One-glance verdict
Overvalued
$21.54 our estimate vs market $68.38
Wall Street consensus: $110.00 (410.6% higher than our fair-value estimate)
217% above our estimate, beyond the bull case
Fundamentals snapshot
Arrowhead Pharmaceuticals, Inc.
ARWR · NMS · Healthcare · Biotechnology
Current price
$68.38
52-week range
$31.45 - $95.49
Market cap
$9.66B
Balance sheet
Healthy
1.10x Concerning
Net cash $218.45M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
3 Risks
1 rewards · 3 risks
- Reward Free cash flow was positive in 3/10 years.
- Risk Operating margin compressed from -73.4% to -226.0% over 3 years.
- Risk Return on equity was -55.2% last year — the company lost money on shareholders' equity.
- Risk Insider ownership is only 3.7% (peer median: 4.3%).
What this company does
Arrowhead Pharmaceuticals, Inc.
Arrowhead Pharmaceuticals is a drug development company that creates new medicines for diseases that are currently very difficult to treat. The company makes money not from selling finished products, but by partnering with larger pharmaceutical firms that pay to help develop its drug pipeline (the set of potential new medicines it is currently testing). Therefore, Arrowhead's success depends on whether its drugs can pass clinical trials (the required stages of human testing for safety and effectiveness) and get approved for sale.
How the company got here
Arrowhead Pharmaceuticals was founded in its current form in 2003 and initially had a broader focus on nanotechnology. A key turning point came in 2007 when the current CEO, Christopher Anzalone, joined and decided to focus the company entirely on a promising technology called RNA interference (RNAi). The company grew by acquiring RNAi technology and assets from large pharmaceutical companies like Roche and Novartis. A significant challenge occurred in 2016 when the FDA (the U.S. Food and Drug Administration, which approves new medicines) put a hold on its clinical trials, causing the company to halt three of its programs. Since then, Arrowhead has rebuilt its pipeline of potential medicines and formed major partnerships to fund its research.
What it actually does
Arrowhead is working on a new type of medicine that can "turn off" or "silence" specific genes in your body that cause diseases. This technology is called RNA interference (RNAi), which is a natural process in our cells that the company's medicines are designed to trigger. By silencing a faulty gene, they can stop the production of a harmful protein that is making someone sick. As of late 2025, the company has its first approved product, REDEMPLO® (plozasiran), which treats a rare genetic disease causing very high levels of triglycerides (a type of fat in the blood). The rest of its work involves developing a pipeline (the set of drugs a company is working on) of other potential RNAi medicines for various diseases.
Wholly-Owned Programs
This is Arrowhead's core business, where it develops and plans to sell its own medicines, keeping all the potential profits. The company is focusing its own sales efforts on drugs for cardiometabolic diseases, which relate to heart disease and metabolism. Its first commercial product, REDEMPLO®, for a rare triglyceride disorder, falls into this category. Arrowhead is also working on expanding the use of this drug for more common conditions and is developing other potential medicines for obesity and cardiovascular diseases that it intends to own fully. This represents the company's bet on becoming a self-sustaining, commercial-stage business.
Partnered Programs
A major part of Arrowhead's strategy involves partnering with large, established pharmaceutical companies like Takeda, Amgen, and GSK. In these deals, Arrowhead typically gives the partner an exclusive license (the right to develop and sell a drug) for a specific drug candidate in exchange for upfront payments, future payments based on success, called milestones, and royalties (a percentage of sales). This provides Arrowhead with significant cash to fund its own research, reduces its financial risk, and gets help from partners with expensive late-stage clinical trials and global sales. These partnerships cover a wide range of diseases, from liver and lung conditions to diseases of the central nervous system.
What management is betting on now
Management's primary focus is on successfully launching and expanding sales of its first approved drug, REDEMPLO®, to prove it can be a commercial company. A major strategic goal, called "20 in 25," is to have 20 different drugs in clinical trials or on the market by the year 2025, showing the power of its technology platform. The company is also heavily investing in expanding its RNAi technology to treat diseases in tissues beyond the liver, such as the lungs and central nervous system, which has been a difficult challenge for this type of medicine. These partnerships remain a key part of the strategy, as they provide the necessary funding (money that doesn't have to be paid back) to support their ambitious pipeline growth.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$-161.50M
FY2025 Q1
$-153.79M
FY2025 Q2
$454.76M
FY2025 Q3
$-157.08M
FY2025 Q4
$13.00M
FY2026 Q1
$11.33M
FY2026 Q2
$81.88M
FY2026 Q3
$-181.32M
Revenue
$75.25M
Net income
$-194.28M
Diluted EPS
-1.36
Operating cash flow
$-177.47M
Free cash flow
$-181.32M
Fetching…
Sources
Revenue
$73.74M
Net income
$-132.73M
Diluted EPS
-0.93
Operating cash flow
$84.44M
Free cash flow
$81.88M
Fetching…
Sources
Revenue
$264.03M
Net income
$30.81M
Diluted EPS
0.22
Operating cash flow
$13.48M
Free cash flow
$11.33M
Fetching…
Sources
Revenue
$256.47M
Net income
$-23.75M
Diluted EPS
-0.11
Operating cash flow
$20.49M
Free cash flow
$13.00M
Fetching…
Sources
Revenue
$27.77M
Net income
$-175.24M
Diluted EPS
-1.26
Operating cash flow
$-154.72M
Free cash flow
$-157.08M
Fetching…
Sources
Revenue
$542.71M
Net income
$370.44M
Diluted EPS
2.75
Operating cash flow
$460.05M
Free cash flow
$454.76M
Fetching…
Sources
Revenue
$2.50M
Net income
$-173.09M
Diluted EPS
-1.39
Operating cash flow
$-146.27M
Free cash flow
$-153.79M
Fetching…
Sources
Revenue
$0.00
Net income
$-170.54M
Diluted EPS
-1.36
Operating cash flow
$-137.22M
Free cash flow
$-161.50M
Fetching…
Sources
Is it cheap or expensive?
Fair value $21.54 vs current price $68.38
Wall Street consensus is the average analyst price target: $110.00 (410.6% higher than our fair-value estimate).
Our most-likely fair value is $21.54 a share — about 68.5% below today's price of $68.38, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $218.5M - more cash than debt. Interest coverage 1.1x.
Net debt
$-218.45M
Interest coverage
1.10x
Arrowhead Pharmaceuticals, Inc.'s profit covers its interest bill about 1.1 times over. which is stronger than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
ARWR
BASELINE
Arrowhead Pharmaceuticals, Inc.
Total debt $1.38B Interest coverage 1.10x This is the baseline the peer rows are being compared against.
Total debt $2.19B Interest coverage -4.53x -100% vs ARWR This peer has almost no interest-payment cushion compared with ARWR.
Total debt $2.99B Interest coverage 1.99x +80% vs ARWR Carries about 1.8x more debt cushion than ARWR.
Total debt $1.29B Interest coverage -307.40x -100% vs ARWR This peer has almost no interest-payment cushion compared with ARWR.
Total debt $93.27M Interest coverage -11.92x -100% vs ARWR This peer has almost no interest-payment cushion compared with ARWR.
What you should know
The case for and against ARWR
1 Reward
3 Risks
Rewards
-
Free cash flow was positive in 3/10 years.
Risks
-
Operating margin compressed from -73.4% to -226.0% over 3 years.
-
Return on equity was -55.2% last year — the company lost money on shareholders' equity.
-
Insider ownership is only 3.7% (peer median: 4.3%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
-14.23x
P/B
20.73x
P/S
14.43x
EV/EBITDA
-47.34x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
100.0%
Operating margin
-226.0%
Net margin
-47.8%
ROE
-55.2%
ROA
-8.1%
Health
Liquidity and balance-sheet strength
Debt / equity
2.96x
Current ratio
5.90x
Quick ratio
5.71x
Total debt
$1.38B
Total cash
$1.60B
Growth
How the business has been compounding
Revenue TTM
$669.50M
Revenue 5Y CAGR
56.5%
EPS TTM
-2.28
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$-59.05M
Free CF TTM
$156.89M
FCF margin
23.4%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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