Last Update 18 Dec 25

Fair value Increased 11%

ARWR: Upcoming SHTG Readouts Will Temper Optimism Despite Recent Cardiometabolic Progress

Analysts have raised their price targets on Arrowhead Pharmaceuticals by roughly $6 to the mid $40s to low $60s range, citing the FDA approval of Redemplo, a strengthened commercial outlook in familial chylomicronemia syndrome and sHTG, and underappreciated long term cost and margin advantages.

Analyst Commentary

Bullish analysts view Redemplo's FCS approval as a key de-risking event that supports higher valuation multiples and justifies recent price target increases into the high $40s to low $60s range. They highlight both near term launch momentum and the potential for broader cardiovascular and metabolic indications to drive multi year growth.

Bullish Takeaways

Redemplo's initial FCS approval is seen as a strategic foothold that sets the stage for meaningful label expansion into sHTG, supporting expectations for a larger addressable market and sustained revenue growth.
Phase 3 SHASTA 3 and 4 readouts in sHTG, expected around 2026, are viewed as important catalysts that could validate pancreatitis risk reduction and materially expand peak sales assumptions embedded in current price targets.
Several bullish analysts emphasize Arrowhead's structural cost of goods advantages, suggesting that superior manufacturing economics can translate into higher long term gross margins and justify premium valuation relative to RNA competitors.
Redemplo's pricing and "best case" label profile are seen as favorable for the initial FCS launch and as a signal of Arrowhead's ability to execute commercially, which in turn supports confidence in the transition from a development stage story to a revenue scaling narrative.

Bearish Takeaways

Bearish analysts remain cautious on the risk reward balance despite higher targets, maintaining more neutral ratings as they await proof that Redemplo can translate clinical momentum into durable commercial uptake in both FCS and sHTG.
There is concern that competitive dynamics in triglyceride lowering therapies, particularly as the market broadens to sHTG, could pressure pricing power and limit upside to current valuation assumptions.
Uncertainty around the magnitude and timing of label expansions, especially for pancreatitis risk reduction, leads more conservative analysts to discount longer term revenue contributions from the SHASTA 3 and 4 programs.
Some bearish analysts see execution risk around Arrowhead's shift to a fully integrated commercial model, warning that missteps in launch strategy or market education could delay operating leverage and margin expansion that are embedded in more optimistic models.

What's in the News

FDA approves REDEMPLO, Arrowhead's first commercial siRNA therapy, for adults with familial chylomicronemia syndrome, marking the company’s transition to a commercial stage and enabling at home quarterly dosing via subcutaneous injection (Key Developments).
FDA grants Breakthrough Therapy designation to investigational plozasiran for adults with severe hypertriglyceridemia, with Arrowhead targeting completion of SHASTA 3, SHASTA 4, and MUIR 3 Phase 3 trials by mid 2026 and an sNDA filing by year end 2026 (Key Developments).
Arrowhead closes a global licensing and collaboration deal with Novartis for ARO SNCA and potential additional TRiM platform programs, securing a $200 million upfront payment, up to $2 billion in milestones, and tiered royalties up to the low double digits (Key Developments).
The company files for regulatory clearance to begin a Phase 1/2a trial of ARO DIMER PA, the first dual target RNAi candidate aimed at simultaneously silencing PCSK9 and APOC3 to address mixed hyperlipidemia and atherosclerotic cardiovascular disease (Key Developments).
Arrowhead doses first subjects in a Phase 1/2a trial of ARO MAPT, its lead CNS RNAi therapy designed to cross the blood brain barrier and reduce tau pathology in Alzheimer’s disease and related tauopathies, leveraging a new proprietary delivery system (Key Developments).

Valuation Changes

The fair value estimate has risen moderately, increasing from approximately $57.67 to $64.08 per share.
The discount rate has edged up slightly, from about 7.16 percent to 7.18 percent, reflecting a modest change in perceived risk.
The revenue growth outlook has deteriorated slightly, with the long-term growth rate moving from around negative 14.61 percent to negative 16.30 percent.
The net profit margin forecast is effectively unchanged, holding near 16.03 percent.
The future P/E multiple has increased meaningfully, from roughly 142.3x to 168.0x, indicating a higher valuation being ascribed to expected 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