreement will be recognized as the company continues to work toward completing the performance obligations of managing clinical trials in process and certain manufacturing related services. There remains $209 million of revenue to be recognized associated with the Takeda collaboration and it is anticipated to be recognized over approximately two to three years.

The company estimates the operating cash burn to be $60 to $80 million per quarter in fiscal 2022. In addition, the company is planning to expand the manufacturing capabilities and expand the R&D facilities. These capital projects, along with routine capital expenditures, will add an incremental cash outlay of $80 to $90 million for full year fiscal 2022.