Last Update 04 Dec 25

Fair value Increased 4.85%

ARWR: Upcoming SHTG Data Will Likely Undermine Optimistic Cardiometabolic Expectations

Analysts have nudged their average price target on Arrowhead Pharmaceuticals higher to about $58 from $55, citing the FDA approval of Redemplo, expectations for a broader sHTG label, and underappreciated long term cost and margin advantages.

Analyst Commentary

Research coverage following the Redemplo approval has generally tilted positive, with several firms lifting their price targets and highlighting both the commercial opportunity in sHTG and Arrowhead's long term margin profile. However, not all are ready to turn outright bullish, reflecting lingering questions around execution, pricing dynamics, and competitive positioning.

Bullish Takeaways

Bullish analysts see Redemplo's initial FCS approval as a strategic beachhead that could support meaningful label expansion into sHTG. They note that this could transform Arrowhead's revenue growth profile through 2026 and beyond.
Several models assume successful readouts from the SHASTA 3 and 4 Phase 3 studies, with some calling out a decent chance of demonstrating a pancreatitis benefit. In their view, this could justify higher peak sales and a richer multiple.
Some valuation frameworks emphasize Arrowhead's structural cost advantages and argue that materially lower per patient manufacturing costs could drive superior gross margins and support higher long term earnings power versus peers.
Bullish analysts also point to Redemplo's first in class status within Arrowhead's portfolio as evidence of strong execution and a credible path to scaling a commercial organization. They believe this is underappreciated in current multiples.

Bearish Takeaways

More cautious analysts highlight that, despite target hikes, their ratings remain neutral. This reflects execution risk as Arrowhead transitions from a development stage story to a fully commercial business.
Concerns remain around pricing and competitive dynamics as both Arrowhead and rival platforms move from the rare FCS market into the larger sHTG population. In that setting, payer pushback and comparative effectiveness could pressure assumptions.
Some models flag that the current Redemplo label, while favorable, is still narrowly focused on FCS. Any delay, setback, or weaker than expected data in sHTG could challenge the recent step up in valuation.
Bullish assumptions around long term cost advantages and margin expansion are not universally shared. Bearish analysts caution that real world manufacturing complexity and commercial scale up costs could erode some of the projected structural edge.

What's in the News

FDA grants Breakthrough Therapy designation to investigational plozasiran for adults with severe hypertriglyceridemia, with Phase 3 SHASTA and MUIR programs expected to read out in mid 2026 and a potential sNDA filing by year end 2026 (Key Developments).
FDA approves REDEMPLO (plozasiran) as Arrowhead's first commercial product, an siRNA therapy self administered quarterly to reduce triglycerides in adults with familial chylomicronemia syndrome (Key Developments).
Arrowhead closes a global licensing and collaboration deal with Novartis for ARO SNCA, securing a $200 million upfront payment and eligibility for up to $2 billion in milestones plus tiered royalties (Key Developments).
The company files for regulatory clearance to begin a Phase 1/2a trial of dual target RNAi candidate ARO DIMER PA for mixed hyperlipidemia, the first clinical RNAi molecule designed to silence two genes simultaneously (Key Developments).
Arrowhead seeks clearance for a Phase 1/2a study of ARO MAPT, an RNAi therapy targeting tau for Alzheimer's and related tauopathies, using a new delivery system that achieves blood brain barrier penetration in preclinical studies (Key Developments).

Valuation Changes

Fair Value: nudged higher from $55.00 to approximately $57.67, reflecting a modest upward revision to intrinsic value estimates.
Discount Rate: declined slightly from 7.19 percent to about 7.16 percent, implying a marginally lower perceived risk profile.
Revenue Growth: long term growth assumption reduced meaningfully from approximately negative 7.67 percent to about negative 14.61 percent, signaling a more conservative outlook on top line expansion.
Net Profit Margin: edged down from roughly 16.98 percent to about 16.03 percent, indicating a small expected compression in long term profitability.
Future P/E: eased from about 149.48x to roughly 142.29x, suggesting a slightly lower valuation multiple applied to forward earnings.

Advancing RNAi therapy pipeline and global partnerships boost Arrowhead's growth prospects, competitive position, and access to emerging healthcare markets.
Strategic collaborations and favorable regulatory trends support revenue stability, strong margins, and opportunities for long-term earnings and expansion.
Heavy reliance on partnership payments, rising costs amid lack of marketed products, regulatory and competitive pressures, and industry headwinds threaten Arrowhead's earnings stability and growth prospects.

Catalysts

About Arrowhead Pharmaceuticals

Develops medicines for the treatment of intractable diseases in the United States.What are the underlying business or industry changes driving this perspective?

Arrowhead's advancing late-stage clinical pipeline-especially the expected launch of plozasiran for FCS and SHTG, plus pivotal studies for three other RNAi therapies targeting major unmet needs-positions the company to capitalize on rising demand for innovative treatments driven by an aging population and increasing prevalence of chronic and genetic diseases, which could significantly accelerate revenue growth as approvals and launches materialize.
Expanding global market access, exemplified by the Sanofi-Visirna partnership in Greater China, enables Arrowhead to reach emerging healthcare markets where spending on novel therapies is rising, opening new revenue streams and increasing the company's total addressable market.
Multiple large pharma collaborations and milestone-generating partnerships (notably with Sarepta, Amgen, Takeda, and Sanofi) provide non-dilutive capital, revenue diversity, and stability independent of volatile equity markets, supporting sustained R&D investments and improving medium-term cash flow visibility.
Progress in RNAi delivery technology (TRiM™ platform), pipeline breadth in both prevalent and rare/orphan indications, and first-mover potential in CNS and adipose tissue RNAi expand Arrowhead's competitive edge as advancements in genomics and precision medicine increase the feasibility and personalization of RNAi therapies-supporting stronger projected net margins and long-term earnings growth if adoption broadens.
Regulatory momentum-including FDA receptivity to RNA-based therapies and the increasing prevalence of high-value, rare disease drug development-sets up favorable pricing/reimbursement scenarios and increases the likelihood of accelerated regulatory pathways, which in turn could boost Arrowhead's risk-adjusted earnings and provide optionality for premium M&A or strategic transactions.

Arrowhead Pharmaceuticals Earnings and Revenue Growth

Arrowhead Pharmaceuticals Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Arrowhead Pharmaceuticals's revenue will decrease by 11.4% annually over the next 3 years.
Analysts are not forecasting that Arrowhead Pharmaceuticals will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Arrowhead Pharmaceuticals's profit margin will increase from -25.9% to the average US Biotechs industry of 16.1% in 3 years.
If Arrowhead Pharmaceuticals's profit margin were to converge on the industry average, you could expect earnings to reach $64.0 million (and earnings per share of $0.38) by about September 2028, up from $-148.4 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 142.3x on those 2028 earnings, up from -25.9x today. This future PE is greater than the current PE for the US Biotechs industry at 15.5x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.95%, as per the Simply Wall St company report.

Arrowhead Pharmaceuticals Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

A significant portion of Arrowhead's current revenue is dependent on milestone and collaboration payments, especially from Sarepta and Visirna/Sanofi deals; any delays, restructuring, or reprioritization by partners (notably given Sarepta's own restructuring and financial turbulence) could result in unpredictable cash flows and threaten earnings stability in coming years.
Rising R&D and SG&A expenses driven by late-stage clinical trials and the commercial buildout-without a major product yet on the market and with net losses increasing-raise the risk that high ongoing costs outpace near-term revenue growth, potentially compressing net margins and stressing Arrowhead's cash runway despite a strong current balance sheet.
Exposure to regulatory risks and approval delays persists, given multiple Phase III programs that are still pending critical data readouts and pivotal approvals (notably plozasiran and zodasiran); any negative trial results or regulatory setbacks could materially impact near-term and long-term revenue prospects.
Arrowhead faces intensifying competition in the cardiometabolic and RNAi therapeutic space (such as Ionis's upcoming readout in the same indication); even if Arrowhead's products prove effective, aggressive competitive dynamics could pressure pricing, slow market adoption, and limit potential revenue growth.
There is a risk that broader industry or policy trends-such as sustained high interest rates, increases in cost of capital, and mounting political scrutiny over drug pricing-could lower company valuations, hinder future fundraising capability, and limit Arrowhead's ability to price new products at premium levels, compressing future revenue and net margins.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $44.071 for Arrowhead Pharmaceuticals based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $80.0, and the most bearish reporting a price target of just $17.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $398.8 million, earnings will come to $64.0 million, and it would be trading on a PE ratio of 142.3x, assuming you use a discount rate of 7.0%.
Given the current share price of $27.8, the analyst price target of $44.07 is 36.9% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Boost Arrowhead Pharmaceuticals Price Target Amid Cost Advantages and Strategic Partnerships